Ten Entertainment - Half-Year Trading Update
12/07/2023 07:00
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RNS Number : 7061F Ten Entertainment Group PLC 12 July 2023
12 July 2023
Ten Entertainment Group plc
Half-Year Trading Update
Consistent profitable growth
Ten Entertainment Group plc ("TEG" or "the Group"), a leading UK based
operator of 49 bowling and family entertainment centres, today announces a
trading update for the 26 weeks to 2 July 2023.
· Continued sales growth building on the record first half in 2022
o +1.6% like-for-like sales growth
o +3.2% total sales growth
o Maintaining step-change performance with sales +57% vs pre-Covid
o Record-breaking Easter performance; biggest sales week in Group's history
· Significant estate expansion continues with at least four new
openings during 2023
o New site in Crewe opened in February and trading well
o Milton Keynes ready to open at the end of July
o Dundee building works almost compete, ready to open in August
o Work has begun on an innovative new entertainment centre in the heart of
Sheffield
· Progressing well for another year of profitable growth
o PBT for H1 23 anticipated to be slightly ahead of last year
o Full year profit growth on track to deliver in line with market
expectation
o Energy now fixed to September 2026 at a level which is significantly below
forecast
o Business still has net cash balance following significant strategic
investment
Sales growth
Like-for-like(1) sales growth in the first half of 2023 was +1.6% compared to
the same period in 2022. This growth builds on the record-breaking performance
in the first half of 2022 when a new baseline in performance was established.
The Group is now delivering sales 57% ahead of pre-Covid levels (+46% on a
like-for-like basis) demonstrating the enduring appeal of bowling in the
growing competitive socialising sector.
To make our proposition even more compelling, we proactively took the decision
to maintain bowling prices at 2019 levels, and we have limited food and drink
price increases to the minimum necessary to only cover inflationary costs.
This has ensured that our customers continue to enjoy the best value leisure
offering in the market.
Strategic development
As well as the development of four brand new centres for 2023, the Group's
ongoing refurbishment programme has seen seven centres transformed in the
first half of 2023, with new games and activities added, resulting in strong
sales growth.
Following the significant investment in growing and improving our estate, the
Group still maintains a healthy net cash balance at half year.
Profitable growth
Last year's first half benefited from reduced rate VAT for hospitality and
business rates relief. These contributed £2m of PBT which was not repeated in
the first half of this year. Even lapping these one-off benefits, the Group
expects to report PBT for H1 23 slightly ahead of last year, demonstrating the
underlying growth.
Cost pressures have been tightly managed in the first half of the year. Labour
inflation has been principally offset through operational and supplier
efficiencies in our centres. Property costs are on long-term leases that are
insulated from short-term fluctuations in RPI. We continue to benefit from our
low electricity prices negotiated before the energy crisis in Europe, and this
has protected the business from a major cost shock. These prices are secure
until September 2024.
We have now signed a new electricity deal, still using 100% renewable energy,
that gives us energy price certainty from the end of our current deal until
September 2026. The new contract costs £1.8m per year more than the current
contract, but this is affordable and significantly less than we had been
expecting to pay, with some forecasts indicating that annual costs may have
been set to increase by £5m or more.
For the balance of 2023 we expect to deliver low single-digit sales growth.
Full year profits are expected to be within the range of market consensus(2).
We will open Milton Keynes and Dundee by the end of the summer and Sheffield
is expected to open in time for Christmas with a fresh new city centre
atmosphere over two floors and a range of new and innovative games and
activities.
TEG plans to announce its half-year results on 20 September 2023.
Graham Blackwell, Chief Executive Officer, commented:
"I am delighted that the first half of 2023 has delivered growth despite a
difficult economic backdrop.
We have been relentless in our focus on value-for-money and high-quality
entertainment and our customers have rewarded us with their loyalty. We
continue to evolve and improve our proposition with new sites, new games and
activities.
We are well set to continue to drive profitable growth in the second half of
the year and to meet market expectations."
Enquiries:
Ten Entertainment Group plc
via Instinctif Partners
Graham Blackwell, Chief Executive Officer
Antony Smith, Chief Financial Officer and Company Secretary
Instinctif Partners
Tel: 020 7457 2020
Matthew Smallwood
Justine Warren
Olga Bate
About Ten Entertainment Group plc
The Group is a market leading social entertainment business in the UK market
with a total of 49 entertainment centres anchored on Tenpin Bowling and
trading under the Tenpin brand with 1,166 bowling lanes across the estate. The
Group also has a variety of entertainment offerings, such as amusement
machines, table-tennis, soft play, escape rooms, laser games and pool tables,
plus food and beverages.
(1)Like-for-like sales compares sales of open centres against the same centres
and same time period in 2022 excluding £1m of benefit in 2022 as a result of
the reduced rate of VAT that applied to hospitality and leisure. This compares
48 of our current 49 centres and takes the 26 weeks to 2 July 2023 and
compares against the 26 weeks to 3 July 2022.
(2)Consensus Profit Before Tax is between £27.7m-£29.6m based on latest
analyst forecasts.
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