Hollywood Bowl Group H1 2026 Earnings Report

Hollywood Bowl Group EPS Results

• Actual EPS: GBX 14.51
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Hollywood Bowl Group Revenue Results

• Actual Revenue: $141.54 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Hollywood Bowl Group Announcement Details

• Quarter: H1 2026
• Date: 5/27/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 27, 2026
• Conference Call Time: 2:00AM ET

Hollywood Bowl Group (LON:BOWL) is a leading international leisure operator of ten-pin bowling and mini-golf centres, bringing families and friends together for affordable fun and safe, healthy competition. Our unique purpose-led culture and proven investment-led strategy are enabling us to capitalise on the significant growth opportunities in the markets we operate in, and achieve strong returns on capital invested. We are market leader in the UK and Canada, and one of the largest operators of ten-pin bowling centres in the world. We operate a high-quality, well-invested estate with diverse revenue streams and multiple levers to drive further growth. The Group operates more than 80 centres, each equipped with state of the art bowling lanes (or mini-golf courses), a licensed bar, a diner and an amusements zone featuring the latest games designed to keep everyone entertained. Through our customer focus and insight-led service, product and technological innovation, we are on a mission to continually enhance our customers’ experience of the inclusive competitive socialising activities of ten-pin bowling and indoor mini-golf. Find out more at www.hollywoodbowlgroup.com

Hollywood Bowl Group H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record first-half performance with revenue of GBP 141.5 million (+9.5% year over year) and record EBITDA of GBP 42.2 million and profit after tax of GBP 22.2 million, showing strong conversion of sales growth into earnings.
• Neutral Sentiment: UK remained the main growth engine, delivering 9.4% revenue growth and 2.6% like-for-like growth through yield management, pricing actions, and strong performance from new centers.
• Positive Sentiment: Canada is scaling quickly, with revenue up 12.8% and new sites contributing heavily; management highlighted an expanding pipeline and said five Canadian sites are planned for FY2027, up from two previously.
• Negative Sentiment: The company took a GBP 2.8 million impairment on one UK bowling center, acknowledging one site underperformed and could not support its carrying value at the assumed cost of capital.
• Positive Sentiment: Balance sheet and capital returns remain strong, with GBP 26 million net cash, an undrawn GBP 25 million RCF, a proposed interim dividend, and a planned GBP 5 million share buyback.

Presentation

[Stephen Burns, CEO at Hollywood Bowl Group]

Thank you very much. A warm welcome to those of you in the room and to those dialing in to our 2026 half year results presentation. My name is Stephen Burns, Chief Executive, I'm joined by our shiny new CFO, Antony Smith, who I know most of you around the table have already met. I plan to take you through the key highlights of the half and our operational highlights in both the U.K. and Canada.

[Stephen Burns, CEO at Hollywood Bowl Group]

Antony will take you through the numbers and the financial outlook. We'll take any questions from the room first and then from those who have dialed in. The first half of our financial year has been a record performance for the group with revenues of GBP 141.5 million. That's up 9.5% on the same period last year and up 2.3% on a like for like constant currency basis.

[Stephen Burns, CEO at Hollywood Bowl Group]

Despite the increased cost burden, we converted that revenue growth to a record EBITDA of GBP 42.2 million on a pre-IFRS 16 basis and profit after tax of GBP 22.2 million. In line with our progressive dividend policy of paying 34% of the previous year's full-year dividend at the half year, we're proposing an interim dividend of GBP 0.0452 per share, funded from a net cash balance at the half of GBP 26 million. We're very pleased with the first half of this financial year and made excellent progress in our trading performance, cost control and strategic execution. First, on trading, we've enjoyed a strong performance in both territories. Demand for high quality family leisure experiences has stayed resilient. On top of that demand, we're using more sophisticated operational levers to support yield and revenue growth.

[Stephen Burns, CEO at Hollywood Bowl Group]

Second, on costs, we've kept things well controlled and maintained our disciplined track record of cost management. That has helped us protect margins. More importantly, our fabulous margin dynamics gives us an enviable insulation against inflationary and government or macroeconomic pressures. Energy is another major factor in that resilience. We've hedged 76% of the group's total energy needs through to the end of FY 2029, which provides meaningful visibility and stability over a key cost line. On strategic progress, we opened a new prime location in Edmonton, Alberta during the half. It's trading well. The estate now stands at 93 centers, 77 in the U.K. and 16 in Canada. We've got momentum into H2 with two new U.K. centers and one Canadian center left to open.

[Stephen Burns, CEO at Hollywood Bowl Group]

Beyond that near term pipeline, we're also accelerating the flow of new centers for FY 2027 and beyond, particularly in Canada, as I'll come on to talk about later in the presentation. Finally, capital allocation remains disciplined. We invested GBP 8.6 million of CapEx into expansion, refurbishments, and center enhancements while maintaining a robust balance sheet. We ended March 2026 with GBP 26 million of net cash and an undrawn GBP 25 million revolving credit facility, giving us significant flexibility to keep investing in growth, returning cash to shareholders while staying financially resilient. We plan to commence a GBP 5 million share buyback in the second half. H1 has shown strong demand, tight execution, and a balance sheet that supports continued momentum into H2 and beyond. I'll now hand over to Antony, who will take you through the numbers.

[Antony Smith, CFO at Hollywood Bowl Group]

Brilliant. Thank you, Steve. Morning, everyone, and it's nice to be here. I'll start by taking you through our revenue growth on slide six. As Steve's already mentioned, we've delivered record revenues of GBP 141.5 million. That's 9.5% up versus last year. In the U.K., sales grew by 9.4%, split roughly three to one new centers to like-for-like growth. The underlying like-for-like in U.K. was a very creditable 2.6% against what was a tough U.K. market backdrop, and that shows the resilience of our value for money proposition. This was delivered through 7.6% increase in spend per game, offsetting a 3.4% decline in our game volumes. We continue to optimize our yield management and pricing and to grow our add-on sales.

[Antony Smith, CFO at Hollywood Bowl Group]

New centers in the U.K. are performing really well. We're delighted with last year's openings in Inverness, Uxbridge, and Reading, which are the principal contributors to that GBP 7.5 million of revenue growth from new centers. Canadian revenue of 12.5% on a constant currency basis is almost entirely driven by our new centers. FY 2025 openings in Kanata and Creekside, as well as this year's Edmonton contribute GBP 3.2 million of additional revenue. Like-for-like in Canada is marginally positive at +0.5%.

[Antony Smith, CFO at Hollywood Bowl Group]

That does include suffering from some short-term closures in February during major snowstorms on the East Coast of North America. The non-core Striker business saw a revenue decline of GBP 0.6 million in the period. That was a conscious decision by us to focus our resources on intra-group installations of Pins on Strings and to help build our new centers.

[Antony Smith, CFO at Hollywood Bowl Group]

This creates long-term value for us as we get access to cheaper capital investment by doing so. There's a small non-cash currency conversion adjustment of GBP 0.6 million. Turning to slide seven, where we'll show how this revenue growth translates into strong profit progression. I'll start by saying I'm showing on this chart our profit progression on a PBT basis. That should be helpful as it deals with both EBITDA movements, but also shows where there are increases in depreciation and financing costs that affect the reported profit. You should note that group adjusted PBT refers to a pre IFRS 16 PBT. That helps exclude the non-cash profit compression resulting from our lease profile, as well as removing the impact of adjusting items that we don't consider part of the ordinary course of business.

[Antony Smith, CFO at Hollywood Bowl Group]

If you need further information on APMs and how they reconcile to reported numbers, there's a slide in the appendix that gives detail as well as in the RNS. I'll concentrate on the central section of this chart, showing 8.1% growth of adjusted PBT from GBP 29.7 million to GBP 32.1. Much of this growth is driven from the excellent U.K. performance, where underlying like-for-like centers grew by GBP 1.5 million and new centers contributed a further GBP 3.4. Canadian like-for-like centers saw a small decline in profits at CAD 0.6 as the 0.5% sales growth wasn't quite enough to offset inflationary pressures on input costs. Our new centers in Canada are performing well and contributed an additional CAD 1.3 million approximately in the period.

[Antony Smith, CFO at Hollywood Bowl Group]

Our recent capital investments in growth, notably new centers, have grown the depreciation of our fixed assets by GBP 0.9. Interest revenue has reduced by GBP 0.2 million as we deployed some of last year's surplus cash as buybacks in the second half of last year. Finally, you'll see a GBP 2 million increase in corporate costs. That includes a small GBP 0.1 million FX translation, which is non-cash. The corporate cost investment comprises three things, which are all investments in growing the business for the long term.

[Antony Smith, CFO at Hollywood Bowl Group]

Firstly, we've up-weighted marketing investment. Secondly, we've invested in our people capability to drive long-term growth and identify future opportunities, including investing ahead of the curve in our Canadian leadership team. Finally, we've accelerated our pipeline, meaning we've spent a little more on external advisors to secure the right assets for our business.

[Antony Smith, CFO at Hollywood Bowl Group]

Moving to slide eight, where I'll briefly take you through the balance of the P&L. I've already taken you through most of the drivers of the movements in profit, but there are a couple of things to draw your attention to. Firstly, you'll see I've made a slight change to the naming conventions. I'm now referring to group-adjusted EBITDA after rent. To be clear, this is exactly the same as EBITDA pre IFRS 16, but moves away from describing our core business with reference to an accounting standard that's been in place for six years. As I've already mentioned, PBT is also on a pre IFRS 16 basis. I've already described that 8.1% increase in PBT, which is a really strong drop-through from 9.5% revenue growth. I'll call out a couple of additional items on this slide.

[Antony Smith, CFO at Hollywood Bowl Group]

Gross profit, which I'm describing here on a reported basis, is growing a little more slowly than revenue at +7.8%. This is impacted by 18.5% increase in center labor, there's a 50/50 split of that. You have the labor increase you'd expect from the extra centers and volume, you have the inflationary pressures from National Living Wage and National Insurance increases. While these pressures are unwelcome, our labor ratio remains at just 20% of revenue. You can see from the overall P&L that even at this level of inflation, it's manageable and doesn't significantly impede the profit growth. Finally on this slide, below adjusted PBT, you can see two layers of adjusting items. The first is the profit compression of GBP 1.6 million, which is a function of our depreciation and interest on leases being higher than the rent payable.

[Antony Smith, CFO at Hollywood Bowl Group]

This is a non-cash profit compression, hence why we continue to discuss PBT on a pre IFRS 16 basis. The second are adjusting items which we consider to be outside the underlying business. GBP 3.3 million of adjusting items comprise a GBP 0.5 million accrual for the contingent acquisition of the Canadian business and a GBP 2.8 million impairment of one of our U.K. bowling centers, something I'll cover in a little more detail on the next page. Last year, adjusting items included a GBP 1.6 million income from a historic insurance claim related to COVID-19. The result of PBT reported for the year was GBP 27.2 million, GBP 1.1 million, and 3.9% behind last year. Turning to page nine, I'll give a bit more detail on that impairment.

[Antony Smith, CFO at Hollywood Bowl Group]

This slide shows our last 12 U.K. bowling center openings, CapEx expended, and the right of use lease asset added to the balance sheet. As you can see, on average, we've spent GBP 3.6 million per center and recognized a right of use lease asset of GBP 2.2 million. A total of GBP 5.8 million investment per center. On the whole, our return on investment for those centers has been excellent. ROI shown here is the annual EBITDA generated, divided by that original capital.

[Antony Smith, CFO at Hollywood Bowl Group]

Return on investment is an average of 26% across these 12 centers. Of course, as with any multi-site business, you do see a range. The lowest returning center on here still generates cash, but as you can see, the returns are single digit. An impairment test requires you to discount cash flows and compare against the carrying value of the asset, including the lease.

[Antony Smith, CFO at Hollywood Bowl Group]

With a pre-tax weighted average cost of capital of 13%, this particular center at single digit is therefore unable to support the carrying value on the balance sheet. As such, we've taken a GBP 2.8 million impairment, GBP 2 million of the capital spend and GBP 0.8 million of right of use asset. This is, of course, a non-cash item in the period reflecting historic asset values, and we remain confident in the quality of our new openings and the ability to generate returns. In this instance, for one center, we have got it slightly wrong, but in the other 12 and indeed the rest of the bowling estate, we've got it right. We remain confident in the investments.

[Antony Smith, CFO at Hollywood Bowl Group]

Moving on to cash flow on slide 10. I've aligned the slide left to right according to our really clear capital allocation policy. Starting with our group operating profit, we add back depreciation, amortization, and adjusting items, which includes the IFRS 16 profit compression of the difference between rent paid and the depreciation and lease interest on the right of use asset. A working capital cash outflow of GBP 4.5 million is a combination of cash outflow from payment of some of the deferred consideration on the Canadian acquisition and some timing differences. Rent costs from the property portfolio were GBP 12.1 million, replacing the depreciation and interest charges, we have GBP 4.6 million of maintenance capital in the period. These elements combine to give a GBP 30 million free cash inflow before investments in shareholder distribution.

[Antony Smith, CFO at Hollywood Bowl Group]

It's a very healthy 71% conversion from the GBP 42.2 million group-adjusted EBITDA. In this half, we've invested a relatively low GBP 3.9 million on completing Edmonton in Canada and commencing work on Cardiff in the U.K., as well as some smaller revenue-enhancing investments. We anticipate two to three times that spend in the second half, as we have two openings in the U.K., one more in Canada, and we commence build on our pipeline for the first half of FY 2027. Finally, in the period, we returned GBP 15.3 million to shareholders from the final dividend from FY 2025. We've announced a GBP 0.0452 interim dividend today, a cash outflow of GBP 7.5 million in H2. In addition to that, we've announced a GBP 5 million buyback program to be executed during the second half.

[Antony Smith, CFO at Hollywood Bowl Group]

Overall, trading in the first half generated a total cash inflow of GBP 10.7 million to leave a cash balance of GBP 26. Finally, turning to slide 11 on our outlook for this year and the midterm. While we don't give a formal forecast, we can give some guidance about how we see the landscape over the balance of year and beyond into FY 2027 and FY 2028. While the consumer market remains challenging, we know that we do have a really strong customer proposition.

[Antony Smith, CFO at Hollywood Bowl Group]

We have a long-term proven track record of like-for-like growth and expect to continue to do so through yield and capacity management, add-on sales, and modest inflation through our dynamic pricing. We see good like-for-like potential in Canada as we continue to improve that proposition. Our costs are well controlled and our business model provides resilience against inflation.

[Antony Smith, CFO at Hollywood Bowl Group]

Labor is a relatively low % of revenue, around 20%, and energy is well covered into the future. Corporate costs are slightly ahead of the growth curve, but these will get fractionalized by the continued growth in our centers. Overall, we don't expect inflationary pressure to significantly impact our overall profit margin. We have a good track record of converting sales growth to profit growth and expect self-help initiatives to offset market headwinds. Our capital allocation policy remains consistent. We ensure our assets are well maintained. We typically convert free cash flow at 65%-75% EBITDA, and the balance we invest in growth and return to shareholders to give an attractive yield. We have good visibility of our pipeline over the next 18 months, and we can see a modest acceleration in the long term, four centers per year stated targets.

[Antony Smith, CFO at Hollywood Bowl Group]

In the second half of this year, we anticipate our investment capital to be two to three times the first half and as of today announced we'll be launching the GBP 5 million buyback. Overall, we expect to deliver in line with expectations. I'll be happy to answer questions at the end of the presentation, but I'll hand you back to Steve now, who'll take you through the operational highlights of the year.

[Stephen Burns, CEO at Hollywood Bowl Group]

Thanks, Antony. We'll take a look at what's been driving the growth in both the U.K. and Canada. Turning to slide 13, we look at the key highlights from the U.K. performance in the period. Strong revenue momentum, compelling value proposition, disciplined cost control, and continued progress on growth and engagement. On U.K. revenue, we delivered GBP 118.4 million, which is 9.4% growth, 2.6% like-for-like growth. A big driver behind that performance is the value for money offer.

[Stephen Burns, CEO at Hollywood Bowl Group]

Around GBP 26 for a family of four. We're staying accessible, and we're also leaning harder into digital demand levers to keep customer flow strong to support yield. On investment and expansion, we're continuing to execute the prime location strategy. We've got two new U.K. centers due to open in H2, and we have a strong pipeline for FY 2027 with two further centers slated.

[Stephen Burns, CEO at Hollywood Bowl Group]

That could be three if the landlord enabling works go in our favor. Customer metrics are another standout in the half. We achieved record results on both our Net Promoter Score and blended service scores. A great value for money experience delivered consistently is the mantra for our operators. As with service, our people metrics are moving in the right direction, too. We've seen record engagement scores, low turnover, record internal promotions, plus external recognition with another The Sunday Times award as one of the best big companies to work for.

[Stephen Burns, CEO at Hollywood Bowl Group]

Overall, we've had resilient demand, disciplined execution, and have a platform to build on during the second half. Slide 14 lays out the main levers we're using to protect and grow revenue, even in a tougher volume environment. It's a mix of smarter pricing, more targeted demand creation, and better in-center execution.

[Stephen Burns, CEO at Hollywood Bowl Group]

At center level, the first lever is revenue optimization through price position, staying competitive where we need to but being deliberate about where we hold or increase price. We're using more targeted campaigns to bring the right customers in at the right times, rather than relying purely on broad-based promotions. We continue to refine our dynamic pricing framework to protect peak periods and avoid giving away margin when demand is already there, while still using price tactically to stimulate off-peak visits. We have some exciting new trials and technology to further enhance this key growth lever as we move into the summer months. On promotions, the focus is being more selective, using offers where they genuinely drive incremental visits or spend and avoiding activity that just dilutes yield.

[Stephen Burns, CEO at Hollywood Bowl Group]

We're also leaning into amusements, investments, and targeted upsells through the use of AI in our proprietary booking system to increase in-center spend and, when capacity allows, encourage more customers to add one more game, one more activity, or one more purchase once they're already on site. The game volume decline that we've experienced on a like-for-like basis over the last two years has been due to the normalization of trade post the bounce experienced in 2022 and the increased competitive environment.

[Stephen Burns, CEO at Hollywood Bowl Group]

That has arrested during the half. As ever, there is a delicate balance between volume and price, and the improvements in our digital capabilities are helping us remain the go-to family entertainment operator in the markets in which we trade. Disciplined cost control is a core organizational priority and continues to support margin resilience and our strong cash generation.

[Stephen Burns, CEO at Hollywood Bowl Group]

There has been persistent inflationary pressure, including labor costs, utilities, rates increases. I could go on. We've proactively managed these headwinds through detailed operational management, as well as benefiting from a business model that is structurally well-insulated against external cost volatility. 70% of Group's revenues are not subject to cost of goods inflation, providing us with some meaningful protection. Labor productivity continues to be managed at a granular center level basis, ensuring service standards are delivered while controlling payroll costs. With U.K. center payroll remaining below 20% of the U.K. revenue and Canada below 26%. Our energy costs are largely hedged, and we're expecting 16% of what we need from our onsite solar. Significantly reducing our exposure to market volatility and providing excellent forward visibility on a key cost line.

[Stephen Burns, CEO at Hollywood Bowl Group]

On slide 15, we look at the continued evolution of the estate and why the group remains strongly positioned despite an increasingly competitive backdrop. Experiential leisure continues to attract new entrants, but Hollywood Bowl is structurally advantaged given its leading brand, customer appeal, and continued investment in the customer proposition. When a new competitor opens in the markets in which we trade, we of course expect some impact on volumes and revenues. As we've seen in the last 18 examples where this has happened, trade performance normalizes and improves from the third year onward. That is because of the strength of the model, particularly our price accessibility, pace of innovation, and the quality of our estate. We have the best locations in these shared catchments.

[Stephen Burns, CEO at Hollywood Bowl Group]

Alongside that resilience, we continue to see attractive growth opportunities through the new center rollout, where returns continue to be encouraging, as you saw from the slide that Antony presented earlier. The U.K. pipeline is progressing well, and we remain disciplined, prioritizing prime locations and return quality over simply adding volume. In the near term, we have two additional centers planned alongside four further committed sites for FY 2027 and FY 2028 in the U.K. We remain on track to deliver on our 95 site target by 2035. Turning our attention to Canada on slide 17. We're really pleased with how things are going across the Atlantic, and Splitsville remains an exciting growth opportunity for the group. We have one more center to refurbish from the original acquisitions.

[Stephen Burns, CEO at Hollywood Bowl Group]

We're currently on site completing a major GBP 3.4 million refurbishment of Richmond Riverport that includes the removal of eight bowling lanes to accommodate a larger amusement offer and the installation of Pins on Strings. The new centers we've opened closely mirror the U.K. property strategy, so co-location with retail and leisure in high footfall locations, supported by a strong local demographic. We have one further site due to open in the second half in Canada.

[Stephen Burns, CEO at Hollywood Bowl Group]

The brand is now gaining traction with the large institutional landlords, and we're being offered some fabulous space now we've demonstrated the quality of our product. We'll open five sites now in FY 2027, an upgrade from the two previously communicated, and with a strong balance sheet and a bolstered senior leadership team with a new territory CEO, we've got ambition to keep this momentum.

[Stephen Burns, CEO at Hollywood Bowl Group]

On slide 18, we've been driving sustainable, profitable growth in Canada since 2022, when we acquired five sites that we grew to 12 through acquiring existing centers to build a presence and a platform in the key geographies that we wanted to trade. We've since been building on that platform, opening new greenfield centers that closely mirror the Hollywood Bowl format whilst ensuring they remain relevant for the Canadian market and Canadian consumer. In 2022, the Canadian business was 3% of revenues. In the half, Canada is now 16% of revenues.

[Stephen Burns, CEO at Hollywood Bowl Group]

With those numbers set to grow as we accelerate our new opening pipeline. Whilst there are still numerous potential acquisition opportunities, the returns that we're generating from the new centers are much more compelling. The four new greenfield sites are generating an average site level EBITDA 39% higher than the platform assets.

[Stephen Burns, CEO at Hollywood Bowl Group]

As you can see on the slide, the new sites are averaging CAD 1.8 million EBITDA and revenue of CAD 5.2 million, whilst the platform assets, post their refurbishments, are generating on average CAD 4.3 million of revenue and CAD 1.3 million of EBITDA. We invested ahead of the curve in Canada into a support center for long-term growth. We now expect only modest increases in corporate costs between now and FY 2028 to facilitate the accelerated growth. On slide 19, I've pulled out some of the country highlights.

[Stephen Burns, CEO at Hollywood Bowl Group]

In the half, we delivered 12.8% revenue growth, like for likes up 0.5%. These were impacted through a number of center closures in Toronto due to the severe winter storms. With a relatively small estate out there concentrated around the Greater Toronto Area, the loss of revenue had a big impact on the like for likes.

[Stephen Burns, CEO at Hollywood Bowl Group]

As a comparison, a listed peer posted negative 8% like for likes over the same period. The new centers you've seen from earlier in the deck are performing nicely ahead of expectation. The new center we opened in Edmonton, Alberta got off to a strong start, and our new site in Barrie, Ontario, that will open in the second half of the year, was starting to take shape when I visited it a couple of weeks ago. In summary, it's been another very successful period for the group.

[Stephen Burns, CEO at Hollywood Bowl Group]

We are the market leader in the experiential leisure sector, and with our value proposition, continue to generate strong demand from our customers. Due to our difficult to replicate operating model, we're well insulated from the cost pressures and inflation and have plenty of growth left to come and a balance sheet that supports that growth ambition.

Participants

Executives

• Antony Smith, CFO
• Stephen Burns, CEO