LONDON (ShareCast) - (Sharecast News) - Shares in Hollywood Bowl slumped on Thursday as the driest UK spring in a century hit sales, although annual guidance was held after a rise in core first-half earnings.


The company on Thursday said earnings before interest, taxes, depreciation, and amortisation rose 2.9% to £49.7m. On an adjusted pre-tax basis earnings were down 9.4% to £49.7m.

"The recent warm and dry weather - marking the driest spring in over a century - has had a short-term impact on trading over that period. In response, we have proactively managed margins and costs, maintaining strong operational performance, which remains at historically high levels," Hollywood Bowl said.

Drier weather earlier in the year between February and late March contributed to a fall in the number of bowling game bookings during its first half to March 31, down 4.5% in the UK on a like-for-like basis. Shares in the firm were down 9% in early London trade.

The fall was also driven by the timing of Easter and last year's leap year, which gave an extra day of trading, "as well as the continuing competition from new competitive socialising offerings opening in certain locations", Hollywood Bowl added.

"Whilst it has been challenging to mitigate the inflationary costs in first half, we are pleased to have achieved this."

"We remain confident in our outlook for the second half of the year. We are well-prepared for the key July and August holiday period and continue to expect full-year EBITDA to fall within the range of current analyst forecasts."

Analysts at Shore Capital maintained a 'buy' rating on the stock, saying they "continue to see material upside from current levels".

"The trading performance remains resilient, free cash flow is robust and set to build to over £50m per annum, return on investment is high, the pipeline is expanding, and management retains a target of 130 centres over the next decade, delivery of which could see EBITDA exceed £100m and underpins our discounted cash flow derived fair value of 400p per share."



Reporting by Frank Prenesti for Sharecast.com

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