4 days ago
Hollywood Bowl Group PLC (FRA:2H4) (H1 2025) Earnings Call Highlights: Record Revenue and ...
Revenue: 129.2 million, up 8.4% year-over-year.
EBITDA: 38.8 million, a record performance.
Net Cash: 22.7 million at the end of the half-year.
UK Revenue: 108.2 million, up 4.7% from the previous year.
Canadian Revenue: CAD $38 million, equivalent to 21.1 million.
Gross Profit Margin: 83%, a reduction of 40 basis points.
UK Gross Profit Margin: 84.2%, up 30 basis points.
Canadian Gross Profit Margin: 76.8%, a reduction of 3.4%.
Same-Store Sales UK: Up 1.5%.
Same-Store Sales Canada: Up 3.7%.
Spend Per Game: Increased by 6.3% from 11.21 to 11.87.
New Centers Opened: 5 new centers (3 in the UK, 2 in Canada).
Refurbishments Completed: 6 refurbishments (4 in the UK, 2 in Canada).
Employee Costs: 24.9 million, up 11%.
Property Costs UK: 21.4 million.
Property Costs Canada: CAD $5.8 million.
Interim Dividend: 4.1p per share, up 3% year-over-year.
Share Buyback: 10 million completed.
Revolving Credit Facility: New 25 million facility with a 5 million accordion.
Warning! GuruFocus has detected 4 Warning Sign with FRA:2H4.
Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Hollywood Bowl Group PLC (FRA:2H4) reported record revenues of 129.2 million, an 8.4% increase from the previous year, despite increased costs.
The company successfully opened five new centers, three in the UK and two in Canada, and completed six refurbishments, all on track to deliver expected returns.
The group ended the half-year with a net cash position of 22.7 million, even after a 10 million share buyback.
Canadian operations showed strong performance with like-for-like center growth of 3.7% and significant revenue contributions from new centers.
The company renewed its revolving credit facility on more favorable terms, which remains undrawn, providing financial flexibility for future investments.
Revenue growth was negatively impacted by the closure of the Hollywood Bowl Center in Surrey Keys and the refurbishment closure of the Edge Lane, Liverpool center.
Game volume in the UK decreased by 4.5%, affected by weather conditions and competition from other socializing offerings.
The Canadian business faced challenges due to forex movements, resulting in a 1.2 million impact due to a weaker Canadian dollar.
Inflationary pressures, including national minimum wage increases and business rates, have significantly impacted costs.
The company faces challenges in replicating its UK operational culture and team development in its Canadian operations.
Q: Can you elaborate on the maturity curve for your centers in the UK and Canada and your confidence in delivering mid to high single-digit EBITDA growth over the coming years? A: Laurence Keen, CFO, explained that while the maturity curve differs between Canada and the UK, they are confident in the centers reaching expected performance levels over the short to medium term. They anticipate mid to high single-digit EBITDA growth and profit growth as well.
Q: What has changed in the performance of the new Canadian centers, Kanata and Creekside, that has exceeded expectations? A: Stephen Burns, CEO, noted that these centers were expected to perform in line with expectations, but early indications show they are exceeding them. The strategy of opening new sites with a brand standard for Splitsville and co-locating with cinemas and retail has proven successful, suggesting this approach should be continued.
Q: How has the weather impacted your sales, and what are your expectations for future volumes? A: Stephen Burns, CEO, mentioned that sales outperform when it rains and underperform when it's sunny. Despite weather swings, they expect the impact to even out over time. Historically, weather has been a significant factor, but they anticipate normalizing effects in FY 2026.
Q: What are the competitive dynamics in the family-oriented venues versus city center corporate-oriented competitive socializing? A: Stephen Burns, CEO, stated that while new operators have entered the market, they primarily target young adults and corporate clients rather than families. Hollywood Bowl's prime locations and value proposition make it difficult for competitors to capture their core family market.
Q: Can you discuss the impact of new operators in the market and your strategy to address this competition? A: Stephen Burns, CEO, explained that while new operators have entered the market, their impact is often short-lived. Hollywood Bowl's strategic locations and focus on family entertainment provide a competitive edge, and they have not seen significant impacts from new entrants targeting family markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
