Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — H1 2019 Earnings Presentation
44 slides from Hollywood Bowl's earnings presentation, May 23, 2019
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTAT I ON Half year ended 31st March 2019
Slide 2: Welcome
W E LCO M E
Slide 3: FY2019 H1 Highlights
FY2019 H1 HIGHLIGHTS H1 total revenue +5.3%, LFL revenue +4.4% All revenue lines in LFL growth TOTAL LFL SALES REVENUE GROWTH Total revenue growth driven through core estate, investments +5.3% +4.4% and new centre openings (£67.0M) Record Christmas and New Years Eve party bookings CONSTANT CENTRE PR
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Slide 5: Sector Update
S E C T O R U P D AT E 311 centres in market Hollywood Bowl Group remains clear market leader with 60 HOLLYWOOD BOWL centres having opened 4 and closed 1 since 2018 GROUP TEG occupy the number 2 position with 44 centres having 60 CENTRES acquired 5 centres (independent and MFA) since January 2018 Re
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Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue (£m): +5.3% Group Adjusted EBITDA (£m): +2.3% 120.5 114.0 104.8 33.4 36.2 29.4 63.6 67.0 21.1 20.7 FY2016 FY2017 FY2018 H1 18 H1 19 FY2016 FY2017 FY2018 H1 18 H1 19 Operating Profit Margin %: +1.4%pts Earnings Per Share (pence): +13.6% 25.0% 12.17 12.52 23.6% 9.34 8.92 2
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Slide 9: LFL Centre EBITDA Growth +4.7%
LFL CENTRE EBITDA GROWTH +4.7% LFL revenue growth of 4.4% New centre performance in line with management expectations Closure of Gravesend in July 2018 Effective cost control throughout the year LFL centre EBITDA up 4.7% 2.4 0.4 0.9 0.3 27.0 25.7 0.3 25.4 5.9 21.1 4
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Slide 11: Income Statement
I N C O M E S TA T E M E N T (£m) H1 H1 Movement FY2019 FY2018 LFL revenue up 4.4% Revenue 67.0 63.6 +5.3% Gross profit 57.5 54.9 +4.7% Gross profit 85.9% in line with Gross profit% 85.9% 86.3% -0.4%pts management expectations Administrative expenses / other income (40.8) (39.9) +2.2% Operating prof
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Slide 13: Strong Cash Generation
S T R O N G C A S H G E N E R AT I O N Group adjusted operating cash flow of £15.0m Dividends of £12.9m paid in H1 (final ordinary and (H1 2018: £14.9m) special for FY2018) Expansionary capex includes 4 refurbishments / Net debt at £5.3m (H1 2018: £7.2m) rebrands and net capex of 2 new centres Inter
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Slide 15: Financial Outlook
FINANCIAL OUTLOOK 7 – 10 refurbishments / rebrands to be completed in FY2019 Total capital expenditure in line with FY2019 guidance Total expansionary capital expenditure expected to be £6.2m - £6.5m Maintenance capital expenditure expected to be £6.0m - £6.5m New scoring technology £2.0m capital ex
Slide 16: Delivering on Our Growth Strategy
DELIVERING ON OUR G ROW T H ST R AT EGY
Slide 17: 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- Rolling refurbishment / rebrand programme of focused culture and innovation 7-10 centres per year Increasing spe
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Slide 19: Food and Drink Enhancements
FOOD AND DRINK ENHANCEMENTS Food SPG up 6.3% and margin % flat Menu development despite cost inflation New food initiative on trial in 4 centres FOOD SPG reflective of wider estate Features simplified menu with complex +6.3% products removed and pizza trial introduced Driving improved speed of servi
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Slide 21: Amusements Innovation
A M U S E M E N T S I N N O VAT I O N Group Expanded Scoring offer Increased space allocation in refurbishments and new centres Amusement Extended amusement product offer SPG Play for Prizes now in 51 centres +12.8% Spend per game up from £1.90 to £2.14 No further roll out planned for VR following t
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Slide 23: Extending the Digital Customer Journey
E X T E N D I N G T H E D I G I TA L C U S T O M E R J O U R N E Y Digital merchandising replacing static In centre advertising in new centres and refurbishments - including leader boards and data capture totems New scoring system rollout continues - now in 12 centres with excellent customer and tea
Slide 24: Refurbishments and New Centre Openings
REFURBISHMENTS AND NEW CENTRE OPENINGS
Slide 25: Investment Led Growth
INVESTMENT LED GROWTH Average return on investment of 46.5% for last 13 5 centres planned to have investment in H2 refurbishments and rebrands Refurbishment capital expenditure forecasted to be LFL revenues continue to outperform at 11.2% up vs £2.8m - £3.0m non invested estate Creation of increment
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Slide 27: Investment Led Growth - Refurbishments
INVESTMENT LED GROWTH - REFURBISHMENTS Bristol - Longwell Green Final Bowlplex centre to be rebranded to Hollywood Game volumes up 5.6% and LFL revenue up 19% Bowl – launched November 2018 since the re-launch to the local market £415k capital investment across all areas of the Payback expected in un
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Slide 29: Investment Led Growth - New Centres: Watford Intu
INVESTMENT LED GROWTH - NEW CENTRES Watford Intu Opened December 2018 14 23,000 sq.ft. ground floor unit LANES Key anchor in new Intu extension Top 20 UK retail destination LANES Pins on strings version 2 New scoring technology NET CAPITAL SPEND Trading in line with expectations since opening £1.8M
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Slide 31: Investment Led Growth - New Centres: Lakeside
INVESTMENT LED GROWTH - NEW CENTRES Lakeside Opened March 2019 - our 60th centre 24 34,000 sq.ft. with 24 lanes LANES New Intu Quay area will also include a Nickelodeon theme park, Flip out, Putt Shack and a Vue cinema Top 10 UK retail destination Pins on strings version 2 New scoring technology NET
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Slide 33: Strong New Centre Pipeline
S T R O N G N E W C E N T R E P I P E L I N E – AV E R A G E 2 N E W C E N T R E S PA York – FY2020 Belfast – FY2021 Leisure extension to successful First Hollywood Bowl in N. Ireland York Vanguard Way scheme Leisure scheme with cinema, Co-located with Puttstars WM5 and Odyssey arena 28,000 sq. ft.
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Slide 35: Indoor Mini-Golf
G R O W T H I N L I N E W I T H M E D I U M T E R M S T R AT E G Y Indoor mini-golf Trial concept of indoor mini-golf centres Shares same demographic appeal as bowling 3 x 9 hole courses per centre Will feature food and drink and amusement areas alongside core offer Centres won’t be themed – focus w
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Slide 37: Outlook
OUTLOOK Strong results with record revenues and profit before tax Deployment of capital into refurbishment and new centre opening programme continues to drive strong returns Ongoing investment and innovation in the customer proposition and technology Strong pipeline of new centres backed by discipli
Slide 38: Appendix
APPENDIX
Slide 39: Management
MANAGEMENT Stephen Burns - Chief Executive Officer Laurence Keen - Chief Financial Officer Appointment: Stephen joined the Group as Business Appointment: Laurence joined the Group as Development Director in 2011. He was promoted to Finance Director in 2014. Managing Director in 2012 and became Chief
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Slide 41: Balance Sheet
BALANCE SHEET (£m) H1 FY2019 H1 FY2018 Non current assets 123.5 120.7 Cash at bank 22.5 22.0 Other current assets 8.8 8.0 Creditors and provisions (32.0) (30.6) Gross debt (27.8) (29.3) Net assets 95.7 90.8
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Slide 43: Business Overview & History
BUSINESS OVERVIEW & HISTORY Multiple revenue streams National scale Customer focused industry leader Other Market leader in size, profitability and margin (c.1%) High quality property portfolio with no loss making Amusement centres machines 18 new Hollywood Bowls opened in last 4 years (c.22%) Bowli
Slide 44: hollywoodbowlgroup.com
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