It’s a strike for Hollywood Bowl as profits hit £24m
THE younger generation’s love of spending on experiences and activities rather than objects has boosted Hollywood Bowl.
By offering a venue where customers can pay to throw a heavy ball down a lane and (hopefully) knock over some pins, Hollywood Bowl raked in pre-tax profits of £23.9m for the 12 months ending in September.
Russ Mould, broker AJ Bell’s investment director, called this performance ‘quite remarkable’, as the business promised another special dividend to take the annual total to 10.6p, up 16.6pc from last year.
He said: ‘Hollywood Bowl shows that classic leisure activities still have a life of their own despite being surrounded by a whirlwind of come-and-go trends which compete for the consumer’s wallet.
‘Nothing beats some competitive fun time with family and friends, and Hollywood Bowl has done its very best to ensure that prices remain affordable while also finding ways to get customers to spend more money once in its centres.’ Revenue grew in every one of Hollywood Bowl’s divisions including bowling, food, drink and arcades. Shares climbed 14.4pc, or 26.5p, to 210p.
But Photo-Me International, the business which started out making passport-photo booths and has now branched out into laundry and money kiosks, wasn’t looking so healthy. Revenue for the six months ending in October fell 2pc compared with last year to £119.8m, while profit before tax plunged 21pc to £26m.
There were some rays of light for Photo-Me. Operations in Japan recovered faster than expected after a tricky period, while the roll-out of its Revolution outdoor self- service washing machines helped revenue in that division climb 28.5pc.
But it blamed slow activity in its UK business-to-business arm for dragging down profits, saying there had been a lag in the number of large orders placed by firms buying its equipment.
Shares dropped by 14.3pc, or 15.2p, to 91p.
In another terrible day for outsourcers, as Interserve plunged 53.1pc, or 13p, to 11.5p on revealing its rescue plan, Kier Group continued to slide lower.
Kier told investors last week it was planning to reduce its debt by offering them new shares to buy, since banks had become less willing to lend to the sector following the collapse of Carillion.
These shares will be sold at 409p, and banks and brokers including Numis, Peel Hunt, Citigroup, HSBC and Santander promised that if they couldn’t find investors to buy all the shares, they would buy the excess themselves.
Since Kier’s share price is significantly lower than the 409p offer price, down 1.5pc, or 5.6p, at 376.4p yesterday, it looks like the banks may have to stump up. Investors aren’t likely to buy the new shares for 409p when they can buy existing ones for just over 376p.
The offer for the new shares closes next Wednesday, so Kier still has a little time to start climbing again.
Despite the sinking pound, which usually boosts the FTSE 100, Britain’s blue- chip index still ended the day down 0.8pc or 56.57 points at 6721.54 points.
The spectre of even more Brexit uncertainty reared its head as Theresa May said she would postpone a crucial vote in Parliament on her deal with the EU. Sterling ended the day at around $1.254, down from $1.273 on Friday.
Meanwhile the threat of a franchise row at Domino’s Pizza pushed shares down 8pc, or 20.5p, to 237p. Franchisees who want a bigger slice of the company’s profits have written to its board threatening to ‘declare war’ on it unless their demands are met, according to weekend reports.