Hollywood Bowl smashes earnings expectations despite cost of living crisis | Hospitality industry

Hollywood Bowl, the UK’s largest bowling operator, has grown its annual revenue and profit well above pre-pandemic levels and believes its value entertainment will continue to appeal to families cutting back on spending .

The company, which claims to be cheaper than its rivals, said the ability for a family of four to gamble for less than £22 would continue to make it attractive during the cost of living crisis.

“While our customers will undoubtedly face a number of challenges, I firmly believe that our excellent value-for-money offering will remain highly attractive to families looking for affordable, high-quality leisure experiences. quality to live together,” said Stephen Burns, general manager of the Hollywood Bowl. , said.

The chain, which operates in the UK and Canada, said like-for-like revenue rose more than 28% to £185m in the year to September 30 compared to the same period in 2019 before the coronavirus pandemic.

The UK, where it operates under the Hollywood Bowl and Puttstars brands, recorded revenues of £178m in its last financial year, up from £72m in 2021 and £130m in 2019.

Full-year profits, which the company said would beat market expectations, also rose more than 40% from pre-pandemic levels. The company, which reintroduced its dividend this year, said its business was relatively insulated against soaring energy bills and inflation in its supply chain.

Electricity costs in the UK are covered until the end of 2024 and food and drink represent less than 10% of total costs. The company simplified its menus to minimize exposure to food and beverage price inflation.

Staff costs account for less than a fifth of total turnover and the workforce benefited from the introduction of a new bonus system and received a cost of living allowance totaling £1 million.

Hollywood Bowl employs 2,200 people in the UK and 200 in Canada. That’s significantly more than the 1,787 employees the company employed at the end of September, according to its latest publicly available annual report.

“Hollywood Bowl is our top pick in our UK entertainment coverage,” said Investec analyst Roberta Ciaccia. “The business is extremely well protected against rising food, labor and energy costs, a position of relative safety in UK leisure.”

Hollywood Bowl, which has £56m of cash on its balance sheet, intends to expand its UK and Canada operations by around 50% to 110 venues in the coming years.

The company operates at 67 sites in the UK, including three centers which opened in Belfast, Birmingham and Harrow during the financial year.

Two centers are due to open soon in Speke and Peterborough, with a further 10 locations in the UK planned by the end of 2025.

In Canada, where Hollywood Bowl operates six locations, the company aims to open up to 10 centers over the next five years, and another 20 locations over the next decade.

“We see a significant opportunity to grow our business to over 110 centers,” Burns said. “Our strong balance sheet and cash-generating business model, combined with our resilience to inflationary pressures, will allow us to capitalize on this potential for organic and international growth.”

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