Hollywood Bwl Regulatory News (BOWL)

5 April 2017

Hollywood Bowl Group plc

("Hollywood Bowl" or the "Group")

Half Year Trading Update

Strong revenue growth with good progress in new centre programme

Hollywood Bowl, the UK's largest ten-pin bowling operator, is pleased to announce a trading update for the six months ended 31 March 2017.

The Group has traded well through the first half of the financial year with total revenue growth of +7.8% and like-for-like ("LFL") revenue growth of +1.2%; this is in spite of the Easter trading period falling in H2 for FY 2017 compared to H1 for FY 2016. Based on historic performance, this switch in the Easter trade has reduced LFL in H1 by c.2.0%pts.

This continued strong LFL performance has been driven by the ongoing successful execution of our organic growth strategy. We continue to invest in improving the customer experience through transformational centre refurbishments (a total of six are expected to be completed in FY 2017, one completed in H1) and our rebrand programme. Rebrands for four Bowlplex centres have now successfully completed and these centres, along with the other refurbishments, are continuing to trade ahead of our original expectations. A further three Bowlplex centres are due to rebrand to 'Hollywood Bowl' by the end of FY 2017 with the four remaining centres being completed by the end of FY 2018. 

The Group continues to benefit from strong cash generation, which combined with lower average net capital investment requirements for the secured pipeline (as detailed below), leaves the Group in a strong financial position. Assuming that cash generation remains in line with expectations for the remainder of the current financial year, the Board will consider the most appropriate use of the Group's financial position to enhance shareholder returns.

The Group continues to trade in line with the Board's expectations for the full year.

New centre programme

At IPO, Hollywood Bowl outlined its plans to open two prime location centres per annum against strict selection criteria, focussing on both new centres and existing centre acquisitions. This programme is progressing very well, with landlords making Hollywood Bowl their bowling operator of choice and a great addition to their retail and leisure assets as the Group provides them with an excellent anchor leisure tenant with a strong, profitable trading history and a continual investment approach in its centres. Based on its current pipeline, Hollywood Bowl will open 3 new prime location centres in FY 2017.

The Group has now signed 6 high quality new centres to provide the pipeline until 2020, with landlord contributions expected to bring down the average net capital investment requirement across these centres to approximately £1.7m. As well as the centres set out below, the Group is proactively looking for further opportunities to grow its footprint: 

· Southampton: opened in December 2016 as part of the Hammerson West Quay development. In the prime location in the city, competing directly with an existing branded tenpin bowling operator in the wider Southampton market, the centre has traded very well since opening and gives the Group confidence for other similar opportunities;

· Derby: will open on 8 April 2017 at the intu retail and leisure development;

· Dagenham: an acquisition of an existing centre in a prime location due to open and be rebranded towards the end of the current financial year, making a full contribution in FY 2018;

· Liverpool: relocation of the current Liverpool centre to a brand new site alongside a new cinema on a redeveloped leisure and retail park. Due to open in late FY 2018;

· Watford: forming part of the extension being added to the intu retail and leisure development. Due to open in FY 2019; and

· Lakeside: due to open in FY 2019. This centre is expected to be the largest bowling centre to open in the UK in the past 10 years, and will form a major part of the leisure extension being added to this successful intu shopping centre.

Stephen Burns, Chief Executive Officer of Hollywood Bowl said:

"This is another strong trading and operational performance from the Group which goes to underline the strength of our business model, the great teams in our centres and the success of our capital investment programme.  The Group had its most successful Christmas period ever, with LFL sales growth for the fifth consecutive year despite extremely tough comparators. Since our last announcement we have successfully opened Southampton, Derby will open this week and we have also signed 4 further sites which will open over the next two financial years.  We are on track at the half year and are focussed on delivering our goals and maximising the opportunities being created by our refurbishment programme and our strong new centre and acquisition pipeline."

The Group expects to report its interim results for the six months ended 31 March 2017 towards the end of May 2017.

Enquiries:

Notes to Editors:

Hollywood Bowl is the UK's largest ten-pin bowling operator, with a high quality portfolio of 55 profitable centres operating across the UK under the Hollywood Bowl, AMF and Bowlplex brands. The Group specialises in operating large, high quality bowling centres, predominantly located in out of town multi-use leisure parks (typically co-located with cinema and casual dining sites) and large retail parks. The centres are designed to offer a complete family entertainment experience with each centre offering bowling lanes, on-site dining, licensed bars, and state-of-the-art family games arcades.