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Wed 15th Jun 2016 - Update: Hollywod Bowl flotation, The Restaurant Group, Bill's
Hollywood Bowl to float: Hollywood Bowl Group, the UK’s largest ten-pin bowling operator, is to launch an initial public offering (IPO) – it is expected to float in July. Having completed the acquisition of 11 Bowlplex centres in December 2015, Hollywood Bowl Group now operates a portfolio of 54 ten-pin bowling centres across the UK under the “Hollywood Bowl”, “AMF” and “Bowlplex” brands. It holds more than five million contacts on its customer database, which the directors believe helps drive customer engagement and the group also operates a 50-seat customer contact centre to manage customer calls and bookings. 12 centres have been refurbished since the start of the financial year ended 30 September 2014 generating, on average, annual returns on investment of 39%. It has opened four new centres since the financial year ended 30 September 2012, which have achieved an average annual return on investment of more than 100% (when including landlord contributions). In the year ended 30 September 2015, sales rose 9% to £86.0m with Adjusted Ebitda up 41% to £20.6m – like-for-like sales growth was 9% (+8% for FY2014). In the six months to 31 March 2016, sales rose 25% to £55.0m and adjusted Ebitda was up 53% to £16.8m. Like-for-like sales growth was 11% for the six months ended 31 March 2016 (+6% for the six months ended 31 March 2015). The company stated: “In FY2015, bowling represented approximately 47% of the group’s total revenue with food and beverage (approximately 28%) and amusement machines (approximately 23%) accounting for the majority of the balance.The group has delivered a consistent track record of strong revenue and Adjusted Ebitda growth. For the financial years ended 30 September 2013 to FY2015, revenue increased from £70.2m to £86.0m, a compound annual growth rate (CAGR) of 10.7%. Over the same period, Adjusted Ebitda increased from £11.0m to £20.6m, a CAGR of 37.0%, and Adjusted Ebitda margin increased from 15.6% to 23.9%. For FY2015, the group had operating cash flow conversion (being cash flow from operations less maintenance capital expenditure and tax) of approximately 75%. Bowling is a relatively low-frequency activity compared to other forms of leisure, such as the cinema. The group’s proposed site roll-out programme will make ten-pin bowling more accessible to new segments of the UK population. The directors believe there is scope to increase the visit frequency by the continued refurbishment of the current estate and by more effectively utilising the customer relationship management system operated by the group and customer database to encourage more regular visits and to promote other revenue streams. The directors believe that it is important for the offering to remain competitively priced; although, as the business continues to enhance its product offering, the directors believe that the achieved price per bowling game will be able to be increased, along with increased spending by customers on food, drinks and amusements. The group’s prices are currently among the lowest of the major multiples. The directors believe that there are a number of opportunities to increase the spend per game by improving the customer experience and dwell time in each centre. In the period from 1 October 2012 to 31 March 2016, the group’s management team completed 16 refurbishments. Refurbishments and new centres have included the development of new bowling environments, such as a smaller, more boutique, ‘urban’ format, the introduction of new dining concepts like Harry’s Diner and Hollywood Diner and the implementation of a new scoring system and VIP lanes (which cost an additional £1 per person). The group has seen strong increases in volumes post refurbishment and refurbished centres have generated attractive returns from capital invested. To date, the group has refurbished only approximately 30% of its existing estate. For the 12 centres refurbished since the start of FY2014, the annual returns on investment average 39 per cent. These returns exclude two of the Group’s centres that were defensive refurbishments in the face of increased local competition.” Stephen Burns, chief executive of Hollywood Bowl Group, said: “We are very excited about the next stage in the development of Hollywood Bowl Group, and believe we have all the attributes to succeed as a listed business. We have achieved a huge amount in the past few years, revolutionising the customer experience and transforming the business through investment and acquisition. We provide an outstanding family entertainment experience and we are looking forward to taking that experience to more and more people across the UK. The IPO will allow us to continue to build the momentum of the business, providing a solid platform for further growth.”

The Restaurant Group hires new chief financial officer: The Restaurant Group has hired Barry Nightingale as chief financial officer. He will start with the company and join the board on Monday (20 June). The company stated: “Barry is an experienced chief financial officer, having recently held that role at Monarch Airlines, where he played a considerable role in the turnaround and prior to that, at leisure giant Betfred, where he led the successful acquisition and integration of the Tote. He has previously held senior finance roles at UK Car Group, Easy Everything and Airtours, having qualified as a chartered accountant with Deloitte. Barry will have accountability for the finance function and also for IT, procurement and property.” Danny Breithaupt, chief executive, said: “I am pleased to welcome Barry to the company. I am delighted that he is able to join immediately and will be able to contribute to and support the implementation of the ongoing review of our operating strategy and brands. Together with his strong financial credentials, he brings very relevant experience from a variety of consumer, leisure and multi-site businesses and will add real strength to our executive Team. We look forward to working with him.” Chairman Debbie Hewitt added: “Barry has a broad commercial background and extensive corporate finance experience, which will bring new insights to the chief financial officer role and which will allow him to make an immediate contribution to this important phase in the company’s development and in the future. We welcome him to the board.”

Bill’s launches own gin: Bill’s has launched its on gin, Bill’s Gin, across its UK restaurants. It is made with specially selected botanical ingredients, including coriander, cardamom, angelica root, grapefruit peel and cubeb berries to give it a smooth texture with a punchy juniper flavour and lingering spicy finish. The idea for a Bill’s Gin came about as a result of former greengrocer and Bill’s founder Bill Collison’s love of all things botanicals. The result is a fresh and flavoursome gin, crafted in the UK. He said: “We’ve joined the gin revolution! My roots as a greengrocer mean I’ve always had an interest in botanicals and so I’m really excited about launching our very own gin. And to mark its launch, we commissioned illustrator Tobias Hall to design a label for the bottle, and he has done us proud with a label that nods to our heritage, our Britishness and the quality of the product.” As well as being the house gin served in the restaurants in a range of summer-inspired cocktails, such as English Country Garden and The Bee’s Knees (part of the partnership with Kew Garden’s “The Hive” installation this summer). Bill’s Gin will also be available to buy in restaurants and online at bills-shop.co.uk this month. 

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