Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — FY2019 Earnings Presentation
50 slides from Hollywood Bowl's earnings presentation, Dec 13, 2019
Slide 1: Financial Year Ended 30 September 2019
FINANCIAL YEAR ENDED 30 SEPTEMBER 2019 Hollywood Bowl Group plc
Slide 2: Welcome
WELCOME Hollywood Bowl Group plc
Slide 3: Agenda
AGENDA STEPHEN BURNS LAURENCE KEEN CEO CFO • FY2019 highlights • Financial performance • Growth strategy • IFRS 16 • Summary • Financial outlook • Property update Hollywood Bowl Group plc Investor Presentation FY2019 1
Slide 4: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 5: FY2019 Financial Highlights - Record Revenue and Profits
FY2019 FINANCIAL HIGHLIGHTS - RECORD REVENUE AND PROFITS TOTAL REVENUE TOTAL SPEND TOTAL LFL REVENUE GROWTH GAME VOLUMES PER GAME GROWTH +7.8% +3.1% +5.5% £9.64 +5.5% £129.9M (+4.5%) PROFIT BEFORE TAX TOTAL ORDINARY DIVIDEND SPECIAL DIVIDEND FREE CASH FLOW GROWTH PENCE PER SHARE PENCE PER SHARE +6.2
Slide 6: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 7: FY Operational Highlights
F Y 2 0 1 9 O P E R AT I O N A L H I G H L I G H T S PORTFOLIO INNOVATION ENGAGEMENT • 2 new centre openings • Pins on Strings now in 11 centres with V3 launched • Customer service scores improved • 6 centres refurbished • New scoring system installed in 24 • Database of 2 million contactable • 2 AM
Slide 8: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (£M) GROUP ADJUSTED EBITDA (£M) +7.8% +5.7% 38.2 129.9 36.2 120.5 33.4 114.0 29.4 104.8 FY2016 FY2017 FY2018 FY2019 FY2016 FY2017 FY2018 FY2019 OPERATING PROFIT MARGIN % EARNINGS PER SHARE (PENCE) +1.3%pts 21.9 +18.7% 14.86 20.6 19.5 12.52 12.17 13.7 9.34 FY2016 FY2017 F
Slide 10: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 11: LFL Centre EBITDA Growth +6.2%
LFL CENTRE EBITDA GROWTH +6.2% • LFL revenue growth of 5.5% • New centre performance in line with management expectations • All revenue lines in LFL growth • Effective cost control throughout the year • FYE of closure of Gravesend in July 2018 • Record EBITDA • LFL centre EBITDA up 6.2% 1.1 5.5 50.1
Slide 12: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 13: Income Statement
I N C O M E S TAT E M E N T (£m) FY2019 FY2018 Movement Revenue 129.9 120.6 +7.8% • LFL revenue up 5.5% Gross profit 111.4 103.8 +7.3% • Gross profit 85.7% in line with Gross profit% 85.7% 86.1% -0.4%pts management expectations Administrative expenses / other income (82.9) (78.9) +5.7% Operating pro
Slide 14: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 15: Strong Cash Generation - Enabling Further Shareholder Returns
S T R O N G C A S H G E N E R AT I O N - E N A B L I N G F U R T H E R S H A R E H O L D E R R E T U R N S • Group adjusted operating cash flow of £25.0m • Dividends of £16.2m paid in FY2019 (FY2018: £24.7m) • Net debt at £2.1m (FY2018: £2.9m) • Expansionary capex includes 8 refurbishments / rebrand
Slide 16: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 17: Financial Outlook for FY2020
FINANCIAL OUTLOOK FOR FY2020 • 7 – 10 refurbishments / rebrands to be completed • 4 new centres (1 bowling and 3 mini-golf) to open • Total expansionary capital expenditure expected to be £9m - £10m, including new centre openings • Maintenance capital expenditure expected to be c.£8m, including comp
Slide 18: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 19: IFRS 16
IFRS 16 • New lease accounting standard to take effect for FY2020 with operating leases being treated similar to finance leases • Hollywood Bowl Group is adopting the modified retrospective approach for FY2020 • No impact on • Strategy of the business • Cash flow • Profit over the life of the lease
Slide 20: Delivering Our Growth Strategy
DELIVERING OUR GROWTH STRATEGY Credit: inspired media Hollywood Bowl Group plc
Slide 21: Growth Strategy
G R O W T H S T R AT E G Y ORGANIC GROWTH INVESTMENT LED GROWTH Constant focus on customer experience Maintaining a high quality, profitable estate • Increasing dwell time through customer–focused • Rolling refurbishment programme of 7-10 centres culture and innovation per year • Attracting and reta
Slide 22: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 23: Enhanced Digital Customer Journey
E N H A N C E D D I G I TA L C U S T O M E R J O U R N E Y Website • Mobile-first website design introduced with new brand creative • Structured to improve navigation and SEO rankings • Mobile devices account for 78% of visits, up 7%pts YOY • 8m visits to the website, driving 37% of bowling revenue
Slide 24: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 25: Food, Drink and Amusements Growth
FOOD, DRINK AND AMUSEMENTS GROWTH Food and drink • Updated Hollywood Diner menu with reduced product lines – improving cost management and speed, quality and consistency • Product innovation successes in the year – introduction of Roband grills and Kitchen IQ order-management technology in higher li
Slide 26: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 27: Improving Space Utilisation
I M P R O V I N G S PA C E U T I L I S AT I O N • Effective deployment of capital through repurposing space to enhance the customer experience, increase operational efficiency and maximise revenue opportunities • Reconfiguration of 3 centres to add extra lanes, combine bar and diner areas and enlarg
Slide 28: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 29: Transformational Refurbishments
T R A N S F O R M AT I O N A L R E F U R B I S H M E N T S • SPG performance +9.3% vs rest of estate • 8 centres refurbished/rebranded in the year • Lineage + 4.3% vs rest of estate • Ongoing pipeline of centres to refurbish – typically on • Average return on investment of 46.1% for last 16 a 5-7 ye
Slide 30: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 31: Technical Excellence and Innovation
T E C H N I C A L E X C E L L E N C E A N D I N N O VAT I O N Pins on strings • Continued development with Qubica - launch of the new Edge String machine in 4 centres • Retro fit improvements to the other 7 Pins on Strings (POS) centres completed • POS GPS at 822 + 20.4% YOY • 6 centres to receive P
Slide 32: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 33: A Commitment to Our People
A COMMITMENT TO OUR PEOPLE Attracting and retaining top talent • Refresh of our employee brand - aligning more closely with our customer brand to support team recruitment • Top talent programmes and improved recruitment processes are gaining traction • 184 team members enrolled onto our talent progr
Slide 34: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 35: Sustainable Growth
S U S TA I N A B L E G R O W T H Solar Panels - capex c. £100k Future focused approach 60 • Improvements in solar technology, supportive landlords and 55 50 45 increasing energy prices are shaping our sustainable energy plans 40 35 Annual benefit (£k) 30 • Following 2 initial installations, we are i
Slide 36: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 37: Leveraging Our Leisure Expertise
LEVERAGING OUR LEISURE EXPERTISE Extending our leisure offer • Highly fragmented UK mini-golf market with lack of scale operators • Opportunity to leverage our indoor leisure experience • The Puttstars mini-golf concept will provide challenging, fun and engaging play in a safe environment with a fam
Slide 38: New Centre Openings
NEW CENTRE OPENINGS Credit: inspired media Hollywood Bowl Group plc
Slide 39: New Centre Openings
NEW CENTRE OPENINGS Watford intu Lakeside intu • Opened December 2018 • Opened March 2019 • 23,000 sq. ft. second floor unit • 34,000 sq. ft. ground floor unit • 14 lanes • 24 lanes • Net capital spend £1.8m • Net capital spend £3.0m • Key anchor in new intu extension • Key anchor in new intu extens
Slide 40: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 41: Strong New Centre Pipeline to FY2023
STRONG NEW CENTRE PIPELINE TO FY2023 LEEDS – FY2020 YORK – FY2020 LIVERPOOL – FY2021 NOTTINGHAM - FY2022 COLCHESTER – FY2023 PUTTSTARS HOLLYWOOD BOWL HOLLYWOOD BOWL HOLLYWOOD BOWL HOLLYWOOD BOWL • Leisure anchor • Leisure extension • Relocation of existing • £150m refurbishment • Large out of town a
Slide 42: Summary
SUMMARY Hollywood Bowl Group plc
Slide 43: Well Positioned for the Future
WELL POSITIONED FOR THE FUTURE • Market leader with high quality, well-invested estate led by experienced management team • Customer focused business leading the ongoing revitalisation of the sector • Significant market opportunity for future expansion and organic growth and leveraging our experienc
Slide 44: Appendix
APPENDIX Hollywood Bowl Group plc
Slide 45: Management
MANAGEMENT STEPHEN BURNS - CHIEF EXECUTIVE OFFICER • Appointment: Stephen joined the Group as Business Development Director in 2011. He was promoted to Managing Director in 2012 and became Chief Executive Officer in 2014. • Skills and experience: Before joining the Group, Stephen worked within the h
Slide 46: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 47: Balance Sheet
BALANCE SHEET (£m) FY2019 FY2018 Non current assets 125.8 119.7 Cash at bank 24.9 26.0 Other current assets 9.2 7.8 Creditors and provisions (31.3) (30.1) Gross debt (27.0) (28.5) Net assets 101.6 94.9 Hollywood Bowl Group plc Investor Presentation FY2019
Slide 48: Hollywood Bowl Group plc
Hollywood Bowl Group plc
Slide 49: IFRS 16 Lease Detail
IFRS 16 • The average lease length for the Group is 13.8 years • As the liability is repaid, the interest costs decreases and the IFRS 16 charge moves into negative territory when • Average rent per sq. ft £8.87 compared to the IAS17 treatment • Interest is front loaded as the lease liability is at
Slide 50: Hollywood Bowl Group plc
LO Poe good bimes. voll! hollywood bowl group plc hollywoodbowlgroup.com