Half Year Results

Hollywood Bowl Group plc

("Hollywood Bowl", the "Company" or the "Group")

Interim Results

for the Six Months ended 31 March 2025

STRONG PERFORMANCE AND PROFITS IN LINE DRIVEN BY INVESTMENT IN GROWTH STRATEGY AND CONTINUED DEMAND FOR FAMILY-FRIENDLY, AFFORDABLE LEISURE

Financial summary

Key highlights

· Record revenues and EBITDA with growth in UK and Canada

o  Total Group like-for-like (LFL) revenue growth of 2.1%, negatively impacted by 0.9% due to movement of Easter and 0.2% due to the additional leap year trading day in 2024

o  UK LFL total revenue up 1.3%, with bowling centres LFL of 1.5%

o  Canada LFL total revenue up 13.6%, with bowling centres LFL of 3.7%, on a constant currency basis

o  Group adjusted EBITDA pre-IFRS 16 up 0.5% to £38.8m

o  Underlying group adjusted EBITDA pre-IFRS 16 grew by 8.8%, after taking account of prior year one off impacts totalling £3.0m2

o  Good returns from investments in new centres and refurbishments in the UK and Canada

o  Strong net cash position at 31 March 2025 of £22.7m; new undrawn £25m RCF signed with £5m accordion at improved margin

o  Successful completion of £10m share buyback - equivalent to two years of special dividends based on historical payouts

o  Interim dividend of 4.10 pence per share, up 3.0% vs H1 FY2024 (3.98 pence per share)

1 A reconciliation between adjusted and statutory is shown later in the report.

2 The Group's adjusted EBITDA pre-IFRS 16 rose by 0.5% to £38.8m. Compared to the first half of FY2024, the Group faced negative impacts from one-off items totalling £3.0m, including business rates rebates (£1.1m), closures at Surrey Quays and Liverpool Edge Lane (£0.9m), and the Easter/leap year effect (£1.0m). Adjusting for these, the rebased H1 FY2024 Group adjusted EBITDA pre-IFRS 16 would be £35.8m, resulting in 8.8% growth for H1 FY2025. This £3.0m negative impact is also seen in the comparatives for H1 FY2024 on Group profit before tax (£2.2m on profit after tax).

UK (75 centres at period end)

· Driving returns through investment in UK estate - on track to open a record five new centres in FY2025

o  Opened three new centres in Swindon, Preston and Inverness, all trading well and in line with expectations (at least 19% ROI)

o  Completed four refurbishments, all trading above UK target hurdle rate of 33% ROI

o  On track to open two new centres and complete one refurbishment in H2 FY2025

o  Pipeline continues to grow with five new locations signed

Canada (15 centres at period end)

· Since acquiring our Canadian business in May 2022, it has trebled in size from 5 to 15 centres, with revenue and EBITDA more than tripling over the same period.

· Growing our market-leading presence in Canada and receiving excellent customer feedback from refurbished and new centres

o  Two new "Hollywood Bowl style" centres opened in Kanata, Ottawa and Creekside, Calgary, both trading well and above expectations

o  Two refurbishments completed in Meridian, Calgary and Glamorgan, Calgary, performing well and receiving excellent feedback

o  On track to complete four refurbishments in H2 FY2025

o  Starting construction at Christy's Corner, Alberta in H2 FY2025, due to open in H1 FY2026

o  Pipeline continues to grow with three new locations signed

· Continued investment in customer experience in the UK and Canada driving higher spend per game (SPG) and record NPS

o  6.3% higher UK SPG with 11.6% increase in amusement SPG following investment in new game formats and space optimisations

o  5.4% higher Canada SPG with 10.7% increase in food and drink SPG reflecting improvements to menu and service

o  Pins on Strings roll out complete in the UK and underway in the Canadian estate, saving costs and enhancing the customer experience

o  New reservation system roll out completed across the Group, significantly improving customer and team experience

Outlook

· Cash generative business model and strong balance sheet supports investment in future growth

o  Strong pipeline for H2 and beyond, on track to achieve target of 130 centres by 2035

o  Resilient demand for value for money leisure experiences

o  Well-insulated from inflationary pressures with over 70% of revenue not subject to cost of goods inflation. Low labour-to-revenue ratio of under 20% in the UK; well-positioned to mitigate higher employment costs

o  The recent warm and dry weather - marking the driest spring in over a century - has had a short-term impact on trading over that period. In response, we have proactively managed margins and costs, maintaining strong operational performance, which remains at historically high levels.

o  Despite this temporary headwind, we remain confident in our outlook for the second half of the year. We are well-prepared for the key July and August holiday period and continue to expect full-year EBITDA to fall within the range of current analyst forecasts.

Stephen Burns, Chief Executive Officer, commented:

"We delivered another strong financial performance in the first half and made excellent progress with our growth strategy in the UK and Canada. Investment in new centres, our refurbishment programme and customer experience continue to deliver excellent returns and record customer satisfaction scores.

"The prolonged period of unprecedented dry and warm weather from March to May, has had a short-term impact on trading. However, we've responded quickly, managing margins and costs while maintaining strong operational performance, which remains as good as it's ever been. Looking ahead, we're well positioned for the key summer holiday period, and we remain confident that full-year EBITDA will be within the range of current analyst forecasts. The significant investments we have made in the estate over the last 12 months, put us on course to enhance future EBITDA returns."

"We remain focused on our growth strategy, supported by our strong balance sheet. We have an exciting, growing pipeline in the UK and Canada and we remain on track to reach 130 centres over the next ten years." 

CHIEF EXECUTIVE OFFICER'S REVIEW

Hollywood Bowl Group reported strong results in the first half of the year, driven by the successful execution of our customer-focused strategy and capital investment programme in both the UK and Canada. The Group delivered record first half revenue of £129.2m, an 8.4% increase, with like-for-like ("LFL") revenues up 2.1%. UK revenue was up 4.7% to £108.2m, with LFL revenue up 1.3%, and bowling centre LFL revenue up 1.5%. The Canadian business also performed well, showing 13.6% LFL revenue growth, with bowling centre LFL revenue growth of 3.7% on a constant currency basis. Total revenues in Canada were CAD 38m (£21.1m), growth of 40.8% on the prior period.

Group LFL revenues were negatively impacted 1.1% in the period under review by a combination of the movement of Easter (0.9%) and the extra leap year day in 2024 (0.2%), collectively worth £1.4m.

We remain focused on enhancing the customer experience and the overall quality of the estate, through new centre openings and acquisitions, both in the UK and in Canada, our programme of refurbishments and rebrands of the Canadian acquisitions, as well as continuous innovation and investments in technology.

The Group's adjusted EBITDA pre-IFRS 16 rose by 0.5% to £38.8m. Adjusting for one off items, totalling £3.0m in H1 FY2024, the rebased H1 FY2024 Group adjusted EBITDA pre-IFRS 16 would be £35.8m, resulting in 8.8% growth for H1 FY2025. These one-off items include business rates rebates (£1.1m), closures at Surrey Quays and Liverpool Edge Lane (£0.9m), and the Easter/leap year effect (£1.0m).

Statutory profit before tax for the year was £28.3m (H1 FY2024: £29.5m). The Group delivered profit after tax of £20.6m (H1 FY2024: £21.9m). Payment of the FY2024 final ordinary dividend in the first half of this financial year and the successful completion of a £10m share buyback, with 3,762,176 shares purchased and cancelled, offset by the strong cash generation of the Group, resulted in net cash of £22.7m at the end of the period. In line with our progressive dividend policy, the Board has declared an interim dividend of 34 per cent of FY2024 full ordinary dividend at 4.10 pence per share, representing 2.5 per cent growth on the comparable period last year, with a record date of 27th June 2025.

Notwithstanding the broader economic landscape and the associated challenges for consumers, we remain confident that by executing our proven strategy of providing an industry-leading leisure experience at a competitive price point, we will continue to generate favourable returns for our shareholders. This confidence is underpinned not only by our dedicated teams and continued focus on cost management, but also by the resilience and consistent long-term growth of the bowling industry, which has demonstrated its ability to perform through economic cycles.

Consistent growth strategy

Our growth strategy remains unchanged, and we are pleased with the progress we have made during the period. Our new centre opening programme is on track in both the UK and Canada, and we continue to grow like‐for‐like revenue through the improvement of the existing estate and our refurbishment programme which continues to deliver very attractive returns.

UK like-for-like growth

We saw a reduction of 4.5% in LFL game volumes versus H1 FY2024, due in the main to the movement of Easter and the leap year impact (1.1%) and the warm and dry weather in late February and all of March, as well as continuing competition from new competitive socialising offerings opening. Whilst we have seen game volumes down, our spend per game is up 6.3%, from £11.21 in H1 FY2024 to £11.87 in H1 FY2025 as customers continue to seek value for money. Our value for money strategy has remained unchanged, and we are still able to offer the lowest price and best value for money product of all the branded bowling operators, with a family of four able to bowl at peak time for less than £26. Our dynamic pricing technology has helped us offer even better value for customers at non-peak periods while driving incremental volume and carefully controlled yield enhancement, with bowling spend per game up 5.9% compared to H1 FY2024, to £5.46.

Refurbishment and space optimisation projects, along with the integration of contactless payment technology, improved prizes, and innovative game formats, contributed to a 11.6% LFL growth in amusement spend per game and a 6.4% increase in LFL amusement revenues. The amusement offering forms a crucial aspect of the overall customer experience. Generally, we have maintained the cost to play at £1 despite substantial enhancements in the gaming experience. However, we are leveraging new payment technologies to optimise yield on certain games where appropriate. New digital payment trials are also underway in several of our centres in both Canada and the UK with some encouraging early results.

Spend on drink grew on a per game LFL basis by 1.2 per cent, as we made further enhancements to the at-lane ordering systems, web upsells, and game and drink product ranges, helping to underpin the performance.

Food spend was also up in the year showing 1.1% LFL improvement in the half. Our focus on speed, quality, consistency, and value for money with our food offer has been well received by our customers. New menu items have been added in line with customer feedback and sales data, and although we have made some changes to price to mitigate the inflationary increases, our most popular product of burger and fries, is still less than £8 (an increase of less than 3.2% CAGR since 2019), and lower than other branded operators.

Expanding and enhancing our UK portfolio

New centres:

Three new centres were opened during the half, taking the total number of centres in the estate to 75, with Reading and Uxbridge scheduled to open during the second half of the financial year, delivering an annual record five new openings in the UK. All of the centres opened in the first half are trading in line with expectations and expected to achieve at least a 19% ROI.

Hollywood Bowl Swindon, at the popular Greenbridge leisure and retail park, opened on 23rd November 2024 for a gross capital spend of £3.5m. The centre is a key anchor complementing the leisure offering of the scheme, alongside a well-established cinema, a gym, and a good selection of lifestyle retail operators. The 22-lane centre occupying 25k square feet, has been very well received and is trading in line with expectations.

We opened Hollywood Bowl Preston on 8th March at the newly developed Animate scheme, close to the town centre. The 18-lane centre, set over 25k square feet is located next to a brand-new cinema, new parking provision and multiple restaurants.

Hollywood Bowl Inverness opened its doors on 29th March at the very popular Inverness Retail Park. The scheme, co-anchored by a leading cinema, has a good mix of retail and leisure in an excellent location within the city.

Our new centre pipeline is in excellent shape, with five signed and more in heads of terms and legals stages. We remain confident in our ability to continue to deliver on our plan of an average of a minimum of two new UK openings a year.

Refurbishments and estate investments:

Our UK refurbishment programme remained on track during the period, with four refurbishments completed in Birmingham Resorts World, Birmingham Bentley Bridge, Yeovil and Tolworth, and a space optimisation project in Putt and Play in Harrow. The refurbishment of our Bentley Bridge centre included extending the amusement area and adding an interactive darts experience to complement the existing offer. All refurbished centres are trading in line with our expectations and above our target UK hurdle rate of 33 per cent return on investment.

One other project, the full redevelopment of our Hollywood Bowl at Edge Lane in Liverpool, completed in the early part of the second half of this financial year. This includes a reduction in overall square footage of 20 per cent, a rent reduction of 25 per cent and a space efficient centre that now reflects all the best features of our recent refurbishments and new centres.

Continued strong growth in Canada

I am delighted with the progress we have made against our strategy in Canada. Over the three years since our entry into our first international market, we have trebled the size of the estate, alongside a more than tripling of revenues and EBITDA. The Canadian business now accounts for 16.3 per cent of Group revenues and 11.6 per cent of Group adjusted EBITDA pre-IFRS 16.

In the first half, the Canadian business contributed CAD 38m (£21.1m) in revenue and CAD 8.2m (£4.5m) of EBITDA on a pre-IFRS 16 basis. Total revenue growth in Canada was 40.8 per cent. Our strategic objectives for FY2025 are to focus on four key areas: enhancing our current estate, establishing new centres, building a pipeline for new centre and strategic acquisitions, and supporting the broader Canadian bowling market with Striker's products and services.

We opened two new Splitsville centres in the first half. Kanata, in the capital Ottawa, opened on 28th February 2025. The new centre, which is the only ten pin bowling centre in the city, is located on the very popular Kanata Entertainment Centrum mixed leisure and retail park. Kanata is the first new opening to mirror a 'Hollywood Bowl' style centre in both size, offer and location. The 18-lane centre sells games of bowling rather than time, allows customers to bowl in their own shoes and boasts a fabulous amusement offer provided by our UK partner Namco. The gross capital spend of CAD 5.1m is expected to deliver a 19 per cent return and is currently trading ahead of expectations. Creekside, in Calgary, Alberta opened on 27th March 2025. The 18-lane centre is located on a mixed retail and leisure park to the north of the city with a catchment of residential areas not covered by the three other centres we operate in Calgary. Also following the Hollywood Bowl model, the centre has made a very encouraging start and has been well received in the local market.

We continue to build our market-leading presence across Canada. We will be on site with construction of Christy's Corner, Edmonton, Alberta in the second half, with it due to open the first half of FY2026.

Our refurbishment programme has seen solid progress with two refurbishments and re-brands completed in the half at our centres in Meridian Calgary and Glamorgan Calgary, which are trading in line with our expectations. Four more refurbishments will be completed in the second half of the financial year as we upgrade the remaining Splitsville centres and fully rebrand the centres acquired in 2022 and 2023. By the end of the financial year all but two of our 15 centres will be in new or refurbished format.

We remain excited about the growth opportunities in Canada. The learnings from the three new centres we have opened, and the performance of the refurbished acquisitions, have helped inform our Canadian roll out strategy, and we are confident of adding an average of two new centres a year over the next 10 years, taking the estate to 35 centres. We have made significant investments in our new centres and refurbishments which will deliver increased EBITDA over the next 12 months and beyond. The learnings from our multi-activity centre 'Stoked' have also been very informative and offer us a compelling proposition for deployment in larger units in high quality locations.

The Striker business continues to play an important role supporting the bowling industry in Canada. In addition to providing the Splitsville centres with the equipment for new builds, refurbishments, and conversions to Pins on String technology, at cost, the external order book is strong for FY2025, with multiple installation and maintenance projects across the country. Revenues in H1 grew from CAD 2.5m, to CAD 5.2m, an increase of 112.3% on a LFL basis.

Group operational excellence

We have made some excellent progress in the half with the expansion of some Group functions which now support both the UK and Canadian operations, to ensure that we are maximising best practice and efficiencies in the areas of marketing, technology, finance, people, and property.

Our new customer booking system has been rolled out across both territories, and we are seeing gains in online conversion and cross-sale rates. We are excited about the roadmap of new functionality that will be tested and introduced in the coming months.

Our progress of delivering against our ESG strategy and targets continued in the first half. Waste recycling percentages improved, and we now have solar panels in 33 UK centres. Our People team has made further progress with our industry-leading training and development programmes in both the UK and Canada, and we were delighted to improve our team members engagement scores in both territories, being awarded a "best place to work" by The Sunday Times. Importantly, we also continue to play an important role in our local communities, again increasing the number of concessionary access and school games played and growing our fundraising support for charity partner Macmillan.

Outlook

We remain focused on the Group's future growth through investment in the size and quality of our estate in the UK and Canada, and in enhancing our market-leading customer experience, and are on course to deliver our key strategic goals for the year.

Whilst it has been challenging to mitigate the inflationary costs in first half, we are pleased to have achieved this. We continue to be well placed to mitigate future inflationary head winds in both territories, with 70 per cent of revenues not subject to cost of goods inflation, hedged energy costs until the end of FY2027 and UK centre payroll at less than 20 per cent.

​The recent warm and dry weather – marking the driest spring in over a century – has had a short-term impact on trading over that period. In response, we have proactively managed margins and costs, maintaining strong operational performance, which remains at historically high levels.

We remain confident in our outlook for the second half of the year. We are well-prepared for the key July and August holiday period and continue to expect full-year EBITDA to fall within the range of current analyst forecasts. The significant investments we have made in the estate over the last 12 months, put us on course to enhance future EBITDA returns. 

The Group remains well placed for the future, given our strong cash generation and balance sheet, which supports our growth strategy, our accessible, value for money offer, and bowling retaining its unique appeal to a wide demographic within a growing competitive socialising market.

Stephen Burns

Chief Executive Officer

29 May 2025

CHIEF FINANCIAL OFFICER'S REVIEW

Group financial results

1 A reconciliation between adjusted and statutory is shown later in the report.

2 The Group's adjusted EBITDA pre-IFRS 16 rose by 0.5% to £38.8m. Compared to the first half of FY2024, the Group faced negative impacts from one-off items totalling £3.0m, including business rates rebates (£1.1m), closures at Surrey Quays and Liverpool Edge Lane (£0.9m), and the Easter/leap year effect (£1.0m). Adjusting for these, the rebased H1 FY2024 Group adjusted EBITDA pre-IFRS 16 would be £35.8m, resulting in 8.8% growth for H1 FY2025. This £3.0m negative impact is also seen in the comparatives for H1 FY2024 on Group profit before tax (£2.2m on profit after tax).

Following the introduction of the lease accounting standard IFRS 16, the Group continues to maintain the reporting of Group adjusted EBITDA on a pre-IFRS 16 basis, as well as on an IFRS 16 basis. This is because the pre-IFRS 16 measure is consistent with the basis used for business decisions, a measure that investors use to consider the underlying business performance as well as being a measure contained within the group's available loan facility. For the purposes of this review, the commentary will clearly state when it is referring to figures on an IFRS 16 or pre-IFRS 16 basis.

New centres in the UK and Canada are included in LFL revenue after they complete the calendar anniversary of their opening date. Closed centres are excluded for the full financial year in which they were closed.

Further details on the alternative performance measures used are at the end of this report.

Revenue

We had a strong start to the financial year, including a record revenue month in December. We grew in both the UK and Canada, achieving record revenues in the first half of FY2025, despite Easter falling into the second half. Total Group revenue for the first half was £129.2m, 8.4 per cent growth on FY2024.

UK centre LFL revenue growth was 1.3 per cent with spend per game growth of 6.3 per cent, taking LFL average spend per game to £11.87, and a 4.5 per cent reduction in LFL game volumes. As noted above, LFL revenues were negatively impacted by Easter moving to the second half, which was worth 0.9 per cent on LFL revenue, as well as the negative impact of the extra trading day in FY2024 due to the leap year, worth 0.2 per cent on LFL revenue. The weather impact in late February and all of March, as well as the continuing competition from new competitive socialising offerings opening in certain locations, were also factors in the game volume reduction versus H1 FY2024.

The LFL revenues, alongside the performance of the new UK centres, resulted in record UK revenues of £108.2m and growth of 4.7 per cent compared H1 FY2024. This total revenue growth has been impacted by the September 2024 closure of the Hollywood Bowl centre in Surrey Quays (H1 FY2024 revenue: £1.7m) as part of an overall landlord redevelopment and the requirement to close our Hollywood Bowl at Edge Lane Liverpool during its refurbishment (H1 FY2024 revenue: £0.5m).

Canadian LFL revenue growth, when reviewing in Canadian Dollars (CAD) to allow for the disaggregation of the foreign currency effect (constant currency), was 13.6 per cent. Alongside this continued LFL revenue growth and new centre openings, Striker saw revenue growth of 112.3 per cent, resulting in total Canada revenues of CAD 38.0m (£21.1m). Splitsville bowling centre revenue was up CAD 8.2m (33.4 per cent) to CAD 32.7m.

Gross profit on cost of goods sold

Gross profit on cost of goods sold is calculated as revenue less directly attributable cost of goods sold and does not include any payroll costs. Gross profit on cost of goods sold was £107.3m, 8.0 per cent growth on H1 FY2024 with gross profit margin on cost of goods sold at 83.0 per cent in H1 FY2025, a reduction of 40bps, due to revenue mix, on the corresponding period in FY2024.

Gross profit on cost of goods sold for the UK business was £91.1m with a margin of 84.2 per cent, up 30 bps on H1 FY2024.

Gross profit on cost of goods sold for the Canadian business was in line with expectations at CAD 29.2m (£16.2m), with a margin of 76.8 per cent (H1 FY2024: 80.0 per cent). Splitsville had a gross profit margin on cost of goods sold of 83.3 per cent, down 140bps compared to the prior year, due to the higher revenue growth reported in amusements, food and drink revenue through non-LFL acquisitions and new centres.

Administrative expenses

Following the adoption of IFRS 16 in FY2020, administrative expenses exclude property rents (turnover rents are not excluded) and includes the depreciation of property right-of-use assets.

Total administrative expenses, including all payroll costs, were £74.0m. On a pre-IFRS 16 basis, administrative expenses were £78.9m (H1 FY2024: £69.2m).

Employee costs in centres were £24.9m, an increase of £2.6m when compared to the same period in the prior year, due to a combination of the impact of the national minimum and living wage increases seen, the impact of higher LFL revenues, new UK centres, as well as the continued growth in Canada.

Total centre employee costs in Canada were CAD 8.2m (£4.9m), an increase of CAD 2.3m, whilst UK centre employee costs were £19.9m, an increase of £1.4m.

Total property-related costs, accounted for under pre-IFRS 16, were £24.6m, with £21.4m for the UK business (H1 FY2024: £18.7m). Rent costs in the UK increased to £9.9m (H1 FY2024: £9.2m). Business rates costs were £3.7m in the first half, an increase of £0.7m compared to H1 FY2024, which was in line with expectations given the change in the uniform business rate effective for the rating year and lower business rates refunds (£0.7m less in refunds this year).

Canadian property centre costs were CAD 5.8m (£3.2m), an increase of CAD 2.6m due to the increased size of the estate when compared to H1 FY2024.

Utility costs increased by £0.9m compared to the same period in FY2024, with UK centres accounting for £0.7m of this increase due to the new hedged rate announced during FY2024, with the balance in relation to the increased number of centres in Canada.

Total property costs, under IFRS 16, were £26.0m, including £6.3m accounted for as property lease assets depreciation and £6.3m in implied interest relating to the lease liability.

Total corporate costs increased marginally to £12.7m. UK corporate costs reduced by £0.2m to £10.4m. As we continue to build out our support team in Canada for growth, corporate costs increased to CAD 4.2m (£2.3m) from CAD 2.9m (£1.7m).

The statutory depreciation and amortisation charge for H1 FY2025 was £15.5m (H1 FY2024: £12.7m). This increase is in part due to the continued capital investment programme, including new centres and refurbishments, with £0.6m due to the increase in IFRS 16 depreciation.

Canadian performance

The Group has continued to grow its footprint in Canada, with 15 centres at the end of the period. During the first half of FY2025, two greenfield centres were opened - one in Kanata, Ottawa and the other in Creekside, Calgary. These centres represent the first centres that are co-located with retail, hospitality and leisure which is an important element in our new centre trials for future growth.

It was widely reported that Canada saw an abnormal amount of snow during certain parts of the first half, including over "Family Weekend" holiday which negatively impacted LFL by 2.7%, with Toronto experiencing more snow in just 30 days than it did in all of 2024. Despite this, the Canadian business continues to trade well, with total revenues in Canada of CAD 38.0m (£21.1m), and just over CAD 8.2m (£4.5m) of EBITDA on a pre-IFRS 16 basis. Bowling centres contributed CAD 32.7m of revenues with EBITDA on a pre-IFRS 16 basis of CAD 11.2m, an increase of CAD 0.9m on the same period in FY2024.

Exceptional items

Exceptional items in the first half FY2025 totalled £0.4m as a net credit and relate to three areas. The first, £1.6m income, is in relation to a business interruption insurance claim received in the period. The second, £0.1m, is administration costs related to the closure of Hollywood Bowl Surrey Quays. The final element is the earn out consideration for Teaquinn President Pat Haggerty, which is an exceptional cost of £1.2m, of which £0.9m is in administrative expenses and £0.3m is in interest expenses. See the table below for the exceptional items included in the Group adjusted EBITDA and operating profit reconciliation. More detail on these exceptional costs is shown in note 4 to the Financial Statements.

Group adjusted EBITDA and operating profit

Group adjusted EBITDA pre-IFRS 16 increased 0.5 per cent, to £38.8m. When comparing to the first half of FY2024 the Group is negatively impacted from one offs, to the value of £3.0m, including business rates rebates (£1.1m), Surrey Quays and Liverpool Edge Lane closures (£0.9m) and the Easter / leap year impact of £1.0m. The rebased H1 FY2024 Group adjusted EBITDA pre-IFRS 16 would be £35.8m, resulting in growth of 8.8 per cent for H1 FY2025. This growth is due to a combination of LFL revenue performance in both the UK and Canada, netted off in part by expected increases in costs and new centre EBITDA.

The reconciliation between statutory operating profit and Group adjusted EBITDA on both a pre-IFRS 16 and under-IFRS 16 basis is shown in the table below.

Segmentation

1 IFRS 16 adoption has an impact on EBITDA, with the removal of rent from the calculation. For Group adjusted EBITDA pre-IFRS 16, it is deducted for comparative purposes and is used by investors as a key measure of the business. The IFRS 16 adjustment is in relation to all rents that are considered to be non-variable and of a nature to be captured by the standard.

Financing

Finance costs (net of finance income) increased to £6.6m (H1 FY2024: £4.8m) comprising mainly of implied interest relating to the lease liability under IFRS 16 of £6.6m (H1 FY2024: £5.4m).

During the second half of FY25, the Group agreed a new three-year, £25m RCF and £5m accordion, with its current provider, Barclays PLC, effective 8 May 2025.

The terms of the new RCF remain largely the same as the current, except for the margin rate which reduced to 1.30 per cent (from 1.65 per cent) above SONIA.

The RCF remains fully undrawn.

Cash flow and liquidity

The liquidity position of the Group remains strong, with a net cash position of £22.7m as at 31 March 2025. Detail on the cash movement in the year is shown in the table below.

During the first half of FY2025 the Group completed £6.3m of an announced £10m share buyback programme. The balance of the buyback was completed in early April 2025. The Group holds no ordinary shares in treasury and therefore the total voting rights in Hollywood Bowl, post the completion of the share buyback, is 168,852,799.

Based on the Group's historic special dividend rates, this buyback represents the equivalent of two-years' worth of special dividends, and in our view was a more efficient method of distributing cash to shareholders.

Capital expenditure

During the first half, the Group invested net capex of £20.0m, including £10.1m in relation to the five new centres that opened during the period.

A total of £4.1m was invested into the refurbishment programme, with four UK centres refurbished as well as the completion of two refurbishments in Canada.

Despite this investment and the associated depreciation, clearly not all of the benefit is evident at this stage in the Group profits due to the growth and expected maturity curve of this capital spend, with UK refurbishments targeting a 33% ROI, Canadian refurbishments a 22% ROI, and all new centres a 19% ROI.

The Group's strong liquidity ensures it can continue to invest in profitable growth and will open a further two new centres in the UK in FY2025 - Uxbridge and Reading - as well as complete the full refurbishment of its centres in Liverpool Edge Lane plus an additional four in Canada. The new centre pipeline for FY2026 and onwards continues to grow in both the UK and Canada.

The Group spent £5.8m on maintenance capital, including £1.0m on Pins on Strings installations and £0.3m on solar panels.

We expect total capital expenditure for FY2025 to be in the region of £40m to £45m.

​

Cash flow and net debt

1 Adjusted operating cash flow is calculated as Group adjusted EBITDA less working capital, maintenance capital expenditure, taxation and payment of the capital element of leases. This represents a good measure for the cash generated by the business after considering all necessary maintenance capital expenditure to ensure the routine running of the business. This excludes exceptional items, net interest paid, debt drawdowns and any debt repayments.

2  Expansionary capital expenditure includes refurbishment and new centre capital expenditure.

3  Free cash flow is defined as net cash flow pre-exceptional items, cost of acquisitions, debt facility repayment, debt drawdowns, dividends, and share buybacks.

Taxation

The Group's tax charge for the half was £7.7m (effective tax rate of 27.2%) arising on the profit before tax generated in the period.

Earnings

Group adjusted profit before tax is £28.0m, whilst Group adjusted profit after tax is £20.6m and basic adjusted earnings per share of 12.01 pence per share (H1 FY2024: 13.60 pence per share).

Statutory profit before tax for the year was £28.3m (H1 FY2024: £29.5m). The Group delivered profit after tax of £20.6m (H1 FY2024: £21.9m) and basic earnings per share was 12.00 pence (H1 FY2024: 12.78 pence).

For more detail on adjusted see note 4 to the Financial Statements and the summary at the end of this report.

Dividend and capital allocation policy

Whilst the Group will continue to pay its full year ordinary dividend based on 55% of adjusted profit after tax, as an update to our policy and to provide investors with a clear view on interim dividends, the Group will declare interim dividends equivalent to 34% of the prior year's full ordinary dividend.

Therefore, in line with the Group's capital allocation policy and the above rule, the Board has declared an interim dividend of 4.10 pence per share.

The ex-dividend date is 26 June 2025, with a record date of 27 June 2025 and a payment date of 25 July 2025.

Going concern

As detailed in note 2 to the Financial Statements, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future, a period of at least 12 months from the date of this report.

Laurence Keen

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Chief Financial Officer

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29 May 2025

Note on alternative performance measures (APMs)

The Group uses APMs alongside statutory measures throughout the interim report ("Report"). The APMs are not intended to replace statutory financial measures but are provided for the following reasons:

A to provide users of the Report with a clear view of what the Company consider to be its underlying operations, enabling a consistent comparison over time as well as across the industry and sector

B to provide additional information to users the Report about the key performance indicators used in the business

C to show reconciliations used by the Remuneration Committee in determining incentive payments

Condensed Consolidated Income Statement and Statement of Comprehensive Income

For the six months ended 31 March 2025

Group adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) reflects the underlying trade of the overall business. It is calculated as operating profit plus depreciation, amortisation, impairment losses, loss on disposal of property, plant and equipment, right-of-use assets and software and exceptional items.

Management use Group adjusted EBITDA as a key performance measure of the business and it is considered by management to be a measure investors look at to reflect the underlying business.

 Condensed Consolidated Statement of Financial Position

As at 31 March 2025

Condensed Consolidated Statement of Cash Flows

For the six months ended 31 March 2025

Notes to the condensed consolidated interim financial statements

1. General information

The Directors of Hollywood Bowl Group plc (together with its subsidiaries, the "Group" or "HWB Group") present their interim report and the unaudited financial statements for the six months ended 31 March 2025 ('Interim Financial Statements').

HWB Group is incorporated and domiciled in England and Wales, under company registration number 10229630. The registered office of the company is Focus 31, West Wing, Cleveland Road, Hemel Hempstead, HP2 7BW, United Kingdom.

The Group's principal activities are that of the operation of ten-pin bowling and mini-golf centres, and a supplier and installer of bowling equipment as well as the development of new centres and other associated activities.

The interim Financial Statements were approved by the Board of Directors on 29 May 2025.

The Group's last annual audited financial statements for the year ended 30 September 2024 have been prepared in accordance with UK-adopted International Accounting Standards ('IFRS Accounting standards') and the requirements of the Companies Act 2006, and these Interim Financial statements should be read in conjunction with them.

The comparative figures for the year ended 30 September 2024 are an abridged version of the Group's last annual financial statements and, together with other financial information contained in these interim results, do not constitute statutory financial statements of the Group as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 30 September 2024 have been delivered to the Registrar of Companies. The external auditor has reported on those accounts: their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

2. Basis of preparation

The Interim Financial Statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting' and the Disclosures and Transparency Rules of the United Kingdom's Financial Conduct Authority. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements.

The functional currencies of entities in the Group are Pounds Sterling and Canadian Dollars. The Interim Financial Statements are presented in Pounds Sterling, rounded to the nearest thousand pounds, except where otherwise indicated; and under the historical cost convention, except for fair value items on acquisition.

The accounting policies adopted in the preparation of the Interim Financial Statements are consistent with those applied in the presentation of the Group's consolidated financial statements for the year ended 30 September 2024. At the date of authorisation of this financial information, certain new standards, amendments and interpretations to existing standards applicable to the Group have been published but are not yet effective and have not been adopted early by the Group. The impact of these standards is not expected to be material.

Basis of consolidation

The consolidated financial information incorporates the Financial Statements of the Company and all of its subsidiary undertakings. The Financial Statements of all Group companies are adjusted, where necessary, to ensure the use of consistent accounting policies. Acquisitions are accounted for under the acquisition method from the date control passes to the Group. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill, or a gain on bargain purchase if the fair values of the identifiable net assets are greater than the cost of acquisition. Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in preparing the consolidated financial statements.

Going concern

The financial position of the Group, its cash flows, performance and position are described in the financial review section. Details of the Group's available and drawn facilities are included in note 13. At 31 March 2025, the Group had a cash balance of £22.7m with an undrawn RCF of £25m with Barclays Bank plc, and no outstanding loan balances, giving an overall liquidity of £47.7m.

In their consideration of going concern, the Directors have reviewed the Group's future cash forecasts and profit projections using a base case and a severe but plausible downside scenario. The Directors are of the opinion that the Group's forecasts and projections show that the Group is able to operate within its current facilities and comfortably comply with the covenants outlined in its RCF.

Taking the above, and the principal risks faced by the Group as outlined in note 15 to these interim financial statements, into consideration, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future, a period of at least twelve months from the date of this report. Accordingly, the Group continues to adopt the going concern basis in preparing these interim financial statements.

Exceptional items and other adjustments

Exceptional items and other adjustments are those that in management's judgement need to be disclosed by virtue of their size, nature and incidence, in order to draw the attention of the reader and to show the underlying business performance of the Group more accurately. Such items are included within the income statement caption to which they relate and are separately disclosed on the face of the condensed consolidated income statement and in the notes to these interim Financial Statements.

Summary of other estimates and judgements

The preparation of the Group financial statements requires management to make judgements, estimates and assumptions in applying the Group's accounting policies to determine the reported amounts of assets, liabilities, income and expenditure. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis, with revisions applied prospectively.

Judgements made by the Directors in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next financial year are set out below.

Key sources of estimation uncertainty

There are no estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year. Set out below are certain areas of estimation uncertainty in the financial statements. There are also no key judgements other than those related to an area of estimation uncertainty:

· Property, plant and equipment and right-of-use asset impairment reviews

Property, plant and equipment and right-of-use assets are assessed for impairment when there is an indication that the assets might be impaired by comparing the carrying value of the assets with their recoverable amounts. The recoverable amount of an asset or a CGU is typically determined based on value-in-use calculations prepared on the basis of management's assumptions and estimates.

The key assumptions in the value-in-use calculations include growth rates of revenue and costs during the five year forecast period, discount rates and the long term growth rate. The carrying value of property, plant and equipment and right-of-use assets have been assessed to reasonable possible changes in key assumptions and these would not lead to a material impairment.

Further information in respect of the Group's property, plant and equipment and right-of-use assets is included in notes 9 and 10 respectively.

· Contingent consideration

Non-current other payables includes contingent consideration in respect of the acquisition of Teaquinn Holdings Inc. in FY2022. The additional consideration to be paid is contingent on the future financial performance of Teaquinn Holdings Inc. in FY2025 or FY2026. This is based on a multiple of 9.2x Teaquinn's EBITDA pre-IFRS 16 in the financial period of settlement and is capped at CAD 17m. The contingent consideration has been accounted for as post-acquisition employee remuneration and recognised over the duration of the employment contract to FY2026. The key assumptions include a range of possible outcomes for the value of the contingent consideration based on Teaquinn's forecasted EBITDA pre-IFRS 16 and the year of payment.

· Dilapidation provision

A provision is made for future expected dilapidation costs on the opening of leasehold properties not covered by the Landlord and Tenant Act 1985 (LTA) and is expected to be utilised on lease expiry. This also includes properties covered by the LTA where we may not extend the lease, after consideration of the long-term trading and viability of the centre. Properties covered by the LTA provide security of tenure and we intend to occupy these premises indefinitely until the landlord serves notice that the centre is to be redeveloped. As such, no charge for dilapidations can be imposed and no dilapidation provision is considered necessary as the outflow of economic benefit is not considered to be probable.

Adjusted measures

The Group uses a number of non-Generally Accepted Accounting Principles (non-GAAP) financial measures in addition to those reported in accordance with IFRS. The Directors believe that these non-GAAP measures, listed below, are important when assessing the underlying financial and operating performance of the Group by investors and shareholders. These non-GAAP measures comprise of like-for-like revenue growth, adjusted profit after tax, adjusted earnings per share, net cash, Group adjusted operating cash flow, revenue generating capex, total average spend per game, free cash flow, gross profit on costs of goods sold, Group adjusted EBITDA and Group adjusted EBITDA margin.

Further explanation on alternative performance measures is provided in the Chief Financial Officer's review.

3. Segmental reporting

Management consider that the Group consists of two operating segments, as it operates within the UK and Canada. No single customer provides more than ten per cent of the Group's revenue. Within these two operating segments there are multiple revenue streams which consist of the following:

1 Group adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is calculated as operating profit plus depreciation, amortisation, impairment losses, loss on disposal of property, plant and equipment, right-of-use assets and software and exceptional items.

4. Exceptional items

Exceptional items are disclosed separately in the financial statements where the Directors consider it necessary to do so to provide further understanding of the financial performance of the Group. They are material items or expenses that have been shown separately due to, in the Directors judgement, their significance, one-off nature or amount:

1 Business interruption insurance claim proceeds received during the period.

2 Administrative expenses related to the closure of Hollywood Bowl Surrey Quays in FY2024.

3 Legal and professional fees in the prior year relating to the acquisitions of Lincoln Bowl, Woodlawn Bowl Inc and Lucky 9 Bowling

Centre Limited.

4 Contingent consideration of £884,000 (31 March 2024: £900,000) in administrative expenses and £291,000 (31 March 2024:

£201,000) of interest expense in relation to the acquisition of Teaquinn in May 2022.

5. Finance income and expenses

6. Taxation

Deferred tax

Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to the periods when the assets are realised or liabilities settled, based on tax rates enacted or substantively enacted at 31 March 2025.

7. Trade and other receivables

Trade receivables have an ECL against them that is immaterial. There were no overdue receivables at the end of any period.

8. Trade and other payables

Accruals and deferred income includes a staff bonus accrual of £3,090,000 (31 March 2024: £2,097,000, 30 September 2024: £3,950,000). Deferred income includes £1,593,000 (31 March 2024: £1,065,000, 30 September 2024: £983,000) of customer deposits received in advance and £1,128,000 (31 March 2024: £3,342,000, 30 September 2024: £2,628,000) relating to bowling equipment installations, all of which is recognised in the income statement during the following 12 months.

Non-current other payables includes £4,974,000 (31 March 2024: £3,357,000, 30 September 2024: £3,928,000) of contingent consideration and £1,747,000 (31 March 2024: £1,831,000, 30 September 2024: £1,759,000) of deferred consideration in respect of the acquisition of Teaquinn Holdings Inc.

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10. Leases

Group as a lessee

The Group has lease contracts for property and amusement machines used in its operations. The Group's obligations under its leases are secured by the lessor's title to the leased assets. The Group is restricted from assigning and subleasing the leased assets. There are ten (FY2024: eight) lease contracts that include variable lease payments in the form of revenue-based rent top-ups.

The Group also has certain leases of equipment with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the 'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period: