-First half sales up 52.6% compared with 2019

-Full-year performance to be ahead of expectations

-Resumption of dividends anticipated

Bowling operator Ten Entertainment (TEG:AIM) said first-half like-for-like sales grew 46% compared with 2019, an acceleration from the 30.3% growth delivered in the second half of 2021.

Given continued momentum in the business, management anticipates full-year performance to be ahead of current expectations.

Investors were bowled over by the positive outlook and earnings upgrade with the shares jumping 7% to 228p. There was a positive read across for rival Hollywood Bowl (BOWL) whose shares gained 6% to 209p.

EARNINGS UPGRADES

Before today’s update analysts were forecasting full-year revenues to increase by 21% compared with 2019 to £102 million and earnings per share to grow 17% to 20.8p.

Analysts have been busily increasing their earnings expectations which have increased by 21% since January 2022. Further positive earnings upgrades are expected to reflect the latest bullish update.

RECORD BREAKER

Record-breaking sales during February half-term, Easter and the May Platinum Jubilee bank holiday contributed to ‘unprecedented’ sales growth, the company said.

The effect of operational gearing and tightly controlled costs has resulted in higher first-half profitability than the second half of 2021.

The company has deliberately preserved entertainment prices at 2019 levels and the firm’s value-for-money proposition has been rewarded with a 43% increase in footfall.

Chief executive Graham Blackwell commented: ‘Our great value family entertainment proposition continues to deliver for our customers.

‘With over 50% sales growth in the first half of this year compared to 2019, we have a winning formula in a post-Covid market. We have significantly outperformed the leisure and hospitality sector and are confident of delivering a record result this year.’

INVESTING FOR GROWTH

During the first half of 2022 the company secured an acquisition, invested in three significant refurbishments, and started building a new centre in Walsall.

Three further sites have been secured for development. The firm has spent £1.8 million on rolling out the latest touchscreen scoring, repairing lanes and installing LED lighting.

Despite the investment the group ended the period with a net cash position. As previously reported the group anticipates repaying £14 million of Government Covid-19 loans in July to pave the way to starting paying dividends again.

Analysts have penciled in 7.93p per share of dividends for 2022.

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Issue Date: 06 Jul 2022