Hollywood Bowl Group Plc · LSE:BOWL
Hollywood Bowl — H1 FY2024 Earnings Presentation
25 slides from Hollywood Bowl's earnings presentation, Jun 3, 2024
Slide 1: Hollywood Bowl Group plc Half Year Results FY2024
Hollywood Bowl Group plc Half Year Results FY2024
Slide 2: Agenda
Agenda Stephen Burns Stephen Burns Chief Executive Officer • H1 FY2024 highlights • Operational progress • Canadian expansion • Summary and outlook Laurence Keen Laurence Keen Chief Financial Officer • H1 FY2024 financial performance • Capital investment update • Property update 2
Slide 3: H1 FY2024 Group financial highlights
H1 FY2024 Group financial highlights Total revenue Total revenue growth £119.2m +8.1% (H1 FY2023: £110.2m) (H1 FY2023: +20.7%) UK LFL revenue growth1 Canada centres LFL revenue growth +1.3% +8.0% (H1 FY2023: +3.5%) (H1 FY2023: NA) Group adjusted EBITDA pre-IFRS162 UK CAGR LFL revenue growth over pas
Slide 4: H1 FY2024 Group operational highlights
H1 FY2024 Group operational highlights Group capital invested (inc. UK centres refurbished/rebranded acquisitions) £23.5m 3 UK centres acquired/opened Signed UK new centre pipeline 1 3 Centres acquired in Canada Signed Canada new centre pipeline 2 2 Average UK refurbishment ROI UK LFL spend per game
Slide 5: Organic and investment led growth strategy
Organic and investment led growth strategy Constant focus on enhancing the Enhancing and expanding a high quality, customer experience profitable estate Increasing customer spend and dwell time 4-6 new Group centres on average per year Investing in technology to unlock growth Rolling refurbishment p
Slide 6: Financial review
Financial review
Slide 7: Strong H1 FY2024 Group financial performance
Strong H1 FY2024 Group financial performance Revenue (£m) Group Adjusted EBITDA** pre-IFRS 16 (£m) +8.1% vs H1 FY2023 +10.0% vs H1 FY2023 119.2 38.6 8.8* 110.2 3.0* 35.1 91.3 31.0 67.0 21.1 H1 19 H1 22 H1 23 H1 24 H1 19 H1 22 H1 23 H1 24 Statutory Operating Profit Margin (%) Adjusted Earnings Per Sh
Slide 8: Record Group revenue performance
Record Group revenue performance • Group record revenue of £119.2m up 8.1% vs H1 FY2023 • Total Canada revenue growth of 46.9% • UK LFL revenue growth of 1.3% • Canada LFL revenue growth of 8.0% ➢Games played -1.8% ➢Games played +0.5% ➢Spend per game +3.2% ➢Spend per game +7.5% ➢UK CAGR LFL growth 5
Slide 9: Record Group EBITDA performance
Record Group EBITDA performance (£m) H1 FY2024 H1 FY2023 Movement vs H1 FY2023 • Total revenue up 8.1% on H1 FY2023 Revenue 119.2 110.2 +8.1% • Gross profit margin 83.4% in line with management expectations Gross profit on cost of goods sold 99.4 91.3 +8.9% Gross profit % on cost of goods sold 83.4%
Slide 10: Mitigating UK inflationary pressures
Mitigating UK inflationary pressures Well insulated from inflationary pressures • 72% revenue has no cost of goods inflation • Labour costs account for <19% of revenue at centre level ➢ Low % to revenue in comparison to rest of hospitality ➢ UK NLW increase in April 2024 – 9.6% impact year on year E
Slide 11: Strong Group trading driving free cash flow
Strong Group trading driving free cash flow Free cash flow Free cash flow utilisation • Group adjusted operating cash flow of £31.3m • Total dividend (incl. special) payments of £19.4m • Continued maintenance capital investment of £5.7m • Three centres acquired in H1 FY2024 • 3 UK refurbishments / r
Slide 12: Return on investment
UK refurbishments continue to deliver above target hurdle rates • 3 refurbishments completed during H1 • Space optimisations support increased amusement spend • Spend per game performance +11.2% • Investment in ancillary offerings – mini-golf and duckpin • Lineage +2.9% • 2nd and 3rd generation refu
Slide 13: Asset optimisation – Stockton Hollywood Bowl
Asset optimisation – Stockton Hollywood Bowl The opportunity Investment rationale • New lease and extending to adjacent building • £1.9m cost of fit out • Investment included: • 33% business case ROI ➢ 2nd generation external and internal • 12 week fit out refurbishment • Project finished in March 2
Slide 14: Strong new centre UK pipeline
Strong new centre UK pipeline Excellent track record of developing new centres in quality locations • Strong catchment areas are key to delivering long term sustainable EBITDA Further progress with new centres • Lincoln Bowl acquired in October 2023 and rebranded to Hollywood Bowl • Refurbishment co
Slide 15: New UK centre case study – Merry Hill
New UK centre case study – Merry Hill Excellent location that met our strict investment criteria • Merry Hill shopping centre includes high performing cinema and new leisure area being developed • Strong local population: 1m households within 16 min drivetime • Indexes at 110 in key Acorn categories
Slide 16: Driving our growth strategy
Driving our growth strategy
Slide 17: Investment in the UK customer experience
Investment in the UK customer experience Ongoing investment in core offer Best in class amusements Value, quality F&B - served fast • Pins on Strings now in 90% of UK • £1.5m invested across the estate • Continued focus on a simple menu that enhancing the quality of offer with new is easy to deliver
Slide 18: Maintaining an affordable, value for money proposition
Maintaining an affordable, value for money proposition • Offering “affordable fun” is core to the Group’s purpose and management is focused on keeping price levels accessible • The relative price of a game at Hollywood Bowl has fallen since 2021 with only small annual increases applied • Dynamic pri
Slide 19: Upgraded technology to support next stage of Group growth
Upgraded technology to support next stage of Group growth New core reservations system Successful UK UK implementation Canada rollout Future roadmap pilot • Developed in-house • Installed in UK • Introduction • Group product • De-risked reliance on 3rd • Increased bowling centres into the roadmap pa
Slide 20: Canada
Canada
Slide 21: Strong trading in Canada driving revenue and EBITDA growth
Strong trading in Canada driving revenue and EBITDA growth • LFL revenue strong at 8.0% in Splitsville centres • Processes and procedures are driving cost control »SPG +7.5% »Centre level gross profit margin 84% (+1%pt vs H1 »Volume +0.5% FY2023) • New centres trading well »Payroll at 24% (improved
Slide 22: Significant progress made in H1 FY2024
Significant progress made in H1 FY2024 Strong financial performance Operational success Estate investment Supporting the industry • LFL revenue growth of 8.0% in • Investment in people with some • Purchased two centres in November • Investments into Splitsville centres roles filled by senior UK team
Slide 23: FY2024 outlook
FY2024 outlook
Slide 24: Group financial outlook for FY2024
Group financial outlook for FY2024 Continued growth • Modest UK LFL growth given beneficial weather in FY2023 and Euro 2024 • Full year effect of FY2023 new centres and refurbishments • At least 3 centres to open in UK/Canada in second half Well positioned against cost inflation elements • NLW payro
Slide 25: Group outlook for FY2024
Group outlook for FY2024 Market leader with high quality, well-invested estate • Leading operator in both UK and Canadian markets Continued demand for affordable leisure experiences • Volumes remain strong even when compared to a record FY2023 • Value for money offer in UK at less than £25 for a fam
Hollywood Bowl Group — H1 FY2024 Earnings Presentation on 6ix