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All good, nice to see Canada doing well. Cash pile growing.
Top of the post covid uptrend is c.£3.70 at Easter at end of this month, normally a busy family weekend. Just a little boost for household discretionary in the budget next week would be nice as well. Hopefully all reflected well in the HY 31/3 trading update due mid April could then push things on - I agree with £4 as a reasonable target with maybe a pause around that obvious psychological level?
Still have buy-backs to resume at some point once volatility settles down, to underpin recent advances. 10 days in row closing above pre covid high of 315 - I'm going to stop tracking that now!
a p/e of 20x would rate this at £4 based on fundamentals (from my *** packet analysis). i think that is a fair value (for now!). i can see this making a climb towards £4 helped by the addition to ftse 250.
in the long run, this is a billion-pound market cap imo.
Hold the phone! BOWL will be promoted to the 250 on Tuesday next week, 5th March. It fell just 4 places short of automatic qualification for the March rebalance on the 18th, however, LXI REIT have a merger approved and will therefore be removed from the 250 with BOWL as the highest placed in the small-cap index getting their place.
https://www.lse.co.uk/rns/LXI/londonmetric-property-2t3xxfrlla7m134.html
And it's going to happen 2 weeks earlier than if it was automatic qualification!
And that's now 9 days running closed above the previous high of 315.
And the buy-backs are still paused.
And still a pause in the buy-backs. Not sure what's going on there?
Still unofficial but looks like no strike with the extra ball, maybe just missed out at the end by three pins - I mean three places - in the table :/
Now 7 days running closed above previous high of 315 from Jan 2020, but going sideways again so needs direction. Same for a number of companies returning to their pre-covid level, maybe just pausing as some LT holders sell once back to break-even?
It's on!
Clean bowled to take out the 7-10 for the spare and at time of writing my estimate is that BOWL is in place for promotion to the FTSE250 when it is rebalanced on 18th March. Needs to hold place at close tonight for the extra ball to count :)
The SP has also closed above the previous all time high of 315 for the last 6 days running, so clear skies above.
Obviously just my own calcs and not official; FTSE Russell announce the actual changes after close tomorrow.
Further observations:
SP ticking up even without support from the BB this week;
Interesting volume of afterhours horse-trading being going on this week, with trade prices to three decimal which often indicates IIs are involved;
And here's the rub - it seems to have gone under the radar but there is now a half chance* that BOWL could be promoted to the FTSE250 next month. Just in line at close today I think, decision will be based on closing MCap on Tuesday and announced after close on Wednesday.
-----
* Let's call it 8 down with a clear chance at a spare in the 10th frame, extra ball wins the match on Tuesday ;o)
Still ticking up nicely here, and a nice dividend paid out today perhaps being re-invested will help.
Not entirely sure why the buybacks have stalled the last two weeks, perhaps the volatility has taken it outside a permitted daily/WAP range in the short term?
I just assumed its a result of the share buyback that has been in-progress for the last week or so.
Anyone know why we popped higher today in a down market...looks like the sort of move on leaked bid runour approach (hopefully)
BOWL was given a 2-page spread in this weeks edition of Investor's Chronicle (FT publication). Basically just talked about some basic facts of the company and how it is a great dividend player that also has actual growth potential.
Nothing major or new, but something that should bring on a few more retail investors
https://twitter.com/CharlieUK98/status/1756848985891881022
My daughter goes regularly, to play pool and I get an update on how busy the bowling is. If Crawley is anything to go by business is great, she goes mid week and reports it’s always buzzing.
Lloyds Bank data shows bowling spend topping the leader board in December at +106% (vs December 2022)
With credit to a poster from the other place...
https://www.lloydsbankinggroup.com/assets/pdfs/media/press-releases/2024-press-releases/lloyds-bank/2024.01.17-bowling-popular-in-december.pdf
PER is 13.2x based on Friday’s closing price of 283p - hardly demanding, still good value I’d say, even after a strong recent run upwards in share price.
Total divis (incl. a special) of 14.54p, that’s a 5.1% yield (incl special)
Share buyback of £10m announced.
Adjustments to profit boost it by £2.7m, but do look reasonable to me - relating to the Canada acquisition costs & adj to consideration, so I think it’s fine to strip those costs out to show the underlying trading.
Note that interest earned on cash is £1.4m vs negligible last year, a nice boost there.
Finance expense of £10.4m nearly all relates to leases under the rubbish IFRS 16 rules. I’m pleased to see that BOWL says it will keep reporting pre-IFRS 16 EBITDA, as that’s what investors (and banks) want.
Outlook - encouraging start to the new year, it says, but no detail provided.
Balance sheet - actually isn’t as strong as I was expecting, with a relatively modest £59m of NTAV, after I write off £89m of goodwill.
This is absolutely fine though, because BOWL hardly has any inventories or receivables, which means almost all the NTAV is net cash of £52.5m.
Property is nearly all leased, with large lease entries on the balance sheet, showing a deficit of £43m - which suggests it might have some under-performing sites? That is also possibly why there were some write-offs against fixed assets both this year and last? Something to ask management if you speak to them, or on a webinar, if they’re doing one?
Cashflow statement - is smashing, this is a reliable cash generative business. It generates a lot of cash, which not only funds hefty capex (c.£22m pa) plus acquisitions, and generous divis, all from internal cashflow - no borrowings required. It has a £25m unused bank facility.
Paul’s opinion - a really impressive business, no doubt about that. Its listed competitor TEG was recently bought out by a US investor, for around the same earnings multiple as BOWL currently sits on. So I wonder if it might also become a bid target?
It’s difficult to see much, if any downside risk with BOWL.
All I can think of is that gross margin is very high (since the bowling alley revenue has no direct cost of sales), which means profit is highly geared to a downturn in demand. Although given that BOWL seems to have ridden out the cost of living crisis with aplomb, there doesn’t seem any sign of that happening. I like that BOWL says it’s keeping prices competitive, with some food items not having increased since 2019. We could even see geared upside to profit from a consumer recovery in 2024, now that wages are rising faster than inflation, and the 2% NIC cut kicks in from Jan 2024.
All in all, this looks a very good business to me, at a reasonable price.
It's really surprising that the share price has almost gone nowhere in 5 years - given that the business and profits have roughly doubled over this period below.
Yep, good update from a super company. Dividend is pretty good comparably too.
Fantastic update with 10m buyback as well.
On first reading FY report looking good....Excellent performance with record revenues and profitable growth
'
Dividend EX 1st Feb ... Paid 23rd Feb 2024
Final ordinary 8.54 p with Special 2.73 p
Total for the year 2023 on par with 2022
'
Growth
Opportunity to add up to ten centres in Canada over the next five years, with the potential to grow the Group estate to 130+ centres across the UK and Canada by 2035
Oh man just read this. Why wasn't this a bid for Hollywood bowl! Hopefully we'll rise as ten entertainment pop tomorrow
Trive capital putting in an estimated £300m bid to takeover Ten Entertainment Group (TEG), BOWL's biggest UK competitor.
Interesting to see how this plays out for the sector.
https://news.sky.com/story/ten-entertainment-bowled-over-by-300m-us-takeover-bid-13023554
I anticipate sideways until Results published on 18th December.. hopefully, we can break this ceiling once and for all.
Interesting tip from Simply Wall Street, SimplyWallSt, for BOWL 21/10/23
Consensus EPS estimates increase by 11%
The consensus outlook for earnings per share (EPS) in fiscal year 2023 has improved.
2023 revenue forecast increased from UK£201.5m to UK£212.5m.
EPS estimate increased from UK£0.187 to UK£0.208 per share.
Net income forecast to grow 13% next year vs 16% growth forecast for Hospitality industry in the United Kingdom.
Consensus price target up from UK£3.51 to UK£3.62.
The Group expects to declare a final ordinary dividend of at least 7 pence per share as a result of its strong financial performance and strategic execution. A further update on the Group's capital allocation policy will be given in the Group's results announcement for the year ended 30 September 2023,
during December 2023.
Looks like possible higher distribution off profits could be on the cards ie dividend special or maybe buy backs see in December.
There are not any broker notes, But One source are these Extracts from Stockopedia 20/10/23... on rrading update:
Lots going on, with new sites, and refurbs, all self-funded from cashflow.
Net cash of £52.4m, plus undrawn £25 RCF.
Final divi of at least 7p. Stockopedia shows a forecast yield of 5.3%, very nice. Especially as the likelihood seems to be that future divis could continue increasing, as the business expands. Self-funding growth, and paying a 5.3% yield, impresses me a lot.
Assuming no change in forecasts, then Stockopedia has it on a forward PER of only 12.0x - that seems smashing value, for a high margin, self-funded growth company, with plenty of net cash, that is paying a >5% dividend yield.
I’ve said it before but what more could you ask from a company during a cost of living crisis?