Hollywood Bowl Group Plc CAPEX surged on 53.4% and Revenue increased on 7.8%
13 Dec 2019 • About Hollywood Bowl Group Plc (
$BOWL) • By InTwits
Hollywood Bowl Group Plc reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hollywood Bowl Group Plc is a growth stock: FY2019 revenue growth was 7.8%, 5 year revenue CAGR was 10.5% at FY2019 ROIC 22.3%
- Hollywood Bowl Group Plc has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.2%. At the same time it's in pair with industry average of 12.6%
- CAPEX is quite volatile: £1m in FY2019, £1m in FY2018, £3m in FY2017, £1m in FY2016, £0m in FY2015
- The company has highly profitable business model: ROIC is 22.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.0x while industry average is 0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Hollywood Bowl Group Plc's Revenue increased on 7.8%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.53 pp from 29.8% to 29.2% in FY2019.
Gross Margin showed almost no change in FY2019. During FY2015-FY2019 Gross Margin topped in FY2017 at 86.5% and was declining since that time. SG&A as a % of Revenue decreased slightly on 1.6 pp from 65.5% to 63.8% in FY2019. During FY2015-FY2019 SG&A as a % of Revenue topped in FY2016 at 71.7% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2019.
Net Income margin increased slightly on 1.6 pp from 15.6% to 17.2% in FY2019. The efficient tax rate was 19.2% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 12.6%. Hollywood Bowl Group Plc's CAPEX/Revenue increased on 3.1 pp from 9.5% in FY2016 to 12.6% in FY2019. For the last three years the average CAPEX/Revenue was 11.1%.
Inventories as a % of Revenue showed almost no change at 0.93% in FY2019.
Return on investment
The company operates at high and attractive ROIC (22.3%) and ROE (22.7%). ROIC increased slightly on 1.8 pp from 20.5% to 22.3% in FY2019. ROE increased on 2.3 pp from 20.3% to 22.7% in FY2019. ROIC followed a growing trend at 2.1 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.0x and Debt / EBITDA is 0.7x. Net Debt / EBITDA decreased slightly on 0.010x from 0.1x to 0.048x in FY2019. Debt decreased on 4.9% while cash decreased on 4.3%. Net Debt/EBITDA followed a declining trend in the last 5 years.
Hollywood Bowl Group Plc has good short term financial stability: Interest coverage ratio (ICR) is 28.9x. Hollywood Bowl Group Plc has no short term refinancing risk: cash is higher than short term debt (1,806.4%).
Average interest expence charged on company's debt was 3.7% in FY2019.
Valuation and dividends
Hollywood Bowl Group Plc's trades at EV/EBITDA 11.1x and P/E 18.9x.
The company paid 71.8% of Net Income as dividends in FY2019.
Management team
At the end of financial year the company had 5.7% shares owned by insiders. Insider ownership didn't change in 2019.
At the end of financial year the company had 2,069 employees. The number of employees increased slightly on 1.2%. Average revenue per employee in FY2019 was £62,781 and it increased on 6.5%.
Financial and operational results
FY ended 30 Sep 2019
Hollywood Bowl Group Plc ($BOWL) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 86.0 | 106.6 | 114.0 | 120.5 | 129.9 | 7.8% |
| Gross Profit | 71.1 | 89.4 | 98.6 | 103.8 | 111.4 | 7.3% |
| SG&A | 58.0 | 76.4 | 76.5 | 78.9 | 82.9 | 5.1% |
| EBITDA | 21.6 | 24.2 | 32.7 | 35.9 | 38.0 | 5.8% |
| EBIT | | | | 24.9 | 28.4 | 14.3% |
| Interest expence | | | | 0.9 | 1.0 | 8.2% |
| Tax | | | | 5.2 | 5.3 | 3.0% |
| Net Income | 3.6 | 1.2 | 18.3 | 18.8 | 22.3 | 18.6% |
| Stock Based Compensation | | | | 0.4 | 0.7 | 86.5% |
Balance Sheet
|
|---|
| Cash | 14.7 | 9.2 | 21.9 | 26.0 | 24.9 | -4.3% |
| Accounts Receivable | | | | | 8.0 | |
| Inventory | | | | 1.3 | 1.2 | -3.3% |
| Short Term Debt | 1.0 | 0.0 | 1.4 | 1.4 | 1.4 | 0.0% |
| Long Term Debt | 92.3 | 29.4 | 28.1 | 26.8 | 25.4 | -5.2% |
Cash flow
|
|---|
| Capex | 7.1 | 10.2 | 13.6 | 10.7 | 16.4 | 53.4% |
| Dividends | | | | 14.0 | 16.0 | 14.3% |
Ratios
|
|---|
| Revenue growth | 9.3% | 23.9% | 6.9% | 5.8% | 7.8% | |
| EBITDA growth | 44.6% | 12.0% | 35.3% | 9.7% | 5.8% | |
|
|---|
| Gross Margin | 82.6% | 83.9% | 86.5% | 86.1% | 85.7% | -0.4% |
| EBITDA Margin | 25.1% | 22.7% | 28.7% | 29.8% | 29.2% | -0.5% |
| EBIT Margin | | | | 20.6% | 21.9% | 1.2% |
| SG&A, % of revenue | 67.5% | 71.7% | 67.1% | 65.5% | 63.8% | -1.6% |
| SBC, % of revenue | | | | 0.3% | 0.5% | 0.2% |
| Net Income Margin | 4.2% | 1.1% | 16.0% | 15.6% | 17.2% | 1.6% |
| CAPEX, % of revenue | 8.2% | 9.5% | 11.9% | 8.9% | 12.6% | 3.8% |
|
|---|
| ROIC | 14.7% | 14.3% | 19.7% | 20.5% | 22.3% | 1.8% |
| ROE | | | 22.3% | 20.3% | 22.7% | 2.3% |
| Net Debt/EBITDA | 3.6x | 0.8x | 0.2x | 0.1x | 0.0x | -0.0x |
| Interest expence / Average debt | | | | 3.2% | 3.7% | 0.5% |
People
|
|---|
| Insider ownership | | | | 5.7% | 5.7% | 0.0% |
| Employees | | | | 2,044 | 2,069 | 1.2% |
| Revenue/Employee, th. £ | | | | 59 | 63 | 6.5% |
Peers in Leisure Facilities
Below we provide Hollywood Bowl Group Plc benchmarking against other companies in Leisure Facilities industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
