Hollywood Bowl to strike lucky despite cost of living pressures
Hollywood Bowl is expected to present investors with strong profits amid a period of strong demand from Brits for leisure activities despite the cost of living crisis.
The operator of bowling alleys and mini golf will announce its full year results on Monday, not long after one of its closest rivals Ten Entertainment was taken over by a US private equity firm.
Earlier this month, Trive Capital Partners entered into an agreement to buy the London-listed operator – which operates out of 52 sites across the UK – for £287m.
At the time the news boosted Hollywood Bowl’s share price as it was considered to be a higher quality company than its peer.
Russ Mould, investment director at AJ Bell said: “Bowling has proved to be a resilient leisure activity during the cost-of-living crisis and the underappreciated value in the sector even prompted a private equity takeover offer for bowling operator Ten Entertainment earlier this month.”
The firm has enjoyed success over the past few months with total UK revenue being up 2.7 per cent at £192.6m, according to its latest trading update.
The bowling business has been steaming ahead with expansion and investment strategies include refurbishments, rebranding and technology instalments.
Three new centres have been opened in the UK this year bringing the total to 66, with a goal for 15 more by the end of 2026.
Mould added: “A recent trading update hinted that the forthcoming numbers could be good so a key focus for the market when results are published will be any strategic initiatives to support growth.
“Ten Entertainment falling into private equity hands effectively puts pressure on Hollywood Bowl to up its game, particularly if the former is going to be used as an acquisition vehicle to branch out into other leisure activities.”
The director said that any updates on its plans to expand into further markets would bode well with investors.
He added: “Hollywood Bowl has already planted flags beyond bowling with its expansion into mini golf via its Puttstars brand, as well as moving overseas with bowling in Canada. Any news on further growth initiatives could go down well with the market.”