Hollywood Bowl Group H2 Earnings Call Highlights

Hollywood Bowl Group (LON:BOWL) reported what management described as a “record year” in FY25, delivering higher revenue, EBITDA and statutory profit despite what executives said were challenging trading conditions for indoor leisure across much of the year.

Record revenue and profit as group expands estate

In prepared remarks, the company said FY25 group revenue rose 8.8% year-over-year to £250.7 million, supported by estate growth and like-for-like gains. On a constant currency basis, like-for-like revenue increased 1.3% for the group, with UK like-for-likes up 1.1%.

Pre-IFRS 16 EBITDA reached a record £68.4 million, which management said was in line with market expectations and slightly above FY24’s £67.7 million. Statutory profit after tax increased to £34.6 million from £29.9 million.

The group ended the year with net cash of £15.2 million, which management said came after substantial investment and shareholder returns totaling £71 million.

Like-for-like growth despite lower game volumes

Executives said FY25 began strongly, but that “the final three quarters of the year were challenging for indoor leisure.” The company pointed to declining game volumes, which were attributed to unseasonable UK weather patterns and muted consumer confidence. UK like-for-like game volumes declined 7.5%, while spend per game increased 9.2% to an average of £12.22 (with management later noting overall spend per game remained below £12.30).

Management said it mitigated volume pressure by driving higher spend per game and increasing off-peak volumes, emphasizing that it did so “without damaging price integrity.” The company also highlighted operational levers including dynamic pricing, marketing initiatives, and the full-year impact of amusement upgrades.

In the UK, revenue increased 6.4% overall, with management attributing performance to spend-per-game growth and contributions from new centers. The company noted one UK center closure early in the new financial year due to a landlord redevelopment in Bracknell, but said new openings improved estate quality.

Canada growth, refurbishments, and supplier partnership

In Canada, management reported like-for-like revenue growth of 3.2% in local currency, following two prior years of strong like-for-like growth. The company described FY25 as a “year of investment” in Canada, completing seven refurbishments and beginning a major partnership with UK amusement supplier Bandai Namco. Executives said trading was disrupted in the short term due to refurbishment work and the removal and installation of more than 500 amusement machines.

Despite those disruptions, management said new centers performed strongly and Splitsville bowling revenue rose 35.1% to CAD 61.1 million. The Striker business generated CAD 8.6 million of revenue, up 17.8%, with management citing a good order book for FY26.

Management also provided a longer-term update on Canada since the April 2022 acquisition of the Splitsville and Striker businesses, stating that over three years the estate has tripled in size, revenues quadrupled, and EBITDA increased from CAD 2.8 million to CAD 10.5 million.

Margins, costs, and IFRS 16 effects

Gross profit rose 9.2% to £208.8 million, with gross margin on cost of goods sold at 83.3%, up 30 basis points year-over-year. UK gross margin was 84.4%, up 40 basis points, which management attributed to cost controls and improved margins across the UK business.

Administrative expenses rose 15.2%. Management highlighted higher center employee costs driven by above-inflation wage increases (national minimum wage and national living wage), new centers, higher revenues, and the part-year impact of increased employer National Insurance contributions. Utility costs increased by £1.9 million, including £1.6 million in the UK as the company exited a prior hedge and began a new one in FY25; management said it does not expect material utility cost increases in FY26 or FY27 beyond standing charges, given hedges through the end of FY27.

The company also discussed the continuing accounting impact of IFRS 16, calling it a “non-cash impact” that can mask underlying trade, particularly following new openings and lease re-gears. Adjusting items totaled a £1.7 million charge in FY25 versus £7.5 million in FY24, including £2.3 million of impairments related to Putt & Play mini golf centers, plus items tied to an earn-out, aborted acquisition and legal costs, and a credit from a business interruption insurance claim.

Capital allocation, dividends, buybacks, and FY26 outlook

Hollywood Bowl said it self-funded £36 million of investment across systems, new centers, and refurbishments, and returned about £35 million to shareholders through dividends and share buybacks, including a £15 million buyback program completed in FY25.

The board proposed a final dividend of 9.18 pence per share, taking the full-year dividend to 13.28 pence, up 10.1% year-over-year. Management said it will make a small change to dividend policy, paying dividends based on an adjusted earnings number on a pre-IFRS 16 basis to better reflect cash generation. The company stated the ex-dividend date is 29 January 2026.

Capital expenditure in FY25 was £36.5 million, down from £52.7 million in FY24. Looking ahead, FY26 CapEx is expected to be £25 million to £30 million, reflecting broadly consistent maintenance spend, up to three planned refurbishments, and the development of two new centers in the UK and two in Canada. Management said both UK openings are expected in H2.

For FY26, management guided to total revenue of approximately £267 million to £275 million, with like-for-like and new center growth “in line with previous guidance.” The company also flagged several cost items for the year ahead, including the full-year impact of employer NIC changes, an expected business rates increase of up to 10% in H2 (about £500,000 per year), and higher depreciation on property, plant and equipment of £2.0 million to £2.5 million.

Management also outlined leadership changes: Antony Smith is set to join as CFO in February, replacing Laurence, who will lead the Canadian business as CEO. Darryl Lewis was promoted to Managing Director for the UK business.

About Hollywood Bowl Group (LON:BOWL)

Hollywood Bowl Group plc 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.