Hollywood Bowl, the UK’s biggest bowling operator, has grown annual revenues and profits to well above pre-pandemic levels and believes it value entertainment will continue to appeal to families cut household spending.
The company, which claims to be cheaper than its rivals, said the ability for a family of four to play for less than £22 would continue to make it attractive during the cost of living crisis.
“While our customers undoubtedly face a number of challenges, I am confident that our great value proposition will remain very attractive to families seeking high-quality, affordable leisure experiences to enjoy together,” said Stephen Burns, CEO of Hollywood Bowl. , said.
The chain, which operates in the UK and Canada, said like-for-like revenue grew by more than 28% to £185m. GBP in the year to 30 September compared to the same period in 2019 before the coronavirus pandemic.
The UK, where it operates under the Hollywood Bowl and Puttstars brands, reported revenue of £178m in its latest financial year, compared to £72m in 2021 and £130m in 2019.
Annual profit, which the company said would exceed market expectations, also rose more than 40% compared with pre-pandemic levels. The company, which reinstated its dividend this year, said its business was relatively insulated from soaring energy bills and inflation in its supply chain.
The UK’s electricity costs are capped until the end of 2024, with food and drink accounting for less than 10% of the total cost. The company has simplified its menus to minimize exposure to food and beverage price increases.
Staffing costs represent less than a fifth of total turnover and the workforce has benefited from the introduction of a new bonus scheme and received a cost of living payment totaling £1m.
The Hollywood Bowl employs 2,200 people in the UK and 200 in Canada. That is significantly more than the 1,787 employees the company employed at the end of September, according to the company’s latest publicly available annual report.
“The Hollywood Bowl is our top pick in our UK leisure coverage,” said Roberta Ciaccia, analyst at Investec. “The business is extremely well protected against rising food, labor and energy costs, a position of relative security in UK leisure.”
Hollywood Bowl, which has £56m of cash on its balance sheet, intends to expand its business in the UK and Canada by around 50% to 110 sites in the coming years.
The company operates from 67 locations 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 UK sites 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 expand our business to more than 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 organic and international growth potential.”