Business Overview
Hollywood Bowl Group plc is a bowling entertainment operator in the United Kingdom with a portfolio of approximately 50 centres.

Recent News
On 4^th November 2019, the company announced that it would publish its final results for the twelve months ended 30 September 2019 on Friday 13^th December 2019.

Trading Statement (30^th September 2019)
On 8^th October 2019, the company announced trading statement for the year ended 30^th September 2019. The company has witnessed strong performance during the period. The company’s total revenue for the year grew 7.7 per cent with like-for-like ("LFL") revenue growth of 5.5 per cent.  The company expected to report profit before tax growth in excess of 10%, slightly ahead of market expectations.

Financial Highlights – H1 Financial year 2019 (31^st March 2019, GBP, million)

(Source: Interim Report, Company Website)

In the first half of the financial year 2019, the company’s total revenue grew by 5.3 per cent to GBP 67 million with LFL revenue grew by 4.4 per cent. This was due to new centres which contributed 2.1 per cent growth. The company’s operating profit increased by 11.4 per cent to GBP 16.8 million and profit after tax grew by 13.6 per cent to GBP 13.4 million. This was due to the new centres opened by the company which acted as growth factors for the company. The company’s basic EPS increased to 8.92p as a result of the above factors. The company declared an interim dividend of 2.27p during the period.

Share Price Performance

Daily Chart as on 5^thDecember 2019, before the market closed (Source: Thomson Reuters)

On December 5^th, 2019, Hollywood Bowl Group Plc shares were trading at GBX 241 at the time of writing before the market close (at 1:00 PM GMT), up by 1.69 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 255/GBX 175. The stock has given a 33 per cent return in the last year, and now some correction in the stock price is expected.

Valuation Methodology
 

Conclusion
The company has delivered a robust financial performance during the first half of the fiscal year 2019. The company is developing new centres which could act as a growth catalyst for the company. The company is generating good returns from its core estate investments. The company is progressing year on year. The company’s outlook for the business is positive, and it looks confident of growing organically as well as through capital deployment. There are certain principal risks associated with the business of the company. Adverse economic conditions could affect the business of the company. Failure to review funding arrangements could impact the operations of the company. Cybersecurity is a big concern for the company, and any breach in data could affect the overall performance of the company. Uncertainty from key suppliers could impact the operations of the company. Any changes in regulatory norms or any government policy could affect the business and profitability of the company.

Based on the valuation and factors as highlighted above, we recommend our investors to keep a “Watch” on the stock at the current price of GBX 242 (as on 5^th December 2019, before the market close at 8.15 AM GMT), with support from new catalysts needs to be evaluated at a later stage.  
 
*All forecasted figures and information have been taken from Thomson Reuters.

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