Hol­ly­wood Bowl is prov­ing to be a su­perb in­vest­ment

Per­for­mance has been flaw­less since it joined the stock mar­ket in 2016

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Tenpin bowl­ing UK mar­ket leader Hol­ly­wood

Bowl (BOWL) is a fan­tas­tic op­por­tu­nity for any­one seek­ing a high qual­ity small cap in­vest­ment.

Shares in the £350m busi­ness have in­creased by 47% to 235p since list­ing in 2016 and we be­lieve they should keep ris­ing.

We’re re­ally im­pressed by the way man­age­ment are test­ing ways in which to drive up rev­enue. They are be­ing very me­thod­i­cal to see if ini­tia­tives work be­fore rolling them out on a wider scale.

This cau­tious ap­proach should be ap­plauded as it means the com­pany isn’t tak­ing bold bets on ini­tia­tives that may not work, thus isn’t wast­ing lots of money.

Hol­ly­wood Bowl has suc­cess­fully tested dif­fer­ent pric­ing mod­els and found ways to drive up the vol­ume of peo­ple bowl­ing and the amount of money peo­ple spend in its sites, as well as hav­ing more ef­fi­cient op­er­a­tions.

An in­cred­i­ble 6.9m bowl­ing games were played at its sites in the six months to 31 March 2018, up 3.6% year-on-year. The av­er­age spend per game in­creased by 5.5% to £9.20; and the av­er­age num­ber of games played on a lane be­fore equip­ment de­vel­oped a fault in­creased by 21% to 431.

A dy­namic pric­ing model has seen Hol­ly­wood Bowl test ways in which it can charge cus­tomers more money depend­ing on how far in ad­vance they book and the time of day at which they would like to play.

It has added £1 to the price of a game and then ap­plies dis­counts based on var­i­ous fac­tors. The next phase of this pric­ing model is to work out how it can avoid los­ing in­ter­ested cus­tomers if they want to book at times when lanes are full.

‘We are go­ing to test ways in which to con­vince some­one who wants to play at 2pm on a Satur­day, for ex­am­ple, to come at 10am in­stead,’ says chief fi­nan­cial of­fi­cer Laurence Keen.

The com­pany is ben­e­fit­ing from higher lane util­i­sa­tion thanks to a more ef­fi­cient book­ing process, plus ini­tia­tives such as let­ting cus­tomers wear their own shoes (no time wasted queu­ing up for bowl­ing shoes) and tak­ing or­ders for food and drink dur­ing games, so the re­fresh­ments are ready as soon as the game ends.

Bowl­ing only ac­counts for 51% of its rev­enue so keep­ing cus­tomers in­ter­ested in other ac­tiv­i­ties is vi­tal for earn­ings growth. As well as re­vamped diners and more ef­fi­cient or­der­ing, Hol­ly­wood Bowl is test­ing the use of cash­less amuse­ment ar­cades which has shown to boost the av­er­age spend per amuse­ment ma­chine.

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