Hollywood Bowl Reports Record Revenue and Confident Outlook Amid Expansion

Rolling Strikes and Record Revenues: Hollywood Bowl’s Winning Formula

Well now, here’s a business that knows how to keep the pins tumbling and cash registers singing. Hollywood Bowl’s latest interim results reveal a fascinating story of strategic expansion, resilient consumer demand, and a touch of British weather drama. Let’s unpick the numbers behind the neon lights.

The Financial Frame: Solid Foundations Amid Expansion

First, the headline act: record revenue of £129.2 million, up 8.4% year-on-year. That’s not just inflation talking – it’s a testament to smart expansion and operational discipline. But as any seasoned investor knows, revenue is just the opening frame. The real intrigue lies beneath:

• Adjusted EBITDA pre-IFRS 16 edged up 0.5% to £38.8m. But peel back the curtain: underlying growth hit 8.8% when adjusting for prior-year one-offs (business rates rebates, centre closures, and timing quirks like Easter shifts).
• Statutory profit before tax dipped to £28.3m (down 4%), reflecting heavy investment in new centres and refurbishments – a calculated trade-off for future returns.
• The interim dividend rose 3% to 4.10p per share, while a £10m share buyback (equivalent to two years of special dividends) signals confidence in surplus cash generation.

Expansion Alley: Spreading the Bowling Gospel

Hollywood Bowl isn’t just maintaining lanes – it’s building empires. The growth engine is firing on both sides of the Atlantic:

UK Roll-Out: Precision Execution

• Opened three new centres (Swindon, Preston, Inverness), all hitting at least 19% ROI targets
• Four refurbishments completed, all exceeding the 33% ROI hurdle rate
• Two more openings (Reading, Uxbridge) and one refurbishment due in H2
• Pipeline bulging with five signed locations

Canadian Conquest: Tripling Down

Since acquiring its Canadian business in May 2022, Hollywood Bowl has turned 5 centres into 15 – and revenues have more than tripled. Standout plays:

• Two new “Hollywood Bowl style” centres opened (Kanata, Ottawa and Creekside, Calgary), trading above expectations
• Four refurbishments completed in H1, with four more due in H2
• Construction started at Christy’s Corner (opening H1 2026)
• Striker equipment arm revenue surged 112.3%

Customer Alchemy: Turning Pins into Pounds

Here’s where the magic happens. Despite game volumes dipping 4.5% (blame Easter timing and that pesky sunshine), spend per game (SPG) soared:

• UK SPG up 6.3% to £11.87, with amusement spend jumping 11.6%
• Canadian SPG up 5.4%, powered by 10.7% growth in food/drink spend

Tech investments are paying dividends: new reservation systems, “Pins on Strings” installations (cutting costs and downtime), and dynamic pricing are enhancing both margins and customer satisfaction.

Weathering the Storm (Literally)

Let’s address the soggy elephant in the room: the UK’s driest spring in a century dented footfall. CEO Stephen Burns acknowledges the “short-term impact” but highlights swift cost management and operational resilience. Crucially, July and August bookings remain robust – the real test for family leisure operators.

The Investment Case: Gutter or Strike?

Three compelling arguments emerge:

1. Inflation Armour: 70% of revenues aren’t subject to cost-of-goods inflation. UK labour-to-revenue ratio sits comfortably below 20%, providing wiggle room for wage pressures.
2. Cash Cannon: Net cash of £22.7m plus a new £25m undrawn facility (at improved margins) offers firepower for expansion. Capex of £40-45m planned for FY2025.
3. Growth Runway: On track for 130 centres by 2035 (currently 90). Canadian expansion alone could deliver 2+ openings annually for a decade.

Final Frame: Why This Analyst is Bullish

Hollywood Bowl demonstrates that affordable, family-focused leisure isn’t just surviving – it’s thriving. The slight profit dip reflects investment, not deterioration. With a proven refurbishment model (33%+ UK returns), disciplined new centre rollouts, and a cash-rich balance sheet, this is a business playing the long game.

The sun may have temporarily stolen customers, but the fundamental proposition – value-driven fun insulated from economic squalls – remains compelling. As Burns succinctly puts it: “We remain confident.” So do I. Now, who fancies a game?