Hollywood Bowl Group (BOWL) H2 2018 earnings summary

Executive summary

• Record FY2018 revenue and profits, supported by estate investment, new centre openings, LFL growth and cost control.

• Growth strategy continued through two new centres, nine refurbishments and customer-led investment in food, drink, amusements and technology.

• Proposed final and special dividends total 8.56p per share; cumulative shareholder cash returns since IPO reached £29.8m.

Financial highlights

• Revenue £120.5m, +5.8% YoY; LFL sales growth 1.8%.

• Adjusted EBITDA £36.2m, +8.3%; adjusted EBITDA margin 30.0%, up 0.4 percentage points.

• Operating profit £24.9m, +12.1%; operating margin 20.6%, up 1.2 percentage points.

• Profit before tax £23.9m, +13.4%; profit after tax £18.8m, +2.9%.

• Statutory EPS 12.52p, +2.9%; excluding ATCA, profit after tax was £19.4m, +6.0%.

Outlook and guidance

• FY2019 plan: 7–10 refurbishments/rebrands and two new centres, Watford before Christmas and Lakeside in H2.

• FY2019 expansionary capex expected at £5.5m–£6.3m; maintenance capex at £6.0m–£6.5m; scoring technology rollout to cost £2.0m.

• Effective tax rate expected at 20.4% in FY2019; IFRS 16 adoption planned for FY2020.

• Current-year performance remained in line with Board expectations, with a pipeline targeting an average of two new centres per year.