Half-year Results
Summary by AI BETAClose X
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 25th June 2026 with a record date of 26th June and payment date of 24th 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
27th 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 |
|
|||||||||
|
|
Note |
Before adjusting items Unaudited £'000 |
Adjusting items (note 4) Unaudited £'000 |
Total Unaudited £'000 |
Before adjusting Items Unaudited £'000 |
Adjusting Items (note 4) Unaudited £'000 |
Total Unaudited £'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 Retranslation gain/(loss) of foreign currency denominated operations |
|
519 |
- |
519 |
(1,219) |
- |
(1,219) |
|
|||||
|
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 |
|
|
|
||||||||||
|
|
|
|
|
|
|||||||||
|
|
Note |
Six months ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'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 ended 31 March 2026 Unaudited £'000
|
Six months ended 31 March 2025 Unaudited £'000
|
Year ended 30 September 2025 Audited £'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
|
|
Note |
31 March 2026 Unaudited £'000 |
31 March 2025 Unaudited £'000 |
30 September 2025 Audited £'000 |
|
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 £'000 |
Capital redemption reserve £'000 |
Share premium £'000 |
Merger reserve £'000 |
Foreign currency translation reserve £'000 |
Retained £'000 |
Total £'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 ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'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 and equipment, software and ROU Assets |
|
|
(6) |
20 |
|
|
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 Unaudited £'000 |
Canada Unaudited £'000 |
Total Unaudited £'000 |
UK Unaudited £'000 |
Canada Unaudited £'000 |
Total Unaudited £'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 Unaudited £'000 |
Canada Unaudited £'000 |
Total Unaudited £'000 |
UK Unaudited £'000 |
Canada Unaudited £'000 |
Total Unaudited £'000 |
|
Revenue |
118,376 |
23,163 |
141,539 |
108,168 |
21,081 |
129,249 |
|
Group adjusted EBITDA1 pre-IFRS16 |
37,929 |
4,319 |
42,248 |
|
|
|
|
Group adjusted EBITDA1 |
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 disposals |
(79) |
85 |
6 |
(24) |
4 |
(20) |
|
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 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'000 |
|
Insurance settlement1 |
|
- |
1,613 |
|
Administrative expenses2 |
|
- |
(62) |
|
Impairment of PPE and ROU Assets3 |
|
(2,848) |
- |
|
Contingent consideration - administrative expenses4 |
|
(114) |
(884) |
|
Adjusting items before interest expense |
|
(2,962) |
667 |
|
Contingent consideration - interest expense4 |
|
(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 ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'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 ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'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 ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'000 |
Year ended 30 September 2025 Audited £'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
|
Current |
Six months ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'000 |
Year ended 30 September 2025 Audited £'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 |
|
Non-current |
Six months ended 31 March 2026 Unaudited £'000 |
Six months ended 31 March 2025 Unaudited £'000 |
Year ended 30 September 2025 Audited £'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 £'000 |
Short leasehold property £'000 |
Lanes and pinspotters £'000 |
Plant & machinery, fixtures and fittings £'000 |
Total £'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 £'000 |
Amusement machines £'000 |
Total £'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 £'000 |
Amusement machines £'000 |
Total £'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 £'000 |
Brand £'000 |
Trademark £'000 |
Customer relationships £'000 |
Software £'000 |
Total £'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.
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 CFO27 May 2026 27 May 2026
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