| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 159.65 | -38 |
| Intrinsic value (DCF) | 137.88 | -47 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 2.62 | -99 |
Hollywood Bowl Group plc (LSE: BOWL.L) is the UK's leading operator of ten-pin bowling and mini-golf entertainment centers. Headquartered in Hemel Hempstead, the company operates 64 venues under its flagship Hollywood Bowl brand, as well as AMF Bowling and Puttstars. Serving the leisure and family entertainment sector, Hollywood Bowl Group capitalizes on the growing demand for experiential out-of-home entertainment. The company's vertically integrated business model combines bowling, arcade games, and F&B offerings to create a compelling customer proposition. With a strong presence across the UK, Hollywood Bowl benefits from economies of scale in procurement and operations. The company has demonstrated resilience post-pandemic, leveraging its market-leading position in the £1.2bn UK bowling market. Its focus on premium experiences, including boutique bowling and immersive mini-golf, positions it well in the competitive leisure landscape.
Hollywood Bowl presents an attractive investment case as the UK's dominant bowling operator with proven cash generation capabilities. The company's 2024 financials show healthy revenue growth to £230.4m and net income of £29.9m, supported by strong operating cash flow of £68m. With a market cap of £504m and beta of 0.855, the stock offers defensive characteristics within consumer cyclicals. The 12.06p dividend per share provides a yield appeal. However, investors should note the £218m debt load and capital-intensive nature of leisure venues. The company's expansion into mini-golf (Puttstars) diversifies revenue streams but faces competition from emerging experiential concepts. Valuation appears reasonable given the company's market leadership and operational leverage potential.
Hollywood Bowl Group enjoys significant competitive advantages as the UK's largest bowling operator with 64 centers. Its scale allows for superior procurement terms, shared marketing costs, and operational efficiencies that smaller rivals cannot match. The company's multi-brand strategy (Hollywood Bowl for mainstream, AMF for value, Puttstars for mini-golf) creates segmentation advantages. Vertical integration with in-house F&B operations boosts margins compared to outsourced models. Hollywood Bowl's modernized venues with advanced scoring systems and premium amenities differentiate from dated independent centers. However, the company faces competition from both traditional leisure operators and new experiential concepts. Its main vulnerability lies in the capital-intensive nature of physical venues, which creates high fixed costs. The company mitigates this through careful site selection and revenue diversification (parties, corporate events). Technology investments in online booking and loyalty programs enhance customer retention. While bowling remains the core revenue driver, the Puttstars expansion provides growth optionality in the competitive mini-golf segment dominated by Paradise Island Adventure Golf and Treetop Adventure Golf.