REG - Hollywood Bowl Group - Half-year Results
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RNS Number : 7663F Hollywood Bowl Group plc 27 May 2026
27 May 2026
Hollywood Bowl Group plc
("Hollywood Bowl", the "Company" or the "Group")
Interim Results for the Six Months ended 31 March 2026
Strong H1 performance driven by continued focus on the quality of our
proposition, and robust demand for affordable leisure experiences
Hollywood Bowl Group plc, the UK and Canada's largest ten-pin bowling
operator, announces its results for the six months ended 31 March 2026 ("H1
FY26").
Financial Summary H1 FY26 H1 FY25 Variance
Revenue £141.5m £129.2m 9.5%
Like-for-like revenue growth total(( i )) 2.3% 1.6% +0.7%pt
LFL - UK 2.6% 1.3% +1.3%pt
LFL - Canada 0.5% 3.7% (3.2%pt)
Group Adjusted EBITDA after rent(( ii )) £42.2m £38.8m 8.9%
Group Adjusted PBT(( iii )) £32.1m £29.7m 8.1%
Adjusted EPS(( iv )) 14.51p 13.04p 11.3%
Dividend per share 4.52p 4.10p 10.2%
Reported Profit before tax £27.2m £28.3m (3.9%)
Reported Profit after tax £19.5m £20.6m (5.3%)
Net cash £26.0m £22.7m 14.3%
EPS 11.70p 12.00p (2.5%)
· Continued strong growth in revenue and Adjusted EBITDA after rent
(pre IFRS16)
o Group revenue of £141.5m up 9.5% (H1 FY25: £129.2m)
o Group Adjusted EBITDA growth of 8.9% to £42.2m (H1 FY25: £38.8m)
· Group like-for-like (LFL) revenue growth of 2.3%
o UK LFL up 2.6% with spend per game ("SPG") up 7.6%, growing in all
categories
o Canada LFL up 0.5% on a constant currency basis impacted by snowstorms
· Group Adjusted Profit before tax up 8.1% to £32.1m (H1 FY25:
£29.7m)
o Strong conversion of increased revenue through to increased profit
o Adjusting items of £3.3m from impairment and earn-out; adjusted for
IFRS16
o Reported Profit after tax down (5.3%) to £19.5m (H1 FY25: £20.6m)
· Robust balance sheet and disciplined capital allocation support
strong cash generation
o Maintained strong cost control across the Group
o £8.5m capex in H1 FY26, increasing in H2 FY26
o Closing net cash balance of £26.0m with undrawn RCF of £25.0m
o £5m Buyback programme for H2 FY26
· Proposed interim dividend of 4.52p, up 10.2% on H1 FY25
Targeted investment across UK and Canada delivering growth
· UK business benefiting from track record of strategic investment
o Prime location strategy driving returns - new centres exceeding
expectations
o Norwich refurbishment completed with continued investment in maintenance
o Remain confident in target of 95 centres by 2035
· Canadian expansion continues at pace
o Largest branded operator in Canada with 16 centres
o New CEO, Canada, supporting team on delivering operational improvements
o New prime location in Edmonton opened in the period and trading well
o Refurbishment programme across legacy estate almost complete
o Targeting 35 centres in Canada by 2032 - acceleration on original 2035
target
Resilient business model and clear strategy supporting performance
· Proactive operational levers improving yield and revenue performance
o Dynamic pricing continues to improve yield and capacity management
o AI optimisation marketing driving increased conversion rates and order
values
· Value proposition remains at heart of robust demand and increased
spend
o Affordable proposition; family of four can bowl for £26 UK and CA$32
Canada
o Ongoing investment in F&B and amusements enhancing proposition and
spend
· Disciplined cost control and insulation against inflationary
pressures
o UK labour to revenue ratio of less than 20%
o c.70% of Group revenues not subject to cost-of-goods inflation
o 76% of electricity hedged to the end of FY29, supported by solar
Outlook
· The Group remains confident in delivering on expectations for FY26
· Two new UK centres and one Canadian centre due to open in H2 FY26
· Accelerated new centre pipeline for FY27
· Differentiated proposition and strategy ensures the Group, with its
cash generative model, continues to be well-positioned to deliver long-term
shareholder value
Stephen Burns, Chief Executive Officer, commented:
"Our strong performance in the first half has been driven by continued demand
from customers for our high-quality and affordable leisure experiences. Our
clear strategy and targeted investment programme are delivering. Multiple
strategic initiatives are underpinning increased spend per game across our
estate, and our new and refurbished centres in the UK and Canada are driving
robust returns.
"Looking ahead, we are confident in delivering on expectations for FY26, as
customer appeal for our value offer remains robust, and we continue to
maintain a tight grip on costs. We have an exciting pipeline of centres for H2
and expect this to accelerate in FY27 and beyond, positioning us for
sustainable profitable growth over the long-term"
(( 1 )) Like-for-like (LFL) revenue is from centres which have traded in both
periods and have comparable days in each period. LFL revenue excludes revenues
from our non-centre business Striker which acts as a wholesaler and installer
for bowling equipment in Canada. Canada LFL revenues are reported on a
constant currency basis.
(( 1 )) Group Adjusted EBITDA after rent shows earnings before interest,
depreciation and amortisation with an expense applied for property rent from
leases. This rent replaces the depreciation and interest costs of the Right-
of-Use property assets (ROU). This profit is before Adjusting items which
management deem to be one-off in nature. The group has previously named this
APM as EBITDA pre-IFRS16.
(( 1 )) Group Adjusted PBT is the Profit before tax subject to Adjusting items
which management consider to be one-off in nature and using property rent
instead of ROU Asset depreciation and interest costs under IFRS16. Adjusting
items for H1 FY26 are £3.3m of costs, comprising: £0.5m cost for contingent
consideration of the Canadian business and a £2.8m non-cash cost for the
impairment of an under-performing centre. Adjusting items for H1 FY25 were
£0.4m of income, comprising £1.2m cost relating to contingent consideration
on the Canadian acquisition and £1.6m of net income from a Covid-19 related
insurance claim. Property rent is £1.6m lower than the ROU depreciation and
interest charge (H1 FY26: £1.8m lower)
(( 1 )) Adjusted EPS uses Group Adjusted PBT and applies the reported tax
charge, less tax specifically related to the Adjusting items. This Group
Adjusted Profit after tax is then attributed over the weighted average number
of shares in issue to generate an earnings per share.
Enquiries:
Hollywood Bowl Group PLC - via Headland
Stephen Burns, Chief Executive Officer
Antony Smith, Chief Financial Officer
Mat Hart, Group Business Development Director
Headland
Rosh Field / Antonia Pollock
hollywoodbowl@headlandconsultancy.com
+44 (0)20 3805 4822
Chief Executive Officer's Review
The Group delivered an excellent first half performance, achieving record
revenues of £141.5m, a 9.5% increase on the prior year, with like-for-like
("LFL") revenues up 2.3%. This result is a direct reflection of the returns
generated from our investment strategy, the quality of our proposition, the
discipline of our operational model and the commitment of our teams across
both our UK and Canadian territories. Against a challenging backdrop, the
resilience of our business model, and ongoing appeal of our value offer for
customers is clear.
UK revenue grew 9.4% to £118.4m, with LFL revenue up 2.6%, representing a
strong performance that reflects both our continued investment in the customer
experience and the robust appeal of affordable, experience-led leisure. In
Canada, revenue increased 12.8% to CA$42.9m (£23.2m), with LFL revenue up
0.5%, on a constant currency basis, demonstrating meaningful progress as we
apply our proven playbook in a highly fragmented and underserved market.
Group adjusted EBITDA after rent increased to £42.2m, up 8.8% on the prior
year. Group adjusted PBT increased to £32.1m, up 8.1% on the prior year, a
result that reflects disciplined cost management, and the structural
resilience of our business model and strong conversion of increased revenues
to profits.
Reported profit after tax for the period was £19.5m (H1 FY25: £20.6m). The
strong trading performance of the business, combined with the highly
cash-generative nature of our model, resulted in net cash of £26.0m at the
period end, after payment of the FY25 final ordinary dividend of £15.3m.
In line with our capital allocation policy, the Board has declared an interim
dividend of 4.52 pence per share; representing 34% of the FY25 final ordinary
dividend and 10% growth on the comparable period last year, with a record date
of 26th June 2026. In addition, we will be undertaking a £5m share Buyback
programme in the second half of FY26. This reflects our confidence in the
ongoing strength of the business and our commitment to delivering attractive
returns for shareholders.
Revenue Performance
Our revenue performance in the first half demonstrates the effectiveness of
our strategy across both territories. We remain firmly focused on driving
revenue through complementary investment levers: enhancing the customer
experience, improving the quality of our centres, and expanding our estate
through prime location new centre openings, in both the UK and Canada.
Consumers continue to prioritise experiences and shared social occasions over
discretionary retail spend, and bowling's broad, multigenerational appeal
positions the Group, with its prime locations and well-invested proposition,
strongly within the competitive socialising market.
In the UK, total revenue grew 9.4% to £118.4m, with LFL revenue up 2.6%, a
strong result achieved despite ongoing pressure on household budgets. In
Canada, revenue grew 12.8% on a constant currency basis to CA$42.9m (£23.2m),
with LFL revenue up 0.5%, impacted by unseasonably heavy snowfall in certain
key periods.
Our Canadian business accounts for 16% of Group revenue, up from 9% in FY22,
and this is set to increase further in the coming years, reflecting the scale
and momentum we are building in that market.
Value proposition
We are the largest branded bowling operator in both territories, and whilst
the level of competitive socialising operators has increased in a number of
catchments in recent years, our scale, proven operating model and first-mover
advantage continue to translate into meaningful commercial benefits; through
revenue resilience in competitive markets, prime locations, supplier
relationships, customer reach and capital efficiency.
Affordability remains central to our proposition and is increasingly important
as households remain selective with their discretionary spending. A family of
four can bowl at peak times for £26 in the UK and CA$32 in Canada; a
compelling value position that continues to resonate with customers across a
broad demographic base. This accessibility, combined with a consistently
high-quality experience, reinforces brand loyalty and our position as the most
affordable branded bowling operator.
Proactive levers to drive demand
Our increasingly sophisticated approach to yield management continues to be a
key strength and differentiator. Dynamic pricing allows us to balance
value-led accessibility during off-peak periods with carefully controlled
capacity management at peak demand, supporting revenue quality while
protecting the integrity of our value proposition. Each initiative is executed
with precision at a centre and day-part level rather than through a broad,
one-size-fits-all approach.
Digital marketing and our evolving ecommerce platform are playing an
increasingly important role in both revenue performance and demand management.
AI-enhanced improvements to our online booking journey and marketing tools
have supported improved conversion rates, higher average booking values, and
greater effectiveness in demand stimulation. These tools also enable more
personalised customer communication, supporting upsells and cross-sells in a
way that feels relevant and tailored rather than transactional. They also
provide us with richer visibility of customer behaviour to support more
informed decision-making across pricing, promotion and capacity planning.
Investing in growth
Our diversified product mix continues to underpin revenue quality and
spend-per-game performance, which increased to £12.77 in the UK, up 7.6%, and
CA$19.10 in Canada, up 9.7%. Ongoing investment to refresh and innovate within
our second largest category - amusements - continues to enhance the overall
customer experience while supporting incremental spend, with amusement spend
per game increasing to £3.69 in the UK, up 12.7%, and CA$3.34 in Canada, up
17.6%. Selective trials of new ancillary products including E-Darts, alongside
improvements in payment technology, ensure that our total customer proposition
evolves to changing customer expectations, and remains dynamic, engaging and
relevant.
With the support of newly appointed Canadian CEO, our Canadian management team
are making tangible impacts on operational performance, with our full range of
demand generation and operational levers increasingly being deployed to good
effect across both territories.
Cost Control
Disciplined cost control is a core organisational priority and continues to
support margin resilience and strong cash generation. In a period
characterised by persistent inflationary pressure, including labour and
utilities costs, we have proactively managed these headwinds through detailed
operational management and a business model that is structurally
well-insulated against external cost volatility.
Approximately 70% of Group revenues are not subject to cost-of-goods
inflation, providing meaningful protection. Energy commodity costs are largely
hedged, with 76% of electricity requirements secured through to the end of
FY29; including 12% from on-site solar, significantly reducing our exposure to
market volatility and providing excellent forward visibility on a key cost
line.
Labour productivity continues to be managed at a granular, centre-level basis,
ensuring service standards are delivered while controlling payroll costs, with
UK centre payroll remaining below 20% of UK revenue and Canada below 26%.
Ongoing investment in team member training, engagement and operational
capability has supported the consistent delivery of our leading customer
experience, and we are proud to have achieved record levels of both customer
satisfaction and team member engagement, maintaining our Sunday Times Best
Places to Work award and our Great Place to Work accreditation in Canada.
These achievements are a direct reflection of the quality of our teams and the
culture we have built across the Group.
Strategic Progress
Our growth strategy is progressing well, with strong momentum across both
territories.
Canada
In Canada, our expansion programme continues at pace, with a clear focus on
opening high-quality greenfield locations in prime, high-footfall
destinations. Our three most recently opened centres; Kanata, Creekside and
Edmonton, the latter opening in H1 of this year, are all performing well and
are progressively improving average estate returns as the portfolio evolves
from the platform Splitsville estate we acquired in FY22. The refurbishment
programme across the legacy estate is now largely complete. Our new centre
pipeline in Canada continues to develop well, and we remain on track to open
one centre in H2, with five planned to open in FY27 and 40 further potential
locations identified. The Canadian market remains highly fragmented, and as
the largest branded operator, we are well positioned to capture future growth
opportunities subject to them meeting our strict investment criteria. We are
now targeting an estate size of 35 centres by 2032, an acceleration on our
original target of 2035, reflecting both the strength of our pipeline and the
confidence we have in the market opportunity.
UK
In the UK, our new centres continue to perform well. Our completely rebuilt
Liverpool Edge Lane centre reopened in FY26 in addition to our new Reading
centre, and both have exceeded expectations since launch, a further
endorsement of our site selection discipline and our ability to deliver an
excellent customer experience from day one. Our UK pipeline remains robust,
with two openings planned for H2, four centres committed across FY27 and FY28
and a further 20 potential locations identified. We remain confident in
reaching a UK estate size of 95 centres by 2035.
Our new Cardiff centre will open in the second half to extend our presence in
the Cardiff market ahead of the planned closure of our existing centre in
FY31. The new centre will be our largest UK venue to date, positioned in the
city's prime retail destination and featuring E-karting and other new
ancillary products alongside our core bowling offer. We also completed a
refurbishment in Norwich in the half, alongside continued investment in our
maintenance programme across the estate.
Disciplined investment
Our strong cash generation and robust balance sheet provide the financial
flexibility to continue investing in estate growth and deliver value to
shareholders, while ensuring that every investment decision remains grounded
in a clear strategic rationale and robust returns criteria.
Outlook
The Group enters the second half in excellent shape, and with confidence. In
this uncertain environment, our sector-leading proposition remains accessible
and is underpinned by consumer trends supporting demand for affordable
leisure. Our market-leading position and scale continue to provide a clear and
sustainable competitive advantage across both territories.
We are well positioned to manage costs while continuing to invest, supported
by strong cash generation, protection from energy costs, proven operational
discipline and a robust balance sheet that offers significant capital
flexibility. With a high-quality pipeline of new centres in both the UK and
Canada, ongoing investment in our existing estate and a highly disciplined
approach to capital allocation, we remain confident in the outlook for the
full financial year.
The fundamentals of our business are strong, our strategy is clear, and our
teams are executing with skill and purpose. The Group remains well positioned
to deliver sustainable growth and attractive long-term returns for
shareholders.
Stephen Burns
Chief Executive Officer
27 May 2026
Chief Financial Officer's review
Group Financial Results
H1 FY26 H1 FY25 YOY Var
Revenue 141.5 129.2 9.5%
COGS (23.2) (21.9) 5.9%
Centre staff costs (29.5) (24.9) 18.5%
Gross profit 88.8 82.4 7.8%
Gross profit % 62.8% 63.8% (1.0%pt)
Administrative expenses (39.1) (34.8) 12.2%
Corporate costs (15.1) (12.7) 18.6%
Operating profit 34.7 34.9 (0.5%)
Finance expenses (7.5) (6.6) 13.9%
Profit before tax 27.2 28.3 (3.9%)
APM 1 Add back Adjusting items 3.3 (0.4)
Add back property ROU asset dep'n and interest 13.7 12.7
Less property rent (12.1) (10.9)
APM 3 Group Adjusted PBT 32.1 29.7 8.1%
APM 2 Group Adjusted EBITDA after rent 42.2 38.8 8.9%
Basic earnings per share (EPS) 11.70p 12.00p (2.5%)
APM 4 Adjusted EPS 14.51p 13.04p 11.3%
Interim ordinary dividend per share 4.52p 4.10p
A full reconciliation of APMs can be found at the end of this section of the
report. A summary of the movements and adjustments is as follows:
APM 1 - Adjusting items of £3.3m in FY26 are a (£2.8m) impairment of an
under-performing centre and a (£0.5m) accrual for deferred consideration on
acquisition of the Canadian business. In FY25 there was (£1.2m) of expense in
relation to the Canadian acquisition and net income of +£1.6m benefit from a
Covid insurance claim.
APM 2 - Group Adjusted EBITDA after property rent has previously been reported
as "Group EBITDA pre-IFRS16". It represents EBITDA after accounting for the
rental charges on the Group's leasehold property portfolio rather than using
ROU asset depreciation and finance costs. This is the same as pre-IFRS16
APM 3 - Group Adjusted PBT is the underlying PBT after adjusting items and
replacing ROU asset depreciation and financing costs on the Group's leasehold
properties with the property rent paid on those properties.
APM 4 - Adjusted earnings per share uses the APM 3, the Group Adjusted PBT and
applies a tax rate to the Adjusting items (but no change in tax attributed to
the IFRS16 change to rent) in order to reach a profit after tax number which
is then allocated by the weighted average shares in the same calculation as
basic EPS
Summary
The first half delivered 9.5% growth in revenue, with costs well controlled.
Profit Before Tax was £27.2m (H1FY25: £28.3m). The Group is reporting £3.3m
of one-off non-cash costs as Adjusting items to help understand the underlying
business performance.
Excluding these Adjusting items, and replacing IFRS16 depreciation and
interest with property rent, the Group's Adjusted PBT has increased by 8.1% to
£32.1m in the first half (H1 FY25: £29.7m), demonstrating a strong
drop-through of revenue growth to profit growth.
This improved profit, combined with a 2.8% net reduction in the total number
of shares, results in a 11.3% increase in the Adjusted earnings per share
(EPS) to 14.51p (H1 FY25: 13.04p). Reported basic EPS of 11.70p (H1 FY25:
12.00p) showed a modest decline as the one-off non-cash impairment of an
under-performing centre offsets the strong underlying improvement in business
growth.
The Group uses certain Alternative Performance Measures (APMs) to incorporate
measures that management and investors frequently use for decision making
purposes. These include adjustments for specific one-off non-recurring items
to help understand the underlying business; accounting for property rent in
place of ROU asset depreciation and interest, a commonly used KPI for business
performance and banking covenants; and reporting like-for-like (LFL) revenues.
Full details of the APMs and how they are calculated are shown at the end of
this report. Where APMs are referred to in this review they are clearly
indicated.
Revenue
H1 FY26 H1 FY25 Movement %
£m UK Canada Total UK Canada Total UK Canada Total
Like for like centres 109.7 18.3 128.0 107.0 18.2 125.2 2.6% 0.5% 2.3%
New centres 7.7 3.2 10.8 - - - -
Closed centres 1.0 - 1.0 1.2 - 1.2 (17.1%)
Non centre revenue - 2.3 2.3 - 2.9 2.9 (20.0%)
FX to constant currency - (0.6) (0.6) - - - -
Total reported revenue 118.4 23.2 141.5 108.2 21.1 129.2 9.4% 9.9% 9.5%
% Bowling revenue 44.6% 44.8% 44.6% 44.7% 43.3% 44.5%
The Group delivered strong revenue growth in both territories, with a total
growth in the first half of 9.5% to £141.5m (H1 FY25: £129.2m) and with
similar results in the UK and Canada at +9.4% and +9.9% respectively.
Like-for-like (LFL) centres are defined as those centres which have traded
fully in both periods and excludes revenue from the non-centre business
Striker, which installs and distributes bowling equipment in Canada. Canadian
LFL sales are reported on a constant currency basis.
The UK delivered strong sales growth for the first half. Total UK revenue was
up 9.4% to £118.4m (H1 FY25: £108.2m). New centres contributed £7.7m of
additional revenue, offset in part by (£0.2m) less revenue from centres which
had closures due to refurbishment works. LFL sales growth was 2.6% which was
an excellent performance in the context of a challenging UK consumer market.
There was a modest reduction in game volumes, but these saw an improving trend
in the second quarter, and in total were more than offset by increasing Spend
per Game (SPG). SPG grew by 7.6% to £12.77 as a function of modest
inflationary price increases; optimising our peak pricing for yield; improved
uptake of add-on sales such as VIP lanes; and a strong amusements mix.
The Canadian business also delivered strong revenue growth in the first half,
with sales increasing 9.9% to £23.2m. New centre growth of £3.2m was a
bigger driver than in the UK, contributing almost all of the total sales
growth. LFL sales also remained in growth at 0.5% and this was despite a very
heavy snowfall in the east of the country which closed some centres for
several days. SPG in Canada was £11.44 and saw growth of 10.1% on an LFL
basis as we continue to optimise the model, including success in growing
customer participation in add-on activities when they visit. Sales declined in
our non-centre Striker business by 20%. This was a result of a commercial
decision to focus the Striker installations teams on the Group's own internal
refurbishment programme and fit out of new centres. Whilst this does not
contribute to Striker's revenue or margin, it helps keeps investment costs
lower on these projects.
Gross profit
Reported gross profit in the first half was 62.8% compared to 63.8% in H1
FY25, a reduction of 1.0%pts. This reduction is principally a function of
centre staffing costs increasing ahead of revenues. Centre staff costs
increased by 18.5%, with 9.5% of this from opening new centres.
In addition to this expected increase driven by sales growth, there has been
an accelerated increase in centre labour costs. This reflects the impact of
increased National Insurance costs and a National Living Wage increase above
inflation. Each of these contributed c.£1m of additional labour costs within
the centres, suppressing the gross margin rate by 1%pt.
The overall gross margin of 62.8% remains extremely strong however, allowing
for revenue growth to translate well into profit growth. With centre labour
only representing 20.8% of sales, the Group is far less exposed to labour
inflationary pressures than many other businesses in the hospitality and
leisure sector.
Administrative expenses and corporate costs
H1 FY26 H1 FY25 Movement
Administrative expenses (39.1) (34.8) 12.2%
Corporate costs (15.1) (12.7) 18.6%
Add back dep'n and amortisation 16.7 15.5 7.9%
APM 1 Add back Adjusting items 3.0 (0.7)
Admin expenses per Adjusted EBITDA (34.5) (32.7) 5.5%
Administrative costs are best considered on the basis that they are presented
for Group Adjusted EBITDA as shown in the table above. This ensures that
movements in rent, Adjusting items and corporate costs can be considered
individually.
Administration costs were £34.5m (H1 FY25: £32.7m) which was a 5.5% increase
on last year. The increase is principally a function of the increasing estate
size both in the UK and Canada. New centres added net revenue of £10.6m or
8.2% to the Group and carry additional administrative costs. In addition, UK
inflation for the period was 3.3% with Canadian inflation running a little
lower.
Corporate costs for the period were £15.1m (H1 FY25: £12.7m), an increase of
18.6%. This increase reflects 3-5% of inflationary pressures plus three key
business decisions to invest in our capability to drive business growth
faster.
The Group has upweighted investment in leadership roles to deliver long-term
growth. This includes the senior leadership team in Canada; increased
participation in long term bonuses for key members of the wider management
team; and new roles in the UK operations team to drive additional revenue
streams and focus on underlying LFL growth.
In addition, the Group has increased its investment in marketing both in the
UK and Canada. In part this is to accelerate growth, but is also reflective of
the competitive environment, especially in the UK, where a challenging
consumer landscape means we are having to compete harder for share of wallet.
Finally, we have invested in support functions to help accelerate our property
pipeline. This includes property professional fees, training, recruitment and
finance. These targeted investments are helping us to identify and realise
opportunities and bring them to market more quickly.
Overall, these corporate costs remain at c.10% of sales. We expect some
continuing investment in this area as we drive growth from the underlying
business and add centres to our portfolio both in the UK and Canada.
Adjusting items
The Group is reporting two cost elements in the first half which we consider
to be one-off in nature. Therefore, these should be excluded from the
underlying profit of the business. In total we recognise (£3.3m) of Adjusting
items (H1 FY25: income of £0.4m).
The first element is the ongoing treatment of the earn out consideration in
respect of the Teaquinn Holdings acquisition in FY22. In the period, there was
a cost of £0.5m (H1 FY25: £1.2m) which is lower than last year. As we get
closer to the calculation date in September 2026, we are able to narrow down
the cost expectations more accurately.
The second element is a non-cash impairment of the assets of one of our
centres in the UK. The centre has opened within the past 3 years and therefore
has a high NBV of assets and ROU asset. It was the second to open in its local
market and faces intense competition. While the centre is still cash
generative on a CGU basis, it is not performing at the level we had originally
anticipated. As a result, we have taken a one-off non-cash impairment of
£2.0m on the PPE and a further £0.8m on the ROU asset. While we remain
confident the centre will remain cash generative over the term of the lease,
the NPV of the cashflows are not sufficient to support the balance sheet asset
valuation.
Group Adjusted EBITDA and operating profit
H1 FY26 H1 FY25 Movement
Operating profit 34.7 34.9 -0.5%
Add depreciation 16.1 14.9 8.0%
Add amortisation 0.6 0.6 10.2%
Add gain/loss on PPE (0.0) 0.0
APM 1 Add Adjusting items before tax & interest 3.0 (0.7)
Less rent (12.1) (10.9) 11.2%
APM 2 Group Adjusted EBITDA after rent 42.2 38.8 8.9%
Group operating profit was slightly down versus last year at £34.7m (H1 FY25:
£34.9m). This was however after taking a £2.8m non-cash asset impairment and
compared to the previous year where the Group received a net £1.6m of benefit
from a Covid related insurance claim. Excluding these Adjusting items, the
operating profit has increased.
Management use Group Adjusted EBITDA after rent to assess the underlying
business performance, and this was up 8.9% in the first half to £42.2m (H1
FY25: £38.8m). The principal driver of this growth in EBITDA is the revenue
generated by our new centres in the UK and Canada which was delivered on a
highly consistent year-on-year cost base. The result is that sales growth
translates into profit growth.
Financing and ROU asset profit impact
Total finance expenses of £7.5m (H1 FY25: £6.6m) increased by 13.9% in the
period. The majority of this financing charge, £7.2m (H1 FY25: £6.6m), is a
function of the interest cost of leases under IFRS 16, described below.
Of the balancing finance charges, £0.3m (H1 FY25: £0.3m) relates to the
interest element of the earn out on Teaquinn Holdings, which as set out above,
is considered as an Adjusting item and is therefore excluded from the adjusted
numbers.
There were no further finance costs in H1 FY26, with the commitment fee on the
undrawn £25m RCF being offset by modest interest income from cash balances
held. Last year the cash balances in H1 were more substantial and resulted in
net interest income of £0.3m.
In understanding the property costs, it is important to consider not only the
interest on ROU assets, which forms part of the finance income, but also the
depreciation on the asset which is reported in administration expenses. The
table below shows the relationship between these elements and compares it to
the rental charges that are used for adjustment purposes to arrive at an
EBITDA number.
£m H1 FY26 H1 FY25 Movement
Interest charge ROU asset 7.2 6.6 9.6%
Depreciation ROU asset 6.5 6.0 6.9%
Total IFRS16 property charge 13.7 12.7 8.3%
Property rent 12.1 10.9 11.2%
Profit compression as a result of IFRS 16 (1.6) (1.8) (9.4%)
Total property costs in H1 are £13.7m (H1 FY25: £12.7m), reported in
interest costs and administration costs. They are 8.3% higher than last year,
principally because of new centre openings both in Canada and the UK.
Property rent of £12.1m (H1 FY25: £10.9m) in the half was 11.2% higher than
last year, also as a result of new centre openings. This property rent is used
for Group Adjusted EBITDA after rent. Our leases are relatively young in
tenure as a function of expansion and commercially advantageous lease
renewals. Therefore, there is a non-cash (£1.6m) compression of profit in the
half (H1 FY25: £1.8m). This is a result of the computed lease interest and
depreciation being higher than the actual paid rent on our portfolio.
The Group has a £25m RCF available from Barclays Bank PLC which is a 3-year
term expiring in May 2028. The facility allows for drawing on request, with a
margin of 1.30%pts above SONIA. At the period end this facility remained fully
undrawn.
Cash flow and investment
£m H1 FY26 H1 FY25
Operating profit 34.7 34.9
Add back depreciation & amortisation 16.7 15.5
APM 1 Add back Adjusting items 3.3 (0.4)
Movement in working capital (4.1) (1.2)
Rent (12.1) (10.9)
Maintenance capex (4.6) (5.8)
Tax and interest (3.9) (3.7)
Free Cash flow before investment 30.0 28.4
Investment capex (3.9) (14.2)
Dividends and share buybacks (15.3) (20.2)
Total net cashflow 10.8 (6.0)
Opening net cash 15.2 28.7
Closing cash 26.0 22.7
The Group continues to generate a strong free cash flow, with £30.0m of free
cash inflow before investment and shareholder returns in the period. This is a
cash conversion of 71% of the £42.2m of Group Adjusted EBITDA after rent.
Total capital expenditure in the first half comprised £4.6m maintenance
investment on existing centres and a further £3.9m of investment capex,
principally on new centres. Capital spend is expected to accelerate in the
second half with a new centre already under construction in the UK and another
about to start. Both expected to open in H2, albeit late in the year. In
Canada we also have a new centre under construction and with three expected to
open in H1 FY27, there will be expenditure in the second half related to these
centres.
Taxation
Total tax charge for H1 was £7.7m (H1 FY25: £7.7m). This represents an
effective tax rate of 28.3% on profit arising in the period.
Earnings per share
Earnings per share of 11.70p (H1 FY25: 12.00) show a (2.5%) decline. Included
in this are the £3.3m non-cash Adjusting items as described above.
Excluding these one-off items, and adjusting for property rent, Adjusted EPS
was 14.51p (H1 FY25: 13.04p), an 11.3% increase. This is a function of both
the 8.1% increase in Group Adjusted PBT and a 2.8% reduction in the weighted
number of shares; a result of the H2 FY25 buyback programme.
Group Adjusted PBT of £32.1m (H1 FY25: £29.7m) is subject to taxation of
£7.9m being the £7.7m reported tax charge plus an additional £0.2m tax
charge arising from the add-back of the £3.3m Adjusting items. In addition,
adjusting for a pre-IFRS16 basis, there is £1.6m to add back as a function of
the profit compression. This results in an Adjusted profit after tax of
£24.2m across a weighted average of 167.1m shares (H1 FY25: £22.4m over
171.9m shares).
Dividend
The Group maintains its commitment to distribute 55% of Adjusted profit after
tax as an ordinary dividend to its shareholders.
In line with the policy set out in May 2025, this takes the form of an interim
dividend of 34% of the prior year's full year dividend, with the balance being
proposed as a final dividend once the full year results are published.
The Group therefore declares an interim ordinary dividend of 4.52p per share.
The ex-dividend date will be 25(th) June 2026 with a record date of 26(th)
June and payment date of 24(th) July 2026.
Additionally, the Group will initiate a Buyback programme of £5m for the
second half.
Going Concern
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. Further details may be found in note 2 of the
accompanying financial statements.
Antony Smith
Chief Financial Officer
27(th) May 2026
Notes and reconciliations of Alternative Performance Measures (APMs)
The Group uses certain APMs to assist users of the accounts to understand the
business performance. Where APMs have been used in this report they have been
clearly noted as such. The APMs are aligned to the measures management use
internally and can be reconciled to the reported numbers as set out in the
tables below:
APM 1 Adjusting items H1 FY26 H1 FY25
Other income (insurance settlement) - (1.6)
Contingent consideration 0.5 1.2
Administrative expenses - 0.1
Impairment 2.8 -
Adjusting items including interest 3.3 (0.4)
Interest included in Adjusting items (0.3) (0.3)
Adjusting items before tax and interest 3.0 (0.7)
These are items deemed to be adjusted to help understand underlying
profitability of the business.
APM 2 Group Adjusted EBITDA after rent H1 FY26 H1 FY25 Movement
Operating profit 34.7 34.9 (0.5%)
Add depreciation 16.1 14.9 8.0%
Add amortisation 0.6 0.6 10.2%
Add gain/loss on PPE (0.0) 0.0
APM 1 Add Adjusting items before tax and interest 3.0 (0.7)
Less property rent (12.1) (10.9) 11.2%
Group adjusted EBITDA after rent 42.2 38.8 8.9%
Management deem EBITDA to be a critical measure that investors, analysts and
banking covenants use to determine the underlying cash generation and
profitability of a business. EBITDA is a commonly used profit metric to
determine business valuations. The Group has previously described this measure
as Group Adjusted EBITDA pre-IFRS16. We have changed the nomenclature, but
adjustments remain consistent.
APM 3 Group Adjusted PBT H1 FY26 H1 FY25 Movement
PBT 27.2 28.3 (3.9%)
APM 1 Add back Adjusting items 3.3 (0.4)
Group Adjusted PBT under IFRS16 30.5 28.0 9.2%
Add depreciation and interest on ROU assets 13.7 12.7
Less rent (12.1) (10.9)
Group Adjusted PBT 32.1 29.7 8.1%
This is used as a fundamental measure of the Group's profitability, removing
the adjusting items as per APM 1 and adjusting for property rent in place of
ROU asset depreciation and interest costs. This measure has previously been
called Group Adjusted PBT pre-IFRS16. Management's short and long-term bonus
targets are linked to Group Adjusted PBT.
APM 4 Adjusted EPS H1 FY26 H1 FY25 Movement
Profit after tax 19.5 20.6
APM 1 Add Adjusting items 3.3 (0.4)
Tax impact of Adjusting items (0.2) 0.4
Group Adjusted profit after tax under IFRS16 22.6 20.6 9.6%
Add depreciation and interest on ROU assets 13.7 12.7
Less rent (12.1) (10.9)
Adjusted profit after tax 24.2 22.4 8.1%
Weighted average number of shares 167,076,651 171,939,567
Adjusted EPS 14.51p 13.04p 11.3%
The Group's dividend policy is anchored to distribution of 55% of the Group's
Adjusted profit after tax, after removing Adjusting items and adjusting for
IFRS16 profit compression and dividing by the weighted average number of
shares in the period. Management incentives are linked to this measure. No tax
adjustment is made for moving from IFRS16 lease accounting to a rent basis.
Condensed Consolidated Income Statement and Statement of Comprehensive Income
For the six months ended 31 March 2026
Six months ended 31 March 2026 Six months ended 31 March 2025
Before Adjusting items Total Before Adjusting Total
adjusting (note 4) Unaudited adjusting Items Unaudited
items Unaudited £'000 Items (note 4) £'000
Unaudited £'000 Unaudited Unaudited
Note £'000 £'000 £'000
Revenue 141,539 - 141,539 129,249 - 129,249
Cost of goods sold (23,240) - (23,240) (21,950) - (21,950)
Centre staff costs (29,461) - (29,461) (24,869) - (24,869)
Gross profit 88,838 - 88,838 82,430 - 82,430
Other income - - - - 1,613 1,613
Administrative expenses (51,176) (2,962) (54,138) (48,209) (946) (49,155)
Operating profit 37,662 (2,962) 34,700 34,221 667 34,888
Finance income 5 329 - 329 555 - 555
Finance expenses 5 (7,454) (343) (7,797) (6,818) (291) (7,109)
Profit before tax 30,537 (3,305) 27,232 27,958 376 28,334
Tax (charge)/credit 6 (7,898) 212 (7,686) (7,310) (391) (7,701)
Profit for the period attributable to equity shareholders 22,639 (3,093) 19,546 20,648 (15) 20,633
Other comprehensive income 519 - 519 (1,219) - (1,219)
Retranslation gain/(loss) of foreign currency denominated operations
Total comprehensive income for the period attributable to equity shareholders 23,158 (3,093) 20,065 19,429 (15) 19,414
Earnings per share
Basic earnings per share (pence) 11.70 12.00
Diluted earnings per share (pence) 11.64 11.93
Weighted average number of shares - Basic 167,076,651 171,939,567
Dilutive potential ordinary shares 879,658 1,040,490
Weighted average number of shares - Diluted 167,956,309 172,980,057
Reconciliation of operating profit to Group adjusted EBITDA
Six months ended 31 March 2026 Six months ended 31 March 2025
Unaudited Unaudited
Note £'000 £'000
Operating profit 34,700 34,888
Adjusting items excluding impairment 4 114 (667)
Depreciation of property, plant and equipment 9 7,144 6,746
Depreciation of right-of-use assets 10 8,948 8,160
Amortisation of intangible assets 11 612 556
Impairment of property, plant and equipment 9 1,999 -
Impairment of right-of-use assets 10 849 -
(Profit)/loss on disposal of property, plant and equipment, right-of-use
assets and software
9, 10, 11 (6) 20
Group adjusted EBITDA 54,360 49,703
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 adjusting 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.
Reconciliation of net debt Six months Six months Year ended
ended ended 30 September
31 March 2026 31 March 2025 2025
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash and cash equivalents (25,994) (22,738) (15,189)
Net (cash) excluding finance leases (25,994) (22,738) (15,189)
Finance leases 235,134 231,523 235,793
Net debt 209,140 208,785 220,604
Net debt is defined as borrowings from bank facilities excluding issue costs,
plus finance leases less cash and cash equivalents.
Condensed Consolidated Statement of Financial Position
As at 31 March 2026
31 March 31 March 30 September
2026 2025 2025
Unaudited Unaudited Audited
£'000 £'000 £'000
Note
Assets
Non-current assets
Property, plant and equipment 9 121,367 114,261 121,737
Right-of-use assets 10 183,349 184,927 186,717
Goodwill and intangible assets 11 99,064 99,596 99,336
Deferred tax asset - 577 849
403,780 399,361 408,639
Current assets
Cash and cash equivalents 25,994 22,738 15,189
Trade and other receivables 7 7,335 7,544 9,633
Corporation tax receivable - - 2,208
Inventories 4,160 3,045 3,553
37,489 33,327 30,583
Total assets 441,269 432,688 439,222
LIABILITIES
Current liabilities
Trade and other payables 8 36,352 28,725 35,063
Lease liabilities 10 15,158 15,155 15,131
Corporation tax payable 1,193 1,424 -
52,703 45,304 50,194
Non-current liabilities
Other payables 8 961 7,907 5,706
Lease liabilities 10 219,976 216,368 220,662
Deferred tax liability 4,649 4,971 5,552
Provisions 6,077 6,019 5,820
231,663 235,265 237,740
Total liabilities 284,366 280,569 287,934
NET ASSETS 156,903 152,119 151,288
Equity attributable to shareholders
Share capital 12 1,676 1,702 1,668
Share premium 40,141 39,716 39,716
Merger reserve (49,897) (49,897) (49,897)
Capital redemption reserve 59 25 59
Foreign currency translation reserve (1,932) (2,409) (2,451)
Retained earnings 166,856 162,982 162,193
TOTAL EQUITY 156,903 152,119 151,288
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 March 2026
Note Share Merger Foreign Retained
capital
earnings
Capital redemption reserve reserve currency translation reserve
Total
£'000
£'000
£'000 Share £'000 £'000 £'000
premium
£'000
Equity at 30 September 2024 (audited) 1,721 1 39,716 (49,897) (1,190) 161,854 152,205
Shares issued during the period 5 - - - - - 5
Share buy back (24) 24 - - - (6,313) (6,313)
Dividends paid - - - - - (13,904) (13,904)
Share-based payments 14 - - - - - 778 778
Deferred tax on share-based payments - - - - - (66) (66)
Retranslation of foreign currency denominated operations - - - - (1,219) - (1,219)
Profit for the period - - - - - 20,633 20,633
Equity at 31 March 2025 (unaudited) 1,702 25 39,716 (49,897) (2,409) 162,982 152,119
Share buy back S (34) 34 - - - (8,838) (8,838)
Dividends paid - - - - - (6,923) (6,923)
Share-based payments 14 - - - - - 1,020 1,020
Deferred tax on share-based payments - - - - - (24) (24)
Retranslation of foreign currency denominated operations - - - - (42) - (42)
Profit for the period - - - - - 13,976 13,976
Equity at 30 September 2025(audited) 1,668 59 39,716 (49,897) (2,451) 162,193 151,288
Shares issued during the period 8 - 425 - - (6) 427
Dividends paid - - - - - (15,634) (15,634)
Share-based payments 14 - - - - - 754 754
Deferred tax on share-based payments - - - - - 3 3
Retranslation of foreign currency denominated operations - - - - 519 - 519
Profit for the period - - - - - 19,546 19,546
Equity at 31 March 2026 (unaudited) 1,676 59 40,141 (49,897) (1,932) 166,856 156,903
Condensed Consolidated Statement of Cash Flows
For the six months ended 31 March 2026
Note Six months Six months
ended ended
31 March 2026 31 March 2025
Unaudited Unaudited
£'000 £'000
Cash flows from operating activities
Profit before tax 27,232 28,334
Adjusted by:
Depreciation of property, plant and equipment (PPE) 9 7,144 6,746
Depreciation of right-of-use (ROU) assets 10 8,948 8,160
Amortisation of intangible assets 11 612 556
Impairment of PPE and ROU Assets 9,10 2,848 -
Net interest expense 5 7,468 6,554
(Profit)/loss on disposal of property, plant (6) 20
and equipment, software and ROU Assets
Share-based payments 754 778
Operating profit before working capital changes 55,000 51,148
Increase in inventories (608) (148)
Decrease in trade and other receivables 2,277 1,857
Decrease in payables and provisions (3,877) (1,540)
Cash inflow generated from operations 52,792 51,317
Interest received 308 581
Corporation tax paid (4,339) (4,157)
Bank interest paid (58) (46)
Lease interest paid (7,244) (6,608)
Net cash inflow from operating activities 41,459 41,087
Cash flows from investing activities
Purchase of property, plant and equipment (8,208) (19,669)
Purchase of intangible assets (264) (358)
Proceeds from sale of assets 98 -
Net cash used in investing activities (8,374) (20,027)
Cash flows from financing activities
Payment of capital elements of leases (7,142) (6,754)
Share buy back - (6,313)
Issue of shares 12 109 -
Dividends paid (15,316) (13,904)
Net cash used in financing activities (22,349) (26,971)
Net change in cash and cash equivalents for the period 10,736 (5,911)
Effect of foreign exchange rates on cash and cash equivalents 69 (53)
Cash and cash equivalents at the beginning of the period 15,189 28,702
Cash and cash equivalents at the end of the period 25,994 22,738
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 2026 ('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 27
May 2026.
The Group's last annual audited financial statements for the year ended 30
September 2025 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 2025 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 2025 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
2025. 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 2026, the
Group had a cash balance of £26.0m with an undrawn RCF of £25m with Barclays
Bank plc, and no outstanding loan balances, giving an overall liquidity of
£51.0m.
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.
Adjusting items
Adjusting items 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
Set out below are areas of estimation uncertainty in the financial
statements. There are 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 is determined as being the highest of the value-in-use and
fair value less costs to sell. 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, but if a potential impairment is
identified then the recoverable amount is also determined using fair value
less costs to sell.
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. Following the impairment charge recorded in the period
of £2,848,000 for one bowling centre, the estimation uncertainty associated
with the remaining carrying amount is significantly reduced, and whilst
estimation uncertainty remains, this is not assessed as being material. As
such, reasonably possible changes to the assumptions in the future for this
centre would not lead to material adjustments to the carrying values. The
remaining carrying amount of property, plant and equipment is £897,000 and
right-of-use assets is £401,000 at this centre.
The key assumption in the fair value less costs to sell calculation, under the
market approach, is the EBITDA multiple.
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
Current other payables include 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 Xtreme Bowling
Entertainment Corporation (XBEC) in FY2026. This is based on a multiple of
9.2x XBEC's EBITDA pre-IFRS 16 in the financial period 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 XBEC's
forecasted EBITDA pre-IFRS 16.
· 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:
Six months ended 31 March 2026 Six months ended 31 March 2025
UK Canada Total UK Canada Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
£'000 £'000 £'000 £'000 £'000 £'000
Bowling 52,746 10,379 63,125 48,372 9,117 57,489
Food and drink 30,263 6,394 36,657 28,644 5,656 34,300
Amusements 34,201 3,612 37,813 29,846 2,928 32,774
Installation of bowling equipment - 2,249 2,249 - 2,897 2,897
Other 1,166 529 1,695 1,306 483 1,789
118,376 23,163 141,539 108,168 21,081 129,249
Six months ended 31 March 2026 Six months ended 31 March 2025
UK Canada Total UK Canada Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 118,376 23,163 141,539 108,168 21,081 129,249
Group adjusted EBITDA(1) pre-IFRS16 37,929 4,319 42,248
Group adjusted EBITDA(1) 47,929 6,431 54,360 43,304 6,399 49,703
Depreciation and amortisation (13,634) (3,070) (16,704) (12,713) (2,749) (15,462)
Impairment of PPE and ROU Assets (2,848) - (2,848) - - -
(Loss)/gain on property, right-of-use assets, plant and equipment and software (79) 85 6 (24) 4 (20)
disposals
Adjusting items excluding interest - (114) (114) 1,563 (896) 667
Operating profit 31,368 3,332 34,700 32,130 2,758 34,888
Finance income 304 25 329 529 26 555
Finance expense (6,163) (1,634) (7,797) (5,653) (1,456) (7,109)
Profit before tax 25,509 1,723 27,232 27,006 1,328 28,334
PPE asset additions 3,580 4,757 8,337 12,201 7,534 19,735
Intangible asset additions 255 9 264 358 - 358
Total assets 344,187 97,082 441,269 341,902 90,786 432,688
Total liabilities 233,293 51,073 284,366 227,572 52,997 280,569
(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 adjusting items.
4. Adjusting items
Adjusting 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
size, nature and incidence:
Six months ended Six months ended
31 March 2026 31 March 2025
Unaudited Unaudited
£'000 £'000
Insurance settlement(1) - 1,613
Administrative expenses(2) - (62)
Impairment of PPE and ROU Assets(3) (2,848) -
Contingent consideration - administrative expenses(4) (114) (884)
Adjusting items before interest expense (2,962) 667
Contingent consideration - interest expense(4) (343) (291)
Adjusting items before tax (3,305) 376
Tax charge 212 (391)
Adjusting items after tax (3,093) (15)
(1) During the prior year, the Group received a business interruption
insurance settlement.
(2) Administrative expenses related to the closure of Hollywood Bowl Surrey
Quays.
(3) Impairment of PPE of £1,999,000 (31 March 2025: £nil) and ROU Assets of
£849,000 (31 March 2025: £nil)
(4) Contingent consideration of £114,000 (31 March 2025: £884,000) in
administrative expenses and £343,000 (31 March 2025:
£291,000) of interest expense in relation to the acquisition of Teaquinn
in May 2022.
5. Finance income and expenses
Six months Six months
ended ended
31 March 2026 31 March 2025
Unaudited Unaudited
£'000 £'000
Interest on bank deposits 329 555
Finance income 329 555
Interest on bank borrowings 82 105
Unwinding of discount on provisions 128 105
Unwinding of discount on contingent consideration (note 4) 343 291
Finance costs on lease liabilities 7,244 6,608
Finance expense 7,797 7,109
6. Taxation
Six months Six months
ended ended
31 March 2026 31 March 2025
Unaudited Unaudited
£'000 £'000
The tax expense is as follows:
- UK Corporation tax 7,099 5,622
- Foreign tax suffered 641 1,160
Total current tax 7,740 6,782
Deferred tax:
Origination and reversal of temporary differences (54) 919
Total deferred tax (54) 919
Total tax expense 7,686 7,701
Factors affecting tax charge:
The income tax expense was recognised based on management's best estimate of
the weighted average annual income tax rate expected for the full financial
year applied to the profit before tax for the half year ended 31 March 2026.
.
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 2026.
7. Trade and other receivables
Six months Six months Year ended
ended ended 30 September
31 March 2026 31 March 2025 2025
Unaudited Unaudited Audited
£'000 £'000 £'000
Trade receivables 979 823 1,815
Other receivables 172 1,351 155
Prepayments 6,184 5,370 7,663
7,335 7,544 9,633
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
Six months Six months Year ended
ended ended 30 September
31 March 2026 31 March 2025 2025
Unaudited Unaudited Audited
Current £'000 £'000 £'000
Trade payables 6,544 6,119 7,166
Other payables 8,823 4,200 4,927
Accruals and deferred income 14,277 13,159 16,832
Taxation and social security 6,708 5,247 6,138
36,352 28,725 35,063
Six months Six months Year ended
ended ended 30 September
31 March 2026 31 March 2025 2025
Unaudited Unaudited Audited
Non-current £'000 £'000 £'000
Other payables 961 7,907 5,706
Accruals and deferred income include a staff bonus accrual of £2,211,000 (31
March 2025: £3,090,000, 30 September 2025: £3,903,000). Deferred income
includes £1,933,000 (31 March 2025: £1,593,000, 30 September 2025:
£1,814,000) of customer deposits received in advance and £1,065,000 (31
March 2025: £1,128,000, 30 September 2025: £2,885,000) relating to bowling
equipment installations, all of which is recognised in the income statement
during the following 12 months.
Current other payables include £4,958,000 (31 March 2025: £nil, 30
September 2025: £nil) of contingent consideration and £nil (31 March 2025:
£nil, 30 September 2025: 1,764,000) of deferred consideration in respect of
the acquisition of Teaquinn Holdings Inc.
Non-current other payables includes £nil (31 March 2025: £4,974,000, 30
September 2025: £4,475,000) of contingent consideration and £nil (31 March
2025: £1,747,000, 30 September 2025: £nil) of deferred consideration in
respect of the acquisition of Teaquinn Holdings Inc.
9. Property, plant and equipment
Freehold property Short leasehold property £'000 Lanes and pinspotters Plant & machinery, fixtures and fittings Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2024 6,274 72,581 25,693 63,836 168,384
Additions - 19,756 6,824 8,930 35,510
Disposals - (1,622) (396) (1,365) (3,383)
Effects of movement in foreign exchange (204) (521) (139) (95) (959)
At 30 September 2025 (audited) 6,070 90,194 31,982 71,306 199,552
Additions - 4,468 1,287 2,582 8,337
Disposals - (316) - (896) (1,212)
Effects of movement in foreign exchange 107 331 88 55 581
At 31 March 2026 (unaudited) 6,177 94,677 33,357 73,047 207,258
Accumulated depreciation
At 1 October 2024 140 26,373 5,433 34,502 66,448
Depreciation charge 147 5,318 1,203 6,787 13,455
Impairment charge - 235 - 824 1,059
Disposals - (1,572) (332) (1,144) (3,048)
Effects of movement in foreign exchange (8) (40) (24) (27) (99)
At 30 September 2025 (audited) 279 30,314 6,280 40,942 77,815
Depreciation charge 68 2,870 676 3,530 7,144
Impairment charge - 1,835 - 164 1,999
Disposals - (316) - (804) (1,120)
Effects of movement in foreign exchange 5 20 13 15 53
At 31 March 2026 (unaudited) 352 34,723 6,969 43,847 85,891
Net book value
At 31 March 2026 (unaudited) 5,825 59,954 26,388 29,200 121,367
At 30 September 2025 (audited) 5,791 59,880 25,702 30,364 121,737
Short leasehold property includes £2,801,000 (31 March 2025: £2,747,000; 30
September 2025: £1,660,000) of assets in the course of construction, relating
to the development of new centres.
As at 31 March 2026, outstanding capital commitments to fit out new and
refurbish existing sites totalled £4,439,000 (31 March 2025: £10,812,451; 30
September 2025: £345,000).
Impairment
Impairment testing is carried out as outlined in the Group's consolidated
financial statements for the year ended 30 September 2025. Detailed impairment
testing, due to the financial performance of certain centres, resulted in the
recognition of an impairment charge in the period of £1,999,000 (30 September
2025: £1,059,000) against property, plant and equipment assets and £849,000
(30 September 2025: £1,229,000) against right-of-use assets for one bowling
centre (30 September 2025: four mini-golf centres and one combined centre
(note 10), which form part of the UK operating segment.
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 fourteen (FY2025: ten) 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:
Property Amusement machines Total
£'000 £'000 £'000
Cost
At 1 October 2024 220,809 19,328 240,137
Additions 24,254 4,452 28,706
Modifications and remeasurements 4,968 - 4,968
Surrenders - (1,068) (1,068)
Effects of movement in foreign exchange (1,236) - (1,236)
At 30 September 2025 (audited) 248,795 22,712 271,507
Additions 3,248 918 4,166
Modifications and remeasurements 1,649 - 1,649
Surrenders - (384) (384)
Effects of movement in foreign exchange 654 - 654
At 31 March 2026 (unaudited) 254,346 23,246 277,592
Accumulated depreciation
At 1 October 2024 57,048 10,322 67,370
Depreciation charge 13,044 4,006 17,050
Impairment charge 1,229 - 1,229
Surrenders - (859) (859)
At 30 September 2025 (audited) 71,321 13,469 84,790
Depreciation charge 6,757 2,191 8,948
Impairment charge 849 - 849
Surrenders - (344) (344)
At 31 March 2026 (unaudited) 78,927 15,316 94,243
Net book value
At 31 March 2026 (unaudited) 175,419 7,930 183,349
At 30 September 2025 (audited) 177,474 9,243 186,717
Impairment testing is carried out as outlined in the Group's consolidated
financial statements for the year ended 30 September 2025. Detailed impairment
testing resulted in the recognition of an impairment charge in the period of
£849,000 (30 September 2025: £1,229,000) against right-of-use assets for one
bowling centre (30 September 2025: two UK mini-golf centres and one combined
centre) (note 9).
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
Property Amusement machines Total
£'000 £'000 £'000
Lease liabilities
At 1 October 2024 208,600 9,642 218,242
Additions 24,254 4,452 28,706
Modifications and remeasurements 4,968 - 4,968
Accretion of interest 13,113 618 13,731
Surrenders - (241) (241)
Payments (23,816) (4,475) (28,291)
Effects of movement in foreign exchange (1,322) - (1,322)
At 30 September 2025 (audited) 225,797 9,996 235,793
Additions 3,248 918 4,166
Modifications and remeasurements 1,649 - 1,649
Accretion of interest 6,940 304 7,244
Surrenders - (43) (43)
Payments (11,914) (2,472) (14,386)
Effects of movement in foreign exchange 711 - 711
At 31 March 2026 (unaudited) 226,431 8,703 235,134
Current 10,933 4,225 15,158
Non-current 215,498 4,478 219,976
At 31 March 2026 226,431 8,703 235,134
Current 10,645 4,486 15,131
Non-current 215,152 5,510 220,662
At 30 September 2025 225,797 9,996 235,793
( )
11. Goodwill and intangible assets
Goodwill Brand Trademark £'000 Customer relationships £'000 Software Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2024 92,713 7,229 798 1,105 2,903 104,748
Additions - - - - 714 714
Effects of movement in foreign exchange (5) (548) - (37) - (590)
At 30 September 2025 (audited) 92,708 6,681 798 1,068 3,617 104,872
Additions - - - - 264 264
Effects of movement in foreign exchange 3 61 - 18 1 83
At 31 March 2026 (unaudited) 92,711 6,742 798 1,086 3,882 105,219
Accumulated amortisation
At 1 October 2024 - 2,662 516 126 1,121 4,425
Amortisation charge - 569 50 79 457 1,155
Effects of movement in foreign exchange - (33) - (11) - (44)
At 30 September 2025 (audited) - 3,198 566 194 1,578 5,536
Amortisation charge - 284 25 36 267 612
Effects of movement in foreign exchange - 4 - 3 - 7
At 31 March 2026 (unaudited) - 3,486 591 233 1,845 6,155
Net book value
At 31 March 2026 (unaudited) 92,711 3,256 207 853 2,037 99,064
At 30 September 2025 (audited) 92,708 3,483 232 874 2,039 99,336
12. Share capital
The share capital of the Group is represented by the share capital of the
Parent Company, Hollywood Bowl Group plc.
During the period, 736,901 ordinary shares (31 March 2025 and 30 September
2025: 531,122 ordinary shares) of £0.01 each were issued under the Group's
LTIP scheme and 44,435 ordinary shares (31 March 2025: nil, 30 September 2025:
1,265 ordinary shares) of £0.01 each were issued under the Group's SAYE
scheme.
The ordinary shares are entitled to dividends.
13. Loans and borrowings
On 8 May 2025, the Group entered into a £25m revolving credit facility (RCF)
with Barclays Bank plc. The RCF has a termination date of 7 May 2028.
Interest is charged on any drawn balance based on the reference rate (SONIA),
plus a margin of 1.30 per cent (31 March 2025: 1.65 per cent, 30 September
2025: 1.30 per cent).
A commitment fee equal to 35 per cent of the drawn margin is payable on the
undrawn facility balance. The commitment fee rate as at 31 March 2026 was
therefore 0.4550 per cent (31 March 2025: 0.5775 per cent, 30 September 2025:
0.4550 per cent).
Issue costs of £125,000 were paid to Barclays Bank plc on commencement of the
RCF. These costs are being amortised over the term of the facility and are
included within prepayments.
The terms of the Barclays Bank plc facility include a Group financial
covenants that each quarter the ratio of total net debt to Group adjusted
EBITDA pre-IFRS 16 shall not exceed 1.75:1.
The Group operated within the covenants during the period and the previous
period.
14. Performance share-based payments - Long-term employee incentive costs
The Group had the following performance share-based payment arrangements in
operation during the period:
a) The Hollywood Bowl Group plc Long Term Incentive Plan 2023
b) The Hollywood Bowl Group plc Long Term Incentive Plan 2024
c) The Hollywood Bowl Group plc Long Term Incentive Plan 2025
d) The Hollywood Bowl Group plc Long Term Incentive Plan 2026
Long Term Incentive Plans
HWB Group plc operates Long Term Incentive Plans (LTIPs) for certain key
management. In accordance with IFRS 2 Share-based payment, the values of the
awards are measured at fair value at the date of grant. The exercise price of
the LTIPs is equal to the nominal price of the underlying shares on the date
of grant. The fair value is determined based on the exercise price and number
of shares granted, and is written off on a straight-line basis over the
vesting period, based on management's estimate of the number of shares that
will eventually vest.
In accordance with the LTIP schemes outlined in the Group's Remuneration
Policy (Annual Report FY2025), the vesting of these awards is conditional upon
the achievement of an EPS target set at the time of grant and measured at the
end of a 3-year period ending 30 September 2025, 2026, 2027 and 2028 and the
Executive Directors' continued employment at the date of vesting. The LTIPs
also have performance targets based on return on centre invested capital,
emissions ratio for Scope 1 and Scope 2 and (except for LTIP 2025 and 2026)
team member development. LTIP 2025 and 2026 also have a market based
performance condition linked to relative Total Shareholder Return (TSR).
Subject to performance against the targets, the awards will vest three years
after grant and will be subject to a further 2 year holding period.
During the six months ended 31 March 2026, 556,532 (31 March 2025 and 30
September 2025: 572,104) share awards were granted under the LTIPs and an
additional 118,013 (31 March 2025 and 30 September 2025: 67,686) shares were
issued to cover the LTIP 2023 dividend equivalents (31 March 2025 and 30
September 2025: LTIP 2022 dividend equivalents).
For the six months ended 31 March 2026, the Group has recognised £753,996 of
performance share-based payment expense in the profit or loss account (31
March 2025: £758,312 and 30 September 2025: £1,789,739).
The LTIP shares are dilutive for the purposes of calculating diluted earnings
per share.
15. Principal Risks and Uncertainties
The Directors have reconsidered the principal risks and uncertainties of the
Group and have determined that those reported in the Annual Report for the
year ended 30 September 2025 remain relevant for the remaining half of the
financial year. These risks are summarised below, and how the Group seeks to
mitigate these risks is set out on pages 43 to 49 of the Annual Report and
Accounts 2025, which can be found at www.hollywoodbowlgroup.com
(http://www.hollywoodbowlgroup.com) .
In summary, these include:
· The economic condition in the UK and Canada - results in a decline
in GDP, consumer spending, a fall in revenue and inflation pressure impacting
the Group's strategy.
· Breach of covenants - could result in a review of banking
arrangements and potential liquidity issues.
· Expansion and growth - a competitive environment for new centres
resulting in less new Group centre openings. This also includes the impact of
non-bowling centre openings which provide competition for the leisure
discretionary spend.
· Dependency on the performance of core IT systems - reducing the
ability of the Group to take bookings and resulting in loss of revenue.
Inaccuracy of data could lead to incorrect business decisions being made.
· Delivery of products and services from third party suppliers which
are key to the customer experience - impacting on the overall offer to the
customer.
· Management retention and recruitment - lack of direction at centre
level with effect on customer experience. More difficult to execute business
plans and strategy, impacting on revenue and profitability.
· Health and safety - significant injury / death from accidents or
fire. Major food incident including allergen or fresh food issues. Loss of
trade and reputation, potential closure and litigation.
· Cyber security and GDPR - risk of cyber-attack/terrorism could
impact the Group's ability to keep trading and prevent customers from booking
online. Data protection or GDPR breach. Theft of customer or staff data,
including but not limited to, email addresses and the ensuing impact on brand
reputation in the case of a breach.
· Compliance - failure to adhere to regulatory requirements such as
listing rules, taxation, health and safety, planning regulations and other
laws. Potential financial penalties and reputational damage.
· Climate change - increasing carbon taxes, business interruption and
damage to assets and cost of transitioning operations to net zero.
16. Related Party Transactions
There were no related party transactions during the period ending 31 March
2026 or 31 March 2025.
Responsibility Statement
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting'.
· The interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
This responsibility statement was approved by the Board on 27 May 2026 and is
signed on its behalf by:
Stephen Burns
Antony Smith
CEO CFO
27 May 2026 27 May 2026
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