Family-oriented value for money ten-pin bowling operator Hollywood Bowl (BOWL:AIM) reported Covid-19 impacted full-year results to 30 September with revenues down 39% to £79.5 million and operating profits 75% lower at £9.9 million.
The shares fell 1.3% to 188p having rallied by a third over the last three months.
WELL POSITIONED FOR REOPENING
Since reopening with comprehensive Covid-19 safety measures in place, performance exceeded expectations with trading reaching 66% of the prior year despite only half of capacity available due to alternate lanes in use.
The introduction of the 10pm curfew and second lockdown again impacted the business and today around 60% of venues remain open for business. The regional tier system seems to be causing some confusion among customers about which sites remain open.
The run-up to Christmas is a key trading period and would usually see full capacity. The company has spent over £1 million installing new safety measures including vertical screening between lanes and new balls which allows all lanes to be operated safely and bodes well for a full reopening.
PUTTSARS POTENTIAL
Hollywood Bowl also opened three of its new Puttstars mini-golf concept venues during the year with trading said to be in-line with pre-Covid-19 business plans, showing the popularity of the game.
The management has scoped out the potential for around new 30 sites and aims to open two to three venues per year. Four new bowling centres were opened during the year and the firm has a strong pipeline out to 2024.
SOLID FINANCES
The company ended the period with £20.8 million in cash and net debt of £8.7 million, providing total liquidity of £31.8 million. Encouragingly, trading was said to be cash flow positive from August to October.
While the timing of a full reopening remains uncertain the potential to continue the group’s successful growth strategy looks intact over the medium term.
Shore Capital commented, ‘Hollywood Bowl is exceptionally well managed, conservatively financed, with an attractive long-term rollout story, where future opportunities may have somewhat increased given the current property environment.’
