Hollywood Bowl sales hit record £230m despite UK slowdown

Hollywood Bowl has raised annual profit expectations after double-digit profits in its Canadian business offset slowing growth in its domestic UK market.

The group expects to post profits before unpleasantries “in excess” of £65 million thanks to record revenue of £230.4 million for the 12 months to September 30, after Canadian sales rose 42.2 per cent in constant currency up to £30.7 million.

Total UK revenue rose 3.8 per cent to £199.7 million but was flat on a like-for-like basis after slowing in the second half.

It marks another year of record results for the Hollywood Bowl, which has seen significant growth in the years since the pandemic thanks to booming demand.

The group continued its ongoing expansion drive with eight new venues during the period – four in the UK and Canada, now home to 72 and 13 Hollywood Bowls respectively.

Hollywood Bowl, which first expanded into Canada with the £10.6 million acquisition of Teaquinn Holdings in 2022, aims to have a presence of 130 venues by 2035.

Hollywood Bowl said the UK’s flat growth over the past year “reflects the anticipated normalization in trade after three years of exceptional performance”, having achieved a compound annual growth rate of more than 6 per cent since 2019.

Chief Stephen Burns added: “Our strong cash position means we are well positioned to continue investing in our growth, increasing the size and quality of our estate and seeking to continually improve the customer experience.”

Can Hollywood Bowl Stock Keep Up the Momentum?

Hollywood Bowl Actions They rose 2.6 per cent to 333.5 pence on Monday morning, having added more than 150 per cent since their March 2020 low.

Shore Capital analyst Greg Johnson backs the stock to continue the momentum with a “buy” rating.

He wrote in a note: ‘BOWL is a quality, well-run leisure operator, which has built an excellent track record over recent years.

‘This has been further supported by the continued resilience of trade, despite increasingly challenging benchmarks during the second half.

‘From a net cash position and with an attractive return on investment, we continue to believe that BOWL is well positioned to deliver on its launch aspirations, leading to continued strong growth in profitability and attractive returns to shareholders over the course of the period.

“In our view, this is not reflected in current valuation metrics.”

Analysts at Peel Hunt are more cautious with an ‘add’ rating and a 375p price target.

They wrote: ‘We consider the current valuation to be fair, given that the stock is unlikely to be rerated without the boost from LFL sales.

“The company likely expects record levels of investment in 2024E to help achieve that outcome.”