Hollywood Bowl Plans Significant Expansion in the UK by 2035
Increase in Dividends Announced by Ten-pin Bowling Venue Operator at Hollywood Bowl
British bowling and leisure operator Hollywood Bowl reported stable trading, with an eye on a significant expansion in the UK. The company has outlined ambitious growth plans, aiming to increase its UK presence to over 130 centers by 2035.
Hollywood Bowl's latest financial report reveals growth in the six months ended March 31. The company registered a like-for-like revenue increase of 2.1 percent, with a 1.3 percent rise in UK like-for-like total revenue. Despite a late Easter and favorable spring weather that encouraged outdoor activities, the group still posted a decent performance. Group adjusted EBITDA grew 0.5 percent to £38.8 million, albeit with a decline in earnings per share of 11.6 percent to 13.6p.
Despite slower-than-anticipated revenue growth, Hollywood Bowl raised its interim dividend by three percent to 4.1p. Significant capital investment in expansion projects also saw an increase of more than 50 percent year-on-year, reaching £14.1 million.
Operating 90 centers across the UK and Canada, Hollywood Bowl currently has 75 locations within the UK, with plans to expand aggressively. The company opened three centers during the first half of the year, with Reading and Uxbridge slated for second-half openings. The recently opened centers are performing in line with expectations, with an anticipated minimum return on investment of 19 percent.
Hollywood Bowl has also been prioritizing refurbishments, completing four projects during the first half of the year. The revamped centers exhibit an average return on investment of 33 percent.
Analyst Dan Lane of Robinhood suggested that expansion should be the priority over returning dividends, stating," The attractive dividend and buyback plans might frustrate investors who look at the success so far in Canada and wonder if that cash could be put to good use instead of returning it to shareholders."
CEO Stephen Burns remains optimistic, commenting, "Investment in new centers, our refurbishment program, and customer experience continue to deliver excellent returns and record customer satisfaction scores." Looking ahead, Burns is confident about the company's performance, citing the key summer holiday period and belief that the full-year EBITDA will align with current analyst forecasts.
In the pursuit of further growth, Hollywood Bowl is planning to invest significantly in expanding its UK real-estate presence, with ambitions to operate over 130 centers by 2035. As part of this strategy, the company has earmarked capital for business expansion projects, observing an increase of more than 50 percent year-on-year, reaching £14.1 million.
