Hollywood Bowl Group plc
Annual report and accounts 2024
Growing through
investment in
the customer
experience
We continuously invest
Our unique purpose-led culture and proven customer-driven
investment strategy is enabling us to further develop our
market‑leading position and capitalise on the growth opportunities
in the territories we operate in.
in the customer experience
Strategic report
1
Highlights
2
Strategic roadmap
3
Investment case
4
At a glance
6
Chair’s statement
10 Growth
12
Our markets
20 Chief Executive Officer’s review
26 Our culture
28 Business model
30 Strategy and KPIs
38 Chief Financial Officer’s review
44 Section 172
45 Stakeholder engagement
48 Sustainability overview
64 TCFD
74 Risk management
75 Principal risks
80 Going concern and viability statement
81
Non-financial and sustainability
information statement
Governance report
82 Chairs introduction to governance
84 Board of Directors
86 Corporate governance report
93 Report of the Nomination Committee
99 Report of the Audit Committee
104 Report of the Corporate
Responsibility Committee
105 Report of the Remuneration Committee
109 Directors’ Remuneration Policy
119 Annual report on remuneration
128 Directors’ report
131 Statement of Directors’ responsibilities
Financial statements
133 Independent auditor’s report
141 Consolidated income statement and
statement of comprehensive income
142 Consolidated statement of financial position
143 Consolidated statement of changes in equity
144 Consolidated statement of cash flows
145 Notes to the financial statements
172 Company statement of financial position
173 Company statement of changes in equity
173 Company statement of cash flows
174 Notes to the Company financial statements
180 Company information
Highlights
Financial
performance
LFL revenue growth1
+0.2%
28.3
2024
2023
2022
Profit after tax
£29.9m
34.2
29.9
37.5
2024
2023
2022
Adjusted profit after tax1
£32.3m
36.6
32.3
39.4
2024
2023
2022
Revenue
£230.4m
215.1
230.4
193.7
2024
2023
2022
Total average spend
per game
£11.05
Earnings per share
17.42p
19.92
17.42
21.91
2024
2023
10.82
11.05
10.68
2024
2023
2022
2022
Adjusted earnings
per share1
18.82p
21.37
18.82
23.07
2024
2023
2022
Group adjusted EBITDA1
£87.6m
82.7
87.6
77.5
2024
2023
2022
Total revenue growth
+7.1%
11.0
169.5
2024
2023
2022
Total ordinary dividend
per share
12.06p
11.81
12.06
11.53
2024
2023
2022
Net cash
£28.7m
52.5
28.7
56.1
2024
2023
2022
1 Definitions for these measures are in
the key performance indicators section
(pages 36 and 37). A reconciliation
between key adjusted and statutory
measures, as well as notes on
alternative performance measures, is
provided in the Chief Financial Officer’s
review (pages 38 to 42). Management
believes providing these specific
financial highlights gives valuable
supplemental detail regarding the
Group’s results, consistent with how
management and investors evaluate
the Group’s performance.
Canadian growth
Find out how we are utilising our proven
Group operating model to develop our
business in Canada.
Read more on pages 16 to 19
Career development
Find out how our training and development
programmes are delivering career
opportunities for our team members.
Read more on pages 52 to 53
Energy saving
Find out how we are installing solar panels
and energy-efficient technology to reduce
our carbon footprint.
Read more on pages 54 to 55
7.1
4.5
0.2
1
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Strategic roadmap
Our collective purpose drives us
We bring families and friends together to enjoy
affordable fun and safe, healthy competition.
Our strategy…
is underpinned by our commitment to sustainable growth…
and strong market fundamentals…
enabling us to create value for our stakeholders
Driving revenue
growth
Safe and inclusive
leisure destinations
Continually enhancing
our customers’
experience through
service excellence, and
innovative products
and technology
Building energetic and
engaging teams who
share our values and are
proud to be part of
our culture
Maintaining the support
of our investors to help
us grow the business
and consistently
deliver returns
Outstanding
workplaces
Sustainable
centres
Active asset
refurbishment
New centres and
acquisitions
Focus on
our people
International
expansion
Read more on pages 30 to 36
Read more on pages 48 to 59
Read more on page 15
Read more on page 19
Read more on pages 28 to 29
UK
Canada
Rise of competitive
socialising
Retail and leisure
combining
Under investment
in the sector
Sector
consolidation
2
Hollywood Bowl Group plc
Annual report and accounts 2024
Investment case
Hollywood Bowl Group is the UK’s established market leader with national
scale and the second largest operator of ten-pin bowling centres globally.
We operate a high-quality, well-invested estate with diverse revenue streams
and multiple growth levers, including our expansion into Canada.
Investment case
1
Clear strategy and
market‑leading position
As the leader in the UK ten-pin bowling and
competitive socialising markets, and the Canadian
ten-pin bowling market, we are well positioned to
capitalise on the available growth opportunities.
Read more on pages 30 to 35
8
Centres added to the Group estate in FY2024.
2
Strong customer proposition
Our centres provide fun and safe environments for
customers. We continually enhance their experience
through a focus on feedback insights, service
excellence, and innovative products and technology.
Read more on pages 12 to 19
70%
UK net promoter score.
3
People and leadership
Our highly motivated and engaged operational teams
deliver customer-focused experiences, led by a stable
and experienced management team committed to
sustainable growth.
Read more on pages 26 to 27
2*
Our UK high-quality employee experience rating
from WorkL.
4
New centre growth pipeline
Alongside our ongoing centre refurbishment programme,
we are targeting more new centres for our Hollywood
Bowl and Splitsville brands, supported by our rigorous
and disciplined location selection process.
Read more on page 33
130
Target of total Group centres by the end of FY2035.
5
Highly cash generative with
strong liquidity
By driving revenues, achieving healthy margins, and
maintaining a strong balance sheet, we continue to invest
appropriately in enhancing and scaling our business.
Read more on pages 141 to 179
£28.7m
Net cash at year end.
3
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
At a glance
Market leading
We are market leaders in the UK and Canada in the inclusive competitive socialising activity
of ten-pin bowling.
Our centres feature bowling lanes, a licensed bar, a diner, and an amusement zone with the
latest games to ensure that everyone is entertained. We continuously enhance our
customers’ experience through a focus on responding to customer insights, delivering
service excellence, and offering innovative products and technology.
entertainment experiences
Splitsville centres
(including Stoked)
Central support office
13
Centres
Canada
Canada’s largest ten-pin
bowling operator
Our fast-growing Canadian family
entertainment brand with high-quality
centres located in standalone locations, or
co‑located with mixed retail or leisure units.
Read more on pages 16 to 19
4
Hollywood Bowl Group plc
Annual report and accounts 2024
Hollywood Bowl centres
(including mini-golf centres)
Central support office
The UK’s competitive socialising
market leader
Our long-established ten-pin bowling brand
with high-quality centres co-located with
mixed retail or leisure units.
Read more on pages 12 to 15
72
Centres
UK
5
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Chair’s statement
Another year of
record performance
Our performance is testament
to the dedication of our team
members and proof of their hard
work in delivering outstanding
customer experiences.”
Peter Boddy, Non-Executive Chair
Read full biography on page 84
6
Hollywood Bowl Group plc
Annual report and accounts 2024
Hollywood Bowl Group has had another successful
year, delivering further revenue growth and making
excellent strategic progress, enhancing the quality
of our estate and expanding our footprint in the UK
and Canada.
The successful execution of our growth strategy, underpinned
by our customer-focused, value-for-money proposition, is
strengthening our position as a market-leader in both the ten-pin
bowling market and the wider competitive socialising market.
Group revenue grew by 7.1 per cent to £230.4m and 0.2 per cent on
a LFL basis, as we achieved another year of record revenues, in line
with expectations, against the very strong prior year comparative
and previous two years of exceptional growth. Our continued focus
on operational excellence and customer experience supported our
growth in Group adjusted EBITDA to £87.6m and delivered profit after
tax of £29.9m.
The strong performance in FY2024 is a testament to the continued
dedication of our team members and proof of their hard work in
delivering outstanding customer experiences, as demonstrated by
our record customer satisfaction levels achieved during the year.
We made further progress in our ESG strategy and our collective
efforts to embed a sustainable and responsible approach across all
of our operations are a real source of pride.
FY2024 was a year of further investments supporting the Group’s
growth strategy, including the record ongoing investment into our
existing assets and growing our estate, supported by our strong
liquidity. We have invested more than £50m into the estate in the
past year, maintaining the current centres, continuing to roll out Pins
on Strings, opening and acquiring new centres as well as completing
12 refurbishments across the UK and Canada. We added eight
centres to our estate during the year, bringing our total to 85, with
72 in the UK and 13 in Canada.
We have also continued to invest in technology to support our next
stage of growth, and in July launched a new modern and flexible
reservation platform. The system has been rolled out in the UK with
excellent results including improved usability, reliability, speed and
reduced operational costs. Already being piloted, we will be rolling
this system out in our Canadian operations in FY2025.
Further growth in the UK
UK families continue to face cost of living challenges, and against
that backdrop, delivering high-quality experiences that can be
enjoyed for great value is even more important. Our resilience to
inflationary pressures means that we have been able to keep our
prices affordable, a family of four being able to enjoy a game of
bowling with us for under £26. Our bowling prices in the UK rose by
just 20 pence in FY2024, well below inflation, to an average of £7.15
for adults and £6.21 for children, and with food, drink and amusement
price increases also kept low, meaning that, in real terms, it was
cheaper than the previous year for our customers to enjoy an outing
to Hollywood Bowl.
UK LFL performance was driven by increased spend per game in all
areas of the business and an overall spend per game increase of
3.3 per cent. Game volumes declined marginally, primarily as a result
of the difference in trading conditions compared to FY2023 when
unseasonal weather conditions during key trading periods drove
people indoors, compounded by the impact of a summer of major
sporting events in FY2024.
We are constantly innovating and improving our customer experience,
trialling new initiatives which, if successful, are introduced to our centres
as part of our ongoing refurbishment programme. We completed ten
UK centre refurbishments in the year, some of which are now
entering their second or third-generation cycle. We continue to
deliver impressive returns on investment for all generations of
refurbishments as well as receiving excellent customer feedback.
We have continued to grow our UK estate, adding four centres
during the year, including one acquisition, Lincoln Bowl, which
has since been rebranded and refurbished and is trading in line
with expectations.
Excellent progress in Canada
Our Canadian business continues to go from strength to strength.
Since entering the market in May 2022, through the acquisition of
Splitsville and its five centres, we have more than doubled the size
of our estate to 13 centres. In FY2024, we added four new centres
through the three acquisitions and opening of our first new,
state-of-the‑art development in Waterloo, Ontario.
The refurbishment programme is progressing well and we completed
two during the year, leveraging our customer-led operating expertise,
technology and brand experience from the UK. We continue to test
and seek feedback when developing new ways to evolve the offer for
customers in Canada, allowing us to attract a wider customer base.
We have so far transferred four UK team members to Canada,
demonstrating the importance we place on the sharing of
knowledge between our UK and Canadian teams.
85
Group centres
(FY2023: 79)
70%
UK net promoter score in FY2024
7
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Excellent progress in Canada continued
Splitsville is already the largest single branded operator in the
territory and, as the market remains under-invested and highly
fragmented, we are excited about the significant opportunity to
grow and add value to the Splitsville business. We have a pipeline
of acquisition opportunities and new development centres and by
the end of FY2025, we expect to have tripled our original size.
Capital allocation policy
Given our financial position and cash balance at year end, the Board
is pleased to declare a final ordinary dividend of 8.08 pence per
share in line with our capital allocation policy of 55 per cent of
adjusted profit after tax. Together with the interim dividend of
3.98 pence per share, this represents 2.1 per cent growth in the
ordinary dividend compared to the prior year. Total shareholder
returns for FY2024 will amount to £20.7m.
Social and environmental responsibility
We are progressing with our environmental and social agenda, with
oversight from the Corporate Responsibility Committee which we
established in FY2023. To support our wider pathway to achieving net
zero, we installed more solar panels in our centres, with 42 per cent of
our UK estate now fitted with nearly 15,000 solar panels, providing
clean energy to our centres and reducing our reliance on bought-in
energy and exposure to energy prices. We have also made progress
with our waste recycling levels, our responsible construction
approach and our supplier engagement programme. Furthermore,
we have also begun to introduce our sustainability strategy to our
Canadian operations and have set targets for FY2025.
Our people are our most important asset and are critical to our
customers receiving a consistently high-quality experience in our
centres. We are proud to support all our team members through our
industry-leading training and development programmes, as well as
financially through comprehensive bonus and incentive schemes.
We have made further progress through our updated employer brand
which was relaunched last year, enabling us to attract the best talent
but also to give our team members the opportunity to progress and
develop their careers. Our UK operation has a low staff turnover rate
compared to the wider hospitality sector, and we are delighted that
58 per cent of management appointments in FY2024 were filled by
internal talent. The efforts of our people team were recognised once
again, as the Group was named one of The UK’s Best Big Companies
to Work For.
We were pleased to continue to support the communities where we
operate, including increasing the number of concessionary discount
games played to over 1m and breaking our charity fundraising target
for our partner Macmillan by raising £85,000.
Board changes
Nick Backhouse, who served as the Group’s Senior Independent
Director (SID), retired by rotation from the Board at the Annual
General Meeting (AGM) in January 2024. Consequently, Rachel
Addison, appointed to the Board in July 2023, has stepped up as
SID and also taken on the position of Chair of the Audit Committee.
In line with the Group’s succession planning, I too will be retiring by
rotation from the Board after ten years as Non-Executive Chairman,
Chair of the Nomination Committee and member of the Corporate
Responsibility Committee at the AGM in January 2025.
Darren Shapland has been appointed as an independent
Non‑Executive Director and Chair Designate, as well as a member
of the Nomination and Corporate Responsibility Committees,
effective 1 December 2024. Darren brings extensive experience
from his 40-year career in retail and consumer businesses and I
am confident he is the right person to lead the Board as the Group
enters its next stage of growth.
I am very proud of the Group’s many achievements since I joined in
2014, up to and including its inclusion in the FTSE 250 in March
2024, and look forward to following the Group’s continued growth.
Long-term growth
Our continued strong performance demonstrates the robust
demand for fun, affordable, family-friendly leisure activities.
We remain resilient to inflationary pressures with over 70 per cent
of Group revenue not subject to cost-of-goods inflation, enabling us
to continue to meet this demand while reinforcing our reputation for
delivering high-quality, great value-for-money experiences.
The new measures announced by the UK Government in the
October Budget will disproportionately impact the hospitality
industry as a result of the significantly increased employment costs
for a sector powered by people. Even with these new changes,
Hollywood Bowl remains well positioned for future growth and to
mitigate the significantly increased labour costs while keeping our
bowling offer affordable for our customers.
The Group has a successful, proven strategy focused on growing
and improving the quality of the estate in the UK and Canada, and
enhancing the customer experience. The highly cash generative
nature of the business and strength of our balance sheet mean that
we are well placed to pursue opportunities to invest in our future
growth and meet our target of 130 centres by 2035, whilst continuing
to make returns to shareholders.
I would like to take the opportunity in this, my final Annual Report
as Chairman, to thank every team member and my fellow Board
members, past and present, for ten memorable and exciting years.
I also wish to thank the many and varying stakeholders for the
support and contributions they have made over the past ten years.
It has been a privilege to serve as the Group’s Chairman.
Hollywood Bowl Group has a very promising future, and I wish it
every success.
Peter Boddy
Non-Executive Chair
16 December 2024
Chair’s statement continued
8
Hollywood Bowl Group plc
Annual report and accounts 2024
Since the IPO, we have grown the Group estate from 54
to 85 centres, all the while continuing to innovate and
enhance our customer experience, creating value for both
institutional and employee shareholders. Entering Canada,
our first international steps, was a significant milestone for
the business and it is exciting to see the Group at the early
stages of its growth potential in this market.
Finally, spending time on the lanes and enjoying some
friendly competition with colleagues, investors and my
own family has been a major advantage of this role,
meeting our teams and getting to witness first hand our
amazing customer offer.
Where would you like to see the business in ten
years time?
I look forward to seeing the business continually evolve
and innovate its customer proposition, and grow the size
of the estate. Already the market leader in the UK and
Canada, the Group is well positioned to meet its growth
targets of at least 130 centres in those two markets, which
would be a significant achievement.
There may be opportunities to develop the business in
new ways, perhaps in new countries with attractive market
dynamics and returns potential. I am confident that the
Board will continue to weigh up any potential risks and
maintain its prudent approach. However, for now, the
Group has plenty of work to do in the UK and Canada.
We ask Chair Peter Boddy about
his highlights of FY2024 and future
ambitions for the Group
Q&A
with Peter
What were the key achievements in the year?
Our teams have once again delivered an outstanding
performance. Even after two years of exceptional
performances, underpinned by favourable trading
conditions, we have continued to again drive performance
from within our centres, without relying on price-led
growth, keeping the customer experience at the heart of
everything we do. This is largely due to the dedication and
hard work of our team members which is evidenced by the
positive customer feedback and record service levels
achieved in the year.
As a gateway employer, the fact that Hollywood Bowl
has one of the lowest staff turnover rates in our industry
is a continual source of pride, as is the quality of our
recruitment, training and talent development
programmes. This year saw 58 per cent of management
appointments filled by internal talent, as well as some of
our UK team members taking on new roles in our
Canadian business.
What have been your highlights in your ten
years as Chairman of the Board?
There are too many to count! It has been a pleasure
working with such fantastic people over the past ten years.
At the time of the IPO in 2016, I said that I firmly believed
that Hollywood Bowl Group had a very promising future.
How true that was. There have been many challenges
along the way, not least a global pandemic, but I am proud
of the way we have consistently risen to the occasion and
emerged in a stronger position.
Q
Q
Q
A
A
A
9
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Growth
41
Centres
Merger of selected AMF and
Hollywood Bowl centres
Acquisition of 11 Bowlplex
locations (rebranded to
Hollywood Bowl) growing the
estate to 54 centres
Group lists on LSE Main Market
£240m
Market capitalisation
Launch of Group
sustainability strategy
Estate investment continues
during COVID-19 closure
Launch of Puttstars
mini-golf brand
2010
2016
2020
2021
Our growth story
The Group was created in 2010 with
41 UK ten-pin bowling centres. It has
since significantly grown its presence
and scale in the UK market and, more
recently, in the Canadian market.
10
85
Centres
Group admitted to FTSE 250
Record levels of Group
capital investment
Launch of new customer
booking system
Acquisition of Splitsville –
a Canadian bowling operator
with five centres
130
Centres
Target combined estate scale
for the UK and Canada
2022
2024
2035
£215m
Revenue
Splitsville becomes
Canada’s market-leading
ten-pin bowling brand
2023
11
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Our markets
The complete
entertainment experience
United Kingdom
12
Hollywood Bowl Group plc
Annual report and accounts 2024
1,607
Bowling lanes
(FY2023: 1,515)
72
Centres*
(FY2023: 70)
17.3m
Games bowled
(FY2023: 17.1m)
The clear market leader
Ten-pin bowling is a key constituent of the UK’s growing
and diverse competitive socialising sector, offering an
inclusive, fun, and affordable experience for friends,
families, and work colleagues.
Hollywood Bowl is the market-leading brand in the
UK, specialising in operating large, high-quality
bowling centres.
Our centres are predominantly located in prime
‘out-of-town’ multi-use leisure parks alongside cinemas
and casual dining sites.
The complete entertainment experience
In addition to bowling, we offer food, drink, and
amusements, providing a complete entertainment
experience that encourages longer visits and
increased secondary spending.
Our popular and simplified food menu offers value and
quality meals, snacks and sharer options, all served
quickly. This has helped achieve a 6.0 per cent increase
in diner spend per game vs prior year.
Our comprehensive drinks range also offers great value
for money and we saw a 0.6 per cent increase in bar
spend per game vs prior year supported by our at-lane
drink ordering technology which allows customers to
order from their phones.
Our best-in-class family-friendly games and
amusements areas are constantly evolving with
innovations and the introduction of new game formats.
A rolling machine upgrade programme allows us to
continue to improve the quality of our amusement
offering, with 578 new machines being introduced into
the estate in FY2024. Most amusements can still be
played for as little as £1, with Nayax ‘tap to play’ providing
digital coin credit and cash payment options.
Overall we saw a 6.1 per cent increase in amusement
spend per game vs prior year.
* Includes Putt & Play centres.
13
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Our markets continued
New customer booking system
This scalable and flexible platform offers enhanced security
and is integrated with both operational and marketing
systems, serving as a core enabler of the Group’s growth
plans and enhanced digital capabilities.
Following a successful rollout in the UK, the system has
delivered increased performance and reliability, improved the
speed of interactions for both customers and team members,
and reduced processing and hosting costs.
The future roadmap includes rollout to Canada in FY2025,
and plans to test and refine new functionalities, such as
self-service features, and integration with best-of-breed
external software.
£24.5m
Expansionary capital in FY2024
(FY2023: £13.8m)
70%
Net promoter score
(FY2023: 64%)
Focusing on the elements our customers value
Our customer service is a true point of differentiation in a
competitive leisure market.
We focus on four critical customer satisfaction drivers: value for
money, cleanliness, team friendliness, and service speed.
Our customer experience feedback programmes provide valuable
insights into our customers’ preferences by digitally capturing
satisfaction levels following each visit.
We carefully monitor customer satisfaction and net promoter
scores, ready to react quickly to any operational issues or
customer feedback.
Team members’ bonuses are linked to these satisfaction drivers,
helping enhance centre performance, revenues, and yields.
Maintaining an affordable, value-for-money proposition
Offering ‘affordable fun’ is core to the Group’s purpose, and
management is focused on keeping price levels accessible.
The relative price of a game at Hollywood Bowl has fallen since 2021
relative to inflation and National Living Wage increases, with only
small annual increases applied to bowling and food and drink in
recent years.
Value-for-money customer feedback scores were at record
levels in FY2024, up four percentage points compared to FY2023,
and Hollywood Bowl remains the lowest-priced branded bowling
operator, with a family of four able to bowl for under £26.
Utilising marketing and technology
Our ongoing investment in technology and in-house specialist
marketing and development teams continues to enhance the digital
customer journey from pre-booking, to in-centre experience, to
post-booking communications.
We have evolved our digital brand and content, social media activity,
sales activation, and CRM campaigns, all which help drive our
website sales, with online bookings accounting for 61 per cent of
bowling revenue. We drive yields through dynamic pricing and
customer demand through targeted digital sales and marketing.
We increase engagement and dwell time in our centres with digital
content, such as our popular live leaderboards, and vary in-centre
content to target specific customers with relevant content and sales
messaging. For example, daytime content is more family focused
compared to evening content.
In H2 FY2024, we launched our new customer booking system,
designed to meet the needs of our growing and diverse business.
Delivered on time and on budget, this significant investment in
a modern and flexible technology platform supports the future
development and growth of the Group in multiple territories
(see case study opposite).
Case study
14
Hollywood Bowl Group plc
Annual report and accounts 2024
Market trends in the UK
The rise of competitive socialising
Link to strategy
1 2 3 4
Consumers are prioritising social experiences over
material possessions, influencing how they allocate
their discretionary budgets and leisure time.
Opportunity
The ‘competitive socialising market’ has evolved due to a strong
consumer appetite for unique and inclusive experiences,
including modern takes on traditional activities such as bowling,
mini-golf, table tennis and bingo.
Response
Through our active refurbishment programme, high service
standards, and the introduction of innovations such as advanced
scoring systems and leaderboards, we continue to set the
standard for competitive socialising in the UK. This enables us
to successfully compete with the fast-growing number of recent
entrants in the market.
Key to strategy
1 Driving revenue growth
2 Active asset refurbishment
3 New centres and acquisitions
4 Focus on our people
5 International expansion
See our strategy on pages 30 and 35
Link to strategy
1 2 3 4
Retail and leisure combining
Traditional high street and out-of-town retail outlets
are under increasing pressure from online channels
and the rise of the ‘experience economy’.
Opportunity
Many retail property landlords and developers are expanding
their leisure offerings to create a broader destination experience,
aiming to increase footfall and extend dwell time.
Response
Our strong track record of successful partnerships with landlords
and our unique customer offering position us as a key tenant.
This is either alongside other leisure and casual dining operators
or as a stand-alone leisure proposition in high-footfall,
predominantly retail schemes.
See case study on page 33
Ongoing investment in the core offer
Bowling is our core product and we continue to invest
in improving the customer experience at the lanes.
Pins on Strings technology is now in 91 per cent of
the UK estate and has helped improve the customer
experience by increasing the number of games
between faults, in addition to reducing our energy
usage and operational costs.
In our new centres we have enhanced the bowling
experience further with an upgraded music system,
digital screens and impact lighting to enhance and
vary the bowling atmosphere by time of day.
Optimising our assets
When refurbishing centres, we also reconfigure floor
areas to maximise revenue and centre yields.
Examples of this have included combining bar, diner
and reception areas to improve operational efficiency
and create a better customer journey in the centre.
We also look to extend our amusement areas to allow
the inclusion of more, and larger format machines.
Space reconfiguration can also sometimes provide
an opportunity to extend the number of bowling lanes
in a centre or to add an additional leisure offering to
our range.
In FY2024, we added six duck-pin bowling lanes at
London O2, and added five extra bowling lanes at
Stockton, further enhancing the customer experience
and encouraging longer stays and increased spending.
Evolving our mini-golf offer
We launched the Puttstars mini-golf brand in FY2020
operating five centres with a diverse entertainment
experience, including nine-hole mini-golf courses, bar,
diner, and amusements area.
We have gathered some excellent insights from
operating the five centres, which have led us to evolve
the customer offer and optimise space returns.
This has been achieved through the addition of duck-pin
bowling lanes in Leeds, extending amusements areas in
Harrow and Rochdale, and adopting a single operating
approach in York, which had Puttstars as a standalone
business above a Hollywood Bowl centre.
To better reflect the extended offer, leverage the
Hollywood Bowl brand association and marketing
channels, and provide operational efficiencies, the
remaining Puttstars centres have been rebranded
as ‘Putt & Play from Hollywood Bowl’.
Whilst bowling centres are the Group’s first choice
when entering new locations due to their heightened
returns, the customer appetite for other activities
remains strong.
We have consequently introduced mini-golf as a fourth
offer in our Hollywood Bowl centres in Leeds and
Stockton, as well as including in our new centre in
Colchester, to extend the venue appeal and increase
customer dwell time.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Our markets continued
A significant
growth opportunity
Canada
16
Hollywood Bowl Group plc
Annual report and accounts 2024
359
Bowling lanes
(FY2023: 254)
13
Large-format centres in highly
populated locations
(FY2023: 9)
#1
Splitsville is the largest branded
ten-pin bowling operator in Canada
Excellent progress in a new market
Hollywood Bowl Group took its first steps into
international markets with the acquisition of the
Splitsville business in May 2022.
Extensive customer research confirmed that the
Canadian market is ready for an upgraded, branded,
family-friendly leisure proposition similar to Hollywood
Bowl’s UK model.
Since its acquisition, Splitsville has grown significantly
from originally operating five centres to now
comprising 13 large family entertainment centres
spread across the country.
In a short period of time, it is now established as the
ten-pin bowling market leader in Canada, with the
estate now including centres in Ontario, British
Columbia, Alberta and Saskatchewan.
Each centre features ten-pin bowling lanes, a large bar
and diner, and an amusements area, with some also
offering laser tag and indoor mini-golf.
Estate investment
FY2024 has been an exciting growth year, including
several existing centre acquisitions being made, and
our first newly built centre being opened in Waterloo.
The Splitsville brand framework has been further
evolved and all acquired centres (excluding Stoked -
see case study) have now been rebranded to Splitsville.
Our centre refurbishment programme has continued,
with Kingston and Glamorgan completed in FY2024
and five centres scheduled for completion in FY2025.
These renovations incorporate many features already
established in the UK such as VIP lanes, bowling lane
lighting, and enhanced bar and reception environments.
Since the FY2023 refurbishment (and market
relaunch under the Splitsville brand), of our large-scale
centre in Richmond Hill, it has exceeded revenue and
profitability expectations.
Importantly, Richmond Hill has also provided some
excellent operational and customer feedback insights
which have been taken into account in subsequent
centre refurbishments.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Our markets continued
Stoked - a multi-leisure offer
The Group continued its growth in Canada with the
acquisition of an entertainment centre in Saskatoon,
Saskatchewan, in June 2024.
In a centre measuring in excess of 55,000 sq. ft, ‘Stoked’
features an exciting line-up of activities including bowling,
arcade, indoor electric go-karts, ropes course and ziplines,
and offers guests an elevated dining experience in the Stoked
Kitchen & Bar.
The centre will be operated as a proof of concept to
understand the opportunity for Splitsville to add value
and assess the viability for future rollout of larger-scale
multi-offer entertainment centres in the Canadian market,
alongside smaller bowling-focused centres.
Exciting property pipeline
The Group has a robust new centre development and existing
centre acquisition pipeline across the Canadian market.
The opportunity for market consolidation is clear with almost
200 single-owned or multi-site Group-owned ten-pin bowling
centres across Canada.
The opportunity for new builds in prime footfall leisure and retail
locations is also significant. Overall we aim to expand the Splitsville
estate to 30 centres by 2035.
At the start of FY2025, we are on site with two new builds and
negotiating several other new build sites.
We maintain strict expansion criteria, with all acquisitions and
developments needing to adhere to the same return on investment
hurdle rate.
Strengthening operational foundations
As we have gained a more detailed understanding of the Canadian
operation, it has become clear that there are opportunities to
improve operational processes and help enhance the customer
experience through the introduction of many of the ways of working
from our UK business.
In FY2024 we started a significant programme to look to leverage
the experience and operational practices from the UK to help drive
a more consistent and structured approach.
Many operational practices from the UK business have now
been introduced to Splitsville, with the programme set to continue
into FY2025.
Key initiatives that were implemented in FY2024 were;
• the launch of a management development programme for centre
managers and assistant managers in training;
• a behavioural wheel and pin badge rewards programme;
• performance management training for all centre managers and
heads of departments;
• monthly 1:1’s for all team members and feedback sessions with
senior management;
• a new and improved benefits programme;
• a new careers website and employer brand;
• an annual centre manager and support centre conference;
• a new customer feedback programme which has helped identify
the key drivers of customer satisfaction; and
• new centre and refurbishment project management framework
Group support functions
Alongside the introduction of some UK ways of working, we have
extended our UK Hemel-based departments to provide support
for Canada, which in turn is helping us generate synergies and
implement best practice across the Group.
These include finance, recruitment, digital marketing, data and
business intelligence, IT support and development, as well as
using the Customer Contact centre to take customer calls for
the Canadian centres.
4
New centres added to the estate
(FY2023: 3)
5.9%
Increase in LFL Splitsville revenue
(FY2023: 15.1%)
Case study
18
Hollywood Bowl Group plc
Annual report and accounts 2024
Market trends in Canada
Key to strategy
1 Driving revenue growth
2 Active asset refurbishment
3 New centres and acquisitions
4 Focus on our people
5 International expansion
See our strategy on pages 30 and 35
Under investment in the sector
Link to strategy
1 2 3 4 5
Many bowling centres in Canada have historically
suffered from low levels of investment leading to a
decline in the standard of the customer experience.
Opportunity
Existing centre environments and customer experience are ripe
for upgrading to attract a new leisure clientele, following the
approach taken by recent entrants into the broader Canadian
leisure market.
Response
We are investing in upgrading the centre environments through
refurbishments and new centre builds, introducing features like
VIP lanes and digital signage. Our team member development
programmes are also aimed at improving the service experience.
Link to strategy
1 2 3 4 5
Sector consolidation
With over 170 single-owned or small multi-site ten-pin
bowling operators, the opportunity for market
consolidation under a single brand is significant.
Opportunity
Well capitalised businesses like Hollywood Bowl Group can
increase their share of the ten-pin bowling and wider leisure
market as smaller operators become financially challenged,
unable to invest in capital projects, or seek to exit the market.
Response
Our centre acquisition model focuses on acquiring existing
centres in prime locations and adopting the subsequent rebrand
and refurbishment strategy that we have employed in the UK.
Where appropriate, we have moved to standard IT
systems across areas like finance, reporting, customer
data and marketing which will help to create a consistent
approach across the Group.
The next phase will see our new customer booking
system being rolled out in Canada in FY2025 and
further sustainability initiatives being introduced.
Investing in our people
Alongside the introduction of new talent development
programmes, we have also invested in the Canadian team.
We have established the structural foundations to
support a fast-growing business over the coming
years, including forming a new senior leadership team
and upskilling centre managers to drive sales and
service superiority.
Notably, several key roles have been filled by senior
UK team members, including a new VP of Splitsville,
centre managers, an HR Business Partner, and two
Regional Managers.
Product innovation
We are starting to trial some product innovation in
selected centres in the Splitsville operation to see if the
UK approach has relevance to Canadian customers.
Thi includes testing the removal of compulsory bowling
shoes (wear your own shoes), game formats, dynamic
pricing, new group party packages and a simplified
food menu.
Supporting the national bowling sector
Our Striker Bowling Solutions (SBS) operation
continues to support the wider Canadian bowling
industry as a primary supplier and installer of bowling
equipment across the country.
SBS is an important asset to the Group in Canada as it
supports Splitsville’s installation and equipment
requirements when we are refurbishing existing centres
and opening new centres.
Additionally, its established national network provides
us with access to a large section of Canadian operators
in the regional markets, giving SBS an unmatched
insight into wider industry trends and developments.
19
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Chief Executive Officer’s review
Our proven strategy
has again delivered excellent results
Our highly cash generative
model and a strong balance
sheet underpin our ability to drive
returns through investment in
our growth strategy.”
Stephen Burns, Chief Executive Officer
Read full biography on page 84
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Hollywood Bowl Group plc
Annual report and accounts 2024
Hollywood Bowl Group delivered another excellent
performance in FY2024. The continued investment in
the quality and expansion of the estate in the UK and
Canada, as well as further innovation of the customer
experience, led to impressive operational and
financial performance.
Group revenue grew 7.1 per cent to £230.4m and 0.2 per cent on a
LFL basis, with adjusted profit before tax of £45.0m, and adjusted
profit after tax of £32.3m. Statutory profit before tax was £42.8m
(FY2023: £45.1m) and profit after tax £29.9m (FY2023: £34.2m).
This includes the impact of an impairment in the year of £5.3m
(FY2023: £2.2m) in relation to the mini-golf centres.
Our continued growth has been achieved by executing our clear and
consistent customer-led strategy to provide great value-for-money,
family-friendly experiences in well-invested venues, and to grow the
size of our estate.
The Group’s robust financial position, characterised by a highly
cash generative model and no bank debt drawn, underpins our
ability to drive returns through investment in our growth strategy.
The Group’s capital investment in new centres, acquisitions and
refurbishments in FY2024 was over £50m. The Group grew to
85 centres, opening four new centres in the UK and four in Canada,
as well as completing ten UK and two Canada refurbishments in
FY2024. Net cash at the end of FY2024 was £28.7m.
In the UK, we are the established market leader delivering a
best-in-class experience while remaining the best value of the
branded bowling operators. Our progress in Canada means we
are now the largest branded bowling operator and, leveraging our
Group expertise, we are enhancing the standard of experience
for our customers.
None of this would be possible without our highly talented,
enthusiastic and motivated teams. I thank them for the hard work
that goes into providing our customers with an excellent customer
experience each day as evidenced by the record UK customer
satisfaction levels achieved during the year.
Outstanding UK performance
We delivered another outstanding result in the UK, particularly in the
context of the two previous years of exceptional performances.
Our FY2024 performance demonstrates the robust demand for
family-friendly, affordable leisure activities, as well as the success of
our growth strategy. As a result of our customer-focused operating
model, we grew average spend per game by 2.1 per cent to £11.05.
Total UK revenue grew 3.8 per cent year on year, with LFL revenue
flat year on year, with growth of 0.3 per cent in the Hollywood Bowl
centres offset by the decline seen in the Puttstars trial centres.
Adjusted EBITDA on a pre-IFRS 16 basis in the UK increased to a
record £62.3m and there is more detail on this in the Chief Financial
Officer’s review.
Value for money
UK families remain under pressure from cost-of-living challenges
and we are proud that we can still offer a family of four a game of
bowling for £26, even at peak times. Headline bowling prices have
increased by a CAGR of just 2.6 per cent since 2021, well
below inflation and National Living Wage increases. Our dynamic
pricing allows us to offer even better value for customers at
non-peak periods, helping to drive incremental volume alongside
carefully controlled yield enhancement.
Our simplified food menu and the focus on speed, quality,
consistency and value for money have supported a 2.4 per cent
increase in bar and diner spend per game, with value-for-money
scores also up compared to FY2023.
Our market-leading amusements continues to be key to our
attractiveness to customers. In FY2024 we saw spend per game grow
by 6.1 per cent with investment in new machines, as well as the use of
seamless payment technology, being fundamental in this performance.
Our play for prizes machines are a great way for our customers to play
and win, which provides an unmatched value-for-money experience.
Refurbishments
Our rolling refurbishment programme remains on track. Ten UK centre
refurbishments were completed during the year, some of which are
on their second or third generation refurbishment, benefiting from the
continuous learnings made over the last cycle of investment.
This constant innovation of our customer offer is a key driver of
higher spend in our centres. In addition to introducing the latest
digital signage and new brand environments, we are finding new
opportunities to optimise our space that complement our core
bowling offer and increase the yield per sq ft potential. This includes
increasing the density and range of our amusements, as well as
introducing new payment options, helping drive amusement SPG
by more than 6 per cent. In some centres, where space allows, we
have introduced extra full-size or compact-format bowling lanes,
such as duck-pin and five-pin, as well as including mini-golf courses.
£230.4m
Group revenue
(FY2023: £215.1m)
£87.6m
Group adjusted EBITDA
(FY2023: £82.7m)
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Annual report and accounts 2024
Strategic report
Chief Executive Officer’s review continued
Outstanding UK performance continued
Refurbishments continued
All of the completed refurbishments are trading in line with or above
our expectations since the investment.
We have continued the roll out of Pins on Strings with eight installed
in the year and a further four have been completed since the end of
the financial year, meaning that all but two of our UK centres benefit
from this cost-saving and experience-enhancing technology at the
time of writing.
New centres
We added four centres in the UK during the year, taking our total UK
estate to 72. We acquired Lincoln Bowl in the first half of the year,
and opened three new centres in the second half, in Dundee,
Westwood Cross (Kent) and Colchester. We are pleased with the
performance of all the new centres, demonstrating the strength of
our new centre pipeline and our ability to secure opportunities in
prime locations in line with our strict investment criteria.
The highly anticipated Westwood Cross centre, which saw a former
department store transformed into an anchor leisure destination,
set trading records in its opening weekend in August 2024 following
a two-year development.
The success of our recent openings is also helping to evolve our
framework of what creates a prime new centre location. This has
been demonstrated by the new Merry Hill and Westwood Cross
centres which are both located in high-footfall shopping centre
schemes and are trading ahead of expectations. It was disappointing
to have to close our centre in Surrey Quays as part of a landlord
redevelopment, but we have added capacity to our centre at
London O2 as part of its refurbishment and are confident this will
be appealing to those customers.
We have an exciting pipeline of new opportunities with a further
four expected to open in FY2025 and we remain on track to meet
our target of six new UK centres by FY2026.
Puttstars
In FY2020, we launched a mini-golf leisure brand called Puttstars,
testing the concept in five centres. Whilst we have seen some good
performance, it has become clear that bowling centres offer higher
returns potential and will remain the Group’s first choice when
entering new locations.
The significant insights gained from the Puttstars centres have
allowed us to evolve our mini-golf customer offer and optimise
space returns through the addition of complementary duck-pin
bowling and amusement activities in four of the five centres. To
better reflect the extended offer, leverage the Hollywood Bowl brand
association and marketing channels, and deliver greater operational
efficiencies, these four Puttstars centres have now been rebranded
as ‘Putt and Play from Hollywood Bowl’. The fifth centre in York,
which had Puttstars as a standalone offer above a Hollywood Bowl,
was integrated into the Hollywood Bowl unit and operated as a
combined single unit, from July 2024.
Investment in technology
We have invested significantly in our customers’ digital journey
over the last year, developing our own new, modern and flexible
technology platform that we can further evolve and which will
support our next stage of growth.
We successfully launched the system in July 2024, resulting in
a more scalable, reliable and usable reservation system that
integrates with our marketing and data platforms. We are delighted
with the results so far. The booking experience has been significantly
improved for our customers and team members, with increased
usability, reliability, speed and an uptick in online conversion rates,
as well as reduced operational costs.
We have direct control of the system, having developed the
technology in-house, and therefore we can enhance functionality
over time. Following the success of this launch in the UK, we are
piloting the system in Canada and will make any locally relevant
adjustments before beginning the roll out in FY2025.
Exciting Canada opportunity
Our business in Canada performed well, with total revenue
increasing by 42.2 per cent to CAD 53.0m (£30.7m) and LFL
revenue on a constant currency basis up by 6.3 per cent.
Adjusted EBITDA on a pre-IFRS 16 basis increased by CAD 2.1m
to CAD 9.5m (£5.4m).
Acquisitions and new centre developments
The Canadian market remains highly fragmented and
underinvested, creating a significant opportunity for us to acquire
existing businesses that fit our strict criteria or extend our
geographic presence through new centre developments in
well-populated urban areas that are currently under-served by
family entertainment offers.
We added four new sites during the year, taking the total size of
the estate to 13 centres and making the Group the single largest
branded bowling operator in Canada.
We acquired two centres, Woodlawn Bowl in Ontario and Richmond
Riverport (Lucky 9) in British Columbia, in the first half, and Stoked
in Saskatchewan in June 2024, all of which are performing in line
with expectations.
Woodlawn Bowl is a 36,000 sq ft centre acquired for CAD 4.7m
(£2.8m). It offers 24 lanes of ten-pin and 8 lanes of five-pin bowling,
a large amusements area and a bar and diner. Richmond Riverport
was acquired for a total consideration of CAD 425k and included
the assets and lease of a family entertainment centre featuring
34 ten-pin and 6 five-pin lanes, a large bar and diner, and a small
amusements area.
Woodlawn Bowl and Richmond Riverport have had signage installed
rebranding them to Splitsville and essential maintenance capital
invested, prior to their full refurbishments which are due to be
completed in FY2025.
The Saskatoon centre is a high-quality indoor entertainment
complex operating as ‘Stoked’, a well-established brand in the
local area. In addition to 15 bowling lanes, the centre offers multiple
activities, including high ropes, zipline, go karting, arcade and a bar
and dining area. The centre, which will remain under the
management of its existing local team with support from the
Splitsville team, provides us with the opportunity to trial an
enhanced entertainment offer and other competitive socialising
activities in the Canadian market.
We were delighted to open our first custom-built centre in Waterloo,
Ontario, in July. Located in the heart of this tri-university city,
benefitting from a large local student population, the 43,000 sq ft
state-of-the-art Splitsville Waterloo is the first family entertainment
bowling centre in the area. Offering 24 bowling lanes, an arcade, a
bar and lounge, pool tables and sports games, it is well on its way to
22
Hollywood Bowl Group plc
Annual report and accounts 2024
achieving its return targets. Given the infancy of the Splitsville brand,
we expect new centres in Canada to take a little longer to get to
maturity than in the UK.
As we continue to open new centres in Canada, we are leveraging
our development expertise gained in the UK to ensure that future
construction and refurbishment projects are delivered on budget
and on time. We have exchanged on a further three new sites, two
of which are in Alberta and one in Ottawa; at least two of these are
expected to open in FY2025.
In addition to our organic growth pipeline, we continue to see
opportunity to grow the estate through the acquisition of single-
owned centres or small group-owned businesses.
Refurbishments
Our refurbishment programme has also progressed well, delivering
strong returns and excellent customer feedback. We completed
the refurbishment of two centres in FY2024, at Kingston and
Glamorgan, introducing new signage, upgraded environments,
new technologies and yield-enhancing space optimisations.
We are confident these investments will hit our 25 per cent hurdle
rate for refurbishments in Canada.
Leveraging our expertise
Our success to date demonstrates our ability to increase our market
share, enhance the customer offer through refurbishments and
innovation, and provide an industry-leading competitive socialising
experience to a wide customer demographic. As we continue to
learn more about our Canadian customers, we can do more to apply
our insights alongside our proven UK operating model to this market.
This will be evident in a number of different ways. We have already
begun sharing our best practice and knowledge, not least through a
number of our UK team taking up a variety of operational roles in our
Canada business. We are moving to align our technology and Group
support functions, increasing our operational efficiency and further
enhancing our returns in Canada.
Striker
Our Striker business continues to perform well and grow in line with
increased investment into bowling centres. Revenues in FY2024
totalled CAD 7.7m (£4.5m), with a good order book for multiple
installation and maintenance projects in FY2025.
Our ability to invest in bowling equipment and technology at cost
has significantly reduced our capital expenditure and lead times for
centre upgrades as we invest in the quality of the estate in Canada.
An industry-leading team
Our teams are at the heart of delivering an excellent customer
experience and key to the Group’s success.
We take great pride in our industry-leading, in-house training and
development programme. For the third year running, we ranked
among the UK’s Best Big Companies to Work For. We also retained
the top 3* ranking for our working practices at our Hemel
Hempstead Group support office.
This year, we achieved record attendance on our management
development programmes, and we were delighted that 58 per cent
of internal management positions were achieved through internal
appointments. These results explain why we have relatively low
team member turnover rates compared to the wider leisure market
and illustrate our record in home-growing talent.
For FY2024 we paid out over £1.0m in centre-level management
bonuses and £0.6m to hourly rate team members measured
against financial, environmental and customer satisfaction criteria.
Growing sustainably
Running and growing our business in a sustainable manner remains
a key focus for the Group, and we are making good progress against
our sustainability strategy and targets. We have recycled more
waste than ever before, an achievement supported by behavioural
programmes and the application of standard operating procedures.
The rollout of solar panels in the UK continues with 30 centres
benefiting from solar arrays at the year end, and two more currently
in progress.
Discussions with landlords and identifying opportunities to increase
the number of centres using renewable energy is a key priority as
we continue to seek to reduce our centre level carbon footprint
and reliance on purchased electricity. We are also installing more
low-carbon materials and energy-efficient technologies in
refurbishments and new centre builds.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Growing sustainably continued
Our centres continue to play an important social role in our local
communities, and we were pleased to have beaten our targets for
concessionary discount and school games played and for charity
fundraising for our new charity partner, Macmillan.
We will be more closely aligning our Canadian operations with our
UK sustainability strategy from FY2025, so that we can further
improve our environmental and social performance.
Resilient to inflationary pressures
Our unrelenting focus on service and delivering value for our
stakeholders, alongside managing costs, has continued and we
have hedged our energy costs through FY2027. In addition, we are
well insulated from inflationary pressures with over 70 per cent of
our revenue not subject to cost-of-goods inflation. We also have
relatively low exposure to National Living Wage increases
compared to other leisure operators, given our labour cost in the
UK is less than 20 per cent of revenue at centre level.
Update following UK Government Budget
The recent changes announced by the Government in the Budget
to Employers’ National Insurance contributions and threshold levels,
coupled with ongoing wage increases will have a significant impact
on the hospitality industry. It will be felt most keenly by smaller
operators across the country for whom the increased costs will be
unsustainable and therefore could be at risk of closure. There are
likely to be further consequences following the Government
changes with potential for higher inflation, and future job creation,
and growth investment at risk.
While we are not immune from these changes, as a bowling business
with an average customer frequency of around once a year,
significant scale advantages, strong cost culture and a relatively
low labour-to-revenue ratio of under 20 per cent in the UK, we are in
a better position than many to mitigate the effect of increased costs.
The Employers National Insurance cost for an average UK hourly paid
team member working 20 hours per week, on national living wage, will
increase from just under £400 per annum, to £1,155 per annum. We
expect the cost impact to be c. £1.2m on an annualised basis from when
the changes are implemented in April 2025.
As a people-led business, our success hinges on having great people
who deliver the best possible experience to our customers. We are
working to mitigate the cost challenges presented by the
Chancellor’s recent budget, and our commitment to prioritising
investment in attracting and retaining top talent won’t change as a
result of these new measures.
Outlook
The recent changes announced by the Chancellor to employers’
National Insurance, coupled with ongoing wage increases, pose
challenges for many businesses. We had expected the increase
to wages, but the increased tax burden now falls heavily on
labour-intensive sectors, like hospitality.
The competitive socialising market has evolved in recent years
due to a strong consumer appetite to share unique and inclusive
experiences, shaping how consumers spend their discretionary
income. Whilst many new and different concepts have launched in
recent years, we believe that bowling retains its unique position with its
ability to appeal to a wide demographic with anyone able to take part.
In a growing market, and against the backdrop of upcoming inflationary
pressures off the back of the new Government measures,
customer service and great value for money will be a true point of
differentiation. We are committed to supporting our teams to deliver
outstanding customer service, whilst maintaining an affordable price
point for our customers.
Our performance in FY2024 demonstrates our ability to execute
our customer-led strategy and generate attractive returns through
investment, supported by our strong balance sheet and highly cash
generative business model.
We have ten refurbishments planned across the UK and Canada
in FY2025 as we continue to prioritise maintaining our well-
invested estate with further innovation of our customer offer,
setting industry standards.
The Group is on track to reach our target of 130 centres by FY2035
and plan to open four new centres in the UK and at least two in
Canada, in FY2025.
We are in an excellent position for future growth, with our strong UK
and international pipeline, capital investment programme and our
highly resilient business model. We remain confident in the outlook
for the business as the market leader in competitive socialising in
both the UK and Canada, and we are well positioned for another
successful year ahead.
Stephen Burns
Chief Executive Officer
16 December 2024
7.1%
100
30
Group revenue growth
Hollywood Bowl centre estate
target opportunity by 2035
Splitsville centre estate target
opportunity by 2035
Chief Executive Officer’s review continued
24
Hollywood Bowl Group plc
Annual report and accounts 2024
However, this does not mean that we are standing still!
Our refurbishment programme keeps our centres looking
their best, whether that is through improving the quality
of our amusement machines or introducing mini-golf in
an existing Hollywood Bowl to give customers more
reasons to stay with us for longer. We are starting to share
our customer innovations with our Canadian colleagues
as we continue to build a recognisable brand in this new
and exciting market.
What are you looking forward to in the
coming year?
As always, we have a busy year ahead and our main
focus will be on our ambitious growth plans both in
the UK and Canada.
We have learnt a great deal from our expansion in Canada
and we will be further integrating our UK ways of working
within our Canadian operations. One of the best parts
of my job is working with such dedicated, enthusiastic
colleagues and we were very pleased to sponsor more UK
team members to move to Canada to take up a variety of
operational management roles.
I am excited about the pipeline of opportunities ahead
and working to capture these with our outstanding team
members who work hard each day to deliver the best
possible experiences for our customers.
We ask CEO Stephen Burns about
performance in FY2024 and future
growth opportunities.
Q&A
with Stephen
How do you see the use of technology evolving
for the Group?
We are always thinking about how we can enhance the
customer experience and keep our offer fresh and
relevant – and technology of course plays a key role in
this. We are extremely excited about our new customer
booking system, which has been our biggest technology
investment yet. We built this in house and rolled this out
in July across our UK centres. We are already seeing
excellent results and, crucially, it gives us additional
resilience and future development flexibility. Our next
step is to roll this out in Canada next year, following the
completion of the pilot phase.
Technology has really helped us increase engagement
in our centres and it has been fantastic to see how much
our digital content adds to the customer experience,
for example our live leaderboards which promote
friendly competition. Similarly, we are always making
enhancements to our ordering systems – customers
can have food and drink delivered directly to their lane
so that there are no interruptions during a crucial game!
With increased competition from other indoor
leisure operators, what plans do you have to
offer additional or new experiences?
It is a positive time for the industry, with consumers
continuing to prioritise high-quality experiences rather
than buying material items. We are pleased to continue
to set the standard for competitive socialising and we
know that by remaining true to our core purpose,
bringing families and friends together for affordable
and fun competition, we will deliver strong results.
Q
Q
Q
A
A
A
25
Strategic report
Our culture
Our people
and culture
Company culture
Our culture defines the environment in which our teams work. It
encompasses our mission, values, expectations, and goals. At
Hollywood Bowl Group, we are a purpose-led, performance-driven
business that places our people at the heart of everything we do.
When asked to describe our culture, our team members say they
love working with colleagues in a respectful, welcoming environment
that creates great memories for our customers, offers lots of
development opportunities, feels like family, treats everyone as
equal, and is enjoyable, honest, and supportive.
Ways of working
In 2010, we developed our ways of working models centred around
service. By 2013, we introduced our behavioural “Wheel”, which has
become fundamental to our DNA and culture. Post COVID-19, we
took the opportunity to retrain all of our team members on our
cultural and behavioural ways of working, resulting in improved
service scores. This year, we extended our ways of working to the
Splitsville teams in Canada, leading to further increases in service
scores.
Diversity and inclusion
Embedding our Diversity and Inclusion (D&I) strategy is crucial to
Hollywood Bowl Group because it ensures that every team member
feels valued, respected, and included, which in turn fosters a positive
and productive work environment.
Supported by five dedicated D&I champions, our strategy promotes
a culture of equality and belonging, which is essential for attracting
and retaining top talent, driving innovation, and enhancing customer
experiences. As a result of these efforts, D&I has become one of
our highest-rated categories on external review sites, reflecting our
commitment to creating an inclusive workplace where everyone
can thrive.
Engagement and development
We ensure our culture is embedded in everything we do by checking
in with our team members at least once per month in 1:1 meetings.
Developing our teams is also extremely important and in FY2024,
11 per cent of our team members participated in one of our top
talent programmes.
Communication
We use Fourth Engage to communicate
regularly, celebrate success, and bring
our culture to life on a daily basis. This
year we shared over 8,500 pieces of
content with our team.
Celebrating success
We love to celebrate success and recognise team members
displaying the right behaviours through our pin badge
programme. In FY2024, we issued over 1,500 pin badges
in the UK and more than 250 in Canada which are proudly
displayed on team member lanyards. Over 60 per cent of UK
hourly paid team members received an additional 50 pence
bonus per hour worked, for meeting monthly service
standards, marking a 9 per cent increase from last year.
Recognition and achievement
We measure team engagement twice a year to ensure we
are providing fun, supportive, and rewarding careers. In 2024,
we were recognised as the 12th Best Big Company to Work
For and the 19th Best Company in Leisure by Best
Companies. More recently, we received a 2* high-quality
employee experience rating from WorkL in the UK, and
celebrated a 4 percentage point improvement in team
engagement scores in Canada.
Case study
Case study
26
Hollywood Bowl Group plc
Annual report and accounts 2024
We ask CPO Melanie Dickinson
about her highlights in FY2024
and future areas of focus
Q&A
with Mel
What were some of your highlights over the past
12 months?
Our team members are our greatest asset, and as a
people-led business, our success hinges on having great
people. This year, we’ve enhanced our learning journey
by introducing a more engaging and interactive learning
management system to support our team’s ongoing
development. We continued to invest in our top talent
programmes, with 11 per cent of our team members
benefiting from a development programme last year.
This investment led to 58 per cent of all UK management
appointments being made internally, a record-breaking
achievement for us!
The evolution of our employer brand has resulted in
a 33 per cent increase in job applications through
social media channels. We were thrilled to launch our
employer brand in our Canadian business, receiving
very positive feedback.
Our focus on team engagement has kept us in the UK
Best Companies rankings as the 12th Best Big Company
To Work For and we received a 2* high-quality employee
experience rating from WorkL. We’ve also made significant
progress in launching our development programmes and
training every team member on our culture and ways of
working in Splitsville.
What does the people strategy look like for the
year ahead?
Recruiting, developing, engaging, and retaining top talent
remains a top priority at Hollywood Bowl Group in both
the UK and Canada. To support this, we’ve strengthened
our People Partner teams in both countries, ensuring
consistent delivery of our people strategy across all
centres. In light of the New Deal for Working People in the
UK, we’re focusing on preparing for these changes and
ensuring we have the right processes and ways of working
in place. Our diversity strategy also remains a top priority,
with significant progress made in establishing diversity
working groups and champions last year.
What initiatives do you have to ensure
continuous employee engagement?
To keep our teams engaged and ensure their job
satisfaction, we actively seek their input at every
opportunity. We conduct bi-annual engagement
surveys in both the UK and Canada and hold
listening groups led by our CEO.
Every team member has a monthly 1:1 with their
manager to regularly check in on what’s working
well and where improvements can be made. We also
gather feedback informally through team meetings,
centre visits, and by fostering an open culture where
feedback is welcomed and encouraged.
Each centre and support department in both the
UK and Canada has an engagement action plan
that we review monthly to continuously improve
team engagement. This year, we’ve partnered with
a new external engagement partner, WorkL, to
further enhance our team engagement and
workplace happiness.
Q
A
Q
Q
A
A
27
Strategic report
Business model
Value creation
through continuous investment in
enhancing the customer experience
What sets us apart
What we do
Our successful brands
We operate an extensive portfolio of
bowling centres across the UK and Canada
under our Hollywood Bowl and Splitsville
brands.
A high-quality estate
Our centres are predominantly located in
prime out-of-town, multi-use leisure and
retail parks, alongside cinemas and casual
dining sites.
Motivated and engaged teams
Our teams are the face of our business,
dedicated to delivering the best brand
experience for our customers.
The customer experience
Our entire operation is focused towards
delivering a memorable experience for
customers every time they visit.
Our landlord relationships
We maintain excellent relationships with
developers, agents, and landlords,
ensuring a strong pipeline of potential
new high-quality sites.
High levels of cash generation
By driving revenues and achieving healthy
margins in all of our product areas.
A strong balance sheet
By maintaining a strong cash and liquidity
postion, we can invest appropriately in all
areas of our business, creating value for our
stakeholders.
Our centres offer a complete entertainment experience for
customers of all ages.
In addition to our core offering of ten-pin bowling, customers
can enjoy amusements, food and drink, and in some centres
mini-golf or duck-pin bowling.
These additional offerings not only enhance their experience
and provide more reasons to visit, but also increase dwell time
and secondary spending.
Multiple
revenue
streams
M
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-
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f
B
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e
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a
g
e
s
F
o
o
d
A
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u
s
e
m
e
n
t
s
B
o
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li
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g
See our strategy on pages 30 to 35
28
Hollywood Bowl Group plc
Annual report and accounts 2024
Where we invest
Our customers
We are committed to delivering exceptional experiences through
outstanding service in unique, contemporary, safe, and exciting
environments, all at a highly accessible price point.
70%
UK net promoter score
Our people
Our team is dedicated to achieving commercial success, customer
satisfaction, and operating in a sustainable manner.
We implement management programmes to attract, retain, and nurture top
talent, ensuring our customers receive the best possible experience.
58%
Of UK management vacancies filled internally
Our partners
We support a diverse ecosystem of partners and suppliers through commercial
arrangements designed to foster mutually beneficial long-term relationships.
8
New centres added to the Group estate in FY2024
Our communities
Alongside community employment opportunities, the inclusive nature of
bowling significantly contributes to social wellbeing. To facilitate greater access,
we provide subsidised rates for concessionary users and educational groups.
1m+
Discounted concession games played
Our investors
We focus on sustainable, profitable growth by driving revenues and managing
our margins and cash position to deliver attractive returns.
£20.7m
Total shareholder returns in FY2024
The value we create
The customer experience
• Safe and secure environments
• Technology to enhance the
customer journey
• Centre maintenance and upgrades
• Centre refurbishments and
reconfigurations
• Customer insight programmes
Link to strategy
1 Delivering revenue growth
2 Actively refurbishing our assets
Our people
• Attracting and retaining the best
people in the leisure industry
• A fair deal for our team members
with comprehensive bonus and
incentive schemes
• Extensive training and development
• Team engagement and wellbeing
programmes
Link to strategy
4 Focusing on our people
Enabling growth
• New centre developments
• Broadening the appeal to new and
existing customers through digital
marketing programmes and
environment upgrades
• Centre acquisitions
• UK and international market expansion
Link to strategy
3 Developing new centres
and acquisitions
5 International expansion
29
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
1
Driving revenue growth
2
Active asset
refurbishment
3
New centres and
acquisitions
4
Focus on our people
5
International expansion
Strategy and KPIs
Our proven
growth strategy
See our principal risks on pages 75 to 79
See our markets on pages 12 to 19
30
Hollywood Bowl Group plc
Annual report and accounts 2024
Best in class amusements
A £5.5m investment across the UK estate has enhanced
the quality of our offer with many new machines
introduced. We have introduced new payment options
and increased the price of play on selected machines.
Additionally, we have improved the standards and
reliability of our games areas through our amusement
training academies. This has resulted in an increase in UK
amusements spend per game of 6.0 per cent compared
to FY2023.
We drive revenue growth by attracting new
customers, increasing the frequency of visits,
and encouraging higher ancillary spending.
Our approach:
• Sales, service, and safety excellence: We focus on superior
sales, service, and safety to improve centre performance.
• Outstanding customer experience: We prioritise four key
drivers of customer satisfaction: value for money, cleanliness,
team friendliness, and service speed.
• Extended dwell time: We offer a diverse entertainment
experience to increase customer dwell time.
• Technology investment: We invest in technology to enhance the
digital customer journey, driving sales and engagement.
• Targeted digital marketing: We maximise customer awareness
and engagement through targeted digital marketing campaigns.
• Enhanced food and beverage: We evolve our menus and
remove barriers to ordering.
• Accessible amusement options: We enhance our amusement
offer and focus on making them affordable and accessible.
• Minimised downtime: We reduce bowling-lane downtime
through the rollout of Pins on Strings technology.
Achievements in FY2024:
• Net Promoter score: Achieved a record score of 70% in the UK.
• Customer satisfaction: 62% of UK customers were
highly satisfied.
• Team member incentives: Bonus schemes linked to our four
critical customer satisfaction drivers.
• New booking system: Launched our new customer booking
system to support further growth in the UK and Canada.
• Marketing: Drove customer engagement rates and revenue
generation through our customer data platform.
• Online experience: Refined functionality to simplify the customer
website journey and improve product presentation, promotions,
and dynamic pricing.
• Food and beverage: Enhanced our value snacks and sharers
menu, increasing at-lane orders.
• Space optimisation: Added extra bowling lanes and extended
amusement areas where possible in our refurbishments.
Future plans:
• Refurbishment programme: Continue refurbishments in the
UK (approx. 33% ROI) and Canada (approx. 25% ROI).
• Innovation and technology: Maintain focus on product
innovation and technology investment.
• Data-driven marketing programmes: Continue to utilise
data and technology solutions to further optimise marketing
campaign performance.
Driving revenue growth
1
Case study
Links to risks
1 Economic environment
5 Food and drink suppliers
6 Amusement supplier
7 Management recruitment and retention
0.3%
UK LFL Hollywood Bowl revenue growth
5.9%
Canada LFL Splitsville revenue growth
7.1%
Total Group revenue growth
31
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Active asset refurbishment
Strategy and KPIs continued
Investment in our centres enhances the
customer experience and drives sales,
satisfaction levels and profitability.
Our approach:
• Refurbishment programme: We run a five-to-seven-year
refurbishment programme in the UK with an average spend of
c.£400k per centre, ensuring our centres remain in top condition
and allow us to introduce upgrades. Canada refurbishments are
costing more initially as we combine upgrades with required
maintenance spend to save time and further disruption.
• Space optimisation: We reconfigure centres to optimise space
and drive revenues, such as combining bar and diner areas to
create more amusement space and introducing mini-golf
courses in under-utilised areas.
• Enhanced amusement offerings: We increase the space,
density, and quality of family games and amusement machines,
driving ancillary revenues.
• Digital content upgrades: We upgrade in-centre digital content
systems to improve customer engagement and encourage food
and beverage spending.
• Sustainability investment: We invest in solar panels and Pins
on Strings to reduce our environmental impact
Achievements in FY2024:
• Centre refurbishments: Completed the refurbishment or
rebranding of 12 centres (ten in the UK and two in Canada),
investing £11.5m in improvements.
• Amusement space expansion: Added extra amusement space
during refurbishments, creating more ways for our customers to
spend, as well as higher pricepoint machines, dirving spend per game.
• Digital installations: Continued the rollout of in-centre
digital screens.
• Nayax ‘Tap to Play’: Continued the rollout of Nayax ‘Tap to Play’.
• Pins on Strings: Completed the rollout of Pins on Strings in eight
more centres, now in 64 UK centres at the end of FY2024.
• Solar panel installation: Installed solar panels at three more
centres in FY2024, bringing the UK total to 30 centres.
• Brand updates: New brand framework introduced for Hollywood
Bowl and new Canadian centres migrated to the Splitsville brand.
Future plans:
• Upcoming refurbishments: Complete at least seven
refurbishments in FY2025.
• Pins on Strings rollout: Continue the rollout of Pins on Strings
in the UK to improve games per stop (GPS).
• Solar panel expansion: Ongoing negotiations with landlords
to continue the solar panel rollout.
Stockton centre expansion
We secured a new lease and extended the centre into an
adjacent building. The investment included refurbishment
of the exterior and interior, extra bowling lanes, a mini-golf
course and an expanded amusements offer.
At a cost of £1.9m and with a 12-week fit-out, the project
completed in March 2024. Since completion, we have
experienced record trading levels for the centre.
Case study
2
Links to risks
1 Economic environment
6 Amusement supplier
11 Climate change
10
UK centres refurbished or rebranded in FY2024
8.5%
LFL spend growth in first year after refurbishment
33%
Target average ROI on UK refurbishment
capital expenditure
32
Hollywood Bowl Group plc
Annual report and accounts 2024
New centres and acquisitions
We actively pursue growth opportunities in
new local markets by building additional
centres and acquiring existing sites.
Our approach:
• Quality openings: We focus on high-quality locations, setting
a minimum 19 per cent ROI on net capital expenditure.
• Strategic acquisitions: We seek acquisitions that meet strict
investment criteria, both overseas and in the UK, where we can
add value and achieve sustainable, profitable growth.
Achievements in FY2024:
• New centres: Opened three new Hollywood Bowl centres and
one new Splitsville centre.
• Acquisitions: Acquired one centre in the UK and three centres
in Canada.
• Construction: Commenced construction on four new centres
in the UK and two new centres in Canada.
Future plans:
• Expansion: Open at least four additional centres in the UK and
two in Canada, by the end of FY2025.
• Value addition: Leverage our customer-led operating model,
technology, and digital marketing expertise to further enhance
expansion of the Canadian business.
• Pipeline development: Continue to build the pipeline of new
Canadian site opportunities, with plans for more than ten
additional sites or acquisitions before FY2030.
Transforming retail space
Merry Hill Shopping Centre near Birmingham, met
our strict investment criteria, with excellent local
demographics, a high-performing cinema and a new
leisure area under development in ex-retail space.
This centre was the first to feature our new brand identity
and is projected to achieve a 40 per cent ROI on gross
capital spend. It has been credited with increasing footfall
levels in the wider Merry HIll scheme.
Case study
3
4
New centres added in the UK in FY2024
4
Centres added in Canada in FY2024
6
New Group centres targeted by end of FY2025
Links to risks
1 Economic environment
2 Covenant breach
3 Expansion and growth
7 Management recruitment and retention
33
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Focus on our people
Strategy and KPIs continued
Our dedicated, dynamic, and diverse teams
are key to fulfilling the Group’s purpose.
Our approach:
• Positive culture: We foster a positive, inclusive, fun, and
high‑performance culture.
• Clear purpose: We ensure our purpose is well understood and
underpins the way our teams work.
• Training and development: We provide industry-leading training
and development programmes.
• Career progression: We offer all team members opportunities
to progress and develop their careers.
• Competitive compensation: We offer competitive pay, benefits,
and bonus schemes.
• Engagement and communication: We actively engage and
regularly communicate with all team members.
Achievements in FY2024:
• Increased remuneration: Raised salaried centre teams’
remuneration by 5.3 per cent.
• Performance bonuses: Rewarded more than 60 per cent of our
hourly paid team members with performance-related bonuses.
• Employer brand: Promoted our employer brand to attract top
talent, a more diverse workforce, and increase job applicants.
• Careers website: Increased visits by 26 per cent YOY.
• Training programmes: Increased the number of Assistant
Centre Manager and Centre Manager in Training programmes,
and held talent programmes for technicians and contact
centre teams.
• Leadership development: 14 team members completed the
Senior Leadership Development Programme.
• Internal promotions: Filled 58 per cent of management
vacancies from our internal talent pipeline.
• Recognition: Ranked 12th in the UK’s Top 25 Best Big Companies
to Work For in 2024 and achieved a 2* high-quality employee
experience rating from WorkL.
Future plans:
• Incentive schemes: Continue to run market-leading incentive
schemes for our teams.
• Canada development programmes: Continue to extend the UK
framework of team member programmes to Splitsville.
• Graduate training programme: Welcome our second cohort
of graduates onto our graduate training programme.
• Employer brand: Continue to develop and utilise our employer
brand in the Canadian operation.
Top talent attraction
Over the past twelve months, we have continued to build
up the visibility of our employer brand by externally
promoting to prospective employees about what it is
like to work at Hollywood Bowl Group.
Our social media campaigns have led to more than
25% of our applications coming directly through these
channels, and our workplace review site ratings have
seen year-over-year rating increases.
Case study
4
Links to risks
1 Economic environment
4 Core systems
7 Management recruitment and retention
58%
UK management vacancies filled internally
60%+
UK hourly paid team members receiving bonuses
£1.6m
Bonuses paid to UK centre teams
34
Hollywood Bowl Group plc
Annual report and accounts 2024
International expansion
We explore and evaluate international growth
opportunities in the indoor leisure sector.
Our approach:
• Extensive research: We undertake customer and market
research to evaluate market opportunities.
• Investment criteria: We target fragmented and underinvested
international markets that are ripe for consolidation and apply
strict investment criteria before entering new markets.
• Trials: We conduct trials to test centre environments and
customer propositions.
Achievements in FY2024:
• Expansion of the Splitsville brand: From nine to 13 centres
consolidating its position as the largest branded ten-pin bowling
operator in Canada.
• Refurbishments and rebrands: Refurbished two Canadian
centres and rebranded acquired centres to Splitsville.
• Strengthened the senior leadership team: Expanded the
Canadian leadership team and initiated an ongoing upskilling
programme for Centre Managers.
• UK team members: Recruited to support roles in the Canadian
team, facilitating cross-learning and improved ways of working.
Future plans
• Customer-led operating model: Continue to leverage
our technology and operating model to add value to the
Canadian business.
• Canadian estate expansion: Continue to develop a pipeline of
new centre opportunities with plans for more than ten additional
sites or acquisitions over the next five years.
• Multi-leisure centre trial: Gain insights from the ‘Stoked’
centre trial in Canada to evaluate a wider range of leisure offers
in a single facility.
• International market expansion: Evaluate further opportunities
in new territories through the acquisition of high-quality indoor
leisure operators.
Guest contact centre
We were able to utilise the UK contact centre to help
support our Canadian centres.
Sales and enquiry calls were historically taken in the
Splitsville centres, but by directing them to the UK team
we allowed our local reception teams to better focus on
serving our customers.
We have subsequently opened a small contact centre
in Canada to allow us to extend the call coverage when
the UK contact centre is closed.
Case study
5
4
Canadian centres added to the portfolio in FY2024
30
Target size of the Canadian estate by 2035
#1
Splitsville is the market-leading
ten-pin bowling brand in Canada
Links to risks
2 Covenant breach
3 Expansion and growth
4 Core systems
35
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Strategy and KPIs continued
We systematically monitor our performance through regular reviews
of key performance indicators (KPIs). This approach enables us to
gain a comprehensive understanding of the factors influencing our
performance, operational efficiency, and financial health.
Financial KPIs
Revenue
(£m)
+7.1%
Definition
Revenue is generated from customers
visiting our centres to bowl or play mini-golf,
and spending money on one of the ancillary
offers, amusements, diner or bar. It also
includes revenue generated by our Striker
Installations business in Canada.
Comment
Revenue increased by 7.1 per cent, to
£230.4m, driven through LFL growth
and new centres.
215.1
45.1
13.8
4.5
82.7
52.5
230.4
42.8
31.0
0.2
87.6
28.7
193.7
46.7
12.5
28.3
77.5
56.1
71.9
3.6
28.6
30.6
29.9
Profit before tax
(£m)
-5.2%
Definition
Profit before tax as shown in the
financial statements.
Comment
Profit before tax decreased to £42.8m
due to a higher depreciation, impairment
and amortisation charge, offset in part by
higher revenues in centres.
Revenue generating capex
(£m)
+124.5%
Definition
Capital expenditure on refurbishments,
rebrands and new centres (excluding
maintenance capex).
Comment
Revenue generating capex increased to
£31.0m, due to a higher spend on
completing more refurbishments and new
centres in the year than FY2023.
Group adjusted EBITDA
(£m)
+5.9%
Definition
Group adjusted EBITDA is calculated as
operating profit before depreciation,
impairment, amortisation, loss on disposal
of property, plant, equipment and software
and exceptional items. A reconciliation
between Group adjusted EBITDA and
statutory operating profit is on page 40.
Comment
Group adjusted EBITDA increased
by £4.9m to £87.6m, largely due to
revenue growth.
Like-for-like revenue growth
(%)
+0.2%pts
Definition
LFL revenue growth is total revenue
excluding any new centres and closed
centres. New centres are included in the
LFL revenue growth calculation for the
period after they complete the calendar
anniversary of their opening date. Closed
centres are excluded for the full financial
year in which they were closed.
Comment
LFL revenue has increased 0.2 per cent
when compared to FY2023.
Net cash/(debt)
(£m)
-45.3%
Definition
Net cash/(debt) is defined as cash and cash
equivalents (£28.7m) less borrowings from
bank facilities (£nil) excluding issue costs.
Comment
Net cash reduced in FY2024 compared to
the prior year due to the significant capital
investment in the year as well as the
dividends paid.
2024
2024
2024
2024
2024
2024
2023
2023
2023
2023
2023
2023
2022
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
2021
0.5
36
Hollywood Bowl Group plc
Annual report and accounts 2024
38.5
10.82
82.6
52.0
25.1
38.0
11.05
83.0
57.9
23.2
40.0
10.68
84.8
55.9
28.6
42.5
9.98
85.7
22.1
13.3
Gross profit margin on cost of goods
sold (%)
+0.4%pts
Definition
Gross profit margin on cost of goods sold
is calculated as revenue minus the cost of
good sold (COGS) and any irrecoverable
VAT, divided by revenue. COGS excludes
any labour costs. This is how gross profit
margin is reported monthly by the Group
and how Centres are managed.
Comment
Adjusted gross profit margin increased
year on year due to a combination of higher
margin in UK amusements, as well as a
stronger margin in the Canadian business
as Splitsville revenue represented a larger
proportion of the business in FY2024.
Group adjusted operating cash flow
(£m)
+11.2%
Definition
Group adjusted operating cash flow is
calculated as Group adjusted EBITDA
less working capital, maintenance capital
expenditure and corporation tax paid.
A reconciliation of Group adjusted
operating cash flow to net cash flow is
provided on page 41.
Comment
Group adjusted operating cash flow
increased due to a higher Group adjusted
EBITDA combined with lower maintenance
capital, netted off in part by higher tax in
the year.
Group adjusted EBITDA margin
(%)
-0.5%pts
Definition
Group adjusted EBITDA margin is
calculated as Group adjusted EBITDA
divided by total revenue.
Comment
Group adjusted EBITDA margin was
38.0 per cent (FY2023: 38.5 per cent), in line
with management expectations. Group
adjusted EBITDA margin on a pre-IFRS 16
basis was 29.4 per cent (FY2023: 30.2 per
cent) declining year on year given the greater
impact of the Canadian centres as well as
the inflationary cost increases in the year.
Total average spend per game
(£)
+2.1%
Definition
Total average spend per game is defined
as total revenue in the year, excluding any
exceptional items, divided by the number
of bowling games and golf rounds played
in the year.
Comment
Average spend per game increased by
2.1 per cent, to £11.05, due to customers
continuing to spend more during their visits.
Group operating profit margin
(%)
-1.9%pts
Definition
Operating profit margin is calculated
as operating profit per the Financial
Statements divided by revenue.
Comment
Operating profit margin decreased year
on year to 23.2 per cent, due in the main
to a higher depreciation, impairment and
amortisation charge, offset in part by
higher revenues.
1 Some of the measures described are not financial
measures under Generally Accepted Accounting
Principles (GAAP), including International Financial
Reporting Standards (IFRS), and should not be
considered in isolation or as an alternative to the IFRS
Financial Statements. These KPIs have been chosen
as ones which represent the underlying trade of the
business and which are of interest to our shareholders.
2024
2024
2024
2024
2024
2023
2023
2023
2023
2023
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
37
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Chief Financial Officer’s review
Continued growth
and strong returns
On the back of record revenues
in FY2023, it was encouraging
to continue to see revenue
growth in both the UK and
Canada in FY2024.”
Laurence Keen, Chief Financial Officer
Read full biography on page 84
38
Hollywood Bowl Group plc
Annual report and accounts 2024
Group financial results
FY2023
Movement
FY2024 vs
FY2024
FY2023
Revenue
£230.4m
£215.1m 5
+7.1%
Gross profit on cost of goods sold1
£191.2m
£177.6m
+4.5%
Gross profit margin on cost of goods sold1
83.0%
82.6%
+40bps
Administrative expenses1
£137.7m
£123.5m
+11.5%
Group adjusted EBITDA2
£87.6m
£82.7m
+5.9%
Group adjusted EBITDA2 pre-IFRS 16
£67.7m
£64.9m
+4.3%
Group profit before tax
£42.8m
£45.1m
-5.2%
Group profit after tax
£29.9m
£34.2m
-12.4%
Group adjusted profit before tax3
£45.0m
£47.5m
-5.2%
Group adjusted profit after tax3
£32.3m
£36.6m
-11.8%
Free cash flow4
£16.9m
£29.5m
-42.6%
Total ordinary dividend per share
12.06p
11.81p
+2.1%
1 Gross profit on cost of goods sold is calculated as revenue less directly attributable cost of goods sold and excludes any payroll costs. This is how we report in the business
monthly and at centre level, as labour costs are judged as material and thus reported separately within administrative expenses. Administrative expenses also includes a
settlement payment from the landlord resulting from the closure of Hollywood Bowl Surrey Quays (£0.6m).
2 Group adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is calculated as statutory operating profit plus depreciation, amortisation, impairment, loss
on disposal of property, right-of-use assets, plant and equipment and software and any exceptional costs or income, and is also shown pre-IFRS 16 as well as adjusted for IFRS 16.
These adjustments show the underlying trade of the overall business which these costs or income can distort. The reconciliation to operating profit is set out below.
3 Adjusted group profit before /after tax is calculated as group profit before/after tax, adding back acquisition fees of £0.9m (FY2023: £0.7m), the non-cash expense of £1.9m
(FY2023: £2.0m) related to the fair value of the earn out consideration on the Teaquinn acquisition in May 2022 and deducting the £0.6m received in compensation for the
closure of our Surrey Quays centre. Also, in FY2023 it included the removal of the reduced rate (TRR) of VAT benefit on bowling of £0.3m.
4 Free cash flow is defined as net cash flow pre-exceptional items, cost of acquisitions, debt facility repayment, RCF drawdowns, dividends and equity placing.
5 Group revenue in FY2023 includes £0.2m in respect of TRR of VAT.
6 Revenues in GBP based on an actual foreign exchange rate over the relevant period, unless otherwise stated.
Following the introduction of the lease accounting standard IFRS 16,
the Group continues to maintain the reporting of Group adjusted
EBITDA on a pre-IFRS 16 basis, as well as on an IFRS 16 basis. This is
because the pre-IFRS 16 measure is consistent with the basis used
for business decisions, a measure that investors use to consider the
underlying business performance as well as being a measure
contained within the group’s available loan facility. For the purposes
of this review, the commentary will clearly state when it is referring to
figures on an IFRS 16 or pre-IFRS 16 basis.
All LFL revenue commentary excludes the impact of TRR of VAT
on bowling. New centres in the UK and Canada are included in LFL
revenue after they complete the calendar anniversary of their
opening date. Closed centres are excluded for the full financial year
in which they were closed.
Further details on the alternative performance measures used are
at the end of this report.
Revenue
On the back of record revenues in FY2023, it was encouraging to
continue to see revenue growth in both the UK and Canada. Total
Group revenue for FY2024 was £230.4m, 7.1 per cent growth
on FY2023.
UK centre LFL revenue growth was flat with spend per game growth
of 3.3 per cent, taking LFL average spend per game to £11.19, and a
3.2 per cent decline in LFL game volumes. The LFL revenues,
alongside the performance of the new UK centres, resulted in record
UK revenues of £199.7m and growth of 3.8 per cent compared to the
very strong underlying revenues in the prior year. Since FY2019 the
UK business has seen 5.9 per cent compound annual revenue growth.
Canadian LFL revenue growth, when reviewing in Canadian Dollars
(CAD) to allow for the disaggregation of the foreign currency effect
(constant currency), was 6.3 per cent. Alongside this strong LFL
revenue growth, new centres performed well and resulted in total
revenue of CAD 53.0m (£30.7m), growth year on year in Canada of
42.2 per cent on a constant currency basis. Splitsville bowling centre
revenue was up CAD 15.2m (50.4 per cent) to CAD 45.3m.
Gross profit on cost of goods sold
Gross profit on cost of goods sold is calculated as revenue less
directly attributable cost of goods sold and does not include any
payroll costs. Gross profit on cost of goods sold was £191.2m,
7.7 per cent growth on FY2023 with gross profit margin on cost
of goods sold at 83.0 per cent in FY2024, up 40bps on FY2023.
Gross profit on cost of goods sold for the UK business was £167.6m
with a margin of 83.9 per cent, up 20 bps on FY2023.
Gross profit on cost of goods sold for the Canadian business was
in line with expectations at CAD 40.7m (£23.6m), with a margin of
76.8 per cent (FY2023: 73.6 per cent). This margin increase is due
in part to the significant revenue growth seen in the Splitsville
bowling centres which make up a significantly larger proportion
of total revenue in Canada versus our Striker equipment business.
Splitsville had a gross profit margin on cost of goods sold of
84.8 per cent, in line with expectations. Striker generated revenue
of CAD 7.7m (FY2023: CAD 7.1m) in the year.
Administrative expenses
Following the adoption of IFRS 16 in FY2020, administrative
expenses exclude property rents (turnover rents are not excluded)
and include the depreciation of property right-of-use assets.
Total administrative expenses, including all payroll costs, were
£138.3m. On a pre-IFRS 16 basis, administrative expenses were
£144.3m, compared to £130.0m in FY2023.
39
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Administrative expense continued
Employee costs in centres were £45.7m, an increase of £5.0m when
compared to FY2023, due to a combination of the impact of the
higher than inflationary national minimum and living wage increases
seen compared to the prior year, the impact of higher LFL revenues,
new UK centres, as well as the significant revenue growth in
Canadian centres.
Total centre employee costs in Canada were CAD 13.6m (£7.8m),
an increase of CAD 4.1m (£2.2m), whilst UK centre employee costs
were £37.9m, an increase of £2.9m when compared to FY2023.
Total property-related costs, accounted for under pre-IFRS 16, were
£42.0m, with £37.4m for the UK business (FY2023: £33.9m). Rent
costs account for nearly 50 per cent of total property costs in the
UK and increased to £18.3m (FY2023: £17.6m) and were up less than
one per cent on a LFL basis. We received business rates rebates in
the second half, in relation to claims made in respect of the 2023
revaluation being agreed. These rebates resulted in business rates
in the UK being flat year on year, at £5.6m. Underlying business
rates for H2 FY2025 are expected to increase by 1.7 per cent on a
LFL basis.
Canadian property centre costs were in line with expectations at
CAD 7.9m (£4.6m), an increase of CAD 3.4m due to the increased
size of the estate when compared to FY2023.
Utility costs increased compared to the same period in FY2023, by
£1.9m, with UK centres accounting for £1.7m of this increase due to
a combination of an increase in the cost per unit and the hedge sell
off during FY2023, with the balance in relation to the increased
number of centres in Canada.
Total property costs, under IFRS 16, were £47.6m, including £13.8m
accounted for as property lease assets depreciation and £11.6m
in implied interest relating to the lease liability.
Total corporate costs decreased marginally year on year, by
£0.4m, to £24.9m. UK corporate costs reduced by £2.0m to
£20.6m. As we continue to build out our support team in Canada
for growth, corporate costs increased to CAD 6.5m (£3.8m) from
CAD 3.9m (£2.4m).
The statutory depreciation, amortisation and impairment charge
for FY2024 was £32.2m compared to £26.1m in FY2023. This
increase is in part due to the continued capital investment
programme, including new centres and refurbishments.
We undertook detailed impairment testing which resulted in an
impairment charge in the year of a total of £5.3m (FY2023: £2.2m).
This impairment primarily relates to our Puttstars mini-golf centres.
Whilst these centres were intended to explore customer interest in
mini-golf based entertainment alongside a food, drink and
amusement offering, the results have indicated that customer
demand for mini-golf centres is lower than anticipated. These results
support the decision to focus on the continued expansion of our
Hollywood Bowl and Splitsville locations, as well as rebranding of
Puttstars mini-golf centres to ‘Putt & Play from Hollywood Bowl’.
The impairment reflects a discounted cash flow analysis of future
cash flows, resulting in a reassessment of the carrying value of
property, plant and equipment (PPE) and right-of-use (ROU) assets
associated with the mini-golf centres on the balance sheet. The
discount rate used for the weighted average cost of capital (WACC)
was 12.4 per cent pre-tax (FY2023: 12.7 per cent) in the UK.
See note 12 to the Financial Statements for more information.
Canadian performance
The Group has continued to grow its footprint in Canada, with
13 centres at the end of FY2024 (FY2023: 9). During FY2024 the
Group acquired three centres – in November 2023 it acquired
Woodlawn Bowl in Ontario and Lucky 9 Bowling Centre Limited
as well as its associated restaurant and bar, Monkey 9 Brewing
Pub Corp (‘Riverport’) in British Columbia. Both of these centres
will benefit from investment in FY2025, with Riverport having a
significant refurbishment costing over CAD 3.0m, which will include,
but not be limited to, the introduction of a full amusement offer as
well as the installation of Pins on Strings.
In June 2024, the Group acquired Stoked, a multi-activity family
entertainment centre in Saskatoon. All three acquisitions are
trading in line with management expectations. We were also
pleased to open our first greenfield centre, in Waterloo, Ontario.
The Canadian business continues to trade strongly, with total
revenues in Canada of CAD 53.0m (£30.7m), and just over
CAD 9.4m (£5.4m) of EBITDA on a pre-IFRS 16 basis. Bowling
centres contributed CAD 45.3m of revenues with EBITDA on
a pre-IFRS 16 basis of CAD 14.7m, an increase of CAD 4.4m on
the same period in FY2023.
Exceptional costs
Exceptional costs in FY2024 totalled £2.3m (FY2023: £2.4m) and
relate to three areas. The first is the acquisition costs in relation to
the acquisition of four centres – one in the UK and three in Canada,
which totalled £0.9m. The second is the earn out consideration for
Teaquinn President Pat Haggerty, which is an exceptional cost of
£1.9m, of which £1.5m is in administrative expenses and £0.4m is
in interest expenses. See the table below for the exceptional items
included in the Group adjusted EBITDA and operating profit
reconciliation. We also received £0.6m in compensation for the
closure of our Surrey Quays centre. More detail on these exceptional
costs is shown in note 5 to the Financial Statements.
Group adjusted EBITDA and operating profit
Group adjusted EBITDA pre-IFRS 16 increased 4.3 per cent, to
£67.7m. The increase is due to a combination of LFL revenue
performance in both the UK and Canada as well as the new centre
growth across both territories when compared to the same period
in FY2023. The reconciliation between statutory operating profit
and Group adjusted EBITDA on both a pre-IFRS 16 and under-
IFRS 16 basis is shown in the table below.
FY2024
£’000
FY2023
£’000
Operating profit1
53,506
54,085
Depreciation
25,919
23,107
Impairment
5,316
2,210
Amortisation
935
820
Loss on property, right-of-use assets, plant
and equipment and software disposal
88
306
Exceptional costs excluding interest
1,823
2,203
Group adjusted EBITDA under IFRS 16
87,587
82,731
IFRS 16 adjustment
(19,838)
(17,799)
Group adjusted EBITDA pre-IFRS 16
67,749
64,932
1 IFRS 16 adoption has an impact on EBITDA, with the removal of rent from the
calculation. For Group adjusted EBITDA pre-IFRS 16, it is deducted for comparative
purposes and is used by investors as a key measure of the business. The IFRS 16
adjustment is in relation to all rents that are considered to be non-variable and of a
nature to be captured by the standard.
Chief Financial Officer’s review continued
40
Hollywood Bowl Group plc
Annual report and accounts 2024
Segmentation
Year ended 30 September 2024
UK
£’000
Canada
£’000
Total
£’000
Revenue
199,696
30,703
230,399
Group adjusted EBITDA1
pre-IFRS 16
62,308
5,441
67,749
Group adjusted EBITDA1
79,715
7,872
87,587
Depreciation and
amortisation
23,490
3,364
26,854
Impairment of PPE
and ROU assets
5,316
—
5,316
Loss on property,
right-of-use assets, plant
and equipment and
software disposal
88
—
88
Exceptional costs /(income)
excluding interest
(591)
2,414
1,823
Operating profit
51,412
2,094
53,506
Finance (income)
(1,580)
(142)
(1,722)
Finance expense
10,425
2,045
12,470
Profit before tax
42,567
191
42,758
Share-based payments
During the year, the Group granted further Long-Term Incentive Plan
(LTIP) shares to the senior leadership team as well as starting a new
save as you earn (SAYE) scheme for all team members. The LTIP
awards vest in three years providing continuous employment during the
period, and attainment of performance conditions as outlined in the
FY2024 Annual Report. The Group recognised a total charge of £1.8m
(FY2023: £1.2m) in relation to the Group’s share-based arrangements.
Share-based costs are not classified as exceptional costs.
Financing
Finance costs (net of finance income) increased to £12.5m in
FY2024 (FY2023: £10.4m) comprising mainly of implied interest
relating to the lease liability under IFRS 16 of £11.6m.
During the year, the Group agreed a 12-month extension to the £25m
RCF and £5m accordion, resulting in a margin rate reduction to 1.65
per cent above SONIA effective from 22 March 2024. The RCF term
now runs to the end of December 2025 and remains fully undrawn.
Cash flow and liquidity
The liquidity position of the Group remains strong, with a net cash
position of £28.7m as at 30 September 2024. Detail on the cash
movement in the year is shown in the table opposite.
Capital expenditure
During the financial year, the Group invested a record net capex of
£52.7m, including £13.8m on the acquisition of four centres, one of
which, Lincoln Bowl, was in the UK.
On 2 October 2023, the Group purchased the assets, including the
long leasehold, of Lincoln Bowl for total of £4.5m, of which £2.0m
was allocated to the long leasehold.
In Canada, three centres were acquired in FY2024. The first was a
family entertainment centre in Guelph, Ontario, for CAD 4.7m
(£2.8m), on 7 November 2023. The second was the acquisition of
the assets and lease of a centre in Vancouver, for consideration of
CAD 0.4m (£0.3m). The final acquisition was ‘Stoked’ in
Saskatchewan, for a total consideration of CAD 10.8m (£6.2m).
More information on all of these acquisitions is provided in note 32 to
the Financial Statements.
A total of £11.5m was invested into the refurbishment programme,
with ten UK centres refurbished as well as investments into the
Canadian estate.
A significant proportion of the refurbishment spend in the UK, £1.9m,
was in relation to the extension and refurbishment of our centre in
Stockton. This centre was already one of the most successful in the
estate and we have now increased its potential. In conjunction with a
new lease for a period of 15 years and investment into the existing
space, the Group also extended into the adjacent unit, adding an
extra five lanes, a Puttstars mini-golf course and a large
amusements area. The refurbishment was completed in time for
Easter trading and results are very encouraging.
Despite inflationary pressures, returns on the UK refurbishments
continue to exceed the UK hurdle rate of 33 per cent return on
investment.
New centre capital expenditure was a net £19.5m.
The Group’s strong liquidity ensures it can continue to invest in
profitable growth with plans to open more locations during FY2024
and beyond.
The Group spent £8.0m on maintenance capital, including continued
spend on the rollout of Pins on Strings technology (£1.8m) and solar
panels as well as extensions of current installations (£1.0m).
We expect total capital expenditure for FY2025 to be in the region
of £40m to £45m.
Cash flow and net debt
FY2024
£’000
FY2023
£’000
Group adjusted EBITDA under IFRS 16
87,587
82,731
Movement in working capital
1,097
(1,103)
Maintenance capital expenditure
(7,973)
(9,072)
Taxation
(10,536)
(9,100)
Payment of capital elements of leases
(12,305)
(11,419)
Adjusted operating cash flow (OCF)1
57,870
52,037
Adjusted OCF conversion
66.1%
62.9%
Expansionary capital expenditure2
(30,952)
(13,786)
Disposal proceeds
—
10
Net bank interest received
1,616
1,008
Lease interest paid
(11,615)
(9,808)
Free cash flow (FCF)3
16,919
29,461
Exceptional items
(436)
(343)
Acquisition of centres in Canada
(9,283)
(7,716)
Cash acquired in acquisitions
78
319
Acquisition of centres in UK
(4,474)
—
Share (buyback)/issue
(378)
6
Dividends paid
(26,180)
(25,338)
Net cash flow
(23,754)
(3,611)
1 Adjusted operating cash flow is calculated as Group adjusted EBITDA less working
capital, maintenance capital expenditure, taxation and payment of the capital
element of leases. This represents a good measure for the cash generated by the
business after considering all necessary maintenance capital expenditure to ensure
the routine running of the business. This excludes exceptional items, net interest
paid, debt drawdowns and any debt repayments.
2 Expansionary capital expenditure includes refurbishment and new centre capital
expenditure.
3 Free cash flow is defined as net cash flow pre-exceptional items, cost of acquisitions,
debt facility repayment, debt drawdowns, dividends and equity placing.
41
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Taxation
The Group’s tax charge for the year is £12.8m arising on the
profit before tax generated in the period. The increase in the
Group’s tax charge is due to the increase in the UK corporation tax
rate from 19 per cent to 25 per cent from April 2023.
Earnings
Statutory profit before tax for the year was £42.8m (FY2023: £45.1m),
with an impairment charge of £5.3m, which was higher by £3.1m than
the previous year.
The Group delivered profit after tax of £29.9m (FY2023: £34.2m)
and basic earnings per share was 17.42 pence (FY2023: 19.92 pence).
Group adjusted profit before tax is £45.0m, whilst Group adjusted
profit after tax is £32.3m and basic adjusted earnings per share of
18.82 pence per share (FY2023: 21.37 pence per share).
These adjustments are adding back the exceptional costs
highlighted earlier in the report. For more detail see note 5 to the
Financial Statements.
It is also noteworthy to highlight Group adjusted profit before tax
adding back impairments, is £50.3m (FY2023: £49.9m).
Dividend and capital allocation policy
In line with the Group’s capital allocation policy, the Board has
declared a final ordinary dividend of 8.08 pence per share.
Subject to approval at the AGM, the ex-dividend date will be 30
January 2025, with a record date of 31 January 2025 and a payment
date of 21 February 2025.
Going concern
As detailed in note 2 to the Financial Statements, 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.
UK Government Budget
As outlined in the Chief Executive Officer’s review, the changes to
Employers National Insurance Contributions and Thresholds will
result in significantly increased employment costs, impacting the
hospitality industry in particular.
We expect to see an increase in employee costs in UK LFL centres
in excess of 8 per cent for the second half of FY2025 given the
National Living and Minimum Wage announcement, with the National
Insurance increase costing in excess of £1.2m on an annualised basis.
Laurence Keen
Chief Financial Officer
16 December 2024
Note on alternative performance measures (APMs)
The Group uses APMs to enable management and users of the financial
statements to better understand elements of the financial performance
in the period. APMs referenced earlier in the report are explained as
follows. These are not intended to replace statutory financial measures
UK like-for-like (LFL) revenue for FY2024 is calculated as:
• Total Group revenues £230.4m, less
• New UK centre revenues for FY2024 that have not
annualised £7.8m, less
• Closed centres for the full year of £3.1m, less
• Canada revenues for FY2024 of £30.7m (CAD 53.0m)
Canada like-for-like (LFL) revenue for FY2024 is calculated as:
• Total Canada revenues CAD 53.0m, less
• New Canada centre revenues for FY2024 that have not
annualised CAD 13.4m
New centres are included in the LFL revenue after they complete
the calendar anniversary of their opening date. Closed centres are
excluded for the full financial year in which they were closed. LFL UK
comparatives for FY2023 are £188.8m. LFL Canada comparatives
for FY2023 are CAD 37.3m
Gross profit on cost of goods sold is calculated as revenue less
directly attributable cost of goods sold and excludes any payroll
costs. This is how we report in the business monthly and at centre
level, as labour costs are judged as material and thus reported
separately within administrative expenses. These amounts are
presented separately on the consolidated income statement for
ease of reconciliation.
Group adjusted EBITDA (earnings before interest, tax, depreciation
and amortisation) reflects the underlying trade of the overall business.
It is calculated as statutory operating profit plus depreciation,
amortisation, impairment, loss on disposal of property, right-of-use
assets, plant and equipment and software and any exceptional costs or
income, and is also shown pre-IFRS 16 as well as adjusted for IFRS 16.
The reconciliation to operating profit is set out in this report.
Free cash flow is defined as net cash flow pre-dividends,
exceptional items, acquisition costs, bank funding and any equity
placing. Useful for investors to evaluate cash from normalised trading.
LFL spend per game is defined as LFL revenue in the year divided
by the number of bowling games and golf rounds played.
Adjusted operating cash flow is calculated as Group adjusted
EBITDA less working capital, maintenance capital expenditure,
taxation and payment of the capital element of leases. This
represents a good measure for the cash generated by the business
after considering all necessary maintenance capital expenditure
to ensure the routine running of the business. This excludes
exceptional items, acquisitions, share buyback/issue, dividends paid,
net interest paid, debt drawdowns and any debt repayments.
Expansionary capital expenditure includes all capital on new
centres, refurbishments and rebrands only. Investors see this as
growth potential.
Group adjusted profit after tax is calculated as statutory profit
after tax, adding back the acquisition fees of £0.9m (FY2023: £0.7m),
the non-cash expense of £1.9m (FY2023: £2.0m) related to the fair
value of the earn out consideration on the Canadian acquisition in
May 2022 and deducting the £0.6m in compensation received for the
closure of our Surrey Quays centre. This adjusted profit after tax is
also used to calculate adjusted earnings per share.
Constant currency exchange rates are the actual periodic
exchange rates from the previous financial period and are used to
eliminate the effects of the exchange rate fluctuations in assessing
certain KPIs and performance.
Chief Financial Officer’s review continued
42
Hollywood Bowl Group plc
Annual report and accounts 2024
43
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Section 172
Effective
stakeholder engagement
and collaboration
Engaging and collaborating with all stakeholder groups
is crucial to the Board’s strategic decision-making
process. Aligning stakeholder engagement with
our culture and supporting our goal of maintaining
industry leadership is essential for the Group’s long-
term sustainable success.
Section 172 of the Companies Act 2006 mandates that directors
act in good faith and in a manner most likely to promote the
company’s success for the benefit of its stakeholders.
Consequently, the Board must consider how decisions balance
the needs of various stakeholders and their impact on long-term
performance. Operating a large-scale business often involves
making decisions amidst competing stakeholder priorities, where
positive outcomes for all stakeholders may not always be achievable.
Our stakeholder engagement processes enable us to understand
stakeholder priorities, consider all relevant factors, and choose the
best course of action for the Group’s long-term success.
S172(1) statement:
In accordance with section 172(1) of the
Companies Act 2006, a director of a
company must act in the way he or she
considers, in good faith, would be most
likely to promote the success of the Group
for the benefit of its members as a whole
and, in doing so, have regard, amongst
other matters, to:
a. the likely consequences of any decision
in the long term;
b. the interests of the Group’s employees;
c. the need to foster the Group’s
business relationships with
customers and suppliers;
d. the impact of the Group’s operations
on the community and the environment;
e. the desirability of the Group maintaining
a reputation for high standards of
business conduct; and
f. the need to act fairly between members
of the Group.
The following disclosure describes how
the Directors of the Group have taken
account of the matters set out in section
172(1) (a) to (f) and forms the Directors’
statement required under section 172 of
the Companies Act 2006.
How we engage with
our key stakeholders
Here, we outline the Board and Group’s
approach to considering and engaging with
our key stakeholder groups. In addition to
our ongoing engagement activities, we
regularly receive and respond to specific
feedback and provide updates on important
issues to our stakeholders.
The Board reserves certain matters for its
own decision-making, as outlined on page
86.
We take steps to enhance our
communication, collaboration, and
information sharing with stakeholders
regarding our actions and their potential
impacts. This approach has been adopted
in the UK, and we are starting to extend
these engagement and collaboration
methods to our Canadian operations as
our Group’s ways of working become more
embedded in this business.
On the following pages we outline the details
of the activities we undertook in FY2024
and the outcomes of our engagement with
stakeholder groups.
Our key stakeholders
The Board identifies the Group’s key
stakeholders as:
Customers
Team members (employees)
Communities
Investors
Environment
Suppliers and partners
Lending banks
For more information, refer to:
Business model on pages 28 and 29
Sustainability on pages 48 to 59
Governance on pages 82 to 131
44
Hollywood Bowl Group plc
Annual report and accounts 2024
Team members
Customers
Our team members
are essential to our
business success
and the driving
force behind our
fun-filled customer
experiences
What is important to them
• Regular, relevant, and clear communication
• Engagement with all levels of management
• Opportunities to provide feedback
• Career and skills development pathways
• Attractive salary, benefits, and opportunities
to share in the Group’s success
• Working for an inclusive employer that
embraces diversity at all levels
Our core focus is
providing a great
experience every
visit, with ongoing
feedback serving as
the best indicator of
our success
What is important to them
• A great value visit every time
• A clean and safe environment
• Correct pace of experience in all centre areas
• Excellent customer service from friendly
team members
• Fully working, fault-free equipment
Stakeholder engagement
How the Board considers
their interests
• Directors visit multiple new, refurbished
and existing centres, each year
• Attendance at the annual
management conference
• Bi-annual feedback sessions between
management and team members
• Diversity is a key consideration in the Board’s
succession planning
Engagement in FY2024
• New training system, Thrive, introduced
based on team member feedback
• Used Fourth Engage to communicate key
messages, enabling team interaction (over
8,500 internal social posts in the year) and
delivering wellbeing initiatives
• Conducted employee engagement surveys
and pulse surveys
• Maintained a Whistleblowing policy, with all
cases reported at every Board meeting
• Published our annual Gender Pay Gap report
How the Board considers
their interests
• Reviews customer satisfaction scores at
every Board meeting
• Includes customer satisfaction scores in
bonus schemes from team members
to senior leadership
• Uses customer feedback to identify
improvements to operational ways of
working and to guide investment in new
centres and refurbishments
Engagement in FY2024
• Conducted post-visit customer
satisfaction surveys
• New customer feedback programme
introduced in Canada
• Monitored social media and customer
queries submitted via the contact centre
• Regular feedback and monitoring to meet
safety standards and expectations
Outcomes of this engagement
• Team member monthly 1:1s
• Updated our learning platform to
include more user-generated content
and encourage self-led learning
• The Board and senior leadership
considered team member
engagement survey outputs resulting
in identified actions
• Recognised as one of the UK’s
Top Best Big Companies to Work
For in 2024 and achieved a 2*
high-quality employee experience
score from WorkL.
Outcomes of this engagement
• Record number of customer
surveys returned
• Record levels of customer
satisfaction scores in UK
• Further enhancements to the
Hollywood Bowl and Splitsville
brand and service propositions
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Annual report and accounts 2024
Strategic report
Communities
Investors
We are proud to be
an active part of
our communities
as an employer and
provider of leisure
amenities
Our investors
provide valuable
feedback on our
business model and
future growth plans
What is important to them
• Relevant and timely information on Group
performance and strategic plans
• Regular engagement with management
• Growth of share price and dividend returns
• Capital allocation policy
• Information on ESG strategy
and performance
• Information on Remuneration policy
Stakeholder engagement continued
What is important to them
• Positive contributions to local communities
through employment and amenity provision
• Ongoing support for local and national charities
How the Board considers
their interests
• Considers the impact of local operations as part
of its sustainability strategy
Engagement in FY2024
• New national charity partner appointed
• Over 100 new jobs created in our new
centre openings
• Progress with our ESG strategy and initiatives
(Sustainability report on pages 48 to 59)
How the Board considers
their interests
• Receives feedback from shareholder
meetings and through the Group’s brokers,
Investec and Berenberg
• Welcomes questions from shareholders at
any time
• The Remuneration Committee Chair consults
shareholders on any major policy changes
(Report on pages 105 to 118)
• Focuses on the Group’s ESG initiatives
(Sustainability report on pages 48 to 59,
Corporate governance on pages 86 to 92)
Engagement in FY2024
• Held the AGM in January 2024
• Conducted investor relations meetings with
current and prospective shareholders and
presented annual and interim results
• Attended and presented at investor
conferences
• Disclosed climate reduction performance
via CDP
Outcomes of this engagement
• Increased uptake of UK concessionary
discounts compared to FY2023
• Supported Macmillan as our UK
national charity partner and other
community-based charities
• Made further progress in our ESG
strategy and initiatives
Outcomes of this engagement
• Outlined the Board’s view on
dividends in the Chief Financial
Officer’s review (pages 38 to 43)
• Made further progress with our ESG
strategy (pages 48 to 59)
• Won the Investor Relations Society
Best Practice Award for Small Cap
PLC Website
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Annual report and accounts 2024
Suppliers and partners
Lending banks
Environment
Our partnerships
include landlords,
construction
companies, suppliers
of amusements and
food and beverage
What is important to them
• Clear and concise communication that
demonstrates integrity and reliability
• Strong listed covenant
• Responsible tenancy holders
Our lending banks
provide funds for
growth and working
capital when required
What is important to them
• Regular monthly reporting, including
rolling 12-month forecasts
• Invitations to new openings and
refurbishment launches
We always consider
the environmental
impacts of our
operations and strategy
What is important to them
• Energy efficiency and minimising
environmental impacts of our direct
operations and supply chains
• Sustainable building and
refurbishment practices
How the Board considers their interests
• Commitment to high ethical standards
• Expectation of high ethical standards from
all suppliers and partners
• Regular discussions between Executive
Directors and main suppliers
• Zero-tolerance approach to bribery, corruption,
and modern slavery, with regular reviews of
supplier and partner policies
Engagement in FY2024
• Executive Directors engaged closely with
landlords to agree on extensions and revised
terms as needed
• Actively managed supplier relationships to
handle costs and supply chain disruptions
• Published the Payment Practices Report
twice in the year
• Conducted annual audits of suppliers for
compliance with modern slavery and human
trafficking legislation
• Communicated with key suppliers as part of
our ESG supplier engagement programme
How the Board considers
their interests
• Bank representatives attend half-year and
full-year results presentations
• Forward-looking forecasts provided at
every monthly Board meeting to ensure
covenant compliance
Engagement in FY2024
• Provided regular monthly updates on company
performance and debt covenant forecasts
• Attended half yearly meetings with lending bank
as well as others interested in future lending
How the Board considers
their interests
• Considers the impact of the Group’s direct
operations and supply chains as part of its
sustainability strategy
• Focuses on improving energy efficiency in
the estate
Engagement in FY2024
• Supplier engagement programme launched
to gain increased understanding of net zero
ambitions and access to primary data
• Canadian climate risks and opportunities
analysis undertaken
Outcomes of this engagement
• Maintained positive relationships with
major suppliers and landlords
• Gained access to increased supplier
primary data for Scope 3 emissions
Outcomes of this engagement
• The £25m revolving credit facility
(RCF) remains available to the Group
until Decmber 2025
Outcomes of this engagement
• Continued investment in solar panels,
with three installations completed
• Energy-efficient Pins on Strings
technology is now in 91% of our UK
bowling centres
• Launched a supplier engagement
programme
47
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Annual report and accounts 2024
Strategic report
Sustainability overview
A responsible
and sustainable business
At Hollywood Bowl Group, we are committed
to placing sustainability at the heart of
everything we do.
We are always looking for ways
to make a positive difference
– for our team, our customers,
our communities and our planet.”
As a people-focused business, we prioritise employment and community
engagement at our centres. We are dedicated to reducing our
environmental impact both locally and globally as we continue to grow.
We take our responsibility seriously, with a strong track record
of supporting our teams, our communities, and implementing a variety
of carbon-saving initiatives.
Introduction to the sustainability report
As the Chair of the Corporate Responsibility Committee (see page 104), I
am immensely proud to be part of a business that prioritises sustainability.
We are always looking for ways to make a positive difference – for our
team, our customers, the communities in which we operate and our
planet. We have always conducted our operations with integrity
because what we do, and how we do it, really matters.
The Group is committed to building on the strong foundations that
we have established with our three sustainability pillars, including the
introduction of these into our Canadian operations.
Our teams have set challenging targets and built operational initiatives
to deliver them, and we are pleased to share an update on
our progress in the following pages.
We recognise that there is still much to accomplish, but we are confident
in our ability to make a significant impact for all our stakeholders.
Ivan Schofield
Chair of the Corporate Responsibility Committee
This report refers to UK operations
only unless otherwise stated.
48
Our ambition
We create welcoming centres
where health and safety, responsible
eating and drinking, accessibility for
all, and positive community relations
are prioritised.
Read more on pages 50 to 51
Strategic objectives
1 Driving revenue growth
2 Active asset refurbishment
4 Focusing on our people
5 International expansion
Our ambition
We focus on developing and training
our team members, supporting their
wellbeing, and fostering a diverse and
inclusive company culture where they
can thrive.
Read more on pages 52 to 53
Strategic objectives
1 Driving revenue growth
4 Focusing on our people
Our ambition
Our centres are designed to be
energy-efficient, low-emission,
sustainably sourced, and
recycling‑oriented places for
playing, working, and socialising.
Read more on pages 54 to 55
Strategic objectives
2 Active asset refurbishment
3 New centres and acquistions
Investing in
people and the planet
Our purpose:
Bringing families and friends together for
affordable fun and safe, healthy competition
49
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Annual report and accounts 2024
Strategic report
Outstanding
workplaces
Safe and inclusive
leisure destinations
Sustainable centres
Sustainability overview continued
Safe and inclusive destinations
Target progress
£85k
Raised for national charity
partner Macmillan
FY2024 target
£50,000
FY2023
£58,000
FY2022 £28,000
FY2022
750k
FY2022
132k
FY2022
48%
1m+
Concessionary discount
games played
FY2024 target
950k
FY2023
963k
170k
Schools games played
49%
Of soft drinks sold were sugar free
FY2024 target
160k
FY2024 target
50%
FY2023
155k
FY2023
50%
1 Local investment
As we grow our business, our commitment to positively impacting
the local communities in which we operate remains a priority.
Each new centre we open represents a significant investment in the
region of £3 million into the local economy, enhancing footfall to the
wider location and significantly benefiting surrounding leisure and
retail businesses.
Additionally, we create approximately 30 jobs per centre,
contributing to local employment, and importantly providing a
gateway first job to many of our team members. In FY2024 we
opened four new centres in the UK creating in excess of 100 new
jobs.
2 Inclusivity and community relations
We are dedicated to providing inclusive and enjoyable activities
that bring families and friends of all ages and abilities together in
a welcoming environment.
Participation in ten-pin bowling promotes wellbeing and social
interaction through its unique blend of healthy competition.
1
2
Our centres are designed to be accessible to everyone, featuring
disabled access, moveable ramps for lane access, bowling
assistance, and disabled toilet facilities.
We work hard to create strong community relations through initiatives
like offering concessionary discounts and active local engagement,
including charity fundraising events, junior sports team sponsorship
and local school partnerships.
For the first time in FY2024, more than 1 million discounted
concession games were bowled in a year. This highlighs the
importance that our safe and inclusive venues and activities plays in
the lives of these groups of customers.
We were delighted to partner with Macmillan as our new national UK
charity in FY2024 following a selection process driven by team
member voting for their favourite charity causes.
This new partnership has already resulted in a record £85,000 being
raised through our local centre teams and central Hemel support
office team. We have extended the partnership into FY2025.
Our centres are important social venues for the local communities they serve
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Annual report and accounts 2024
Macmillan meet-ups
We were delighted to launch a new initiative this year with
Macmillan. Cancer Community Meet-ups are an opportunity
to meet with other people living with cancer from the local
area in a relaxed and comfortable space, and to connect over
a free game of bowling.
These events are giving people the opportunity to express
what they are going through and can offer reassurance to
meet others with similar thoughts and feelings.
Following a successful pilot the scheme is being rolled out to
more centres in FY2025.
3 Health and safety
The health and safety of our teams and customers is paramount.
We continuously measure and monitor performance across all of our
locations to ensure that we provide safe and healthy environments in
all aspects of our operations, which is a crucial foundation to our
business performance and customer experience.
Our policies and practices are regularly reviewed with external
agencies to ensure compliance with safety legislation. All incidents
involving customers or team members are reported and addressed
promptly. Internal audits, including safety reviews, are conducted
and reviewed by the Board.
4 Responsible food and beverage
We are committed to providing transparent information to help
customers make informed choices about our food and beverage
choices, including providing allergen details.
In collaboration with our suppliers, we offer menu options with
reduced salt and sugar content in our food and beverage ranges.
We also promote a variety of sugar-free soft drinks which account
for just under half of our soft drink sales (a ratio which has been
consistent in the last three years), and ensure fresh water is readily
available to our customers.
We continue to review and streamline our supply chain and ordering
practices to further reduce the number of food and drink deliveries
to our centres.
Health and safety are integral to our daily hospitality operations,
with team members undergoing food safety and allergen
awareness training.
Our centres consistently achieve high food hygiene ratings
through regular audits by internal food safety auditors or external
environmental health officers.
3
4
51
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Annual report and accounts 2024
Strategic report
Case study
Outstanding workplaces
1 Attracting and retaining top talent
Our team members are the centre of our business and key to delivering
our purpose of bringing friends and family together for affordable fun
and safe, healthy competition.
They have been instrumental to our performance in FY2024 which
can be demonstrated through the achievement of record customer
satisfaction scores. Our strategic pillar; “focusing on our people”
reinforces our recognition of our people as a key driver of our
ongoing success.
Our people focused activities are designed to attract and retain the
best talent in a competitive labour market. Despite the ongoing
challenges of recruitment and retention in our sector, our
industry‑leading training programmes and limited exposure to EU
labour and the London market enable us to continue to outperform
our hospitality and leisure peers in terms of team turnover rates.
Sustainability overview continued
Target progress
58%
Of our management appointments
from internal candidates
2 star
High-quality employee experience
rating from WorkL
11%
Of our team members
participating in development
programmes
94%
Team members completing online
development modules
FY2024 target
47%
FY2024 target
1 star
FY2023
45%
FY2023
1 star
FY2022
40%
FY2022
1 star
FY2022
97%
FY2022
5.6%
FY2024 target
7%
FY2023
11%
FY2024 target
92%
FY2023
94%
We foster a high-performance, purpose-led culture that recognises
individual contributions which are often promoted through our
internal social media channels and in our annual awards programme.
Our generous perks and benefits programme includes team
member discounts, top talent development programmes, and
performance-related pay. We paid out £636k in bonuses to centre
teams, with 60.3% of our hourly paid team members receiving an
additional 50 pence per hour bonus in recognition of excellence.
With inflation impacting team members’ finances, we increased
average pay in April by 9.2% for salaried team members and by
5.3% for Centre Managers and Assistant Centre Managers. We are
committed to paying a living wage to our hourly-rate team members.
2 Training and development
Working with us is more than just a job – we have a high-performance
culture where teams are nurtured through exceptional training and
where defined behaviours are rewarded. We know that some of these
jobs will turn into long-term careers in leisure and hospitality, and we
support our people to grow with us and become future leaders.
Our team members are key to delivering great customer experiences
and we strive to provide them with a great work experience
1
2
52
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Annual report and accounts 2024
We believe that anyone with the right drive and training can become
progress in our organisation. In FY2024 we saw record attendance
on our team development programmes with 11% of our team
participating in one of our top talent programmes.
Our graduate training programme will see graduates develop into
Centre Managers within three years. Additionally, our Senior
Leadership Development Programme (SLDP), which equips future
leaders with the management skills and business knowledge to join
the senior leadership team, has 12 colleagues enrolled.
With many roles filled internally in FY2024 and with our planned
new centre openings, we again increased the number of Assistant
Manager in Training and Centre Manager in Training programmes.
We were delighted that a record 58% of management vacancies
were filled internally in FY2024.
We launched a new training portal called Thrive to further
improve our ongoing team member training, compliance and
professional development.
3 Team wellbeing
Team member wellbeing is of vital importance to us, and we have
well-established initiatives in place. This includes Mental Health
First Aiders, regular communications on Fourth Engage (our internal
social media platform) to highlight events such as World Mental
Health Day, wellbeing modules in our training programmes, and our
Employee Assistance Programme (EAP), which provides free
support services and resources for physical and mental health,
wellbeing, financial, legal, or bereavement issues.
Team engagement has further improved, and we received a WorkL
2* high quality employee experience in our centres, 3* rating for the
support centre and increased scores on employee review websites.
4 Diversity and inclusion
We value and celebrate differences, reflecting the people and
communities we serve, and ensuring we provide experiences that
are relevant, accessible, and welcoming. We promote a culture that
fosters diversity and inclusion, committing to non-discrimination on
the grounds of gender, race, ethnicity, religious belief, political
affiliation, sexual orientation, age, or disability. Our careers website
and marketing activity is designed to reach and appeal to a broad
range of talent and we saw a 69 per cent increase in applications
being originated from social media activity.
International careers
To help develop the culture and ways of working in our
Canadian business, we have sponsored a number of
experienced UK Hollywood Bowl team members to take up
roles in the Splitsville business.
To date these have included regional support roles (including
Regional Manager; Adam West pictured above), centre
managers, human resources and executive management.
In addition we are centralising some Group support functions
which gives UK based team members the opportunity to
support our Canadian business.
Case study
We continue to host focus groups to make our business more
attractive to a diverse workforce. Team members are invited to join
and lead these groups, resulting in highly productive sessions
focused on age, gender, heritage, ethnicity, the LGBTQ+ community,
and culture. Feedback from these sessions is helping us to continue
to evolve our diversity strategy, and we have representatives for
each group who publish updates in our D&I newsletters.
We continue to encourage women to apply for senior roles by
offering flexible working structures and enhanced maternity,
paternity, or shared parental leave. Our approach has resulted in
a significant increase in females on our talent programme, with
51 Assistant Managers in Training, 8 Centre Managers in Training,
and 4 on our SLDP.
3
4
53
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Sustainable centres
1 Increasingly efficient centres
We understand that our business has an impact on climate, the
environment and nature; including land, forests and water ecosystems
and we are committed to reducing the impacts from operations.
We also recognise biodiversity loss as an emerging risk, so
protecting this is important to ensure the resilience of our business
and the communities where we operate.
The burning of fossil fuels is damaging to the environment, and we
seek to reduce our impact through reducing the energy we consume
in our centres, on-site generation of renewable electricity and
improving energy efficiency through a variety of initiatives:
• Our directly purchased electricity in UK and Canada is from 100%
renewable sources (backed in the UK by REGOs and from
1 October 2024 in Canada by RECs)
• Promoting energy saving behavioural change within our centre teams
• Implementing energy-efficient air handling systems
Sustainability overview continued
Target progress
82.9%
Of waste recycled, with 100
per cent diverted from landfill
100%
Of our UK directly
purchased energy from
renewable sources
30
UK centres with
solar arrays installed
56.8
UK Intensity ratio Scope 1
and 2 emissions
FY2024 target
82%
FY2023
82.7%
FY2022
77.7%
FY2022 0%
FY2022
17
FY2023
61.0
FY2022
61.7
FY2024 target
100%
FY2023
100%
FY2024 target
30
FY2023
27
FY2024 target
58.0
1
2
Building, refurbishing and operating our centres to minimise
their impact on the environment is a priority
• In FY2024, we installed solar panels in three more UK centres,
with our estate now having 5,918 kWp of solar power, producing
5,020,003 kWh per year
• We continue to negotiate with landlords to add extra solar arrays
where possible
• Continuing the roll out of energy efficient Pins on Strings technology,
now in 91% of the UK estate
• Our teams have also played their part with our recent travel
survey showing a reduction in commuting petrol and diesel miles
and an increase in bus usage
2 Waste, plastics and water
We are committed to enhancing waste reduction and recycling through
team member behavioural change incentives, including linking waste
management performance to team members’ bonus allocations.
In our UK operations we have increased the percentage of waste
recycled in the centres we manage, from 67.3% in FY2019 to 82.9%
in FY2024, with all waste diverted from landfill.
Sustainability overview continued
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Annual report and accounts 2024
We have a strong track record in minimising food and drink wastage,
targeting less than 1% of food and drink waste as a percentage of
revenue. In FY2024, we achieved 0.6%, demonstrating our progress.
We are committed to changing the way we use, and reuse plastics
in line with the three principles of a circular economy for plastics:
eliminate, innovate, and circulate. We reduced the amount of plastic
in our food and drink packaging by over 61% compared to 2019 and
the total weight of food and drink packaging by over 13%.
We are also reducing the amount of water each centre uses – in
the UK down from 3.38m³ per centre per day in FY2023 to 3.21m³
in FY2024, but also looking at the wastewater that we emit.
We have now installed grease traps into 84% of centres which
reduce the fats and grease emitted from our centres.
3 Building sustainable centres
Our development teams prioritise sustainability in estate additions
and upgrades, partnering with contractors to deliver greener and
more efficient buildings.
The challenge to reach net zero intensifies our focus on “building
better”, from adopting a re-use, re-cover, and recycle approach
to fitting carbon-neutral carpets and 100% recycled vinyl flooring
in refurbishments.
All the timber used for refurbishments and new builds is
FSC accredited.
For new builds, we fit out all our new centres using 100% renewable
energy, adopt a fabric-first approach to enhance energy efficiency
and improve EPC ratings, and install technologies that reduce long-term
environmental impacts.
4 Climate change and Net Zero
We were pleased to become a member of the Zero Carbon
Forum (ZCF) in FY2024 which is enabling us to better understand
our strategy and performance when benchmarked to similar
hospitality businesses.
We are also working with ZCF on a number of future carbon
reduction initiatives. We have also continued our participation in
the UK Hospitality Sustainability Committee.
The Group has made progress this year in further reducing our
Scope 1 and 2 intensity ratios in the UK. We are gaining a more
accurate understanding of our Scope 3 emissions in the UK with the
use of more primary data which has been accessed as a result of
our supplier engagement programme.
3
4
Case study
Building better
For new builds, contractors use 100% renewable energy for
fit-outs and we have transitioned from gas-fired to direct
electric water heating to generate fewer emissions. All LED
lights are on timers, large fixtures and fittings are
manufactured off-site, and design occupancy has been
reduced to lower ventilation and cooling requirements.
Additionally, the cooled area in cellars has been minimised
by introducing plastic curtains or cold-rooms.
For the first time we are reporting Scope 3 emissions for our
Canadian business which has helped us to establish a baseline
as we start to evolve our climate action plan in Canada.
Details of Group climate-related risks and mitigations under TCFD
are provided on pages 60 to 69.
Our climate transition plan continues to evolve. It will help guide us
on a process of transition over the coming years and is outlined on
pages 58 and 59.
Net zero is defined in this report as the point where the Group can
reduce its net GHG emissions to zero.
If it is not feasible to completely abate Scope 1, 2, and 3 emissions
by 2050, the Group will offset residual emissions through actions
like carbon removals or ecosystem restoration.
55
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Annual report and accounts 2024
Strategic report
Sustainability overview continued
UK performance against sustainability targets
Safe and inclusive leisure destinations
FY2023
actual
FY2024
target
FY2024
actual
FY2024
vs target
FY2025
target
Concessionary discount games played
963,161
>750,000
1,088,000
+45.0%
1,000,000
Funds raised for national charity partner
£58,220
£40,000
£85,000
+14.6%
£100,000*
Centres passed food and drink audit
100%
100%
97%
-3pts%
100%
Soft drinks sold that are sugar free
50.5%
50%
49.3%
+0.7pts%
50%
Team in food and drink-related roles to have completed food safety
and allergen training within three months of passing probation
97.7%
97%
97.7%
+0.7pts%
97%
Outstanding workplaces
FY2023
actual
FY2024
target
FY2024
actual
FY2024
vs target
FY2025
target
Management appointments from internal candidates
45%
45%
58%
47%
47%
Team members participating in development programmes
11%
5%
11%
+6.0pts%
10%
Team members completing online development modules
94%
92%
94.5%
2.5pts%
96%
Rating in externally verified team survey (WorkL from FY2025)
1*
1*
1*
1*
2*
Annual team wellbeing survey score
70%
73%
3pts%
70%
Outstanding workplaces – background data
Male %
Female %
Board
67
33
Senior managers
67
33
Centre managers
67
33
Assistant managers/technicians
49
51
Contact centre team
45
55
Hemel team
63
37
Team members
47
53
Total
47
53
Sustainable centres
FY2023
actual
FY2024
target
FY2024
actual
FY2024
vs target
FY2025
target
Waste recycled percentage with 100% diversion from landfill
82.7%
82%
82.9%
+0.9pts%
82%
Food and drink wastage as a percentage of food and drink revenue
0.65%
1%
0.6%
-0.4pts%
1%
Number of centres with solar arrays
27
30
30
0
33
Electricity usage generated from on-site renewables
12%
15%
12.7%
—
N/A
Directly purchased electricity from renewable sources
100%
100%
100%
—
100%
UK estate percentage of bowling centres with Pins on Strings
83.1%
100%
by FY2028
90%
-10pts%
N/A
Scopes 1 and 2 intensity ratio (tCO2e/number of centres)
61.0
58.0
56.8
-1.2pts%
55.0
Sustainable centres – background data
UK waste
General waste
volume
Recycled waste
volume
Total waste
volume
Percentage of total
waste recycled
Waste intensity
(total waste/centre)
FY2019
7,096.24
14,577.34
21,673.58
67.3%
361.23
FY2020*
4,160.00
8,775.86
12,935.86
67.8%
202.12
FY2021*
2,536.16
6,387.16
8,923.32
71.6%
139.43
FY2022
4,517.24
15,713.02
20,230.26
77.7%
293.19
FY2023
3,824.22
18,334.74
22,158.96
82.7%
316.55
FY2024
3,922.52
19,888.92
23,811.44
82.9%
332.05
Waste data is supplied by Biffa for the UK only and excludes data from centres where the landlord manages waste streams.
* Impacted by COVID-19 shutdowns.
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Annual report and accounts 2024
Solar Installs
The 30 roof arrays that we currently have 5918.29 kWp and have a
yield of 5,020,003 kWh.
Greenhouse Gases
Greenhouse Gas (GHG) emissions for FY2024 have been measured
as required under the Large and Medium-Sized Companies and
Groups (Accounts and Reports) Regulations 2008 as amended in
2013. The GHG Protocol Corporate Accounting and Reporting
standards (revised edition) and the electricity and gas consumption
data has been provided by IMServ Datavision, Schneider Electric
and Total. Conversion factors taken from: https://www.gov.uk/
government/publications/greenhouse-gas-reporting-conversion-
factors-2024
The conversion factors for Canada are taken from: https://www.
canada.ca/en/environment-climate-change/services/climate-
change/pricing-pollution-how-it-will-work/output-based-pricing-
system/federal-greenhouse-gas-offset-system/emission-factors-
reference-values.html#toc5. For Canada, the 2024 emission factors
have been used.
UK – Scope 1 + 2
This is made up of natural gas, company cars (there are no ICE
company cars in the UK), refrigerant gas losses (F gas losses),
electricity, electric company vehicles and solar export.
Natural Gas:
Total natural gas consumption = 1,876,123 kWh.
Emission factor = 0.1829 kgCO2e per kWh.
Emissions = 343.14 tCO2e.
F Gas Losses:
Emissions = 52.75 tCO2e.
Total Scope 1:
Emissions = 395.90 tCO2e
Electricity (location-based):
Total electricity consumption = 18,805,491 kWh (this excludes
electricity consumption at our Hemel support centre where data
was not available).
Emission factor = 0.20705 kgCO2e per kWh. In the 2024 update,
the UK Electricity CO2e factor has remained at a similar level to the
factor for 2023.
Emissions = 3,893.68 tCO2e.
Electric Company Vehicles:
Total mileage is 247,912 miles and the electric company vehicles
are classed as ‘luxury battery electric vehicles’.
247,912 x 0.08501 = 21.08 tCO2e.
247,912 x 0.00751 = 1.86 tCO2e.
Emissions = 22.94 tCO2e.
Solar Export:
1,311,379 kWh electricity exported back to the grid as a result of the
solar arrays on our roofs. This equates to a saving of 271.52 tCO2e.
Total Scope 2:
Emissions = 3,645.09 tCO2e
Total Scope 1 + 2:
Emissions = 4,040.99 tCO2e
Location based
Market based
Category
tCO2e
Category
tCO2e
Gas (Scope 1)
343.13
Gas (Scope 1)
343.13
F Gas (Scope 1)
52.75
F Gas (Scope 1)
52.75
Total (Scope 1)
395.9
Total (Scope 1)
395.9
Elec (Scope 2)
3,893.68
Elec (Scope 2)
28.59
Elec Cars (Scope 2)
22.94
Elec Cars (Scope 2)
22.94
Solar (Scope 2)
-271.52
Solar (Scope 2)
-271.52
Total (Scope 2)
3,645.09
Total (Scope 2)
-219.99
Total (Scope 1
+ Scope 2)
4,040.99
Total (Scope 1
+ Scope 2)
175.90
UK – Scope 3
We have calculated Scope 3 emissions for all Scope 3 categories
applicable to Hollywood Bowl Group. This includes a total of
11 categories in addition to water supply and wastewater treatment.
Category
Category Name
tCO2e
C01
Purchased Goods and Services
20,035.55
C02
Capital Goods
7,001.75
C03
Fuel- and Energy-Related Activities Not
Included in Scope 1 or Scope 2
(Transmission and Distribution Losses)
1338.65
C04
Upstream Transportation and
Distribution
586.46
C05
Waste Generated in Operations
13.52
C06
Business Travel
263.89
C06
Business Travel (Hotel Stays - Optional)
33.41
C07
Employee Commuting
1,558.14
C07
Employee Commuting
(Homeworking – Optional)
17.74
C10
Processing of Sold Products
20.23
C11
Use of Sold Products
2.46
C12
End-of-life Treatment of Sold Products
83.22
C15
Investments
420.00
Other
Wastewater Treatment
14.85
Other
Water Supply
12.88
FY2024
Total Scope 3
31,402.75
FY2023
Total Scope 3
40,760.71
FY2024
Scope 3 intensity ratio
438
FY2023
Scope 3 intensity ratio
590
57
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Sustainability overview continued
Greenhouse Gases continued
UK – Scope 3 continued
In FY2024, 86% of our total UK Scope 3 emissions were in categories
1 and 2 (Purchased Goods & Services and Capital Goods). In
FY2023, we calculated all emissions from these two categories using
a spend-based method. However, in FY2024, we calculated 22% of
our emissions from categories 1 and 2 using a supplier-specific
method due to improved data quality from some of our suppliers. We
envisage that as we move towards a 100% supplier-specific method
over the years, our Scope 3 footprint will become more accurate as
data quality will continue to improve. We are not restating prior years
data (FY2023) until we achieve 100% supplier-specific data, and we
will then review which year we use as our base year.
Excluded Categories:
• C08 Upstream Leased Assets – Hollywood Bowl Group does not
have any upstream leased assets, and therefore reporting for this
category is not required.
• C09 Downstream Transportation and Distribution – Hollywood
Bowl Group does not carry out any downstream transportation
and distribution, and therefore reporting for this category is
not required.
• C13 Downstream Leased Assets – Hollywood Bowl Group does
not have any downstream leased assets, and therefore reporting
for this category is not required.
• C14 Franchises – Hollywood Bowl Group does not own or
operate any franchises, and therefore reporting for this category
is not required.
UK Scope 3 Intensity Ratio:
Total Scope 3 emissions =31,402.75 tCO2e
Total Centres =71.71
Scope 3 Intensity Ratio = 437.9 tCO2e per centre
Verification and assurance
The UK greenhouse gas inventory has undergone a third-party
verification, with methodology checked, aligned, and verified by
the Zero Carbon Forum. Key material areas within the carbon
footprint were closely scrutinised and estimation techniques and
assumptions were validated for consistency and transparency.
Limited assurance has been provided on the accuracy and integrity
of the reported data.
Canada – Scope 1 + 2
The conversion factors for Canada are taken from: https://www.
canada.ca/en/environment-climate-change/services/climate-
change/pricing-pollution-how-it-will-work/output-based-pricing-
system/federal-greenhouse-gas-offset-system/emission-factors-
reference-values.html#toc5
Note: Canadian data for emissions is provided in CO2 for gas and no
data is provided that make up the other greenhouse gases so this
number is also used as CO2e. Also, the emission factors for natural
gas and electricity varies by province.
Total natural gas consumption = 319,748 m³ = 3,373,344 kWh
(assuming 1 m³ = 10.55 kWh)
Emissions =619.81 tCO2e.
Total Scope 1:
Emissions =619.81 tCO2e
Electricity (location-based):
Total electricity consumption =5,050,583 kWh
Emissions =744.31 tCO2e.
Total Scope 2:
Emissions =744.31 tCO2e
Total Scope 1 + 2:
Emissions =1,364.12 tCO2e
Canada
FY2024
Total (Scope 1 + Scope 2) (tCO2e)
1,364.12
Number of centres
11.08
Intensity Ratio (tCO2e per centre)
123.1
Canada – Scope 3
We have calculated Scope 3 emissions for 11 Scope 3 categories
applicable to Hollywood Bowl Group’s operations in Canada, in
addition to water supply and wastewater treatment.
Category
Category Name
tCO2e
C01/2
Purchased Goods and Services and
Capital Goods
19,564.85
C03
Fuel- and Energy-Related Activities Not
Included in Scope 1 or Scope 2
(Transmission and Distribution Losses)
255.69
C04
Upstream Transportation and Distribution
199.06
C05
Waste Generated in Operations
10.56
C06
Business Travel
180.95
C06
Business Travel (Hotel Stays - Optional)
11.57
C07
Employee Commuting
417.95
C07
Employee Commuting (Homeworking
– Optional)
4.61
C09
Downstream Transportation
and Distribution
615.59
C11
Use of Sold Products
3,026.42
C12
End-of-life Treatment of Sold Products
0.58
C15
Investments
323.0
Other
Wastewater Treatment
7.98
Other
Water Supply
6.93
Total
24,625.73
Excluded Categories:
• C08 Upstream Leased Assets – Hollywood Bowl Group’s
Canadian operations does not have any upstream leased assets,
and therefore reporting for this category is not required.
• C10 Processing of Sold Products – No data available
• C13 Downstream Leased Assets – Hollywood Bowl Group’s
Canadian operations does not have any downstream
leased assets
• C14 Franchises – Hollywood Bowl Group’s Canadian operations
does not own or operate any franchises
Canada Scope 3 Intensity Ratio:
Total Scope 3 emissions = 24,625.73 tCO2e
Total Centres = 11.28
Scope 3 Intensity Ratio = 2,183.8 tCO2e per centre
58
Hollywood Bowl Group plc
Annual report and accounts 2024
Canada Scope 3 – split by Xtreme Bowling Entertainment, Striker
Installations Inc, Striker Bowling Solutions
Total Scope 3
Emissions
(tCO2e)
tCO2e per
centre
Xtreme Bowling Entertainment
15,054.20
1,335
Striker Installations Inc
8,890.65
Striker Bowling Solutions
680.88
Total
24,625.73
2,183.8
Group totals tCO2e.
Scope
UK
Canada
Total
Scope 1
395.90
619.81
1,015.71
Scope 2
3,645.09
744.31
4,389.40
Scope 1+2
4,040.99
1,364.12
5,405.11
Scope 3
31,402.75
24,625.73
56,028.47
Total
35,443.74
25,989.84
61,433.58
Electricity and Gas Usage
UK
Electricity (kWh)
Gas (kWh)
FY2016
17,380,346
4,866,065
FY2017
18,581,702
4,384,837
FY2018
18,849,729
5,260,995
FY2019
19,573,573
4,104,855
FY2020*
11,560,010
2,830,792
FY2021*
12,192,555
1,932,559
FY2022
17,857,086
2,945,207
FY2023
16,713,202
2,415,585
FY2024
18,805,491
1,876,123
• Electricity excludes solar generated electricity exported to
grid and electricity from our Hemel support office where data
is unavailable.
• FY2020 and FY2021 were impacted by COVID-19 shutdowns.
• We have seen our electricity consumption naturally increase
compared to FY2023 due to the opening of new centres (Dundee,
Lincoln, Merry Hill, Westwood Cross, Colchester). We have also
included data from 3 x landlord centres in FY2024 which has
previously not been included (Belfast, Bracknell and London O2).
Scope 1
Scope 2
Scope 1+2
Intensity Ratio
FY2016
895.7
8,195.0
9,090.7
162.3
FY2017
807.5
6,532.6
7,340.1
132.9
FY2018
967.8
5,335.6
6,303.4
113.7
FY2019
773.6
5,003.0
5,776.6
102.6
FY2020*
568.4
2,695.0
3,263.4
55.1
FY2021*
560.0
2,588.8
3,148.8
50.8
FY2022
541.5
3,373.8
3,915.3
61.7
FY2023
647.45
3,377.00
4,024.44
61.0
FY2024
395.90
3,645.09
4,040.99
56.8
FY2020 and FY2021 were impacted by Covid shutdowns.
Canada
Electricity (kWh)
Gas (kWh)
FY2022
953,709
248,467
FY2023
3,619,113
2,589,139
FY2024
5,050,583
3,373,344
Scope 1
Scope 2
Scope 1+2
Intensity Ratio
FY2022
45.20
26.90
72.10
34.30
FY2023
473.76
402.64
876.40
97.40
FY2024
619.81
744.31
1,364.12
123.08
Electricity Usage
Our commitment to efficiently and ethically use natural resources
is ongoing.
In the UK, all our directly purchased electricity is 100% renewable
and is fully backed by REGOs (Renewable Energy Guarantees of
Origin). In Canada, all directly purchased electricity starting from
1 October 2024 is 100% renewable and is fully backed by RECs
(Renewable Energy Certificates).
We have reduced our UK Intensity Ratio for Scope 1+2 by 45.8
tCO2e per centre or by 44.6% for FY2024 compared to FY2019.
The original target that we set was to bring the UK Intensity Ratio
down below 100 and this has now been achieved. The target is now
to bring down below 55 tCO2e per centre by FY2025.
UK Waste Recycling
We recycle the waste that we produce as this is part of our
commitment to mitigate against the environmental impacts of our
operations. In FY2019 we recycled 67.3% of our waste and this has
increased to 82.9 % for FY2024. All of our waste is 100% diverted
from landfill.
* Waste volumes were impacted by the COVID-19 lockdown for FY2020 and FY2021.
General
Glass
Mixed
Recycling /
Organic
FY2016
7,334.14
1,477.80
11,164.04
FY2017
7,443.72
1,621.44
12,695.88
FY2018
6,770.04
1,652.26
12,978.86
FY2019
7,096.24
1,831.92
12,745.42
FY2020*
4,160.00
1,215.12
7,560.74
FY2021*
2,536.16
914.40
5,472.76
FY2022
4,581.06
2106.72
13,542.48
FY2023
3,824.22
2,107.44
16,227.30
FY2024
3,922.52
2,298.62
17,590.30
General
Recycling
Total Waste
Recycling
Percentage
FY2016
7,334.14
12,641.84
19,975.98
63.3%
FY2017
7,443.72
14,317.32
21,761.04
65.8%
FY2018
6,770.04
14,631.12
21,401.16
68.4%
FY2019
7,096.24
14,577.34
21,673.58
67.3%
FY2020*
4,160.00
8,775.86
12,935.86
67.8%
FY2021*
2,536.16
6,387.16
8,923.32
71.6%
FY2022
4,581.06
15,649.20
20,230.26
77.4%
FY2023
3,824.22
18,334.74
22,158.96
82.7%
FY2024
3,922.52
19,888.92
23,811.44
82.9%
All waste data supplied by Biffa
This excludes data from centres where the landlord manages the
waste streams.
Waste data is for UK only
59
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
Sustainability overview continued
2025 -2030
Targets
Actions
2025
Scope 1 and 2 planned actions
1. Commitment to SBTi and validation of 1.5°C
pathway targets
2. UK Solar panel rollout (subject to landlord agreements)
3. Increased efficiency of plant in new builds
3. Extended centre manager eco-efficiency
incentive scheme
4. Team member behavioural change training in Canada
5. Contracting 100% renewable electricity across
the Group (currently backed in the UK by REGOs
and from 1 October 2024 in Canada by RECs)
6. Evaluation of Canadian solar panel introduction
7. Contracting 100% renewable gas in UK
8. Achieve carbon neutrality in UK (based on
market-based intensity ratio)
9. Modelling cost of Scope 1+2 climate action plan
10. Rollout of energy efficient equipment in Canada
50%
Of UK supplier spend
to suppliers committed
to SBTi pathway or
have net zero climate
transition plans in place
S3
S3
S1
S2
S1
S2
S1
S2
50%
Of Canada supplier
spend to suppliers
committed to SBTi
pathway or have net zero
climate transition plans
in place
100%
UK centres with Pins
on Strings
Progress in FY2024
Continued UK solar panel roll out
We now have solar panels in 30 of our UK
centres and have also increased the volume
of solar arrays in a number of previously
installed centres.
UK intensity ratio reduction
Our UK centre intensity ratio fell to 56.8 in
FY2024 (from 61 in FY2023), and is on a
trajectory to achieve our short term target
of 55 in FY2025.
UK supplier engagement programme
We have engaged with all of our major
suppliers in the UK and are developing an
increased understanding of their carbon
reduction plans and access to primary data.
100%
Renewable energy in UK
(directly purchased gas
and electricity)
100%
Renewable
electricity in Canada
(directly purchased)
There is a clear case for action to address climate change across the entire economy, and this
is equally relevant for Hollywood Bowl Group.
By implementing effective decarbonisation strategies, we can help safeguard our stakeholders from risks and contribute to society’s goal
of achieving net zero. Additionally, we can leverage our influence to collaborate with our team members, suppliers, and industry bodies to drive
broader systemic change.
2026
Transitioning
to net zero
60
Hollywood Bowl Group plc
Annual report and accounts 2024
Climate
action plan
Our goal is to become a net zero business by 2050 in line with the goals of the Paris Agreement.
We are currently in the early stages of this important journey and recognise that our understanding and strategy will evolve over the coming
years. We are committed to working with our stakeholders to achieve this goal and have established a number of targets and initiatives to
reduce Scope 1, 2 and 3 emissions across our operations and supply chain, which are outlined in our climate action transition plan.
Scope 3 planned actions
1. Commitment to SBTi and validation of 1.5°C pathway targets
2. Ongoing UK supplier engagement programme to encourage
increased participation in SBTi and commitments to net zero
transition plans
3. Commencement of Canadian supplier engagement programme
4. Improved accuracy of Scope 3 data evaluation and target
setting (subject to improved supplier data availability)
5. Cross industry intiatives and implemetation of best practice
supply chain management via Zero Carbon Forum membership
6. Modelling costs of delivering Scope 3 climate action plan
7. Review of calculation models to ensure Group best practice
8. Evaluating offsetting activity to mitigate residual emissions
Climate action plan dependencies
The delivery of our climate action transition plan depends upon
comprehensive system-wide changes including electrifying
national grids, supporting decarbonisation policies, advancing
carbon markets, commercialising climate technologies and
materials, sourcing alternative materials like recycled plastics,
and adapting to shifts in consumer preferences.
S1
S2
S1
S2
S3
S1
S2
S3
S3
42%
2030 Target reduction versus 2023 base
Zero
2035 Gas usage in estate
90%
2045 Target reduction versus 2023 base
90%
2045 Target reduction versus 2023 base Net zero
Achieved by 2050
2050
S1
Scope 1
S2
Scope 2
S3
Scope 3
Canadian initiatives underway
Whilst we are still at the start of our journey
in Canada, we have started our programme
with team member energy saving training
and the installation of Pins on Strings in
two centres.
Canadian Scope 3 emmissions
We were pleased to be able to report on our
Canadian Scope 3 emissions for the first
time in FY2024.
UK Scope 3 measurement
Greater access to supplier primary data has
given us a more accurate picture of our UK
Scope 3 emissions than achieved in
prior years.
2030
Strategic report
61
Hollywood Bowl Group plc
Annual report and accounts 2024
Corporate Responsibility
Committee
Hollywood Bowl Group Board
UK operations
Canada operations
Corporate Responsibility
Steering Group
Group Finance
Climate action transition plan - Group governance, organisation and reporting
The Board has overall accountability for the Group’s climate action transition plan. It is supported by the Corporate Responsibility Committee
who oversees the Group’s environmental and social sustainability strategy.
Sustainability overview continued
62
Hollywood Bowl Group plc
Annual report and accounts 2024
Our suppliers
Our industry
Our team members
Scope 3
With 91 per cent of our total emissions
coming from Scope 3, it is imperative
that we work closely with our supply
chain to reduce these in line with our
Net Zero targets
Engagement programmes
We have launched a supplier
engagement programme in the UK,
initially targeting our biggest suppliers
in food and drink, amusements and
construction. This will be extended to
a wider range of suppliers and our
Canadian operations.
Primary data
We have gained access to more
supplier primary data in FY2024 and
we expect this to continue over the
coming years, allowing us to develop
a more accurate understanding of
our Scope 3 emissions.
Shared challenges
Many of the climate challenges we
face are mirrored by other
businesses in the leisure sectors and
we have shared insights into the
success of our climate initiatives with
members of the UKTBO (Ten pin
bowling operators trade body)
The Zero Carbon Forum (ZCF)
Hollywood Bowl Group is a member
of the ZCF, which is a non-profit
organisation, empowering hospitality
industry members to reach
sustainability targets with more
speed, efficiency, and profit as a
united effort.
Behavioural change
We equip and empower our team
members to help reduce the energy
used in our operations through
behavioural change programmes in
the UK and Canada
Incentives
Energy and waste measures are
included in team member incentive
schemes with monthly league tables
published of centre level performance.
Reward and recognition
Our leading centres are recognised
at our annual conference with a
sustainability award which looks at
performance across a variety of
measures including climate impact.
In FY2024 the award went to our
Springfield Quay centre in Glasgow.
How we partner
Collective action is key to making progress on the journey to Net Zero. We are working ever more closely with a wide range of our stakeholder
groups to set ourselves up for success in overcoming the climate challenges we are facing together.
Strategic report
63
Hollywood Bowl Group plc
Annual report and accounts 2024
Task Force on Climate‑related
Financial Disclosures statement
TCFD
TCFD summary disclosure
TCFD pillar
Recommended disclosure
Relevant section
within this report
Governance
Board oversight
Describe the board’s oversight of climate-related risks and opportunities
page 66
Management’s role
Describe management’s role in assessing and managing climate-related
risks and opportunities
page 66
Risk management
Risk identification and
assessment process
Describe the organisation’s processes for identifying and assessing
climate-related risks
page 67
Risk management process
Describe the organisation’s processes for managing climate-related risks
page 67
Integration into overall
risk management
Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
page 67
Strategy
Climate-related risks and
opportunities
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
pages 68 to 71
Impact on the Company’s
businesses, strategy, and
financial planning
Describe the impact of climate-related risks and opportunities on the
organisation’s businesses, strategy, and financial planning
pages 68 to 71
Resilience of the
Company’s strategy
Describe the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including a 2°C or lower scenario.
page 70
Metrics and targets
Climate-related metrics in
line with strategy and risk
management process
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process
pages 56 to 59 and
72
Scope 1 and 2, (and 3) GHG
metrics and the related risks
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas
(GHG) emissions and the related risks
pages 56 to 59 and
68 to 71
Climate-related targets and
performance against targets
Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets
pages 72 to 73
Disclosure consistent with the
TCFD recommendation
Disclosure consistent with the TCFD recommendation
but with improvement opportunities for FY2025
This climate-related financial disclosure report has been prepared to meet the requirements outlined by the
Task Force on Climate-related Financial Disclosures (TCFD) and the mandatory reporting requirements set
out in the Companies Act related to Climate-related Financial Disclosures (CFD).
In accordance with the LSE Listing Rule 9.8.6R(8), and the
Companies (Strategic report) (Climate-related Financial Disclosure)
Regulations 2022, we present our 2024 TCFD compliance
statement and confirm that we have made climate-related financial
disclosures for the year ended 30 September 2024 which are:
a) consistent with the following TCFD recommendations and
recommended disclosures:
• governance – (a) and (b);
• strategy – (a) and (c);
• risk management (a), (b) and (c);
• metrics and targets (a); and
b) partially consistent with the following TCFD recommendations
and recommended disclosures:
• strategy – (b);
• metrics and targets (b) and (c).
A summary of our TCFD compliance statement is set out in the
following table.
Further details regarding how we have aligned to the TCFD
recommendations are set out in the subsequent pages and in
relevant sections of this Annual Report.
64
Hollywood Bowl Group plc
Annual report and accounts 2024
FY2022-2023
FY2024
Coming in FY2025
• First TCFD disclosure and associated
scenario analysis on material areas for
our business developed with external
partner
• First CDP submission
• Formation of Corporate Responsibility
Committee (CRC)
• Board member workshop and climate
training sessions
• Climate related targets included in
Executive incentive plans
• The Group joined the Zero Carbon
Forum (UK hospitality orientated alliance)
• CDP submission
• The Board reviewed Canadian
climate-related matters
• We undertook a qualitative scenario
analysis on selected Canadian climate
risks and opportunities
• Detailed analysis of our Canadian
business including Scope 3 emissions,
• Board review and approval of
updated climate action transition plan
and associated targets
• Launched a UK supplier engagement
programme to better understand our
major suppliers commitments to net
zero and to gain access to primary
Scope 3 data
• Launched an operational behavioural
change programme for our Canadian
team members
• Continued to roll out energy efficient
Pins on Strings technology.
• Validation of climate targets by SBTi
• CDP submission
• Update scenario analysis for
UK operations
• Conduct first quantitative scenario
analysis for Canadian operations
• Increase use of supplier primary
data to improve understanding of
Scope 3 emissions
• Increased reporting on plastics strategy
• Develop financial modelling to include
Canada, the cost of transitioning to net
zero and linkages to our climate action
transition plan
• Board review of the cost of
transitioning to net zero in line with
outputs of planned financial modelling
and agreement of any strategic
changes required
• Consideration of Group business
impacts on nature and biodiversity and
evaluation of use of TNFD framework
TCFD progress
65
Hollywood Bowl Group plc
Annual report and accounts 2024
Strategic report
TCFD continued
Governance
Board oversight
The Board has overall responsibility for climate-related matters and gives
full and close consideration of ESG factors, including climate-related
factors, when assessing the impact of decisions it makes.
Our governance structures support the PLC Board, committees and
senior management to ensure that climate change is integrated into our
strategy, business process and decision making. For more information on
climate governance, see the Risk Management section on page 74
The Corporate Responsibility Committee (CRC), chaired by
Non-Executive Director Ivan Schofield (see page 104) is responsible
for updating the Board on climate issues on a bi-annual basis.
As part of the bi-annual ‘climate change’ agenda item at the Board meeting,
the Board discussed climate change topics, including progress against
relevant pre-existing goals (e.g. renewable energy sources) and future
planned activities and targets. It also considered whether strategic
decisions needed to be made as a result of climate scenario analysis
performed in FY2022 on the most significant climate risks to the business,
namely changing customer behaviour, business interruption and damage
to assets, carbon taxes, cost of transitioning operations to net zero
and energy sources.
It was agreed, based on the findings of the scenario analysis, that the
Group had limited short-term risk exposure at this time but agreed to keep
this under periodic review. The cost of transitioning to net zero risk was
discussed and it was agreed that this would stay under closer review in line
with greater future visibility provided by the ongoing Scope 3 emissions
analysis and the ongoing development of a Group climate transition plan.
Two CRC meeting were held in the year, the first in April where updates were
given on performance against H1 FY2024 metrics and targets and progress
with the ongoing analysis of Scope 3 emissions in the UK and Canada.
The second CRC meeting was held in September, where the Committee
reviewed progress against FY2024 targets and set targets for FY2025.
With the expansion of our Canadian business, the Committee discussed
the differences in the energy usage and efficiency versus the UK
operations and approved the completion of a qualitaitve risk and
opportunity scenario analysis using an external partner.
The Chair of the CRC provides updates to the main Board on the
discussions, decisions and actions arising from these meetings. Minutes
of the meetings are also made available to all Board members through
our electronic Board portal.
A climate-related target is included in Executive Long Term Incentive
Plans, relating to the achievement of UK emission intensity ratios for
Scope 1 and 2. For more detail see pages 120 to 121 and 127.
Priorities for FY2025
• Board review of refreshed quantitative scenario analysis, which will
include Canadian operations
• Board review of performance against FY2025 climate targets
• Board review of cost of transitioning to net zero in line with outputs of
planned financial modelling and agree any strategic changes required.
• Board review and approval of updated Group climate action transition
plan and associated targets.
Corporate Responsibility Committee
Board of Directors
Corporate Responsibility Steering Group
Operational departments
Audit Committee (Risk)
Climate risk - Group governance, organisation and reporting
Management’s role
Responsibility for climate change issues at a management level sits with
our Chief Marketing and Technology Officer, Mathew Hart, who chairs the
Corporate Responsibility Steering Group (CRSG).
Members of the CRSG also include the Chief Operating Officer, Chief People
Officer, Energy & Safety Manager and relevant heads of department.
The CRSG is responsible for the identification, management and reporting of
climate-related risks and opportunities. The CRSG meets on a quarterly basis
to discuss environmental and social strategies and performance against
targets, including climate change, and updates the CRC on a bi-annual basis.
Following the launch of a supplier engagement programme in the UK,
we have been able to access primary data from some of our key
suppliers which has given us a more accurate picture of our UK scope 3
emissions data.
Scope 3 emissions were also calculated for Canadian operations for
the first time.
Now that we have started to gather more climate-related data for our
expanding Canadian operations, it is now resultantly forming a greater part
of the CRSG priorities with Canadian management attending the CRSG
from Q2 FY2024.
We made progress this year towards our climate-related operational and
capital investment targets for our UK business. Additionally, we
successfully delivered increasingly energy-efficient builds of our new
centres.
Priorities for FY2025
• More detailed analysis of our Canadian business including Scope 3
emissions, with the ambition to have Canadian climate targets
integrated into a Group transition plan
• Continued operational energy saving behavioural change programme
for our Canadian team members
• Continue to roll out energy efficient Pins on Strings technology.
• Validation of our UK climate transition plan targets from SBTi.
• Financial modelling to include Canada, to evaluate the cost of
transitioning to net zero and linkages to our climate transition plan.
• Launch a Canadian supplier engagement programme to promote the
adoption of science-based targets among our key suppliers.
• Further analysis of Scope 3 emissions data as more primary data
becomes available from our suppliers.
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Risk management
Strategy
The Board is ultimately responsible for ensuring that a robust risk management process is in place and that it is being adhered to,
including for climate risk. The significance of climate risk is aligned with other risks, given climate risk is identified and assessed in line
with the existing risk processes and is included in our principal risks register. More information on our risk management process is to
available in the Risk management section on pages 74 to 75.
Identifying, assessing and managing climate-related
risks and opportunities
In FY2022 we conducted a detailed climate risk assessment,
across our UK business. Climate scenario analysis was performed
on selected potentially material climate risks and opportunities
to assess the potential quantitative financial impact on the UK
business. External experts, PwC UK, were engaged to support and
assist us with this process; however, we retained ownership over the
assessment, process and output.
As our expanding Canadian business is now considered material in
size, in FY2024 we conducted a climate risk identification and
assessment exercise across the Canadian business. As part of this
exercise, qualitative scenario analysis was performed on selected
potentially material climate risks and opportunities.
The Board reviews identified climate risks and impacts on a bi-annual
item basis. Following a presentation from the CRSG at the Board
meeting in June 2024, the Board determined that as there had been
no material changes to the UK business since the FY2022 scenario
analysis was undertaken and therefore the UK climate risk profile
identified then was still relevant to the Group and could therefore be
relied on for FY2024 reporting.
This climate risk assessment has been complemented by
subsequent horizon scanning to identify external trends, such as legal
and regulatory developments, and emerging science/expert opinion.
The Group plans to update its quantitative climate scenario analysis
on a three-yearly basis, with the next assessment planned for
FY2025. This analysis will include a refresh of the FY2022 analysis
performed for the UK, and an update to the qualitative scenario
analysis performed this year for the Canadian business.
Priorities for FY2025
Review the identified climate risks and opportunities and climate
transition plan and update where necessary. This will be done in line
with our wider risk management and monitoring processes.
Further integrate Canadian operations into the climate risks and
opportunities analysis, and develop an ongoing processes for
monitoring specific risks relating to the Canadian business.
Climate-related risks and opportunities have the potential to
impact our business over the short, medium and long term. In
considering our climate risks and opportunities, we define short,
medium and long-term horizons as follows:
We face potential physical risks including extreme weather events
as well as risks resulting from the transition to a lower carbon
economy including the cost of transitioning products and services
to lower emissions options.
The following climate risks and opportunities have been
identified to be those that have the potential to be material for
the UK and/ or the Canadian business over the short, medium
and long term horizons.
Short term (0–5 years):
aligns to the Group’s financial planning
and modelling horizon
Medium term (5–15 years):
represents the interim period between the
Group’s financial planning horizon and the
longest centre leases
Long Term (15+ years):
aligns with the longest time frame for the
Group’s leasing agreements for properties
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TCFD
category
Geography
Potential impact/outcomes for the Group
Risk
Change in
customer
behaviours and
preferences away
from indoor leisure
in reaction to
increasingly warm
summers
Physical
Chronic
UK and Canada
Outcome
Typically ‘busy’ seasons become shorter with shoulder periods becoming less busy
Increased number of high temperature days lasting for an extended period of time
Greater variability in rainfall leading to more dry days
Impact
Loss of boosted revenues during winter period to make up for slower summer months
The fixed energy costs associated with keeping centres open remain
irrespective of lower footfall that may be experienced
Reduced footfall as customers prioritise outdoor leisure activities in fair
weather conditions
Financial impact
Revenue loss/Increased costs
Risk
Business
interruption and
damage to assets
due to increased
frequency and
severity of extreme
weather events
(e.g. flooding/
extreme heat)
Physical
Acute
UK
Outcome
While the type and severity of hazards will vary by location and season, and
change over time, it is expected that the frequency and severity of events such
as flood events will increase
Impact
These extreme events may impact the Group in three ways:
1) physical damage to operating sites which require repair;
2) disruption to business operations due to temporary closure; and
3) inability of customers to get to the sites
These events may also have further financial impacts, for example, via increased
insurance premiums
Financial impact
Revenue loss/Increased costs
Risk
Carbon taxes
increasing costs
due to pricing of
GHG emissions
being applied to
own operations and
embodied carbon
in supply chain and
transportation/
distribution
Policy and
legal
UK
Outcome
The scope and level of carbon pricing to date have had little impact on the Group
but this could lead to increased costs in the future
Impact
1) increasing energy and other operating costs;
2) leading the Group to retire assets or investment to reduce emissions; and
3) increasing supply chain costs as carbon prices are passed on by suppliers
Financial impact
Revenue loss/Increased costs
TCFD continued
Climate-related risks and opportunities
The climate risk profile identified for the UK in FY2022 is still relevant to the business and therefore continues to be relied on
for FY2024 reporting. We undertook analysis for Canada in FY2024 and have considered this when assessing the overall
climate risk profile for the Group.
Risk/opportunity
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Adaptation and mitigation or promotion strategies
Financial metrics
and targets
Time
horizon
Scenario analysis was conducted in the UK and Canada to assess the extent to which
changing customer behaviours, as a result of changing weather patterns caused by climate,
will impact revenue.
It was found that the impacts of this climate risk were relatively low across all scenarios.
In FY2024 revenues were deflated due to a prolonged unseasonable period of dry
weather in the UK school summer holidays, but the Group holds the current view that on
a rolling basis the impacts of unseasonable wet or hot weather present a low risk as
identified in the scenario analysis.
The Group does targeted marketing and offers discounts in order to attract more
customers during warmer periods. Despite customers potentially shifting to outdoor
activities, Canada has the benefit that bowling leagues are more prevalent, which
provides some level of footfall stability where weather becomes more variable.
We will continue to monitor this risk going forward and our annual financial planning
will take these findings into account.
Metric – internally monitored
revenue reduction in
high-temperature periods
No material revenue impacts
identified in FY2024
Scenario analysis was conducted to assess the extent to which our UK sites are at risk
of business interruption and damage as a result of extreme events such as flooding.
Overall, it was found that only a low number of sites were assessed to be at risk of
flooding under a 4°C scenario.
These sites will continue to be monitored and further assessments will be conducted
to explore mitigation options.
Furthermore, our wide location base limits the scale of exposure caused by localised events.
In FY2024 no centres suffered business interruption or damage due to flood events and
no new UK centres were developed in areas of high flood risk.
Metric – proportion
of revenue located
in areas subject to flooding
No flood impacts in FY2024
and no new centres opened
in flood risk areas
Scenario analysis was conducted to assess the extent to which our UK operations are
at risk of increased costs with the potential introduction of carbon pricing.
Overall, it was found that there was limited exposure to carbon pricing as the Group
continues to address our operational emissions through our investments in energy
efficient equipment, the installation of solar panels where possible at our sites and
renewable energy contracts.
We are working with suppliers to further reduce the emissions of our supply chain and we
launched an engagement programme in FY2024 to encourage more of our major partners
to adopt SBTi or develop transition plans and provide us with access to primary data.
We have subsequently undertaken further analysis of our UK Scope 3 emissions in
FY2024 using more supplier primary data.
Our regular schedule of contract renewals and reviews allows us the opportunity to
benchmark and adjust suppliers based on their carbon intensity and stated transition
plans if appropriate.
Metric – % of directly purchased
energy from renewable sources
Target – 100% by end of FY2025
Achieved 100% in UK in FY2024
Key to time horizon:
Short
Medium
Long
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TCFD continued
TCFD
category
Geography
Potential impact/outcomes for the Group
Risk
Cost of
transitioning
operations to net
zero in order to be
compatible with the
UK and Canada’s
net zero carbon
targets
Technology
UK and Canada
Outcome
The UK and Canada’s commitments to reach net zero emissions by 2050
has several implications for the Group.
Namely, as regulations and standards are adopted to support this ambition,
there may be direct and indirect impacts on our operations. Regulatory or
reputational pressures may increase to reduce Scope 1 , 2 and 3 emissions.
Impact
Installation of new technologies may cause disruption or even temporary
closure to facilities.
Increased operational costs associated with upgrading buildings and assets
to incorporate more energy efficient technology.
Engagement with supply chain to encourage emissions reduction, or find
suppliers with lower emissions
Financial impact
Revenue loss/Increased costs
Opportunity
Energy sources:
increased
investment in and
use of lower
emission sources
of energy,
Energy
source
UK and Canada
Outcome
As the UK and Canada shifts to a low-carbon economy and transitions away
from fossil fuels, it is expected that prices for these energy sources will
increase with the introduction of carbon taxes and become more volatile.
Impact
Reduced exposure to volatility in fossil fuel and energy prices, and future
carbon taxes
Financial impact
Reduced costs
Climate-related risks and opportunities continued
Resilience to climate change
The climate-related risks and
opportunities analysis indicates that
our business is not at high risk of
significant financial impacts arising
from climate-related risks in the
short-term to mid-term. Any climate-
related risks with a medium-risk
financial impact are either projected
to occur in the long-term or are being
addressed through our mitigating
actions. As a result, we do not
anticipate the need for major changes
to our strategy in order to respond to
these risks. In the medium and
long-term, we will need to consider
transition risks. The transition to a
low-carbon economy could have
financial implications for the Group.
However, these risks can be mitigated
if we achieve our carbon reduction
targets across all scopes.
Climate-related scenario analysis
Climate-related scenario analysis has
helped us evaluate the potential
impacts of climate-related risks and
opportunities. In FY2022, we
conducted our first quantative analysis
to better understand these risks and
opportunities and their effects on our
existing UK business model. The
insights gained from this analysis have
informed our strategy and planning.
We undertook a qualitative scenario
analysis for our Canadian business in
FY2024 using the same scenarios as
per the UK analysis in FY2022. The
Publicly available climate scenarios,
sourced from the Network for
Greening the Financial System (NGFS)
and the Intergovernmental Panel on
Climate Change (IPCC), were selected
for our analysis as outlined in the
adjoining table.
Assumptions made in the analysis:
Current mitigating actions were not
included in any of the scenarios. Each
scenario was modeled independently,
with no assumed correlation between
different risks and opportunities.
Investment costs required to realise
opportunities were not considered.
While many scenario models and
techniques are advanced, we
acknowledge that this field is
continually evolving. We anticipate
that models and pathways will improve
over time. However, models have
limitations, and certain areas remain
challenging to model accurately.
Risk/opportunity
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Key to time horizon:
Short
Medium
Long
Climate risk/opportunity
Scenarios
Data sources
Transition risk/opportunity
Energy sources
NGFS scenarios:
IEA1 – Carbon intensities
Scenario 1: Early action
NGFS2 – Carbon prices
Scenario 2: Late action
Scenario 3: No additional action
Physical risk
Business interruption and damage
to assets
IPCC pathways:
Scenario 1: SSP1 – 2.6 (<2°C)
Scenario 2: SSP2 – 4.5 (2–3°C)
We obtained localised climate data to a 90m2 resolution based on
the latest IPCC CMIP6 global climate models, providing projections
for each of our scenarios and time horizons for flood exposure
Changing customer behaviours
Scenario 3: SSP5 – 8.5 (>4°C)
World Meteorological Organization3 – temperature, wind speed
and precipitation (historical data)
Climate Analytics4 – temperature, wind speed and precipitation
(scenario data)
1 International Energy Agency (2022), Global Energy and Climate Model, IEA, Paris https://www.iea.org/reports/global-energy-and-climate-model, Licence: CC BY 4.0.
2 Network for Greening the Financial System (NGFS) (2021), NGFS Scenario Data Downscaled National Data V2.0, https://www.ngfs.net/ngfs-scenarios-portal.
3 World Meteorological Organization (2022), https://public.wmo.int/en.
4 Climate Analytics (2022), Climate Impact Explorer, https://climate-impact-explorer.climateanalytics.org.
The scenarios were selected due to their prominence within climate change discourse. This enables the selected risks and opportunities to
be assessed in line with scenarios that represent the collective market’s understanding of the range of possible outcomes as a result of the
effects of climate change and society’s response.
Adaptation and mitigation or promotion strategies
Financial metrics
and targets
Time
horizon
Scenario analysis was conducted to assess the extent to which our UK and Canadian
operations are at risk of increased costs associated with achieving Net Zero
The highest impacts are expected to be in the medium term, where there will be pressure
to decarbonise the Group’s Canadian centres. This could include additional costs for
purchasing and installing low carbon technology as well as other investments in training,
and the collection and monitoring of additional emission data.
Our purchased goods and services (Scope 3 category 1) accounts for 91 per cent of our
UK Scope 3 emissions and for 79 per cent of our Canadian Scope 3 emissions, and it is
essential that we align our supply chain with the required transition to a low carbon
economy, as demonstrated with our target of suppliers committed to a SBTi pathway
or a net zero transition plan
This Scope 3 analysis is enabliing us to evolve a pathway to net zero transition plan with
the ultimate ambition to achieve net zero in 2050. Further details of the targets and
initiatives to help us achieve this are outlined on pages 60 to 61 and 72 to 73.
We will continue to gather Scope 3 data in both the UK and Canada as more detailed primary
data becomes available from our suppliers and update our targets and financial modelling
including the requirement for residual offsetting in meeting our long-term ambitions.
Metric – Scope 1 and 2
emissions intensity ratio
Target – 55 by end of FY2025
Achieved 56.8 in FY2024
Metric – % of goods for resale
supply chain expenditure that
have a carbon reduction plan
and net zero target defined
Target – 50% of UK supplier
spend to suppliers committed to
SBTi pathway or with net zero
transition plans in place by end
of FY2025
Scenario analysis was conducted to assess the extent to which our UK and Canadian
operations have an opportunity to reduce costs through the use of lower emission
sources of energy.
The Group has already installed operational solar panels in 30 of our UK centres and
contracted renewable energy for our UK operations which helps to mitigate exposure the
energy price volatility.
If the Group implements solar panels at its Canadian centres, on-site generation of
renewable energy (as well as purchased renewable energy) will reduce its exposure to
energy price volatility from fossil fuels in the medium to long term.
Metric – % of total UK electricity
generated from on-site
renewables
Achieved 12.7% in FY2024
Metric – % of UK directly
purchased energy from
renewable sources
Target – 100% by end of FY2025
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TCFD continued
Climate-related metrics
Metrics and targets
The Group has a range of climate-related metrics and targets in the table below.
Due to the estate growth plans of the Group, we set our GHG emissions targets on an intensity ratio basis allowing a meaningful
comparison of performance on a centre level basis.
Unit of
measure
Metric
Geography
Metric target set and reported?
Linked to identified climate risks
and opportunities
GHG emissions
Total tCO2e/
centre
Scope 1+2 emissions
average carbon
energy intensity ratio
by centre
UK
Yes – UK 55 by end of FY2025
56.8
achieved in FY2024
FY2022
61.7
FY2023
61
Carbon taxes and cost of
transitioning operations to net zero
Canada
Target under review for FY2026 and
beyond due to estate expansion
plans in multi-province locations.
123.1
achieved in FY2024
FY2023
97.40
GHG emissions
tCO2e
Scope 3 emissions
average carbon
energy intensity ratio
by centre
UK
Yes – UK reduction targets in line
with SBTi pathway, leading to net
zero in 2050.
42% reduction from FY2024
baseline by 2030, 90% reduction
by 2045
Carbon taxes and cost of
transitioning operations to net zero
Canada
Scope 3 stated for the first time in
FY2024.
Canada reduction targets to be
developed so they fall in line with
SBTi pathway, leading to net zero in
2050.
GHG emissions
% of spend
with suppliers
of good and
services
% of supplier spend
with suppliers
committed to SBTi
pathway or have net
zero transition plans
in place
UK
Yes - 50% of UK supplier spend with
suppliers committed to SBTi
pathway or have net zero transition
plans in place by end FY2025
Carbon taxes and cost of
transitioning operations to net zero
Canada
Will look to follow same approach
with our Canadian suppliers – target
year TBC
TCFD cross-
industry metric
category
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Unit of
measure
Metric
Geography
Metric target set and reported?
Linked to identified
climate risks and
opportunities
Transition risks
%
% of total directly
purchased electricity
from renewable
sources
UK
100%
achieved in FY2024
FY2023
0%
FY2024 target
100%
Energy sources
Canada
Yes – 100 % of total Canada directly purchased
electricity from renewable sources in FY2025
Transition risks
%
% of total electricity
generated from onsite
renewable sources
UK
No target – monitoring total UK electricity
generated from on-site renewable sources
12.7%
achieved in FY2024
Energy sources
Canada
No – no solar arrays are currently installed in
Canada. Under review for FY2026 and beyond.
Transition risks
%
% of total gas directly
purchased in the UK
from renewable
sources
UK
Yes - 100% directly purchased renewable gas
in UK by FY2025
100%
achieved in FY2024
FY2023
0
Energy sources
Canada
No – Under review for FY2026 and beyond.
Transition risks
kWh
Gas usage
UK
Yes – zero by end of FY2030
Energy sources
Canada
No - target year under review
Energy sources
Transition risks
%
% of estate using
energy efficient pins
on strings technology
UK
Yes – 100% by end of FY2028
91%
achieved in FY2024
FY2023
83
Cost of transitioning
operations to net zero
Canada
Two Pins on Strings centres currently in Canada.
Target under review for FY2026 and beyond.
Physical risks
% of annual
revenue
% of UK revenue
located in an area
subject to high risk of
flooding
UK
No target – periodic monitoring to feed into risk
assessment process
Business interruption
and damage to assets
Canada
No target – periodic monitoring to feed into risk
assessment process
TCFD cross-
industry metric
category
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Risk management
Our approach to risk
The Board and senior management take their responsibility for risk
management and internal controls very seriously, and for reviewing
their effectiveness at least bi-annually. An effective risk management
process balances the risks and rewards as well as being dependent
on the judgement of the likelihood and impact of the risk involved.
The Board has overall responsibility for ensuring there is an effective
risk management process in place and to provide reasonable
assurance that it is fully understood and managed.
When we look at risk, we specifically consider the effects it could
have on our business model, our culture and therefore our ability to
deliver our long-term strategic purpose.
Read more on pages 28 and 29
We consider both short and long-term risks and split them into the
following groups: financial, social, operational, technical, governance
and environmental risks.
Risk appetite
This describes the amount of risk we are willing to tolerate as a
business. We have a higher appetite for risks accompanying a
clear opportunity to deliver on the strategy of the business.
We have a low appetite for, and tolerance of, risks that have a
downside only, particularly when they could adversely impact
health and safety or our values, culture or business model.
Risk management activities
Risks are identified through operational
reviews by senior management; internal
audits; control environments; our
whistleblowing helpline; and independent
project analysis.
The internal audit team provides
independent assessment of the operation
and effectiveness of the risk framework
and process in centres, including the
effectiveness of the controls, reporting
of risks and reliability of checks by
management.
We continually review the organisation’s risk
profile to verify that current and emerging
risks have been identified and considered
by each head of department.
Each risk has been scaled as shown on the
risk heat map.
Financial risks
F1 – Economic environment
F2 – Covenant breach
F3 – Expansion and growth
Operational risks
OP1 – Core systems
OP2 – Food and
drink suppliers
OP3 – Amusement supplier
OP4 – Management retention
and recruitment
OP5 – Food safety
Technical risks
T1 – Cyber security & GDPR
Regulatory risks
R1 – Compliance
R2 – Climate change
1
Department heads
Each functional area of the Group
maintains an operational risk register,
where senior management identifies
and documents the risks that their
department faces in the short term,
as well as the longer term. A review of
these risks is undertaken on at least
a bi-annual basis to compile the
department risk register. They consider
the impact each risk could have on the
department and overall business, as
well as the mitigating controls in place.
They assess the likelihood and impact
of each risk.
2
The Executive team
The Executive team reviews each
departmental risk register. Any risks
which are deemed to have a level
above our appetite are added to/
retained on the Group risk register
(GRR) which provides an overview of
such risks and how they are being
managed. The GRR also includes any
risks the Executive team is managing
at a Group level. The Executive team
determines mitigation plans for review
by the Board.
3
The Board
The Board challenges and agrees
the Group’s key risks, appetite and
mitigation actions at least twice yearly
and uses its findings to finalise the
Group’s principal risks. The principal
and emerging risks are taken into
account in the Board’s consideration
of long-term viability as outlined in the
Viability statement.
Read more on pages 80 and 81
Likelihood
Impact
OP5
OP1
T1
OP2
OP4
F2
R1
OP3
R2
Low
High
Our risk management process
The Board is ultimately responsible for ensuring that a robust risk management process is in place and that it is being adhered to.
The main steps in this process are:
F1
F3
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Principal risks
1. Economic environment
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Change in economic conditions, in
particular a recession, as well as
inflationary pressures from the
wars in Ukraine and the Middle
East. Macroeconomic growth in
the UK and Canada is low and
could turn into a recession.
• Adverse economic conditions,
including but not limited to,
increases in interest rates/inflation
may affect Group results.
• With an abundance of empty retail
units across the UK, this provides
opportunities for less focused
operators to open new locations in
Hollywood Bowl markets which
impacts on the revenue of its centres.
• A decline in spend on
discretionary leisure activity could
negatively affect all financial as
well as non-financial KPIs.
• There is still a risk of a contraction on disposable income levels,
impacting consumer confidence and discretionary income. The
Group has low customer frequency per annum and also the lowest
price per game of the branded operators in the UK. Therefore,
whilst it would suffer in such a recession, the Board is comfortable
that the majority of centre locations are based in high-footfall
locations which should better withstand a recessionary decline.
• The impacts of the UK Government’s Budget national insurance
and living wage increases have been considered and factored into
the Group’s financial planning.
• Continued focus on value for money as well as appealing to
all demographics.
• Along with appropriate financial modelling and available liquidity,
a focus on opening new centres and acquiring sites in high-quality
locations only with appropriate property costs, as well as capital
contributions, remains key to the Group’s new centre-opening strategy.
• Electricity prices are hedged in the UK until September 2027. Plans
are developed to mitigate many cost increases, as well as a flexible
labour model, if required, in an economic downturn.
• The new customer booking system will provide more detailed
customer data and trends which should allow for further
enhancement of offers in both the UK and Canada.
2. Covenant breach
Links to strategy:
1
2
3
Risk and impact
Mitigating factors
Risk change
• The banking facility, with Barclays
Plc, has quarterly leverage
covenant tests which are set at a
level the Group is comfortably
forecasting to be within.
• Covenant breach could result in a
review of banking arrangements
and potential liquidity issues.
• Financial resilience has always been central to our decision making
and will remain key for the foreseeable future.
• The current RCF is £25m, margin of 165ps above SONIA as well as
an accordion of £5m. The facility is currently undrawn, which under
the agreement, results in a cost of less than £200k per annum.
• Net cash position was £28.7m at the end of September 2024.
• Appropriate financial modelling has been undertaken to support
the assessment of the business as a going concern. The Group has
headroom on the current facility with leverage cover within its
covenant levels, as shown in the monthly Board packs. We prepare
short-term and long-term cash flow, Group adjusted EBITDA
(pre-IFRS 16) and covenant forecasts to ensure risks are identified
early. Tight controls exist over the approval for capital expenditure
and expenses.
• The Directors consider that the combination of events required to
lower the profitability of the Group to the point of breaching bank
covenants is unlikely.
Financial risks
The Board has identified 11 principal risks
which are set out on page 74. These are the
risks which we believe to be the most material
to our business model, which could adversely
affect the revenue, profit, cash flow and
assets of the Group and operations, which
may prevent the Group from achieving its
strategic objectives.
We acknowledge that risks and uncertainties of which we are
unaware, or which we currently believe are immaterial, may have
an adverse effect on the Group.
Key to risk change
Increasing
Decreasing
Unchanged
Key to strategy
1 Revenue growth
2 Active asset refurbishment
3 New centres and acquisitions
4 Focus on our people
5 International expansion
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Financial risks continued
Principal risks continued
3. Expansion and growth
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Competitive environment for new
centres results in less new Group
centre openings.
• New competitive socialising
concepts could appear more
attractive to landlords.
• Higher rents offered by short-term
private groups.
• Given the success of Hollywood
Bowl, other operators are
prepared to enter its markets for a
slice of the demographic, in less
desirable locations, but still splits
the revenue opportunity.
• The Group uses multiple agents to seek out opportunities across
the UK and Canada.
• Keep future opportunities confidential until launch and continue
with non-compete clauses where appropriate.
• Strong financial covenant provides forward-looking landlords
with both value and future letting opportunities.
• Continued focus with landlords on initial investment, innovation,
as well as refurbishment and maintenance capital.
• Attended key property conferences in the UK and Canada, with
positive feedback and a number of opportunities in negotiation.
• Demographic modelling to be enhanced with new customer
reservation data as becomes available, to ensure as up to date
as possible.
Operational risks
4. Core systems
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Failure in the stability or
availability of information through
IT systems could affect Group
business and operations.
• Technical or business failure in a
critical IT partner could impact the
operations of IT systems.
• Customers not being able to book
through the website is a bigger risk
given the higher proportion of online
bookings compared to prior years.
• Inaccuracy of data could lead
to incorrect business decisions
being made.
• All core UK systems are operated in Microsoft 365 & Azure
with external back-up to immutable storage in an independent
security domain.
• Microsoft Azure and Amazon AWS are robust organisations with
the highest levels of security, compliance and resilience
guarantees, as is our chosen payment services provider.
• Our Compass reservations system is deployed to the whole UK
estate and in trial in Canada. This system has been built in house
and has improved performance, resilience and future development
flexibility. The system is hosted in Azure.
• The CRM/CMS and CDP system is hosted by a third party utilising
cloud infrastructure with data recovery contingency in place.
• Our core Canadian systems are continuing to evolve to towards
parity in with UK systems.
• All Group technology changes which affect core systems are
subject to authorisation and change control procedures with
steering groups in place for key projects.
5. Food and drink suppliers
Links to strategy:
1
2
3
Risk and impact
Mitigating factors
Risk change
• Operational business failures from
key suppliers.
• Unable to provide customers with
a full experience.
• The cost of food and drink for
resale increase due to changes in
demand, legislation or production
costs, leading to decreased profits.
• The Group has key food and drink suppliers under contract with
tight service level agreements (SLAs). Alternative suppliers that
know our business could be introduced, if needed, at short notice.
UK centres hold between 14 and 21 days of food and drink product.
Canadian centres hold marginally more food and drink stock due
to their supplier base and potential for missed deliveries.
• Regular reviews and updates are held with external partners to
identify any perceived allergen risks and their resolutions. A policy
is in place to ensure the safe procurement of food and drink within
allergen controls.
• Regular reviews of food and drink menus are also undertaken to
ensure appropriate stockturn and profitability.
• Key food and drink contracts have cost increase limits negotiated
into them and full contract.
• Splitsville uses Xtreme Hospitality (XH), a group buying company,
and Molson Coors, to align itself with tier one suppliers in all service
categories including food and drink. If XH is unable to provide a
service or product, Splitsville is able to source directly itself.
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6. Amusement supplier
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Any disruption which affects
Group relationship with
amusement suppliers.
• Customers would be unable to
utilise a core offer in the centres.
• Any internal failure of data cabling
or WiFi could impact on the
customer and their ability to play
unhindered. This is most notable in
Canada where it is a “non-cash”
playcard system.
• Namco is a long-term partner that has a strong UK presence and
supports the Group with trials, initiatives and discovery visits.
• In the UK, regular key supplier meetings are held between
Hollywood Bowl’s Head of Amusements and Namco. There are
half-yearly meetings between the CEO, CFO and the Namco UK
leadership team.
• Namco also has strong liquidity which should allow for a continued
relationship during or post any consumer recession.
• Appointment of a Head of Amusements in Canada in late FY2024
to ensure a focus and accountability for a growing part of the
business in Canada.
• The Canadian supplier is Player 1.
• New connectivity has been rolled out to all centres in Canada in
the past financial year and this will continue to be tested on a
frequent basis.
7. Management retention and recruitment
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Loss of key personnel –
centre managers.
• Lack of direction at centre level with
effect on customer experience.
• More difficult to execute business
plans and strategy, impacting on
revenue and profitability.
– Increase in Team Member
absence impacting on
operational delivery.
• Impact of employment
law changes.
• The Group runs Centre Manager In Training (CMIT) and Assistant
Manager In Training (AMIT) programmes annually in the UK, which
identify centre talent and develop team members ready for these
roles. Centre managers in training run centres, with assistance from
their regional support manager as well as experienced centre
managers from across the region, when a vacancy needs to be
filled at short notice. The AMIT programme was also run in Canada
in FY2024 and the CMIT is being launched in FY2025.
• The bonus schemes are reviewed each financial year in the UK
and Canada, to ensure they are still a strong recruitment and
retention tool.
• The hourly bonus scheme has paid out to over 60 per cent of
the UK team in each month in FY2024.
• Increased the People Partner support in the UK in FY2024 to
provide further support to our centres improving engagement
and retention. Also recruiting in Canada to double the headcount
in this areas.
8. Food safety
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Major food incident including
allergen or fresh food issues.
• Loss of trade and reputation,
potential closure and litigation.
• Food and drink audits are undertaken in all centres based upon
learnings of prior year and food incidents seen in other companies.
• UK – allergen awareness is part of our team member training matrix
which needs be completed before team members can take food or
drink orders. Information is regularly updated and remains a focus
for the centres. This was enhanced further in the latest menu, along
with an online allergens list which is available for all customers.
A primary local authority partnership is in place with South
Gloucestershire covering health and safety, as well as food safety.
• In conjunction with the supply chain risk the Allergen Control Policy
has been reviewed and updated (August 2024).
• All food menus in the UK have an allergen disclaimer as well as
QR code, linking the customer to up-to-date allergen content for
each product, updated through the ‘Nutritics’ system.
• Canada – all food menus have an allergen disclaimer. Allergen
checks are undertaken with all customers when they order and are
also audited as part of the Food and Drink audits.
Operational risks continued
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Principal risks continued
9. Cyber security and GDPR
Links to strategy:
1
2
3
4
5
6
Risk and impact
Mitigating factors
Risk change
• Risk of cyber-attack/terrorism
could impact the Group’s ability
to keep trading and prevent
customers from booking online.
• Non-accreditation can lead to
the acquiring bank removing
transaction processing.
• Data protection or GDPR breach.
Theft of customer email
addresses, staff emails and other
personal information – all of which
can impact on brand reputation in
the case of a breach.
• The area is a key focus for the Group and it adopts a multi-faceted
approach to protecting its IT networks through protected firewalls
and secure two-factor authentication passwords, as well as the
frequent running of vulnerability scans to ensure the integrity of
the firewalls.
• An external Security Operations Centre is in place to provide
24/7/365 monitoring and actioning of cyber security alerts and
incidents. We have additional retained services via our Cyber
Insurers and Broker to work with the Group on a priority basis to
provide proactive incident response services should a breach occur.
As noted below, full integration of Canada into the SOC is planned.
• Advancements in the internal IT infrastructure have resulted in a
more secure way of working. By leveraging Microsoft technologies
such as AI threat intelligence and NCSC recommended baselines,
our overall IT estate utilises widely accepted security solutions and
configurations. The Group website is hosted in Amazon Web
Services which enforces a high level of physical security to
safeguard its data centres, with military grade perimeter controls.
• The website and booking site are protected by Cloudflare WAF
with DDoS (Distributed Denial of Service) protection.
• We have achieved PCI compliance across our payment channels,
with robust controls in place externally audited and verified through
the submission of the annual PCI Report on Compliance (ROC) to
both the PCI Council and our acquiring bank. We maintain
compliance through a rigorous, ongoing program of continuous
improvement and continuous development to address new and
emerging risks.
• Canadian systems, including identities, applications and
devices will move towards a managed state in FY2025, in line with
UK operations for centralised control, including full integration with
the UK 24/7 SOC (Security).
• Cyber Essentials Plus certification achieved, verifying controls
such as secure access and vulnerability management.
• A Data Protection Officer has been in position for several years in
the UK and we have a newly appointed Head of IT Security and
Compliance who oversees our strategy, applications and activity
in this area with periodic updates given to the Board.
• GDPR controls and documentation have been externally assessed
and validated assuring us of no areas of non-compliance.
• Broad cyber insurance coverage policy is in place which extends
cover for Canadian systems.
Technical risks
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10. Compliance
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• 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.
• Expert opinion is sought where relevant. We run regular training
and development for appropriately qualified staff.
• The Board has oversight of the management of regulatory
risk and ensures that each member of the Board is aware of
their responsibilities.
• Compliance documentation for centres to complete for health
and safety, and food safety, are updated and circulated twice per
year. Adherence to Company/legal standards is audited by the
internal audit team.
11. Climate change
Links to strategy:
1
2
3
4
5
Risk and impact
Mitigating factors
Risk change
• Utility non-commodity cost
increases.
• Business interruption and damage
to assets.
• Cost of transitioning operations
to net zero.
• Increased environmental
legislation.
• Significant progress already made with UK solar panel installations,
transitioning energy contracts to renewable sources and improving
the energy efficiency of our existing centres and new builds. We will
be extending our UK sustainability strategy and initiatives into our
Canadian operations where appropriate.
• The range of climate-related targets has been extended for
FY2025 to include Canada.
• We have commenced a supplier engagement programme with
key suppliers to understand their carbon reduction plans, access
data specific to our purchased goods and increase visibility of likely
price increases and supply challenges over time.
• The CRC monitors and reports on climate-related risks
and opportunities.
• Our TCFD disclosure includes scenario planning which was
undertaken to understand materiality of risks. This did not identify
any material short to mid-term risks for the Group.
Regulatory risk
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Going concern and viability statement
Going concern
In assessing the going concern position of the Group for the consolidated
financial statements for the year ended 30 September 2024, the
Directors have considered the Group’s cash flow, liquidity, and
business activities, as well as the principal risks identified in the
Annual Report.
As at 30 September 2024, the Group had cash balances of £28.7m,
no outstanding loan balances and an undrawn RCF of £25m.
The Group has undertaken a review of its liquidity using a base case
and a severe but plausible downside scenario.
The base case is the Board approved budget for FY2025 as well as
the first three months of FY2026 which forms part of the Board
approved five-year plan. Under this scenario there would be positive
cash flow, strong profit performance and the Group would continue
to have sufficient cash balances such that the RCF would remain
undrawn. Furthermore, it is assumed that the Group adheres to its
capital allocation policy.
The most severe downside scenario stress tests for reasonably
adverse variations in the economic environment leading to a
deterioration in trading conditions and performance. Under this
severe but plausible downside scenario, the Group has modelled
revenues dropping by four per cent for FY2025 quarter 2 onwards
and FY2026 from the assumed base case, and inflation continues at
an even higher rate than in the base case, specifically around cost of
labour. The model still assumes that investments into our four new
UK centres and two Canada centres would continue, whilst
refurbishments in FY2025 would be reduced. These are mitigating
factors that the Group has in its control. Under this scenario, the
Group will still be profitable and would continue to have sufficient
cash balances such that the RCF would remain undrawn.
Taking the above, and the principal risks faced by the Group 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 12 months from the date of this report.
Accordingly, the Group and Parent Company continue to adopt the
going concern basis in preparing these Financial Statements.
Viability statement
In accordance with the 2018 UK Corporate Governance Code, the
Directors have assessed the prospects of the Group over a period
significantly longer than 12 months and have made this assessment
over a five-year period to 30 September 2029. The Directors have
determined that a five-year period is an appropriate period over
which to assess viability, as it aligns with the Group’s investment plans
and gives a greater certainty over the forecasting assumptions used.
The Directors are mindful of the uncertainty driven by external
factors such as a rise in inflation and slowing GDP growth impacting
all areas of the business, and accept that forecasting across this
time frame remains challenging and have, therefore, also focused on
understanding the level of headroom available before the Group
reaches a position of financial stress.
In making this viability statement, the Directors have reviewed
the overall resilience of the Group and have specifically considered
a robust assessment of the impact, likelihood and management
of both the principal, and emerging, risks facing the Group, as at
30 September 2024 and looking forward over the next five-year
period, including consideration of those risks that could threaten its
business model, future performance, liquidity or sustainability.
The assessment of viability has specifically considered risks that
could threaten the Group’s day to day operations and existence.
This assessment considered how risks could affect the business
now and how they may develop and impact the Group’s financial
forecasts over five years.
The Group’s business model and strategy are central to an
understanding of its prospects, with further details found in
the Strategy section of the Annual Report.
Context
The Group established a base case model of financial performance
over the five-year assessment period and a viability scenario upon
which the Board has made its assessment of the Group’s ongoing
viability, and which reflects prudent expectations of future customer
demand and the successful execution of the Group’s strategic plans.
The Group undertook a review of the previously approved financial
plan and forecasts in light of the uncertainty caused by the recent
Labour Budget, potential increase in inflation and slowing GDP
growth. This would have a negative impact on the forecasts included
in the base case.
Assessment process
The Directors subsequently made a robust consideration of the
key risks and uncertainties that could impact the future performance
of the Group and the achievement of its strategic objectives, as
discussed on pages 30 to 35 of this Annual Report. Particular regard
was paid to the potential impacts of a rise in inflation, holding of
interest rates, slowing wage inflation and increased unmployment in
FY2025 and FY2026.
When considering climate scenario analysis, and modelling severe
but plausible downside scenarios, we have used the NGFS ‘Early
Action’ scenario as the most severe case for climate transition risks,
and the IPCC’s SSP5-8.5 as the most severe case for physical
climate risk. Whilst these represent situations where climate could
have a significant effect on the operations, these do not include our
future mitigating actions which we would adopt as part of our
strategy.
The viability scenario also takes into account the principal risks
and uncertainties facing the Group across the five-year period in
order to assess its ability to withstand multiple challenges. The
impacts of a rise in inflation and slowing GDP growth have been built
into the scenario, but the impact of further one-off events that
cannot be reasonably anticipated has not been included.
Key assumptions
The base case forecast, which is prepared on a prudent basis,
assumes low single-digit LFL revenue increases for FY2025 and
FY2026 compared with FY2024. The process undertaken
considers the Group’s adjusted EBITDA, capital spend, cash flows
and other key financial metrics over the projection period.
The base case assumes no significant change in gross margin
percentage and that dividend payments will continue into FY2025,
in line with the Group’s dividend policy.
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Assessment of viability
Although the viability scenario reflects the Board’s best estimate
of the future prospects of the Group, the Board has also tested
the potential impact of a severe but plausible downside scenario,
by quantifying the financial impact and overlaying this
on the detailed financial forecasts in place.
This severe but plausible downside scenario includes a reduction in
revenue of four percentage points on the base case for FY2025 and
FY2026 and an increase in operating costs to reflect higher inflation.
It is then forecasted that revenue will return to base case forecasts
for FY2027 onwards. The impact of inflation in FY2025 and FY2026
is a three percentage point increase in operating costs above our
base assumptions, excluding rent, with higher labour costs per hour
offset partially by a reduction in the number of hours worked due to
lower revenues.
Whilst these assumptions of a significant increase in inflation above
our base assumption and slowing economic growth in this scenario
is plausible, it does not represent our view of the likely out-turn in the
FY2025 and FY2026 base case scenario. However, the results of
this scenario help to inform the Directors’ assessment of the viability
of the Group.
Viability statement
The Board has a reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as they fall due, retain
sufficient available cash and not breach any covenants under any
drawn facilities over the remaining term of the current facilities.
Non-financial and sustainability information statement
The Group has complied with the requirements of sections 414CA and 414CB of the Companies Act 2006 by including certain non-financial
information within the Strategic report. The following table constitutes our non-financial information and sustainability statement, and
includes cross references to where more detailed disclosures of non-financial information can be found.
Reporting requirement
Principal locations in this Annual Report
Page
Summary of relevant policies
Business model
Business model
28-29
An explanation of the Group’s business model is
given on pages 28 and 29
Principal risks
Principal risks and uncertainties
75-79
The Board has a process for considering the
principal risks as outlined on pages 75-79
Non-financial KPIs
Strategic report
1-79
The Board approves relevant non-financial KPIs
against which operational performance is measured.
These are disclosed in the Strategic report
Environmental and climate-related
financial disclosures
Sustainability overview
TCFD disclosure statement
54-63
64-73
Our environmental strategy and climate transition
plan is set out on pages 54-63
Employees
Chief Executive Officer’s statement
S172 statement/stakeholder engagement
Sustainability overview
Principal risks and uncertainties
20-25
45-47
48-59
75-79
Our employee related policies and procedures
which include our privacy notice and all work-
related policies, are available to all employees on
our intranet
Our social sustainability strategy is set out on
pages 50-53
Human rights, anti-corruption
and anti-bribery
Sustainability overview
S172 statement/stakeholder engagement
46-59
45-47
Our Anti-Bribery and Corruption policy and Modern
Slavery policy set out relevant policies and expected
standards. The Group has a zero-tolerance approach
to human rights abuses, bribery and corruption
We also have a Whistleblowing policy
Social matters
Sustainability overview
S172 statement/stakeholder engagement
46-59
45-47
Our social sustainability strategy is set out on
pages 50-53
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Strategic report
Chair’s introduction to governance
Supporting the delivery of
our strategy
High standards of corporate
governance support
long‑term success.”
Peter Boddy, Non-Executive Chair
Read full biography on page 84
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Annual report and accounts 2024
Dear shareholders,
On behalf of the Board, I am pleased to present our Corporate
governance report for the year ended 30 September 2024, and
my last as Chair of the Board. I have thoroughly enjoyed my time
chairing the Hollywood Bowl Board, and have been fortunate to
work with an exceptional management team and be supported by a
group of highly experienced and capable Non-Executive Directors.
I am confident that the governance framework we have established
will support a seamless transition of Chair responsibilities to Darren
Shapland, and I wish him all the best in the role.
This section of the Annual Report describes how we have applied
the principles of the Code, and highlights the key activities of the
Board and its Committees in the period.
FY2024 has been another good year for the business, with continued
delivery against our key strategic pillars (which are the subject of
regular monitoring and discussion by the Board). We have continued
to make good progress on the expansion of our Canadian business,
strengthening its core team and continuing to integrate and embed
its systems with the UK business. Our programme of investment into,
and development of, our UK estate has delivered ten refurbishments
and four new centre openings in the year, and our focus on our team
and creating an outstanding workplace has supported the business
with us being ranked 12 in the Best Big Companies to Work For survey,
and also achieving a 2* high-quality work experience by WorkL.
We were also pleased to reach the important milestone of admission to
the FTSE 250 during the year. The Board considered the implications
of entering the FTSE 250 from a corporate governance and reporting
perspective. I’m pleased to report that our governance framework was
already meeting the standards of a FTSE 250 business. There are
some areas (e.g. audit tendering) where we are now required to include
additional mandated disclosures (set out in the Audit Committee
report on pages 99 to 103, and we are also aware that some
institutional investor diversity targets are higher for FTSE 250
businesses than they are for smaller cap companies. We therefore
recognise that we are not currently meeting the Investment
Association’s target for gender diversity at Executive Committee
level, but as noted in the Nomination Committee report on pages 93
to 98, we are pleased with the levels of gender diversity across the
business and are aware of our responsibility to promote a diverse
pipeline of future senior leaders.
Following our move into the FTSE 250, we have also increased the
priority on identifying candidates from an ethnic minority
background in our next round of Non-Executive Director recruitment
Our continued focus on high standards of corporate governance
supports this strategic delivery and the long-term success of the
Group. During FY2024, key areas of focus in terms of our
governance framework have included:
• progressing our Board succession with the search for my own
successor (the process being led by Rachel Addison in her role
as SID in accordance with good governance practice, and
described in the Nomination Committee report on page 98);
• developing a Board skills and experience matrix to support future
Board succession, and whole Board training and development
requirements (summarised in the Nomination Committee report
on page 97).
• reviewing (through the Remuneration Committee led by Julia
Porter) our Directors’ Remuneration Policy, and proposing
amendments to ensure that our high-performing executive team
continues to be motivated and incentivised in a way which
supports their retention and the long-term success of the
business. The review of our Remuneration Policy is described in
detail in the Directors’ Remuneration Report on page 106; and
• reviewing the changes to the UK Corporate Governance Code
which will apply to us from FY2026.
Our FY2024 Board evaluation (summarised on page 90) was
conducted internally by way of individual meetings between me
and each of the Directors. I’m pleased that the responses were
again positive, showing good relationships at Board level and
an overall view the Board is effective in providing constructive
support and challenge to the executive.
As noted above, we have conducted a successful process to
identify my own successor as Chair (described in detail in the
Nomination Committee report on page 98). We were delighted
to welcome Darren Shapland to the Board at the beginning of
December, and I will be working closely with Darren in the period
up to our 2025 AGM to ensure an effective handover for when he
assumes the role as Chair.
Peter Boddy
Non-Executive Chair
16 December 2024
Governance report
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Annual report and accounts 2024
Committee key
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee CR Corporate Responsibility Committee
Committee Chair
Appointment
Peter joined the Group as
Non-Executive Chair in 2014.
Skills and experience
Peter has extensive non-executive
experience at board level, including
roles at Thwaites plc (SID and
Chair of Remuneration Committee
2007–2015), Novus Ltd (Chair
2015–2018), Xercise4less (Chair
2013–2019) and the Harley
Medical Group (Chair 2012–2019).
Previously, he held the position of
CEO or Managing Director in a
number of successful private
equity-backed leisure sector
companies including Fitness First
UK, Megabowl Group Limited and
Maxinutrition Limited.
He is currently Chair of Impact Food
Group (a school caterer) and a
Non-Executive Director of Just Pay
Ltd (a payments aggregator). Peter
has a degree in economics from
De Montfort University and an MBA
from Warwick Business School.
Top bowling score
220
Appointment
Stephen joined the Group as
Business Development Director in
2011. He was promoted to Managing
Director in 2012 and became Chief
Executive Officer in 2014.
Skills and experience
Before joining the Group, Stephen
worked within the health and fitness
industry, holding various roles within
Cannons Health and Fitness Limited
from 1999. He became Sales and
Client Retention Director in 2007
upon the acquisition of Cannons
Health and Fitness Limited by
Nuffield Health, and became
Regional Director in 2009.
In 2011, Stephen was appointed to
the operating board of MWB
Business Exchange, a public
company specialising in serviced
offices, meeting and conference
rooms, and virtual offices.
Stephen is Chair of the Inn
Collection Group.
Top bowling score
189
Appointment
Laurence joined the Group as
Finance Director in 2014.
Skills and experience
Laurence has a first-class degree
in business, mathematics and
statistics from the London School
of Economics and Political Science.
He qualified as a Chartered
Accountant in 2000 and has been
an ICAEW Fellow since 2012.
Previously, Laurence was UK
Development Director for Paddy
Power from 2012. He has held
senior retail and finance roles for
Debenhams plc, Pizza Hut (UK)
Limited and Tesco plc. He was
also a Non-Executive Director of
Tortilla Mexican Grill PLC from its
IPO until May 2023.
Top bowling score
191
Appointment
Melanie joined the Group as Talent
Director in October 2012.
Skills and experience
Melanie has over 20 years of HR
experience across the leisure and
hospitality sectors.
Starting her career in retail
operations before moving into HR,
Melanie has held HR roles at Pizza
Express, Holmes Place Health
Clubs and Pizza Hut UK, as well as
obtaining a postgraduate diploma
in personnel and development.
Most recently, she headed the
People function at Zizzi Restaurants,
part of the Gondola group.
Top bowling score
144
Peter Boddy
Non-Executive Chairn
Stephen Burns
Chief Executive Officer
Laurence Keen
Chief Financial Officerr
Melanie Dickinson
Chief People Officer
Board of Directors
N
CR
CR
CR
84
Hollywood Bowl Group plc
Annual report and accounts 2024
Appointment
Rachel joined the Group as an
Independent Non-Executive
Director in September 2023.
Skills and experience
A member of the Institute of
Chartered Accountants in England
and Wales, Rachel has held senior
financial, operational and board
level roles throughout her career.
She was Chief Financial Officer
at both Future plc and TI Media
Limited; Managing Director for
Reach Regionals; both CFO and
Chief Operating Officer for Local
World Limited and Northcliffe
Media Limited; and Head of
Risk Management at Boots
the Chemist.
Rachel is currently a Non-Executive
Director of Marlowe plc, a
business-critical services provider;
Watkin Jones plc, a housing
developer and manager of student
and build-to-rent accommodation;
Gamma Communications plc, a
leading supplier of Unified
Communications as a Service
(UCaaS) into Western European
markets; and Wates Group, the
UK’s leading family-owned
development, building and
property services company.
Top bowling score
130
Appointment
Julia joined the Group as an
Independent Non-Executive
Director in September 2022.
Skills and experience
Julia has more than 30 years
experience encompassing
executive and non-executive roles
in advertising, media and the
technology sectors in the UK and
globally. She has held Executive
Director roles in a number of
businesses including IPC
Magazines, Getty Images and
ITV plc. Most recently, Julia was
Director of Consumer Revenues
at Guardian News & Media where
she developed and delivered
subscriptions and customer
data strategies.
Julia is currently Non‑Executive
Director of Sage Homes and
Chair of the Remuneration and
Nomination Committees.
Previously she has been a
Non-Executive Director of Freeview
(the UK’s largest free to air digital TV
platform), Safestyle UK Plc and
Origin Housing, and was a Trustee
at Worldwide Cancer Research.
She holds an MBA from London
Business School.
Top bowling score
139
Rachel Addison
Senior Independent
Non-Executive Director
Appointment
Ivan joined the Group as an
Independent Non-Executive
Director in October 2017.
Skills and experience
Ivan has extensive experience in
the leisure sector in the UK and
across Continental Europe. He held
a number of senior roles for Yum
Brands Inc. over 15 years, notably
as Managing Director of KFC
France and Western Europe and
more recently as CEO of itsu. Prior
to this, he held roles at Unilever and
LEK Consulting.
Ivan runs his own executive
coaching and leadership
development business and was
previously Non-Executive
Director of Thunderbird Fried
Chicken Limited.
Ivan holds a BSc in economics
with econometrics from the
University of Bath and an MBA
from INSEAD and is a graduate
of the Meyler Campbell Business
Coaching Programme.
Top bowling score
165
Appointment
Darren joined the Group as an
Independent Non-Executive
Director and Chair Designate in
December 2024.
Skills and experience
Darren has 40 years experience in
retail and consumer businesses
serving in leadership, executive
and Non-Executive positions.
He held both financial and general
management roles at Burton Group
plc including Supply Chain Director
for the fashion brands, Finance
Director for Top Shop/Top Man
and Managing Director for the
Home Shopping business.
Subsequently he was Chief
Financial Officer for Superdrug,
Carpetright plc and then Sainsburys
plc. He completed his executive
career as Chief Executive of
Carpetright plc.
More recently Darren has been a
Non-Executive Director and Chair
at a number of public, venture
capital and private equity backed
businesses. Darren‘s public Chair
roles have included Poundland plc
and Topps Tiles plc. He was also
Audit Committee Chair at
Ladbrokes plc and Ferguson plc.
He is currently a Non-Executive
Director at JD Sports plc where he
chairs the ESG Committee.
Top bowling score
139
Ivan Schofield
Independent
Non‑Executive Director
Darren Shapland
Independent Non‑Executive
Director and Chair Designate
Julia Porter
Independent
Non‑Executive Director
A
A
N
A
N
N
N
R
R
R
CR
CR
CR
Governance report
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Hollywood Bowl Group plc
Annual report and accounts 2024
Corporate governance report
UK Corporate Governance Code – Compliance statement
As a company with a premium listing on the London Stock
Exchange, Hollywood Bowl Group plc is required under the FCA’s
UK Listing Rules to comply with the provisions of the UK Governance
Code (the Code) (a copy of which can be found on the website of
the Financial Reporting Council, www.frc.org.uk). For the financial
year ended 30 September 2024, and as set out in the following
report, the Company has applied the principles, and complied with
all relevant provisions, of the Code.
Governance framework and responsibilities
The Board is responsible for promoting the long-term success of the
business for the benefit of shareholders, and overseeing the
development of the Group’s strategic aims and objectives (including
monitoring financial and operational performance against agreed
plans and targets), and ensuring an appropriate system of
governance (including a robust system of internal controls and a
sound risk management framework) is in place.
The Group’s business model and strategy (as developed and
approved by the Board) are set out on pages 28 to 29, and 30 to 36,
and detail how the Group strategy generates value in the long term,
and our contribution to wider society.
The Board is also responsible for establishing our purpose and
values, and providing leadership in setting the desired culture of the
business and ensuring that this is embedded throughout the Group.
The Board continuously monitors the culture of the Group, through
interactions with team members (during site visits and through
attendance at events such as the Company conference), regular
reports to the Board on team member and stakeholder engagement,
and specific updates on team culture and development from the
Chief Operations Officer and Chief People Officer. The Board
remains satisfied that this approach to monitoring culture is
appropriate and effective, that the key elements of the desired
culture (dynamic, inclusive, positive, fun, high performance) are
embedded across the Group, and that the culture is aligned with
our purpose of bringing families and friends together for affordable
fun and safe, healthy competition.
The Board has formally delegated certain governance responsibilities
to its Committees (as outlined in the illustration of our governance
framework below), with those responsibilities set out clearly in the
Committees’ terms of reference. The terms of reference and formal
Schedule of Matters Reserved to the Board (which are available to
view on the Group’s website, www.hollywoodbowlgroup.com), as well
as Group policies and procedures which address specific risk areas,
are core elements of the Group’s governance framework. These are
reviewed annually by the Board and Committees to ensure that they
remain appropriate to support effective governance processes.
Matters outside of the Schedule of Matters Reserved or the
Committees’ terms of reference fall within the responsibility and
authority of the CEO, including all executive management matters.
Governance framework
Executive Committee
Composition: Chief Executive Officer, Chief Financial Officer, Chief People Officer, Chief Marketing and Technology Officer and Chief Operations Officer.
Reporting to the CEO, the Executive Committee is responsible for the day to day operations of the Group and implementing the strategy agreed by
the Board. Monitors performance against financial and operational KPIs, and manages risk through the development and implementation of controls,
policies and procedures.
Audit Committee
Key responsibilities
• Review integrity of annual and
interim financial statements
• Review accounting policies,
financial reporting and
regulatory compliance
• Review internal financial
controls and monitor
effectiveness of risk
management and internal
control systems
• Oversee relationship with
external auditor
Audit Committee report on
pages 99 to 103
Remuneration Committee
Key responsibilities
• Set Remuneration Policy
• Determine Executive Director
and senior management
remuneration
• Approve measures and targets
for annual and long-term
incentive schemes
• Monitor workforce pay and
conditions
Directors’ remuneration policy on
pages 109 to 118
Nomination Committee
Key responsibilities
• Board appointments
• Succession planning
• Promotes diversity and
inclusion
• Monitors NED independence
and time commitments
• Reviews size and composition
of Board and Committees
Nomination Committee report on
pages 93 to 98
Corporate Responsibility
Committee
Key responsibilities
• Develop and recommend
Group ESG strategy
• Monitor performance against
agreed ESG KPIs
• Review material risks
(including climate related)
associated with ESG strategy
• Approve ESG disclosures
(including TCFD)
Corporate Responsibility
Committee report on page 104
Key responsibilities
• Overall leadership of the Group
• Promoting strong corporate governance
• Approving financial statements and dividend policy
• Strategy, purpose, values and culture
• Oversight of systems of internal control and risk management
• Approving, and reviewing performance against, business plans
and budgets
• Approving major contracts and material capital expenditure
Board
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Hollywood Bowl Group plc
Annual report and accounts 2024
Individual Board roles and responsibilities
There is a clear division of responsibilities between the Chair and
Chief Executive Officer. The key responsibilities of members of
the Board are set out below. Biographies of each Director, which
describe the skills and experience he or she brings to the Board,
can be found on pages 84 and 85.
Non-Executive Chair
Peter Boddy (to be succeeded by Darren Shapland following the
2025 AGM)
Peter is responsible for the leadership and overall effectiveness of
the Board and for upholding high standards of corporate governance
throughout the Group and particularly at Board level. In line with the
culture promoted throughout the business, the Chair encourages
open debate and discussion in the interaction of the Board, and
facilitates the effective contribution of the Non-Executive Directors.
Chief Executive Officer (CEO)
Stephen Burns
Stephen is responsible for all executive management matters,
including: performance against the Group’s strategy and
objectives; leading the executive leadership team in dealing with
the day to day operations of the Group; and ensuring that the
culture, values and standards set by the Board are embedded
throughout the organisation.
Senior Independent Director (SID)
Rachel Addison
The SID provides a valuable sounding board for the Chair and
leads the Non-Executive Directors’ annual appraisal of the Chair.
The SID is available to shareholders if they have concerns which
are not resolved through the normal channels of the CEO or Chair,
or where such contact is inappropriate. During FY2024 Rachel
Addison, in her role as SID, also led the recruitment process to
identify a successor to Peter Boddy as Chair of the Company.
Chief Financial Officer (CFO)
Laurence Keen
Laurence works with the CEO to develop and implement the
Group’s strategic objectives. He is also responsible for the
financial performance of the Group and the Group’s property
interests and supports the CEO in all investor relations activities.
Chief People Officer (CPO)
Melanie Dickinson
Melanie works with the CEO and executive leadership to develop
and implement the Group’s strategic objectives, with a particular
focus on people strategy and team member development. Melanie
is responsible for the Group’s HR function, including pay and reward,
culture, training and team engagement.
Non-Executive Directors
Rachel Addison, Julia Porter and Ivan Schofield
Rachel, Julia and Ivan provide objective and constructive challenge
to management and help to develop proposals on strategy. They
also scrutinise and monitor financial and operational performance,
and support the executive leadership team, drawing on their
background and experience from previous roles.
Executive Committee
Mathew Hart
Chief Marketing and Technology Officer
Top bowling score
153
Mathew joined the Group as Commercial Director in January
2015. He has over 25 years of commercial, marketing,
e-commerce and general management experience across
the travel, leisure and healthcare sectors.
Mathew has held executive positions at Holiday Autos
(Managing Director), Lastminute.com (Group Marketing
Director), Cannons Health Clubs (Group Marketing and
Commercial Director), Nuffield Health (Group Marketing
Director) and Encore Tickets (Group Marketing Director)
Darryl Lewis
Chief Operating Officer
Top bowling score
187
Darryl joined the Group as Regional Director in September
2013. He has over 25 years’ experience in key operational roles
across the leisure sector, including cinemas and theme parks.
Darryl worked in general management, film and content
planning and senior operational support roles in the cinema
industry for 20 years with Showcase Cinemas, Warner Bros,
International Theatres and Vue.
Governance report
87
Hollywood Bowl Group plc
Annual report and accounts 2024
Corporate governance report continued
Board independence
As at 30 September 2024 the Board consisted of seven
Directors (including the Chair), three of whom are considered to
be independent as indicated in the table below:
Non-Independent
Peter Boddy (Chair)
Stephen Burns (Chief Executive Officer)
Laurence Keen (Chief Financial Officer)
Melanie Dickinson (Chief People Officer)
Independent
Rachel Addison (SID)
Julia Porter
Ivan Schofield
At least half the Board (excluding the Chair) comprised independent
Non-Executive Directors throughout the year, with a majority of
independent Non-Executive Directors during the part of FY2024
that Nick Backhouse remained on the Board (1 October 2023 to
29 January 2024).
Following the year end, we announced the appointment of Darren
Shapland as an independent Non-Executive Director and Chair
Designate, and that he will succeed Peter Boddy as Chair when
Peter steps down from the Board following the 2025 AGM.
Board and Committee attendance
The Board met formally on nine occasions during FY2024. The table
below shows the attendance (in person or by video conference)
of each Director at the formal scheduled meetings of the Board
and of the Committees of which they are a member:
Membership and attendance of Board and Committees
Director
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Corporate
Responsibility
Committee
Peter Boddy
9/9
N/A
N/A
3/3
2/2
Stephen Burns
9/9
N/A
N/A
N/A
2/2
Laurence Keen
9/9
N/A
N/A
N/A
N/A
Melanie
Dickinson*
8/9
N/A
N/A
N/A
2/2
Rachel
Addison
9/9
4/4
5/5
3/3
N/A
Nick
Backhouse**
2/2
1/1
1/1
1/1
N/A
Julia Porter
9/9
4/4
5/5
3/3
2/2
Ivan Schofield
9/9
4/4
5/5
3/3
2/2
* Melanie Dickinson was unable to attend the Board meeting in October 2023 due
to a family bereavement.
** Nick Backhouse stepped down as a Director at the 2024 AGM. The table above
therefore reflects the meetings he was eligible to attend only.
In addition to the Chief Executive, Chief Financial and Chief People
Officer, and in line with our established practice, the Chief Marketing
and Technology Officer and Chief Operating Officer were present at
Board meetings during the year.
The Non-Executive Directors remain in regular contact with the
Chair, whether in face-to-face meetings or by telephone, to discuss
matters relating to the Group without the executives present.
Information and support
Agendas and accompanying papers are distributed to the Board
and Committee members well in advance of each Board or
Committee meeting via an electronic Board paper system for
efficiency and security purposes. These include reports from
Executive Directors, other members of senior management and
external advisers. The Non-Executive Directors are also in regular
contact with the Executive Directors and other senior executives
outside of formal Board meetings.
All Directors have direct access to senior management should they
require additional information on any of the items to be discussed.
The Board and the Audit Committee receive regular and specific
reports to allow the monitoring of the adequacy of the Group’s
systems of internal controls (described in more detail in the Audit
Committee report on pages 101 and 102).
Appointment and election
Each Non-Executive Director is expected to devote sufficient
time to the Group’s affairs to fulfil his or her duties. Their letters of
appointment anticipates that they will need to commit a minimum
of two days per month to the Group, specifying that more time may
be required. This time commitment was reviewed and confirmed
as appropriate by the Nomination Committee during the year, and
each of the Non-Executive Directors has confirmed that they
continue to be able to devote sufficient time to discharge their
duties effectively as a Director of the Company.
The Board is satisfied that each of the Directors continues to
contribute effectively and is committed to their role. The Board is
therefore pleased to recommend the election of Darren Shapland,
and the re-election of all other Directors (with the exception of
Peter Boddy who will step down from the Board at the AGM) at the
Company’s AGM on 30 January 2025. All of the Directors have a
service agreement or a letter of appointment, with details of their
notice periods and unexpired terms of office set out on page 115.
A formal process to identify a successor to Peter Boddy as Chair
was conducted during the year, and resulted in the appointment of
Darren Shapland as an independent Non-Executive Director and
Chair Designate with effect from 1 December 2024. A detailed
summary of the process is set out in the Nomination Committee
report on page 98.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Activity during the year
The Board approves an annual calendar of agenda items to ensure that all matters are given due consideration and are reviewed at the
appropriate point in the regulatory and financial cycle. The activity of the Board during FY2024 is shown in the table below:
Board agenda for year to 30 September 2024
Oct
Dec
Jan
Mar
Apr
May
Jun
Jul
Sep
Corporate governance
Directors’ conflicts of interest
Board, Director and Committee performance evaluation
Review Schedule of Matters Reserved to the Board
ESG strategy and updates
Board Diversity Policy
NED/Chair recruitment updates/fees
Compliance and risk
The principal risks and uncertainties affecting the Group
Risk register and risk heat map
Risk deep dives
Going concern review and approval of long-term viability statement
Review and approval of Modern Slavery and Human
Trafficking Statement
Review of gender pay gap reporting
Review of Disclosure Policy, Insider List and Share Dealing Code
Group insurances
New UK Corporate Governance Code
Operations, customers and suppliers
Reviewing customer experience measures
Utilities/energy review
People
Review of results of team engagement survey
Team member incentives review
Culture & Diversity
Performance
Approval of full-year results, the Annual Report and
Accounts, half-year results, the Notice of Annual General Meeting
and dividends
Budget
Review of dividend policy/dividend proposals/capital allocation
Review of investment in refurbishments
Strategy
IT projects update
Review of progress on strategic projects
Governance report
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Hollywood Bowl Group plc
Annual report and accounts 2024
Corporate governance report continued
Induction
All new Directors appointed to the Board undertake a tailored induction programme, the purpose of which is to help develop a sound
understanding and awareness of the Group, focusing on its culture, operations and governance structure.
A tailored induction programme is underway for Darren Shapland and is summarised in the table below:
Strategy and culture
Operations and Company events
Financial reporting
and risk management
Board process and
corporate governance
CEO meeting (covering
strategy, business plan
and new business)
Support centre town
hall meeting
CFO meeting (covering external
auditor relationship, Audit Committee
process, internal controls, internal
audit and risk management)
Company Secretary
meeting (covering Board
procedures, terms of reference,
activity schedules and
governance policies)
CPO meeting (covering
organisation, team culture
and HR policies)
Centre visits with the CEO,
COO, Operations Director and
Regional Support Manager
Head of Finance meeting (covering
non-audit services, business planning,
management reporting and tax)
CMTO meeting (covering Group
supporting functions, IR and
communications programme)
Wheel roadshow
cultural induction
Centre visit with Head of Internal Audit
Performance evaluation
F
Y
2
0
2
3
F
Y
2
0
2
4
F
Y
2
0
2
2
Board
evaluation
cycle
FY2022 to FY2024
Internally facilitated questionnaires
Detailed questionnaires completed by
all members and regular attendees.
Some questions designed to gather
feedback on the impact and
implementation of recommendations
from the FY2022 evaluation.
Internally facilitated Chair-led individual interviews
Qualitative feedback on Board process and effectiveness, and views on
progress made against recommendations from prior year evaluations
and suggestions for further improvement in FY2025.
Externally facilitated by
Parsons Talent Consulting
Detailed process involving
questionnaires, individual interviews
with Directors and Board attendees,
meeting observation, and feedback
presentation and detailed report/
recommendations.
Our FY2024 Board evaluation process was conducted internally
and led by the Chair who met with each Board member individually
to discuss the operation and effectiveness of the Board.
During those meetings, Peter also reviewed individual Director
performance. As well as discussing wider business matters, these
sessions also included discussion around individual Director
development, additional knowledge/training requirements
(whether at an individual or Board level), and time spent in the
business. Through a combination of the individual evaluation, and
the Board evaluation process, all individual Directors were shown
to be contributing effectively.
The FY2024 evaluation represented the third stage of our
established three-year evaluation cycle, summarised above, with the
two internally facilitated processes building on the feedback and
recommendations from our FY2022 externally facilitated evaluation.
The feedback from the FY2024 evaluation was that the Board
continues to be effective and performs well. Recommendations
taken forward from previous evaluations have improved the Board
process and supported greater time spent discussing strategy and
long-term planning. As demonstrated throughout the evaluation
cycle, the positive culture of the business has continued to be
evidenced in the Board’s interactions and internal relationships.
The evaluation of the Chair’s performance in FY2024 was led by
Rachel Addison, Senior Independent Director (SID), and conducted
by way of meeting between the Non-Executive Directors. It was
concluded that Peter had performed well in his role as Chair in
FY2024, and across his tenure with the Company.
In line with the approach established in recent years, it is
anticipated that the FY2025 Board performance evaluation
will be externally facilitated.
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Annual report and accounts 2024
Conflicts of interest and external appointments
In accordance with the Board-approved procedure relating to
Directors’ conflicts of interest, all Directors have confirmed that
they did not have any conflicts of interest with the Group during the
year. In accordance with our established policy, and provision 15 of
the Code, Board approval is required before any Director takes on a
new external appointment. Such approval was sought and granted
in relation to a new external appointment taken on by Julia Porter
during the year, the Board being satisfied that Julia’s appointment
as a Director of Sage Homes would not impact or restrict her time
available for the Company.
Whistleblowing Policy
The Group has adopted procedures by which employees may, in
confidence, raise concerns relating to possible improprieties in
matters of financial reporting, financial control or any other matter.
The Whistleblowing Policy applies to all employees of the Group,
who are required to confirm that they have read the policy and are
aware of how the procedure operates as part of an ongoing internal
training programme. The Board receives regular updates with
respect to the whistleblowing procedures during the year, with all
incidents reported to the Board having been addressed under
appropriate Group HR policies and procedures.
Stakeholder engagement
Engagement with the workforce
The Chair and the Non-Executive Directors frequently visit the
Group’s centres, including attending new or refurbished centre
openings, accompanied by regional support managers and centre
management teams. At those centre visits, the Non-Executive
Directors take the opportunity to engage directly with team
members at all levels, allowing them to assess the understanding
of the Group’s culture across the business. Our team members are
encouraged to engage openly with all colleagues, and as a result
the Non-Executives are able to effectively gauge the views of the
workforce. The Non-Executive Directors are also invited to
attend the annual Company conference which provides further
opportunity to engage with team members, and supports a
deeper understanding of how strategic initiatives are cascaded
through the business.
Case study
Centre Audit – site visit
The Group’s Internal Audit function carried out 158 UK
centre audits, two support centre audits, and 89 food & drink
audits in FY2024, the results of which are presented to the
Audit Committee.
On one of those centre audit visits, Rachel Addison, Audit
Committee Chair, shadowed Mark Keiro, Head of Internal
Audit, in order to gain first-hand experience of the detailed
centre audit process.
Rachel commented, “Although we receive regular, in-depth,
updates from our Internal Audit function through our Audit
Committee meetings, it was a great experience to see how
the audits are conducted and to truly get a sense of the
processes and control framework that support our teams in
ensuring that our centres are operated safely and efficiently.
I gained significant assurance that the audit process
promotes high standards of operational safety and customer
service, and that centre teams are supported to efficiently
and effectively address any issues identified.”
Governance report
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Hollywood Bowl Group plc
Annual report and accounts 2024
Corporate governance report continued
Stakeholder engagement continued
Engagement with the workforce continued
How we assess and monitor culture
The Board’s assessment and monitoring of culture (summarised below) includes regular updates on KPIs underpinning the outstanding
workplaces strategic pillar.
Formal reporting in FY2024
Other activity
Board
• Regular CPO updates on people KPIs and trends, including details on participation in Centre
Manager in Training, Assistant Manager in Training, and Senior Leadership Development programmes
• Detailed review of bi-annual employee engagement surveys and action plans
• Monitoring and review of Whistleblowing Policy and incidents
• CEO/COO updates from Dynamic Operations sessions
• Bi-annual feedback from D&I focus groups
• Risk deep dive on management retention
• Annual Board evaluation including questions to assess views on culture across the group, and how it
is evidenced by the Board
• NED site visits
• Attendance at
annual Company
conference
• Other direct
engagement with
team members
Remuneration
Committee
• Review and monitoring of workforce remuneration proposals
• Ensuring alignment of Executive team bonus measures with workforce incentive arrangements
• Monitoring payout levels across centre management bonus scheme
Corporate
Responsibility
Committee
• Monitoring of progress against specific oustanding workplaces KPIs
• Review of output from D&I monitoring survey and D&I focus groups
The Board recognises its critical role and responsibility in ensuring
that the culture of the business is promoted and embedded at all
levels. This includes setting the correct tone from the top, and
demonstrating the desired culture in interactions between Directors
(at Board and Committee meetings) and in our engagement with
team members and customers. The Board considers that the
Executive and Non-Executive Directors continue to act with
integrity and conduct themselves in a manner that is aligned with
and promotes our culture, with this view supported by feedback
from the FY2024 Board evaluation process.
The Board has assessed the various methods by which the Directors
engage with the wider workforce and continues to be of the view that
the combination of the methods described above ensures that the
Board is appropriately informed about, and understands, workforce
views. The Board therefore believes that this approach appropriately
addresses the requirement to engage with the workforce under
provision 5 of the Code and does not currently intend to adopt one
of the three workforce engagement methods suggested in that
provision. The Board will, of course, continue to keep its stakeholder
engagement mechanisms under review.
Relations with shareholders
As part of its ongoing investor relations programme, the Group
aims to maintain an active dialogue with its shareholders, including
institutional investors, to discuss issues relating to the performance
of the Group. Communicating and engaging with investors means
the Board can express clearly its strategy and performance and
receive regular feedback from investors. It also gives the Board
the opportunity to respond to questions and suggestions. Our
engagement with investors is primarily through the CEO and CFO,
who conduct investor and analyst presentations following the
announcement of our full-year and interim results announcements.
During FY2024, the Remuneration Committee Chair has also engaged
directly with our major shareholders in connection with proposed
amendments to our Remuneration Policy. This is disclosed in more
detail in the Directors’ remuneration report on page 106.
The Non-Executive Directors are available to discuss any matter
shareholders might wish to raise and to attend meetings with
investors and analysts, as required. Investor relations activity is a
standing item on the Board’s agenda and ensuring a satisfactory
dialogue with shareholders, and receiving reports on the views of
shareholders, is a matter reserved to the Board.
The Company’s AGM will be held on Thursday 30 January 2025
at the offices of Berenberg Bank, 60 Threadneedle Street, London,
EC2R 8HP. Electronic proxy voting will be available to shareholders
through both our registrar’s website and the CREST service. Voting
at the AGM will be conducted by way of a poll and the results will be
announced through the Regulatory News Service and made
available on the Group’s website.
More information on AGM arrangements is included in the AGM
Notice which will be distributed to shareholders and made available
on the Group’s website.
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Report of the
Nomination Committee
Report of the Nomination Committee
Nomination Committee
Chair
Peter Boddy
Committee members
Rachel Addison
Julia Porter
Ivan Schofield
Darren Shapland
Number of meetings
held in the year
3
Specific duties of the Committee include:
• regularly reviewing the structure, size and composition
(including the skills, knowledge, experience and diversity)
of the Board and making recommendations to the Board
with regard to any changes;
• keeping under review the leadership needs of the
organisation, both Executive and Non-Executive, with a
view to ensuring the continued ability of the organisation
to compete effectively in the marketplace; and
• reviewing annually the time commitment required
of Non-Executive Directors.
The Nomination Committee is also responsible for
keeping Board succession plans under review, monitoring
compliance with the Company’s Board Diversity Policy,
and making recommendations on the composition of
the Board Committees.
Role and responsibilities
The role of the Nomination Committee is set out in its terms of
reference, which are reviewed annually and are available on the
Group’s website. The Committee’s primary purpose is to develop
and maintain a formal, rigorous and transparent procedure for
identifying appropriate candidates for Board appointments and
reappointments, and to make recommendations to the Board.
Activity during the year
The Nomination Committee met three times during the year
and has met once since the year end. Committee meetings
have focused on the matters set out in the table below:
Activities of the Committee during the year
to 30 September 2024
Board succession
planning
Review of Non-Executive succession
planning matrix
Identified need to start process to recruit
Chair successor
Reviewed Executive and senior
management succession plans
Board appointments
Led by the Senior Independent Director,
oversaw search process for new Chair
successor (described in detail below)
Recommended the appointment of
Darren Shapland
Diversity Policy
Reviewed Board Diversity Policy
Reviewed Board diversity, and approach
to diversity in succession planning
Board and Committee
composition
Review of composition of the Board
Review of Non-Executive Directors’
independence
Review of time commitment requirements,
including each Director’s external interests
Developed and reviewed Board skills
matrix to support future succession
planning (and training requirements)
Performance
evaluation
Review of results from Committee
performance evaluation and discussion on
related actions
Review of the Committee’s terms of reference
Peter Boddy
Nomination Committee Chair
Read full biography on page 84
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Succession planning
Our cycle of Non-Executive Director succession has continued
during the year in accordance with our succession planning matrix.
The matrix was established as a tool to support consideration of
the timing for future appointments, and to identify key search
criteria (including skills, experience and diversity), and is reviewed
at each meeting of the Committee.
Our agreed Non-Executive Director succession plan is designed to
ensure a managed approach to the timing of Non-Executive Director
changes given our initial cohort were all appointed at the same time
(in connection with the Company’s IPO). It is also designed on the
assumption that no Non-Executive Director will serve on the Board
for longer than nine years, but retains flexibility such that tenure
beyond nine years may be accepted if considered to be in the best
interests of the Company at the time, and the overall independence
of the Board is not compromised.
In recent years, we have appointed successors to Claire Tiney and
Nick Backhouse, who, along with me, were the Non-Executives in
place at IPO. In line with the plan, and given my tenure with the
Company (having originally been appointed as Chair in 2014, two
years prior to the IPO), this year’s succession planning activity has
been focussed on identifying a suitable candidate to replace me
as Chair. As such, and in line with provision 17 of the UK Corporate
Governance Code, I have not been directly involved in the search
and appointment process which has been led by Rachel Addison
(our Senior Independent Director) who took the Chair for
Nomination Committee meetings where my succession was
discussed. A summary of the Chair recruitment process led by
Rachel is set out in more detail at the end of this report.
We have also continued to review Executive and senior management
succession plans, with the aim of ensuring that the Group’s future
leadership will have the qualities necessary to support the delivery
of our strategic objectives. During the year, the Executive team
presented its detailed succession planning matrix to the Committee,
identifying potential internal successors, and gaps in skills and
experience which may need to be addressed through development
programmes or external recruitment. Following feedback from the
Committee, this succession plan will be further developed to identify
key talent and ‘ones to watch’ at lower levels across the organisation
in order that their progression can be tracked.
In part, in support of the succession plan, potential executive
successors are given opportunities to meet and present to the
Board on their areas of expertise as part of the Board’s schedule
of regular updates and risk deep dives, and this has continued
during FY2024.
Board composition and tenure – as at 30 September 2024
Gender Diversity
Independence (exc. Chair)
NED tenure
Male
Female
Independent
Non-Independent
1 to 3 years
6 to 9 years
Report of the Nomination Committee continued
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Hollywood Bowl Group plc
Annual report and accounts 2024
Diversity
The Committee is responsible for maintaining, and monitoring compliance with, the Board Diversity Policy. Our annual review of the Policy
led to a minor change to reflect that our aspiration to have at least one Director from a non-white ethnic minority background is now a short
to medium-term, rather than longer-term, goal. This, in part, reflects the fact that our move into the FTSE 250 during the year results in us
not having met the Parker Review target of having one Director from an ethnic minority background by 2024, but more importantly reflects
our desire to ensure that the composition of our Board is better reflective of our team member and customer base.
Our Board Diversity Policy recognises the benefits of greater diversity, and sets out the Board’s commitment to ensuring that the Company’s
Directors bring a wide range of skills, knowledge, experience, backgrounds and perspectives to their role. Given the size of the Board, and
the fact that all Non-Executives are members of each of the Audit, Remuneration and Nomination Committees, the Diversity Policy does
not contain any specific diversity objectives relating to the composition of the Board’s Committees.
In addition to a requirement that at least two members of the Board are female, the Diversity Policy also sets out our continuing aim to
achieve no less than 40 per cent female representation on the Board (achieved at the year end with 43 per cent of our Board members
being women) and a short to medium-term aspiration to have at least one Director from a non-white ethnic minority background.
The Policy recognises this balance may not be achieved through our first cycle of Non-Executive Director succession (i.e. the succession
of the Non-Executive Directors appointed at IPO), and that periods of change in Board composition may result in periods when the desired
balance is not met. Progress against objectives set out under the Diversity Policy during the year is summarised below:
Objective/responsibility
Progress/activity in FY2024
Maintain a balance such that:
• at least two members of the Board are female, with a continuing
aspiration to achieve no less than 40 per cent females on
the Board; and
• in the short to medium term, at least one Director to be from a
non-white ethnic minority background,
There have been three female members of the Board throughout
FY2024. 38 per cent of the Board were female from 1 October 2023
to our 2024 AGM. This increased to 43 per cent when Nick
Backhouse stepped down at the 2024 AGM.
Both gender and ethnic diversity objectives were considered as part
of the recruitment process for Darren Shapland and will continue to
form an important consideration in our NED succession planning.
In the recruitment process, encourage diversity in the candidates by:
• only engaging executive search firms that are signatories to the
Executive Search Firms’ Voluntary Code of Conduct;
• ensuring that the search firm engaged is briefed to include an
appropriate emphasis on diversity considerations;
• aim for non-executive shortlists to include at least 50 per cent
female candidates; and
• consider candidates who may not have previous board
experience in executive and non-executive directorship
leadership roles
We engaged Teneo (an accredited executive search firm under
the FTSE Women Leaders Enhanced Code of Conduct) for the
Chair recruitment search.
Teneo’s briefing included appropriate emphasis on
diversity consideration.
Although we aimed for a shortlist comprising at least 50 per cent
female candidates, our priority was to identify candidates from the
long list with the most appropriate skills and experience for the role.
We were pleased that we were able to progress two female
candidates to the interview phase.
Given the nature of the role we were recruiting, we did not feel it
would be appropriate to consider candidates who did not have
previous board experience in this case.
Review regularly the structure, size, and composition of the Board
(including the balance of skills, knowledge, and experience), taking
into account this Policy, and make recommendations to the Board
for any changes.
This is an annually recurring item on the Committee’s agenda and
was reviewed by the Committee at its meeting in September 2024.
Although the Committee is comfortable that the current size of
the Board is appropriate, the potential to increase independent
non-executive representation (to support breadth of experience,
future succession planning, and diversity considerations) remains
under review.
When considering Board succession planning, have regard to the
Board Diversity Policy.
The NED succession planning matrix highlights current diversity
statistics on the Board and will continue to be considered against
the Board Diversity Policy. The need to promote diversity in Board
appointments is considered in all of the Committee’s succession
planning discussions.
Review the Board Diversity Policy annually, assessing its
effectiveness and recommending any changes to the Board.
The Policy is reviewed annually, and was reviewed by the
Committee in September 2024 with the amendments
described above duly approved.
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Diversity continued
Our compliance with the diversity targets set out in UK Listing Rule 6.6.6(9) as at 30 September 2024 was as follows:
Target
Complied
Explanation
At least 40 per cent of the Board are female.
43 per cent of the Board are female as at year end. This will drop to
38 per cent with the appointment of Darren Shapland on 1 December
2024, but will increase back to 43 per cent when Peter Boddy steps
down at the AGM in January 2025.
At least one of the senior Board positions (Chair, CEO,
Senior Independent Director or CFO) is held by a female.
Rachel Addison is SID.
At least one member of the board is from a minority
ethnic background (defined by reference to categories
recommended by the Office for National Statistics and
excluding those from a white ethnic background).
As part of our succession plans, and Non-Executive Director
recruitment processes, the Committee is aware of the need to
continue to promote gender and ethnic diversity. We have revised
our Board Diversity Policy aspiration to have at least one Director
from an ethnic minority background to a short and medium-term
one, and will ensure that the need to see candidates from an ethnic
minority background is specified in our Non-Executive Director search
processes, with the aim of achieving compliance with this target
through our next cycle of Non-Executive Director recruitment.
As required under UK Listing Rule 6.6.6(10), the breakdown of the gender identity and ethnic background of the Company’s Directors and
executive management (the Executive Committee) as at 30 September 2024 is set out in the tables below. Each Director and Executive
Committee member was asked to complete a survey in order to compile this data. Any new appointees to the Board or Executive Committee
in the future will be asked to provide this information.
Gender identity:
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board*
Number in
executive
management
Percentage
of executive
management
Male
4
57%
3
4
83%
Female
3
43%
1
1
17%
Not specified/prefer not to say
—
—
—
—
—
Ethnic background:
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board*
Number in
executive
management
Percentage
of executive
management
White British or other white
7
100%
4
5
100%
Mixed/multiple ethnic groups
—
—
—
—
—
Asian/Asian British
—
—
—
—
—
Black/African/Caribbean/Black British
—
—
—
—
—
Other ethnic group
—
—
—
—
—
Not specified/prefer not to say
—
—
—
—
—
* Includes CEO, CFO, Chair and SID.
We recognise that the composition of our Executive Committee does not meet the threshold recommended in the Investment Association’s
2023 Shareholder Priorities. Given the stability and performance of the existing team, we do not anticipate changes to the composition of the
Executive Committee in the short term. However overall gender diversity across the business is good with the gender balance for direct
reports to the Executive Committee at 50:50 and 53 per cent of the total team member population being female (as shown in the table on
page 56), and the Committee and the Executive team recognise the need to support the development of women into senior management
roles. During FY2024, a total of 11 females were progressed through our CMIT programme, and four through our Senior Leaders Development
programme, representing 42 per cent and 31 per cent respectively of total participants.
Report of the Nomination Committee continued
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Board skills and experience
Following feedback from our FY2023 Board evaluation process,
it was agreed that a formal self-assessment of the skills and
experience across the Board should be conducted to both support
the development of candidate profiles for future Board succession
planning, and to identify potential whole Board training topics
during FY2024. The Company Secretary, Chair and CEO developed
a skills and experience questionnaire under which each Director
was asked to assess their level of knowledge and experience (from
no knowledge/experience to expert knowledge/experience) across
a range of skill categories and industry sectors. The skill categories
and industry sectors were agreed as being those which are key
areas to support the continued performance and strategic growth
of the business over the medium to long term.
Scores were collated (and calibrated), and a skills and experience
matrix which summarised scores both at an individual and whole
Board average level was presented back to the Nomination
Committee and Board for review and discussion. Pleasingly, the
process did not identify any material gaps in knowledge or
experience on the Board as whole, but did highlight some areas
where the main experience is concentrated in individual Directors
and where it would be appropriate for whole Board training to be
sought to ensure our knowledge is kept up to date. The charts
below summarise the whole Board average.
Peter Boddy
Nomination Committee Chair
16 December 2024
Annual review of Board and Committee composition
In accordance with its terms of reference, the Committee
reviews annually the composition of the Board and its
Committees, and the independence of the Non-Executive
Directors. The review was conducted in September 2024,
and therefore took account of Rachel Addison’s recent
appointment to the Board and each of the Committees.
The Committee is satisfied that each of the Non-Executive
Directors continues to be independent in thought and
judgement, and when assessed against the circumstances
likely to impair independence set out in provision 10 of the
Code. Taking account of the continued independence of the
Non-Executive Directors, the Committee is also satisfied that
the composition of the Board and its Committees remains
appropriate having considered the objectives of the Board
Diversity Policy and the balance of skills, experience and
diversity of thought required for those bodies to operate
effectively. All of these factors will of course continue to be
considered through our succession planning and Board
recruitment processes.
Annual evaluation
The Committee has reviewed its own performance in 2024
by way of a questionnaire completed by Committee’s
members and other attendees, with the results discussed at
the Committee’s meetings in December 2024. In general,
the evaluation confirmed that the Nomination Committee
continues to operate effectively.
Scale:
0 = no knowledge / experience
1 = limited knowledge / experience
2 = good knowledge / experience
3 = excellent knowledge / experience
4 = expert knowledge / experience
Employee
engagement
Multi-site leisure
operations
Financial
Human capital
management
Risk
management
Strategy/
transaction
Customer
Governance
and compliance
International
Property/estate
management
Environmental
Capital markets
Technology
and innovation
Cybersecurity
Leadership
UK hospitality
and leisure
Listed company/
UK capital...
Investor
relations
CRM
and data
Industry experience
Skills and experience
International
hospitality and
leisure
Digital
marketing
0.00
1.00
2.00
3.00
4.00
0.00
1.00
2.00
3.00
4.00
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Report of the Nomination Committee continued
Appointment of Darren Shapland as Non-Executive Director and Chair Designate
As noted above, as part of our long-standing Board succession plan the Committee identified the need to commence the search for a
new Board Chair during 2024. The table below summarises the process, led by me in my role as Senior Independent Director, and key
considerations at each step in the search which ultimately led to the appointment of Darren Shapland as a Non-Executive Director and
Chair Designate effective 1 December 2024.
Step
Key considerations/decisions
Develop role/
candidate profile
Working with the CEO, the Committee developed a detailed candidate profile based on an agreed list of key/
desirable skills and attributes including:
• Public markets experience and main Board PLC experience.
• Proven track record of success as a senior executive (including CEO) in businesses of relevant scale.
• Background in businesses that have seen long-term estate expansion in multiple geographies, through both
organic growth and M&A.
• Significant understanding of multi-site consumer experience.
• Interpersonal skills, empathy and high emotional intelligence necessary to foster positive relationships
with Board colleagues.
• Personal presence and strong communication skills to achieve rapid credibility in the role, including
with shareholders.
Identify and engage
external search
agency/service
• Ensuring access to a diverse pool of appropriately experienced candidates, beyond established networks.
• The Committee agreed to engage executive search firm Teneo to support the search process. Teneo is an
accredited executive search firm under the FTSE Women Leaders Enhanced Code of Conduct. Teneo has
no other connection with the Company or individual Directors.
Shortlisting
candidates
• Teneo developed a longlist of candidates matching the role/candidate profile.
• The CEO and I reviewed the longlist and shortlisted six candidates (four male and two female).
• Following the shortlisting process, one candidate withdrew having been progressed in another role.
• A summary of shortlisted candidates was discussed with Nomination Committee members.
Interviews
• With the CEO, I reviewed and interviewed the 5 shortlisted candidates, identifying a reduced shortlist of
4 candidates to be put forward for second interviews with the other Executive and Non-Executive Directors.
• Second interviews were conducted, with detailed feedback provided to the CEO and me, and shared and
reviewed by the Nomination Committee.
Recommendation and
appointment
• Having discussed shortlisted candidates, it became apparent that the unanimously preferred candidate was
Darren Shapland. The members of the Nomination Committee therefore agreed to recommend to the Board
that Darren Shapland be appointed.
• The Board formally approved Darren Shapland’s appointment as a Non-Executive Director and Chair Designate,
with effect from 1 December 2024. Following a handover period, and subject to his election by shareholders,
Darren will succeed Peter Boddy as Chair following the AGM on 30 January 2025.
Rachel Addison
Senior Independent Director
16 December 2024
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Hollywood Bowl Group plc
Annual report and accounts 2024
Report of the
Audit Committee
Report of the Audit Committee
Audit Committee
Chair
Rachel Addison
Committee members
Julia Porter
Ivan Schofield
Number of meetings
held in the year
4
Specific duties of the Committee include:
• monitoring the integrity of the annual and interim
financial statements;
• keeping under review the internal financial control
systems; and
• overseeing the relationship with the internal and
external audit functions.
Role and responsibilities
The Audit Committee’s duties and responsibilities are set out in full
in its terms of reference, which are available on the Company’s
website. The terms of reference were reviewed during the year, with
minor changes (mainly to update references to the UK Listing Rules)
approved by the Committee and Board.
Dear shareholders,
On behalf of the Board, I am pleased to present the Audit Committee
report for the year ended 30 September 2024, my first since
succeeding Nick Backhouse as Audit Committee Chair when Nick
stepped down as a Director at our 2024 AGM.
The business has again performed well in FY2024, with continued
expansion and improvement of our estates in both the UK and
Canada, the successful rollout of our proprietary booking system in
the UK, and continued integration of the Canadian business, and we
know there is still more that we can do in FY2025 on this integration.
The activity of the Committee during FY2024 is described in the
report that follows. Our key role is in monitoring the integrity of
annual and half-year financial statements and ensuring that
appropriate consideration is given to key accounting judgements
and estimates. We also take responsibility for assessing consistency
between the narrative statements in our financial reporting, and the
financial statements themselves, and in that context ensuring that
our financial reports are fair, balanced and understandable.
There have been no significant changes in our accounting policies
during the year, and no material transactions which have required
specific decisions around accounting treatment, the accounting
policies in relation to the acquisition of bowling centres in Canada,
and for revenue recognition in relation to Striker Bowling Solutions
having been agreed as part of the FY2023 year end.
We review and monitor potential asset impairment both at the
half-year and at the financial year end. Prior to the year end, the
Committee met informally with management to review the
impairment model and discuss and agree underlying assumptions
and the approach to the full impairment review which has been
conducted as part of the year-end and audit process.
We have reviewed the effectiveness of the FY2023 external audit
process (also described in more detail below) and assessed
KPMG’s continuing independence. The Committee continues to be
comfortable that KPMG is independent and that the audit service
provided is effective, and we have recommended to the Board that
a resolution to reappoint KPMG as our external auditor be proposed
at our 2024 AGM. We have also considered the required timing of an
external audit tender process to support the enhanced disclosure
we are now required to make under the CMA Order as a constituent
of the FTSE 250. Our disclosure is set out on page 103, with the
conclusion that we will be required to tender our external audit
contract ahead of our FY2026 year-end audit.
Rachel Addison
Audit Committee Chair
Read full biography on page 85
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Hollywood Bowl Group plc
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In accordance with our established formal schedule of annual
activity, the Committee has continued to monitor our internal control
framework through regular reviews of the documented internal
controls matrix (maintained by management), through six-monthly
updates from our Internal Audit function, and through the
programme of deep dives into key risk areas which are presented
by risk owners to the Board and include analysis of controls and
mitigations in place. The Committee is satisfied that it has gained
sufficient assurance through those updates that the framework of
internal controls and risk management systems continue to operate
effectively. The Committee has also begun to consider our approach
to address the new UK Corporate Governance Code provision
29 requirements relating to the effectiveness of material controls,
with a view to ensuring that appropriate processes are established
in advance of the new provision becoming effective for the Group
(financial year commencing 1 October 2026).
The Audit Committee has again evaluated its own performance by
way of questionnaires completed by each member of the
Committee and other regular attendees. We discussed the outcome
of the evaluation at our meeting in December 2024, and I’m pleased
to report that the findings indicate that the Committee continues to
operate effectively.
The Committee has comprised wholly of independent Directors
throughout the year, and the Board has confirmed that it is
satisfied that I have recent and relevant financial experience as
recommended under the Code by virtue of my qualification as
a Chartered Accountant, my executive background in finance
roles, and my experience as an audit committee chair in other
non‑executive positions. As all members of the Committee have
experience as Directors of other companies in the retail and
leisure sector, the Board is also satisfied that the Audit Committee
as a whole continues to have competence relevant to the sector in
which the Group operates.
Rachel Addison
Audit Committee Chair
16 December 2024
Meetings and attendees
The Committee’s terms of reference provide that it should meet at least three times per year, and the Committee met on four occasions
during FY2024. The names of the attendees of the Audit Committee meetings are set out in the table on page 99.
The external auditor has the right to attend meetings, and the Chair of the Board, Chief Executive Officer, Chief Financial Officer and Director of Group
Finance, typically attend by invitation. Outside of the formal regular meeting programme, the Audit Committee Chair maintains a dialogue with key
individuals involved in the Group’s governance, including the Chairman, Chief Executive Officer, Chief Financial Officer and external audit lead partner.
Activity during the year
The Committee’s activity in FY2024 included the topics set out below:
Activities of the Committee during the year to 30 September 2024
Dec
Mar
May
Sept
Financial statements and reports
Review and recommendation to the Board of full-year results, the Annual Report and Accounts and
half-year results
Going concern assessment
Fair, balanced and understandable assessment
Review of significant accounting policies
Risk register review
External audit
External audit plan, engagement fees
External auditor reports to the Committee (including full-year reports)
Assessment of external auditor effectiveness
Independence confirmation and review of non-audit services, spend and policy
Internal controls
Annual review of Internal Audit function requirement
Review of risk management and internal controls
Internal audit reports
Assessment of internal audit effectiveness
Other
Review of results from Committee performance evaluation and discussion of related actions
Review of the Committee’s terms of reference
The key areas of focus of the Committee are discussed in more detail in the rest of this report.
Report of the Audit Committee continued
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Annual report and accounts 2024
Significant issues considered in relation to the financial statements
Significant issues and accounting judgements are identified by the finance team and the external audit process and are reviewed by the Audit
Committee. The significant issues considered by the Committee in respect of the year ended 30 September 2024 are set out in the table below:
Significant issues and judgements
How the issues were addressed
Valuation of property, plant and
equipment and right-of-use assets
The Committee reviewed and challenged the calculations and assumptions (including revenue growth
and discount rates applied) underlying the tests to identify potential impairment of PPE and ROU assets at
the Group’s cash generating units (CGUs). The Committee agreed with management’s judgement in
estimating the recoverable amount of PPE and ROU assets, and that the impairment charge recognised of
£5.3m (£2.8m for PPE and £2.5m for ROU assets) was appropriate.
Fair, balanced and understandable
At the request of the Board, the Committee has considered whether,
in its opinion, the FY2024 Annual Report and Financial Statements
are fair, balanced and understandable, and whether they provide the
information necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
In forming its opinion, the Committee considered whether the
Annual Report presents the full story of performance in the year and
whether the narrative reporting in the Strategic Report is consistent
with the financial performance of the business as set out in the
financial statements. We also assessed whether statutory measures
were given due prominence in line with Alternative Performance
Measures used, the alignment of significant accounting issues with
the key audit risks identified by KPMG, and overall whether the
layout and flow of the Annual Report was logical and understandable
to readers.
Following our review, the Committee was unanimous in its opinion
that it was appropriate to recommend to the Board that the FY2024
Annual Report and Financial Statements are fair, balanced and
understandable.
Risk management and internal controls
The Board has overall responsibility for setting the Group’s risk
appetite and ensuring that there is an effective risk management
framework to maintain appropriate levels of risk, and has delegated
responsibility for review of the risk management methodology, and
the effectiveness of internal controls, to the Audit Committee.
The Group’s system of internal controls comprises entity-wide,
high-level controls, controls over business processes and centre-
level controls. Policies and procedures, including clearly defined
levels of delegated authority, and detailed operational control
manuals, have been communicated throughout the Group. Internal
controls have been implemented in respect of the key operational
and financial processes of the business. The financial control
policies are designed to ensure the accuracy and reliability of
financial reporting and govern the preparation of the financial
statements. The Board is ultimately responsible for the Group’s
system of internal controls and risk management and discharges
its duties in this area by:
• holding regular Board meetings to consider the matters reserved
for its consideration;
• receiving regular management reports which provide an
assessment of key risks and controls, including through our
annual schedule of deep dive presentations on key risks facing
the Group;
• annual Board reviews of strategy, and regular (at least bi-annual)
reviews of the material risks and uncertainties (including emerging
risks) facing the business;
• ensuring there is a clear organisational structure with defined
responsibilities and levels of authority;
• ensuring there are documented policies and procedures in place
to address risk areas; and
• reviewing regular reports containing detailed information
regarding financial performance, rolling forecasts, and financial
and non-financial KPIs.
During FY2024, the Board received specific deep dive presentations
on data protection and security, food safety (including allergen
controls), targeted IT threat risks and cyber security, the expansion
risk linked to new centre openings, competition risk from other
bowling and experiential leisure operators, management retention,
concentration risk relating to amusement suppliers and the wider
economic environment. The programme of deep dives is agreed
annually, informed through the Board’s review of the wider Group risk
register and linked to the principal risks and uncertainties facing the
Group. The deep dives are designed to provide a more engaging
forum for the discussion of risks and associated controls, and to assist
in providing Board members with a broader understanding of how the
risks are identified and assessed by management, and how mitigations
and controls are implemented and their effectiveness tested.
The approach continues to be effective in promoting more focused
discussion and debate around the risks and associated controls.
The process by which the Audit Committee has monitored and
reviewed the effectiveness of the system of internal controls and
risk management during the year has included:
• reviewing the detailed internal controls matrix which identifies
and tracks actions against items such as control deficiencies
identified by KPMG, and challenging management on the
application of controls to gain assurance on their effectiveness;
• receiving updates from the Group’s Internal Audit function on
reviews of key operational processes and controls, including
health and safety, food safety, and payments and refunds;
• conducting an annual review of the Group’s control systems and
their effectiveness; and
• reporting and updating the Board on the risk and control culture
within the Group.
The Committee is satisfied that the Group’s framework of
internal control systems has continued to operate effectively
throughout FY2024.
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Internal audit
The Group’s Internal Audit function is focussed primarily on testing
the application of operational controls in our UK and Canadian
centres, as well as other central operational processes including
supplier on-boarding, employee expenses, customer refunds and
any other areas that the Audit Committee or management indicate
should be reviewed (informed by the internal controls matrix).
The centre audit programme involves the Internal Audit function
regularly testing the detailed processes and controls required to
be applied by centre teams. These included cash controls
(e.g cash security and amusement collections and employee sales
and corrections), stock control and security, licensing and legal
requirements, health and safety, and operating standards. Centre
audit findings are presented to the relevant centre manager,
Regional Support Manager and Chief Financial Officer for review,
with an emphasis on providing support to centre management and
team members to meet the required standards.
The Internal Audit function also conducts a programme of regular
in centre food and drink audits which cover categories such as
allergen controls, product storage, cleaning and maintenance and
temperature control. The food and drink audits are scored in a
similar way to the centre audits, and ensure that appropriate focus
is maintained on food safety standards.
Minimum centre audit and food and drink audit standards are
required to be met for centre teams to earn management bonuses.
Detailed summaries of centre performance against the required
standards are presented to the Audit Committee by a member of the
Internal Audit team twice per year, with trend analysis at a category
and top and bottom performing audit question level to support
challenge around areas requiring specific attention or improvement.
During FY2024, the Internal Audit function has begun work to
integrate the Canadian centre audit approach to mirror the process
and standards applied in the UK. Internal Audit resource in Canada
is now utilising the same platform for recording audit scores, with
reporting in a similar format to the UK process and included in
Internal Audit updates to the Audit Committee.
Specific areas covered in the Internal Audit function’s reports to
the Audit Committee during FY2024 included a review of zero
deposit bookings in centres and through our customer contact
centre, the process around centre refunds (including the
implementation of a limit on the value of refunds), and the process
of issuing gift vouchers.
The Committee has conducted its annual review and assessment
of the Internal Audit function, and has concluded that it continues
to operate effectively and provides appropriate assurance over key
areas of business risk. As part of the assessment, the Committee
also considered the other methods by which it receives assurance
on the effectiveness of risk management and internal controls. The
Committee remains satisfied that it receives appropriate assurance
through a combination of the Internal Audit function’s activities, and
its own review and challenge of the internal control and risk
management systems.
External auditor
The Audit Committee is responsible for overseeing the Group’s
relationship with its external auditor, KPMG. During the year, the
Audit Committee has discharged this responsibility by:
• agreeing the scope of the external audit and negotiating the
remuneration of the external auditor;
• receiving regular reports from the external auditor, including
with regard to audit strategy and year-end audits;
• regularly meeting the external auditor without management
present; and
• assessing the auditor’s independence and the effectiveness of
the external audit process.
External audit effectiveness review
The Audit Committee considers the effectiveness of the external
auditor on an ongoing basis during the year, considering its
independence, objectivity, and professional scepticism through its
own observations and interactions with the external auditor as well
as through feedback from the Chief Financial Officer and members
of the finance team. In considering auditor effectiveness, the
Committee has regard to the experience and expertise of the
external audit team, whether appropriately high standards of
integrity and objectivity are displayed in the auditor’s review of key
accounting judgements, and the extent to which the agreed audit
plan and strategy is fulfilled.
The ongoing consideration by the Committee is supplemented by
an annual formal review of the effectiveness of the external audit
process which is conducted following completion of the relevant
audit. For the FY2023 review, and in accordance with our
established practice, a report was prepared by the finance team
summarising its view of KPMG’s effectiveness based on interactions
during the audit and set out under three headings: ‘Mindset and
culture’; ‘Skills, character and knowledge’; and ‘Quality control’. The
report was discussed at the Committee’s meeting in March 2024.
Report of the Audit Committee continued
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Key points noted under each of the headings were as follows:
FY2023 review
Mindset and culture
• Professional and ethical mindset demonstrated throughout the engagement
• Consistent adherence to relevant accounting and auditing standards
• Approach focused on obtaining accurate and reliable information
• Impartiality maintained throughout the audit – evidenced in interactions with management
(including challenging assumptions)
• Open lines of communication maintained throughout the audit
Skills, character
and judgement
• Systematic and disciplined approach adopted to evaluate controls effectiveness, assess appropriateness
of accounting policies, and test accuracy and completeness of financial transactions
• Knowledge of the Group’s business enhances the auditor’s ability to identify and assess relevant risks,
and target the audit approach appropriately
• Appropriate scepticism and challenge demonstrated in reviews of key audit matters and areas of
management judgement
Quality and control
• Clear discussion on resource requirements for the audit was held with the lead audit partner and signed off
by the Audit Committee
• Commitment to quality was evident in attention to detail and documentation requirements
• Effective communications with the Group finance team
The report set out management’s conclusion that the FY2023 audit
process had been effective, with improvements over the prior year.
Having discussed the report, and taken account of its own ongoing
consideration of audit effectiveness, the Committee agreed with
management’s conclusion that the external audit process had been
effective, noting in particular that KPMG continued to provide an
independent and objective approach to the audit, and to demonstrate
an appropriate level of professional scepticism. The Committee was
also satisfied that KPMG had made appropriate judgements around
materiality, had identified the key areas of audit risk, and had made
reliable evaluations of audit evidence.
Non-audit services
The engagement of the external audit firm to provide non-audit
services to the Group can impact on the independence assessment.
The Company has a policy (which is reviewed annually) which requires
Audit Committee approval for any non-audit services which exceed
£25,000 in value. The engagement of the external auditor to provide
any non-audit services for less than £25,000 (with the exception of
the issuance of turnover certificates and financial covenant tests, for
which authority was delegated to the Chief Financial Officer to
approve where the fee is less than £5,000 per certificate) must be
discussed with the Audit Committee Chair in advance. All requests
to use the external auditor for non-audit services must be reviewed
by the Chief Financial Officer. The policy recognises that certain
non-audit services may not be carried out by the external auditor.
During the year ended 30 September 2024, KPMG was engaged to
provide permitted non-audit services relating to EBITDA certification
and turnover rent certificates for a fee of £8,000, representing 1.6
per cent of the total audit fee. This is shown in further detail in note 6
to the financial statements.
The Committee is satisfied that the level of non-audit fees and
services provided by KPMG does not impact on its independence.
Appointment and tenure
KPMG was first appointed as the Group’s external auditor in 2007.
Matt Radwell was appointed as lead audit partner for the FY2022
audit, and, in line with KPMG’s policy on lead partner rotation (and
absent any change in auditor as a result of a tender process), would
be required to rotate off the Group’s audit after the FY2025 audit.
The Company is required to undertake a mandatory tender process
at least every ten years (commencing from the date of the Group’s
IPO, at which point it became a ‘public interest entity’ for the purpose
of audit tendering requirements). Therefore, the Committee will be
required to conduct an audit tender no later than ahead of the FY2026
audit. Following the assessment of the independence, objectivity and
effectiveness of KPMG as external auditor summarised above, and
the conclusion that the Committee remains satisfied with KPMG’s
capabilities in delivering a quality and effective audit, the Committee
does not anticipate that a tender process will be conducted before it
is required. The Committee is therefore pleased to recommend that
KPMG be reappointed as the Group’s auditor at the 2025 AGM.
Having entered the FTSE 250 during the year, the Committee
confirms its compliance for the period since it became a FTSE 250
constituent to the financial year ended 30 September 2024
with The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014.
Rachel Addison
Audit Committee Chair
16 December 2024
Governance report
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Annual report and accounts 2024
Report of the Corporate
Responsibility Committee
Report of the Corporate Responsibility Committee
Corporate Responsibility Committee
Chair
Ivan Schofield
Committee members
Peter Boddy
Darren Shapland
Julia Porter
Stephen Burns
Melanie Dickinson
Mathew Hart
Number of meetings
held in the year
2
Specific duties of the Committee include:
• reviewing, challenging, and overseeing the content
of and approach to the ESG strategy and that it is
considered as part of the setting of the overall strategy
of the Group by the Board;
• reviewing and approving KPIs and related targets in line
with the ESG strategy;
• reviewing material risks and liabilities (including climate
risks) to the Group in relation to the ESG strategy;
• considering material regulatory and technical
developments in the field of ESG; and
• keeping up to date with ESG best practice and thought
leadership and keeping under review the Group’s
external reporting of relevant ESG performance
(including the Company’s application of the
recommendations of the TCFD).
Dear shareholders,
The Group convenes a Corporate Responsibility Committee (CRC),
to underscore the significance we place on environmental and social
considerations in our governance and decision-making processes.
In FY2024, I chaired two CRC meetings, which highlighted the
Committee’s important role in aiding the Board with ESG strategy
formulation and in overseeing the Corporate Responsibility
Steering Group to drive business transformation.
I am pleased to report that the Group has made excellent progress
this year, advancing on all aspects of our three-pillar sustainability
strategy in the UK.
In our efforts to operate safe and inclusive leisure destinations,
we have notably increased the number of concession games
played and achieved a record level of fundraising for our new
charity partner, Macmillan.
We have excelled again in creating outstanding workplaces for our
team members. We filled a record 58 per cent of management
vacancies internally, reflecting the effectiveness of our training and
development programmes. Additionally, we were once again
recognised as one of the best workplaces in the UK, with further
improved team member engagement and satisfaction levels.
We achieved another record year for waste recycling, expanded
the use of solar arrays, extended the use of renewable energy
sources, and further enhanced the sustainability credentials of
our new centre builds and refurbishments.
We continue to introduce elements of our ESG strategy into our
Canadian business, and will continue on this path in FY2025, as
we move to more closely aligning our Canadian operations and
thereby providing more comprehensive sustainability reporting.
Regarding our environmental impact and transition plan to achieve
net zero, we have again made progress in reducing our Scope 1 and 2
emissions in the UK and have improved our understanding of Scope
3 emissions in our supply chain through a key supplier engagement
programme. This has provided greater visibility into our partners’
measures and climate ambitions, and access to primary data for a
more accurate assessment of our current position.
For the first time, we publish our Scope 3 emissions for our Canadian
operations in this report, establishing a FY2024 baseline to help set
our emission reduction goals. We have also conducted a climate
risks and opportunities analysis for our Canadian business.
The Group remains committed to advancing our sustainability
agenda across all operations and progressing with our climate
transition plan.
Ivan Schofield
Corporate Responsibility Committee Chair
16 December 2024
Ivan Schofield
Corporate Responsibility Committee Chair
Read full biography on page 85
104
Hollywood Bowl Group plc
Annual report and accounts 2024
Report of the
Remuneration Committee
Report of the Remuneration Committee
Remuneration Committee
Chair
Julia Porter
Committee members
Rachel Addison
Ivan Schofield
Number of meetings
held in the year
5
Specific duties of the Committee include:
• setting the Remuneration Policy for Executive Directors,
Chairman and senior management;
• determining individual pay awards within the terms of the
agreed Policy; and
• ensuring that the Remuneration Policy operates to align
the interests of management with those of shareholders.
The Committee also has responsibility for reviewing pay
and conditions across the Group, and the alignment of
incentives and rewards with culture.
Role and responsibilities
The role of the Remuneration Committee is set out in its terms
of reference, which are available on the Group’s website. The
Committee’s primary purpose is to develop and determine the
Group’s Remuneration Policy for the Executive Directors, Chair
and senior management.
Dear shareholders,
On behalf of the Remuneration Committee, I am pleased to
present the Directors’ remuneration report for the year ended
30 September 2024.
This report has been prepared in accordance with The Large and
Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, The Companies (Directors’
Remuneration Policy and Directors’ remuneration report)
Regulations 2019, the FCA’s UK Listing Rules and the Code. The
report is split into three parts:
• my annual statement as the Chair of the Remuneration Committee;
• the Directors’ Remuneration Policy which is to be put to a binding
shareholder vote at the AGM in January 2025 and will then apply
for three years from the date of approval; and
• the annual report on remuneration, which sets out payments
made to the Directors and details the link between Company
performance and remuneration for FY2024. The annual report
on remuneration is subject to an advisory shareholder vote at
the 2025 AGM.
Julia Porter
Remuneration Committee Chair
Read full biography on page 85
105
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Report of the Remuneration Committee continued
Performance in FY2024 and remuneration outcomes
As detailed in the Strategic report, the Group delivered another strong
year of financial and operational performance with total revenue
growth of 7.1 per cent and Group adjusted EBITDA pre-IFRS 16 of
£87.6m. We have continued to make good progress in both integrating
and expanding our Canadian business, which traded ahead of
expectations in FY2024, and our UK centres have continued to deliver
strong performance against both financial and non-financial metrics
(including customer satisfaction and waste recycling). We opened four
new centres in the UK, and our refurbishment programme saw ten
centres receive successful upgrades and are delivering above our
return hurdle rate. Good progress was made across our key ESG
metrics and we met our key FY2024 targets across our three
sustainability pillars.
As set out earlier in this Annual Report, the Group will be paying a
final ordinary dividend of 8.08 pence per share.
Across the wider workforce, we have continued to ensure that we
offer competitive pay levels, supporting the recruitment and
retention of key talent. The average rate of hourly pay increases
across the Group was 10.0 per cent, for salaried centre team
members was 5.3 per cent, and for salaried support centre team
members was 4.2 per cent. These increases were effective from
1 April 2024. We continue to incentivise team members through
our centre management bonus schemes, with metrics aligned to
those that apply for the Executive Directors. In FY2024, we paid out
over £1.0m in centre level bonuses (with centre managers receiving
over 20 per cent of base pay and assistant managers receiving over
6 per cent of base pay) and over £600k in hourly team member
bonuses. We have also maintained our reputation for our positive
working environment, evidenced by our rank as one of ‘The UK’s
25 Best Big Companies to Work For’ and achieving a 2 star
high-quality work experience rating from WorkL.
The FY2024 bonus opportunity for the Executive Directors was up
to 100 per cent of salary, with 80 per cent based on Group adjusted
EBITDA pre-IFRS 16 targets, and the remaining 20 per cent split
equally on performance against the non-financial KPIs of customer
satisfaction (measured based on Group Overall Blended Index) and
waste recycling. A detailed breakdown of the measures is set out on
page 119. All targets were met in full, resulting in a bonus out-turn of
100 per cent of salary for each of the Executive Directors.
Our Executive Directors each received an award under the
Long-Term Incentive Plan (LTIP) in February 2022, which vests by
reference to a scorecard of metrics measured over a three-year
performance period ended 30 September 2024 with 70 per cent
subject to Group adjusted, diluted EPS performance, 10 per cent
subject to return on invested capital, and the remaining 20 per cent
subject to performance against equally weighted non-financial
measures (Scope 1 and Scope 2 carbon emissions reduction, and
team member development). Full details of the measures and our
performance against them is set out on page 120, with the total
outturn for the Executive Directors being 100 per cent of maximum
opportunity, and the Group adjusted, diluted EPS element having
paid out in full.
As is our usual practice, the Committee considered the formulaic
outcomes for the annual bonus and LTIP in the context of overall
business performance and the shareholder experience. In particular,
we took into account the robust financial performance, the share
price performance leading to our admission to the FTSE 250 during
the year, the level of dividends proposed to be paid to shareholders,
the approach to wider workforce pay, the continued expansion of
the Canadian business, and the continued improvement in our
customer engagement scores evidencing our operational focus on
delivering an exceptional customer experience. The Company
delivered a shareholder return of 31.9 per cent over FY2024,
outperforming both the FTSE Small Cap Index and FTSE 250 Index
(which delivered 18.2 and 19.1 per cent returns respectively during the
period). Over the three-year performance period under the 2022
LTIP award, Hollywood Bowl delivered a shareholder return of 44.0
per cent, again outperforming both the FTSE Small Cap Index and
FTSE 250 Index (which delivered 3.3 and 0.2 per cent returns
respectively in the same period). Taking all of this into account, the
Committee determined that the outcomes are appropriate and that
no discretion would be applied.
The Committee can confirm that the Remuneration Policy approved
by shareholders at our 2022 AGM operated as intended in the year
under review.
Remuneration Policy review
Our current Remuneration Policy was approved by shareholders at
the January 2022 AGM (receiving 98 per cent votes in favour) and
is approaching the end of its three year term. The Committee has
therefore undertaken a comprehensive review of the current Policy
to ensure that it continues to align with the Group’s reward principles
(as detailed on page 109) as well as the factors set out in Provision
40 of the Code.
The Committee believes that the current incentive structure
(annual bonus plus LTIP) remains appropriate and continues
to support the delivery of the Group strategy and the generation
of long-term sustainable shareholder value. However, following
consultation with the Group’s major shareholders, the Committee
is proposing changes to the incentive opportunities to better
reflect the increased size and complexity of the organisation,
alongside formalising the approach to annual bonus deferral.
Other minor refinements have also been proposed to provide
greater alignment with market practice in terms of good
governance and Policy flexibility.
Increase the maximum annual bonus opportunity from 100 per
cent to 150 per cent of base salary
A maximum bonus opportunity of 100 per cent of salary has been
in place since the Company’s IPO in 2016. Over the last eight years
the Group has delivered significant growth and expansion,
underpinned by strong financial and operational performance.
The Group’s market capitalisation has increased by c.120 per cent
from c.£240m at IPO to c.£525m, leading to the Group’s promotion
to the FTSE 250. Furthermore, the Group is well position to
continue to build on this progress and deliver long-term sustainable
value to shareholders.
With this in mind, and to ensure that the remuneration arrangements
remain competitive against companies of a similar size and
complexity, the maximum bonus opportunity under the new Policy
has been increased to 150 per cent of base salary. For FY2025,
the CEO and CFO will receive a maximum bonus opportunity of
150 per cent of base salary. The CPO will receive a maximum bonus
opportunity of 100 per cent of base salary, as has been the practice
for this position in the past.
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Annual report and accounts 2024
A maximum bonus opportunity of 150 per cent of base salary for
the CEO and CFO is positioned around the median compared to
the FTSE 250.
Bonus deferral
The Committee considers that bonus deferral for the current
Executive Directors is unnecessary due to their considerable
shareholdings in the Company. Under the new Policy, where an
Executive Director has not met their shareholding guideline,
50 per cent of any bonus earned will be deferred into shares
which vest after two years. This formalises an approach to bonus
deferral where the shareholding guideline has not been met.
Maximum LTIP award limit
The maximum award limit under the new Policy will be increased to
200 per cent of base salary (currently 150 per cent of base salary).
This is to align the maximum award limit in the Policy with the
maximum award limit in the LTIP rules. The Committee does not
currently intend to use this headroom and would consult with
shareholders should it wish to. For FY2025, the CEO and CFO will
receive a maximum LTIP opportunity of 150 per cent of base salary
and the CPO will receive a maximum bonus opportunity of 100 per
cent of base salary.
Non-Executive Director fees
Flexibility will be incorporated into the new Policy to pay additional
fees to Non-Executive Directors for additional responsibilities such
as chairing a committee. This is to align with typical market practice.
Introduction of relative Total Shareholder Return
(TSR as a LTIP performance metric)
Taking into account feedback from a number of the Group’s major
shareholders, a relative TSR metric will be introduced for the
FY2025 LTIP awards. Relative TSR will account for a 10% weighting
of the FY2025 LTIP awards and will be assessed against the
constituents of the FTSE 250 Index (excluding Investment Trusts).
A 10% weighting is considered appropriate at this time given the
current Executive Directors have significant shareholdings and are
therefore already strongly aligned to the shareholder experience.
The weighting will be kept under review for future years. The
performance metrics for the FY2025 LTIP awards are set out below.
FY2025 remuneration
Salary and benefits
The Committee reviewed Executive Director salaries during the
year, and in doing so was mindful of the need to ensure that any
decisions relating to Executive Director pay were taken in the
context of the experience of our wider workforce. The average rate
of hourly pay increases across the Group was 10.0 per cent, for
salaried centre team members was 5.3 per cent, and for salaried
support centre team members was 4.2 per cent, in April 2024. The
Committee also recognises the need to continue to motivate and
retain our high-performing team of Executive Directors to support
the delivery of our strategy and generation of shareholder value.
Having taken these factors into account, the Committee approved
base salary increases of 3 per cent for the Executive Directors with
effect from 1 October 2024.
FY2025 variable pay
As set out in the proposed Remuneration Policy, the maximum
bonus opportunity for the CEO and CFO for FY2025 has been set
at 150 per cent of salary, with the maximum bonus opportunity for
the CPO remaining at 100 per cent of salary. There are no
proposed changes to the maximum LTIP award level for Executive
Directors in FY2025 which remains at 150 per cent of salary for the
CEO and CFO and 100 per cent of salary for the CPO.
The FY2025 bonus outcomes will be determined based on the
achievement of a scorecard of financial and non-financial targets,
with 70 per cent based on Group adjusted EBITDA and 30 per cent
based on non-financial measures comprising customer satisfaction
measured based on Group Overall Blended Index, people
development and engagement, and lastly safety. Performance
targets are considered commercially sensitive and therefore, in
line with our usual practice, actual targets, performance against
them, and the resulting awards will be disclosed in the FY2025
Annual Report.
FY2025 LTIP awards will be subject to adjusted EPS (70 per cent
of award), relative TSR (10 per cent of award), return on centre
invested capital (10 per cent of award) and carbon emissions
reduction (10 per cent of award). The performance targets and
weightings which will apply to the FY2025 LTIP are set out on
page 127.
Stakeholder engagement
The Committee is regularly updated on the pay and benefits
arrangements for team members across the Group, and takes
into account colleague remuneration as part of its review of
executive remuneration. Engagement with the workforce on
remuneration matters, including to explain how executive pay is
aligned with the wider Company pay policy, is conducted through
engagement sessions led by the CEO and COO and the wider
team engagement survey.
Annual General Meeting
On behalf of the Board, I would like to thank shareholders for their
continued support. I am always happy to hear from the Company’s
shareholders. You can contact me via the Company Secretary if
you have any questions on this report or in relation to the Group’s
proposed Remuneration Policy.
Julia Porter
Remuneration Committee Chair
16 December 2024
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Governance report
UK Corporate Governance Code - factors considered in Remuneration Policy review
As part of its review of the Remuneration Policy, the Committee has considered the factors set out in provision 40 of the Code. In our view,
the proposed Policy addresses those factors as set out below:
Factor
How addressed
Clarity – remuneration arrangements
should be transparent and promote effective
engagement with shareholders and
the workforce.
We aim to ensure that our remuneration disclosures are clear and transparent. Remuneration
outcomes are set out in a consistent format each year, with detail on bonus and LTIP performance
measures and targets. Our full Remuneration Policy is set out on pages 109 to 118.
We have engaged with shareholders during the year with respect to proposed changes to the
Remuneration Policy, and the Committee receives regular updates on workforce pay and benefits
during the course of its activity.
Simplicity – remuneration structures should
avoid complexity and their rationale and
operation should be easy to understand.
Our remuneration structure is comprised of fixed and variable remuneration, with the performance
conditions for variable elements clearly communicated to, and understood by, participants. The LTIP
provides a clear mechanism for aligning Executive Director and shareholder interests, and the
diversity of measures in both the annual bonus and LTIP scheme allows for clear alignment with our
strategic pillars, rather than reliance solely on earnings-based measures. Non-financial measures
within the annual bonus also ensure our Executive Directors and wider team members are
incentivised based on key operational KPIs across the Group.
Risk – remuneration arrangements should
ensure reputational and other risks from
excessive rewards, and behavioural risks that
can arise from target-based incentive plans,
are identified and mitigated.
The Remuneration Policy and relevant scheme rules provide discretion to the Committee to reduce
award levels, and awards are subject to malus and clawback decisions. The Committee also has
overriding discretion to reduce awards where out-turns are not a fair and accurate reflection of
business performance.
Predictability – the range of possible values
of rewards to individual Directors, and any
other limits or discretions, should be identified
and explained at the time of approving
the Policy.
See scenario charts on page 116.
The Remuneration Policy outlines the threshold, target and maximum levels of pay that Executive
Directors can earn in any given year over the three-year life of the Remuneration Policy.
Proportionality – the link between individual
awards, the delivery of strategy, and the
long-term performance of the Company
should be clear. Outcomes should not reward
poor performance.
As shown in the scenario charts on page 116, variable, performance-related elements represent a
significant proportion of the total remuneration opportunity for our Executive Directors. The Committee
considers the appropriate financial and non-financial performance measures each year to ensure that
there is a clear link to strategy. The Committee is able to exercise discretion to reduce awards if
necessary to ensure that outcomes are a fair and accurate reflection of holistic business performance.
Alignment to culture – incentive schemes
should drive behaviours consistent with the
Group’s purpose, values, and strategy.
The Committee seeks to ensure that performance measures under the annual bonus scheme
incentivise behaviours consistent with the Group’s culture, purpose, and values. The LTIP clearly
aligns the Executive Directors’ interests with those of shareholders, ensuring a focus on delivering
against strategy to generate long-term value for shareholders.
The Remuneration Committee met on five occasions during the year and has met twice since the year end, and discussed the topics set out
in the table below:
Activities of the Committee during the year to 30 September 2024
Dec
Mar
May
June
Sep
Review of FY2023 performance and the formulaic bonus outcome, and approval of Directors’
bonuses for FY2023
Review/approval of Directors’ bonus KPIs/targets for FY2024 and FY2024 pay
Review/agree FY2024 LTIP performance targets
Remuneration Policy review (including proposed changes and shareholder consultation)
Agree approach to FY2025 bonus targets
Agree approach to FY2025 LTIP performance targets
Approve FY2025 Executive Director salaries
Review/agree share plan awards, vestings and dilution
Review of Directors’ remuneration report (including to ensure compliance with the Remuneration
Reporting Regulations)
Consideration of pay and conditions across the Group
Update on market practice
Review of 2024 AGM and proxy advisory comments
Review of the Committee’s terms of reference
Discussion of Committee evaluation results
Report of the Remuneration Committee continued
108
Hollywood Bowl Group plc
Annual report and accounts 2024
Directors’ Remuneration Policy
The Directors’ Remuneration Policy (the Policy) as set out below will
be put to a binding shareholder vote at the AGM on 30 January 2025
and will apply for the period of three years from the date of approval.
Policy summary
The Committee determines the Policy for the Executive Directors,
Chairman and senior executives for current and future years.
The Committee considers that a successful Policy needs to be
sufficiently flexible to take account of future changes in the
Company’s business environment and in remuneration practice.
In setting the Policy, the Committee considers the following reward
principles (as well as the factors in Provision 40 of the 2024 UK
Corporate Governance Code):
• Shareholder alignment – ensuring a strong link between reward
and individual and Company performance aligns the interests of
Executive Directors, senior management and employees with
those of shareholders.
• Competitive remuneration – maintaining a competitive package
against businesses of a comparable size and nature helps to
attract, retain and motivate high-calibre talent to enable the
Company’s continued growth and success as a listed company.
• Strategic alignment – providing a package with an appropriate
balance between short and longer-term performance targets
linked to the delivery of the Company’s business plan.
• Performance focused compensation – encouraging and
supporting a high-performance culture.
• Setting appropriate performance conditions – in line with the
agreed risk profile of the business.
Differences in policy from the wider employee population
The Group aims to provide a remuneration package for all
employees that is market competitive and operates the same
reward and performance philosophy throughout the business.
Quantum and the provision of certain components of remuneration
(such as long-term incentives) will vary by seniority.
Proposed changes to the Policy and summary of
decision-making process
During 2024, the Committee carried out a comprehensive review
of the current Policy. The outcome of the review and key changes
to the Policy are outlined on pages 106 to 107 and in the table below.
In determining the Policy, the Committee considered the strong
financial and operational performance delivered by the Group, the
growth and expansion of the business leading to the Group’s
promotion to the FTSE 250, and the Group’s strong positioning to
continue to build on this progress and deliver long-term sustainable
value to shareholders.
The Committee followed a robust process which included discussion
on the content of the Policy at Committee meetings. The Committee
considered input from the Executive Directors and its independent
advisers and consulted with major shareholders (representing at
the time approximately 75 per cent of the Company’s issued share
capital). To avoid any conflicts of interest, the Executive Directors
did not take part in any decision-making discussions regarding
changes to the Policy.
Element of remuneration
Current Policy
Proposed approach under new Policy
Rationale for change
Annual bonus plan
Maximum opportunity
100 per cent of base salary.
Increase to 150 per cent of base
salary for the CEO and CFO. CPO
to remain at 100 per cent of base
salary for FY2025.
The increased incentive
opportunity for the CEO and
CFO is more aligned with the
market given the increased size
and complexity of the business,
and reflects strong performance
in recent years.
Deferral
Deferral for the current Executive
Directors has been considered
unnecessary due to their
considerable shareholdings in
the Company.
Where an Executive Director has
not met the shareholding
guideline, 50 per cent of any
bonus earned will be deferred into
shares which vest after two years.
Formalises an approach to bonus
deferral where the shareholding
guideline has not been met.
Long Term Incentive Plan (LTIP)
Maximum opportunity
Maximum award limit of
150 per cent of base salary.
FY2024 LTIP award opportunity
was 150 per cent of base salary
for the CEO and CFO, and
100 per cent of base salary for
the CPO.
Maximum award limit increased
to 200 per cent of base salary.
No increase in opportunity for
the FY2025 LTIP awards: 150 per
cent of base salary for the CEO
and CFO, and 100 per cent of
base salary for the CPO.
To align the maximum award limit
in the Policy with the maximum
award limit in the LTIP rules.
Non-Executive Director fees
Additional fees
No scope to pay additional fees
for chairing a Committee.
Flexibility incorporated for
additional fees to be paid for
additional responsibilities such
as chairing a Committee.
To align with typical
market practice.
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Directors’ Remuneration Policy continued
Policy table
The following table sets out each element of remuneration and how it supports the Company’s short- and long-term strategic objectives.
How the element supports our short
and long-term strategic objectives
Operation
Opportunity
Performance metrics used, weighting
and time period applicable
Salary
Provides a base level of
remuneration to support the
recruitment and retention of
Executive Directors with the
necessary experience and
expertise to deliver the
Company’s strategy.
Base salaries are normally
reviewed annually. When
determining an appropriate level
of base salary, the Committee
considers: remuneration
practices within the Company;
the Executive Director’s
experience, responsibilities
and performance; the general
performance of the Company;
salary levels within companies of
a similar size and/or complexity;
and the economic environment.
Base salaries will normally increase
in line with increases made to the
wider employee workforce.
Increases above this level may be
awarded in certain circumstances
including, but not limited to: where
there has been an expansion in
role or responsibility; to reflect an
Executive Director’s development
or performance in role (e.g. to
align a new hire’s salary with the
market over time); where there is
a significant change in the Group’s
size and/or complexity; or where
the current salary level has fallen
behind the market over time.
None
Benefits
Provides a competitive level
of benefits.
The Executive Directors receive
benefits which include, but are
not limited to, family private
health cover, death in service life
assurance, income protection
insurance, car allowance, and
travel expenses for business-
related travel (including tax if any).
The Committee recognises the
need to maintain suitable flexibility
in the determination of benefits
that ensure it is able to support
the objective of attracting and
retaining employees. Accordingly,
the Committee would expect to
be able to adopt benefits such
as relocation expenses, tax
equalisation and support in
meeting specific costs incurred
by the Executive Directors.
The maximum will be set at
the cost of providing the
benefits described.
None
Pensions
Provides market competitive
retirement benefits.
The Committee retains discretion
to provide pension funding in the
form of a salary supplement or a
direct contribution to a pension
scheme. Any salary supplement
would not form part of the salary
for the purposes of determining
the extent of participation
in the Company’s
incentive arrangements.
The maximum Company
contribution to pension funding
for Executive Directors is aligned
with the contribution available
to the majority of the wider
employee workforce (currently
5 per cent of base salary).
None
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How the element supports our short
and long-term strategic objectives
Operation
Opportunity
Performance metrics used, weighting
and time period applicable
Annual bonus plan
Provides a significant incentive to
the Executive Directors linked to
achievement in delivering goals
that are closely aligned with the
Company’s strategy and the
creation of value for shareholders.
The Committee will determine
the bonus payable after the year
end based on the achievement
of performance metrics.
Where an Executive Director has
met the shareholding guideline,
normally the amount earned will
be paid fully in cash.
Where an Executive Director
has not met the shareholding
guideline, normally 50 per cent
of the amount earned will be paid
in cash and 50 per cent deferred
into shares which vest after
two years.
The Committee may award
dividend equivalents on deferred
share awards to the extent
they vest.
Malus and clawback provisions
will apply to enable the Company
to recover sums paid or withhold
the payment of any sum in the
event of a material misstatement
of results, error in calculation,
serious misconduct, reputational
damage, or material
corporate failure.
The maximum bonus opportunity
is up to 150 per cent of base
salary in respect of a
financial year.
For FY2025, the maximum bonus
opportunity is 150 per cent of
base salary for the CEO and CFO,
and 100 per cent of base salary
for the CPO.
Up to 25 per cent of
maximum may be earned for
threshold performance, with
100 per cent earned for
maximum performance.
The annual bonus outcomes
will be determined based on
achievement of a scorecard of
financial and non-financial
metrics, with at least half of the
bonus being based on
financial performance.
The Committee has discretion
to adjust the vesting outcome if
it is not deemed to be a fair and
accurate reflection of business
performance, the performance
of the individual or the
experience of shareholders or
other stakeholders over the
performance period.
LTIP
Incentivises the Executive
Directors to maximise total
shareholder returns by
successfully delivering the
Company’s long-term
objectives and to share in
the resulting increase in total
shareholder value.
Awards are granted annually in
the form of nil-cost options or
conditional awards of shares.
These will vest at the end of a
three-year period subject to the
Executive Directors’ continued
employment at the date of
vesting and the achievement of
the performance metrics. A
further two-year holding period
will apply post vesting.
The Committee may award
dividend equivalents on awards
to the extent they vest.
Malus and clawback provisions
will apply to enable the Company
to recover sums paid or withhold
the payment of any sum in the
event of a material misstatement
of results, error in calculation,
serious misconduct, reputational
damage, or material
corporate failure.
The maximum LTIP opportunity is
up to 200 per cent of base salary
in respect of a financial year.
For FY2025, the maximum LTIP
opportunity is 150 per cent of
base salary for the CEO and CFO,
and 100 per cent of base salary
for the CPO.
Up to 25 per cent of
maximum may vest for
threshold performance, with
100 per cent vesting for
maximum performance.
At least half of the awards will be
subject to financial performance
metrics, with the balance based
on non-financial metrics.
The Committee has discretion
to adjust the vesting outcome if
it is not deemed to be a fair and
accurate reflection of business
performance, the performance
of the individual or the
experience of shareholders or
other stakeholders over the
performance period.
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Directors’ Remuneration Policy continued
Policy table continued
How the element supports our short
and long-term strategic objectives
Operation
Opportunity
Performance metrics used, weighting
and time period applicable
All-Employee Plan
Encourages wide employee
share ownership and thereby
align employees’ interests
with shareholders.
The Company operates a HMRC
tax-qualifying Share Incentive
Plan and Sharesave Scheme in
which the Executive Directors
are eligible to participate.
In line with HMRC limits as
amended from time to time.
None
Shareholding guidelines
Supporting long-term
commitment to the Company
and the alignment of Executive
Director interests with those
of shareholders.
Executive Directors are
expected to build up and retain
a shareholding equivalent to
200 per cent of base salary.
Executive Directors must
normally retain 50 per cent of
any shares they acquire under
deferred bonus awards and LTIP
awards (post payment of income
tax and social security), until such
time as they have met the
shareholding guideline.
Executive Directors who step
down from the Board are normally
expected to retain a shareholding
for two years post stepping down,
equal to the lower of 200 per cent
of base salary and the actual
shareholding on stepping down.
Adherence to these guidelines
is a condition of continued
participation in the equity
incentive arrangements.
None
None
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How the element supports our short
and long-term strategic objectives
Operation
Opportunity
Performance metrics used, weighting
and time period applicable
Chairman and Non-Executive
Director fees
Provides a level of fees to support
recruitment and retention of a
Chairman and Non-Executive
Directors with the necessary
experience to advise and
assist with establishing and
monitoring the Company’s
strategic objectives.
The Board as a whole is
responsible for setting the
remuneration of the Non‑Executive
Directors, other than the Chairman,
whose remuneration is considered
by the Remuneration Committee
and recommended to the Board.
The Chairman and Non-Executive
Directors are paid a base fee.
Additional fees may be paid to
the Chairman or Non-Executive
Directors for additional
responsibilities including, but not
limited to, chairing committees
and Senior Independent Director
responsibilities.
The fees for the Chairman
and Non-Executive Directors
are set with reference to the time
commitment and responsibilities
expected of the roles and the
market rate.
The Chairman and Non-Executive
Directors may be eligible to
receive benefits linked to the
performance of their duties
including, but not limited to,
travel costs.
The Chairman and Non-Executive
Directors do not participate in
any variable remuneration or
benefits arrangements.
Fee increases for the Chairman
and Non-Executive Directors will
normally be considered taking
into account the general rise in
salaries across the wider
employee workforce.
Increases above this level may be
awarded in certain circumstances
including, but not limited to: where
there has been a material change
in time commitment and/or
responsibilities; where there is a
significant change in the Group’s
size and/or complexity; or where
there has been a material change
in market practice.
None
Choice of performance metrics
The performance metrics used for the annual bonus and LTIP
awards reflect the short- and long-term financial, operating and
strategic priorities of the business.
The performance targets are set annually in accordance with the
Group’s budget and longer-term forecasts. In selecting the targets,
the Committee also takes into account analysts’ forecasts,
economic conditions and the Committee’s expectation of
performance over the relevant period, to ensure that they are
sufficiently stretching.
Details of the performance metrics for the FY2025 annual bonus
and LTIP awards are set out on pages 126 and 127.
The Committee retains discretion to adjust or set different
performance metrics or targets or adjust the weightings attached
to performance metrics if there is a material event which causes
the Committee to determine that the original metrics, targets and/or
weightings are no longer appropriate and that an amendment is
required so that they achieve their original purpose and are not
materially more or less difficult to satisfy.
Share awards may be adjusted in the event of a variation of share
capital or demerger, delisting, special dividend or other event that
may affect the Company’s share price.
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Governance report
Directors’ Remuneration Policy continued
Recruitment policy
The Company’s approach when setting the remuneration of any newly recruited Executive Director will be assessed in line with the same
principles for the Executive Directors, as set out in the Policy table. The Committee’s approach to recruitment remuneration is to pay no
more than is necessary to attract candidates of the appropriate calibre and experience needed for the role from the market in which the
Company competes.
Policy
Salary
Base salary will be set taking into account the individual’s experience, market rates in companies
of a comparable size and complexity, internal relativities and current base salary.
If it is considered appropriate to appoint an Executive Director on a below market salary (for example,
to allow them to gain experience in role), their salary may be increased to a market level by way of above
wider employee workforce salary increases over a number of years. These increases will be subject to
continued development in role.
Buyout awards
The Committee’s policy is not to provide buyouts as a matter of course. However, should the
Committee determine that the individual circumstances of recruitment justify the provision of a buyout,
the equivalent value of any incentives that will be forfeited on cessation of the Executive Director’s previous
employment will be calculated, taking into account the following:
• the proportion of the performance period completed on the date of the Executive Director’s
cessation of employment;
• the performance conditions attached to the vesting of these incentives and the likelihood of them being
satisfied; and
• any other terms and conditions having a material effect on their value.
The Committee may then grant up to the same value as the value forfeited, where possible, under the
Company’s incentive plans. To the extent that it is not possible or practical to provide the buyout within
the terms of the Company’s existing incentive plans, the buyout may be awarded outside of these plans
as permitted under the Listing Rules.
Maximum level of
variable remuneration
The Committee will not offer non-performance-related variable remuneration and the maximum level
of variable remuneration which may be granted (excluding buy-out awards) is 350 per cent of salary,
which is in line with the current maximum limit under the annual bonus and LTIP.
Other elements
of remuneration
Other elements may be included in the following circumstances:
• If an interim appointment is made to fill an Executive Director role on a short-term basis.
• If exceptional circumstances require that the Chairman or a Non-Executive Director take on an executive
function on a short-term basis.
• If an Executive Director is recruited at a time in the year when it would be inappropriate to provide an annual
bonus or LTIP award for that year, subject to the limit on variable remuneration set out above, the quantum
in respect of the period employed during the year may be transferred to the subsequent year.
• If the Executive Director is required to relocate, reasonable relocation, travel and subsistence payments
may be provided (either via one-off or ongoing payments or benefits).
Where an existing employee is promoted to the Board, the terms set out above would apply from the date of promotion but there would be
no retrospective application of the Policy in relation to subsisting incentive awards or remuneration arrangements. Accordingly, prevailing
elements of the remuneration package for an existing employee would be honoured and form part of the ongoing remuneration of the person
concerned. These would be disclosed to shareholders in the Directors’ remuneration report for the relevant financial year.
The Company’s policy when setting fees for the appointment of a new Chairman and Non-Executive Directors is to apply the Policy which
applies to the current Chairman and Non-Executive Directors.
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Service agreements and letters of appointment
Each of the Executive Directors’ service agreements is for a rolling term and may be terminated by the Company or the Executive Director
by giving six months’ notice.
The Committee’s policy for setting notice periods is that a six-month period will apply for Executive Directors. The Committee may in exceptional
circumstances arising on recruitment allow a longer period, which would in any event reduce to six months following the first year of employment.
Name
Position
Date of service agreement
Notice period
by Company
(months)
Notice period
by Director
(months)
Stephen Burns
CEO
24 June 2016
6
6
Laurence Keen
CFO
24 June 2016
6
6
Melanie Dickinson
CPO
21 October 2021
6
6
The Chairman and Non-Executive Directors of the Company do not have service contracts; rather they are appointed by letters of appointment.
Their terms are subject to their re-election by the Company’s shareholders at the AGM scheduled to be held on 30 January 2025 and to
re-election at any subsequent AGM at which the Chairman and Non-Executive Directors stand for re-election. In line with our agreed
Non-Executive Director succession plans, Peter Boddy will not seek re-election at the 2025 AGM.
The details of the Chairman’s Non-Executive Directors’ current terms are set out below:
Name
Date of appointment
Commencement date of current term
Unexpired term as at 16 December 2024
Peter Boddy
13 June 2016
16 September 2022
1 month
Rachel Addison
1 September 2023
1 September 2023
1 year, 9 months
Julia Porter
1 September 2022
1 September 2022
9 months
Ivan Schofield
1 October 2017
1 October 2023
1 year, 10 months
Darren Shapland
1 December 2024
1 December 2024
2 years, 11 months
Illustrations of the application of the Policy
The charts below illustrates the remuneration that would be paid to each of the Executive Directors on a forward-looking basis under the
Policy under the following performance scenarios: (i) minimum; (ii) on target; (iii) maximum; and (iv) maximum with 50 per cent share price
appreciation. The elements of remuneration have been categorised into three components: (i) fixed; (ii) annual bonus; and (iii) LTIP, with the
assumptions set out below:
Element
Description
Minimum
On target
Maximum
Fixed
Salary, benefits and pension Included in full
Included in full
Included in full
Annual bonus
Annual bonus awards
No variable pay
Payout of 50 per cent
of the maximum bonus
Full payout of the
maximum bonus
LTIP
Awards under the LTIP
No variable pay
Vesting of 62.5 per cent
of the maximum award
Full vesting of the
maximum award
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Directors’ Remuneration Policy continued
Illustrations of the application of the Policy continued
Dividend equivalents have not been added to LTIP share awards for the purpose of this illustration.
At minimum, variable remuneration is 0 per cent of base salary, at on-target, variable remuneration represents 169 per cent of base salary,
and at maximum, variable remuneration represents 300 per cent of base salary. At maximum and accounting for a 50 per cent appreciation
in share price, variable remuneration represents 375 percent of base salary.
At minimum, variable remuneration is 0 per cent of base salary, at on-target, variable remuneration represents 169 per cent of base salary,
and at maximum, variable remuneration represents 300 per cent of base salary. At maximum and accounting for a 50 per cent appreciation
in share price, variable remuneration represents 375 percent of base salary.
At minimum, variable remuneration is 0 per cent of base salary, at on-target, variable remuneration represents 113 per cent of base salary,
and at maximum, variable remuneration represents 200 per cent of base salary. At maximum and accounting for a 50 per cent appreciation
in share price, variable remuneration represents 250 percent of base salary.
Minimum
On-target
Maximum
Maximum with 50%
SP appreciation
£2,328,653
23%
28%
40%
100%
31%
36%
27%
31%
36%
33%
15%
£1,969,113
£1,339,919
£530,955
Base
Bonus
LTIP
LTIP with 50% share price appreciation
CEO
Minimum
On-target
Maximum
Maximum with 50%
SP appreciation
£1,535,588
£1,299,949
£887,581
£357,394
23%
28%
40%
100%
31%
36%
27%
31%
36%
33%
15%
Base
Bonus
LTIP
LTIP with 50% share price appreciation
CFO
Minimum
On-target
Maximum
Maximum with 50%
SP appreciation
£670,564
£577,555
£414,789
£205,519
31%
36%
50%
100%
28%
32%
22%
28%
32%
28%
14%
Base
Bonus
LTIP
LTIP with 50% share price appreciation
CPO
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Payment for loss of office
The Committee will honour Executive Directors’ contractual entitlements. Service contracts do not contain liquidated damages clauses.
If a contract is to be terminated, the Committee will determine such mitigation as it considers fair and reasonable in each case. There are
no contractual arrangements that would guarantee a pension with limited or no abatement on severance or early retirement. There is no
agreement between the Company and its Executive Directors or employees providing for compensation for loss of office or employment
that occurs because of a takeover bid. The Committee reserves the right to make additional payments where such payments are made in
good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation); or by way of settlement or
compromise of any claim arising in connection with the termination of an Executive Director’s office or employment. When determining
any loss of office payment for a departing individual, the Committee will always seek to minimise cost to the Company whilst seeking to
address the circumstances at the time.
Remuneration element
Treatment on exit
Salary, benefits
and pension
Salary, benefits and pension will normally be paid over the notice period. The Company has discretion to
make a lump sum payment on termination equal to the salary, value of benefits and value of Company
pension contributions payable during the notice period. In all cases, the Company will seek to mitigate any
payments due.
Annual bonus plan
The payment of a bonus will be at the discretion of the Committee on an individual basis and will be dependent
on a number of factors, including the circumstances of the Executive Director’s departure and contribution to
the business during the year.
Unless the Committee determines otherwise, any bonus payment will be paid at the usual time following the
determination of performance metrics and be subject to a pro-rata reduction for time served during the
performance period.
Any bonus earned for the year of departure and, if relevant, for the prior year, may be paid wholly in cash at
the discretion of the Committee.
Deferred bonus awards
The extent to which any unvested awards will vest will be determined in accordance with the DBP rules.
If an Executive Director departs for any reason (other than dismissal for gross misconduct) during the deferral
period, their award will ordinarily continue to vest at the normal vesting date. In exceptional circumstances, the
Committee may decide that the Executive Director’s award will vest at the date of cessation of employment.
LTIP
The extent to which any unvested awards will vest will be determined in accordance with the LTIP rules.
Unvested awards will normally lapse on cessation of employment. However, if an Executive Director departs
as a ‘good leaver’, then unvested awards will remain capable of vesting at the normal vesting date. In exceptional
circumstances, the Committee may decide that the Executive Director’s awards will vest at the date of
cessation of employment or some other time. In either case, vesting depends on the extent to which the
performance metrics have been satisfied and a pro-rata reduction of the awards will be applied by reference
to the time of cessation (although the Committee has discretion to disapply time prorating if the circumstances
warrant it).
The post-vesting holding period for LTIP awards will continue to apply unless the Committee, in exceptional
circumstances, determines otherwise.
‘Good leavers’ includes cessation of employment by reason of: death; injury, ill health or disability; redundancy;
retirement; a sale of their employer or business in which they were employed; or any other reason at the
discretion of the Committee.
Other payments
In appropriate circumstances, payments may also be made in respect of items such as accrued holiday,
outplacement and legal fees.
The terms applying to awards under the SIP and Sharesave Scheme on cessation of employment will be
determined in accordance with the SIP and Sharesave Scheme rules.
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Directors’ Remuneration Policy continued
Change of control
The policy on the vesting of incentives on a change of control is summarised below:
Name of incentive plan
Change of control
Annual bonus plan
Bonus payments will be determined having regard to the extent to which performance metrics are satisfied
at the date of the change of control and, unless the Committee determines otherwise, payments will be
pro-rated for time.
The Committee has discretion to continue the operation of the bonus plan to the end of the financial year.
Deferred bonus awards
Deferred bonus awards will vest in full in the event of a change of control.
LTIP
LTIP awards will normally vest early in the event of a change of control. The level of vesting will be determined
having regard to the extent to which performance metrics are satisfied at the date of the change of control
and, unless the Committee determines otherwise, awards will be pro-rated for time.
Legacy arrangements
The Committee retains discretion to make any remuneration payment outside of Policy:
• where the terms of the payment were agreed before the Policy came into effect;
• where the terms of the payment were agreed at a time when the relevant individual was not a Director of the Company, and in the opinion
of the Committee, the payment was not in consideration of the individual becoming a Director of the Company; or
• to satisfy contractual arrangements under legacy remuneration arrangements.
For these purposes, ‘payments’ include the satisfaction of variable remuneration and, in relation to an award over shares, the terms of the
payment are ‘agreed’ no later than the time the award is granted.
Consideration of conditions elsewhere in the Company
The Committee considers pay and employment conditions across the Company when reviewing the remuneration of the Executive
Directors and other senior employees. In particular, the Committee considers the range of base pay increases across the Group, further
detail of which is set out in the Remuneration Committee Chair’s letter.
The Committee supports the Board’s initiative to ensure employee views and concerns are taken into account in its decision making and
has a clear understanding of pay and benefits at all team member levels in the Group. This includes decisions relating to the remuneration
arrangements for senior management, the Executive Directors and centre managers.
Consideration of shareholder views
The Committee considers shareholder feedback received in relation to the AGM each year and guidance from shareholder representative
bodies more generally.
As disclosed in the Remuneration Committee Chair’s letter, the views of our major shareholders were sought on proposed amendments to
the Policy and its implementation for FY2025.
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Single total figure of remuneration (audited)
Executive Directors (audited)
The table below sets out the single total figure of remuneration and breakdown for each Executive Director in respect of FY2024. Comparative
figures for FY2023 have been provided. Figures provided have been calculated in accordance with the UK disclosure requirements.
Name
Salary
£’000
Benefits 1
£’000
Pension
£’000
Bonus
£’000
LTIP
£’000 2, 3
Total
£’000
Total
fixed
pay
£’000
Total
variable
pay
£’000
Stephen Burns
2024
465.4
27.6
23.3
465.4
574.8
1,556.5
516.3
1,040.2
2023
443.2
29.6
22.5
443.2
586.2
1,524.7
495.3
1,029.4
Laurence Keen
2024
305.0
27.5
15.3
305.0
373.2
1,026.0
347.8
678.2
2023
290.5
27.4
14.5
290.5
380.6
1,003.5
332.4
671.1
Melanie Dickinson
2024
180.6
10.2
9.0
180.6
223.1
603.5
199.8
403.7
2023
172.0
7.8
8.6
172.0
205.5
565.9
188.4
377.5
1 Benefits include private medical insurance and car allowance, and the intrinsic value of SAYE awards granted in the year.
2 The 2023 LTIP figures were calculated based on the three-month average share price to the end of FY2023, plus the value of dividend equivalents for the period from the 2021
LTIP grant to 30 September 2023. The 2023 LTIP figure in the table above has therefore been adjusted to reflect the actual share price of 321 pence (being the closing share
price on the vesting date of 22 July 2024), and the value of dividend equivalents up to that date. The share price was 237 pence at the grant date of 22 July 2021 and the share
price therefore increased by 84 pence over the vesting period. The proportion of value disclosed in the above table attributable to share price appreciation is 26.2 per cent.
The Remuneration Committee did not exercise discretion in respect of the share price appreciation.
3 The 2024 LTIP figures were calculated based on the three-month average share price to 30 September 2024 (317.4 pence), plus the value of dividend equivalents for the period
from the 2022 LTIP grant to 30 September 2024. See page 120 for the amount attributable to share price appreciation. The actual value that vests, based on the closing price on
the vesting date, will be disclosed in next year’s Annual Report.
Non-Executive Directors (audited)
The table below sets out the single total figure of remuneration and breakdown for each Non-Executive Director:
2024
2023
Name
Fees
£’000
Taxable
benefits
£’000
Total
£’000
Fees
£’000
Taxable
benefits
£’000
Total
£’000
Peter Boddy – Chairman
148.8
—
148.8
141.7
—
141.7
Rachel Addison1
61.1
—
61.1
4.2
—
4.2
Nick Backhouse2
19.5
—
19.5
55.9
—
55.9
Julia Porter
53.5
—
53.5
50.9
—
50.9
Ivan Schofield
53.5
—
53.5
50.9
—
50.9
1 Rachel Addison was appointed as a Director with effect from 1 September 2023.
2 Nick Backhouse stepped down as a Director with effect from the AGM on 29 January 2024. Therefore, only his remuneration to that date is shown in the table above.
Bonus awards (audited)
Each of the Executive Directors was eligible to earn a bonus in respect of FY2024 of up to 100 per cent of base salary. 80 per cent of the
award was based on Group adjusted EBITDA pre-IFRS 16 targets, with the remaining 20 per cent split equally between the non-financial
key performance indicators of customer satisfaction (measured based on Group Overall Blended Index (OBI)) scores for the year, and the
percentage of waste sent to recycling (both of which are structured in the same way as for the wider employee population). Details of the
measures, and performance against them, is set out in the table below:
Metric
Weighting
Performance targets
Actual
% vesting
% of max
bonus
opportunity
Threshold
(25% of max.)
On target
(50% of max.)
Maximum
Group adjusted EBITDA pre-IFRS 16
80% £58.27m £61.33m £64.40m
£67.7m
100%
80%
Average Group OBI
10%
—
—
62%
64.6%
100%
10%
Waste recycling
10%
—
—
75%
82.9%
100%
10%
Total
100%
100%
The Committee considers that the Group adjusted EBITDA pre-IFRS targets were set at stretching levels taking into account the business
plan and market conditions at the time the targets.
The constituent measures of the average Group OBI target for FY2024 comprised overall satisfaction (OSAT), mystery shop scores (CEP) and cleaning
satisfaction (CSAT), with CSAT replacing the net promoter score (NPS) measure from the FY2023 OBI measure. As the CSAT target was a lower
percentage than the FY2023 NPS target, the OBI target of 62 per cent was lower than the 66 per cent target for FY2023 but was considered by the
Committee to be appropriately stretching and reflective of the average customer satisfaction targets applied to centre management bonus schemes.
Annual report on remuneration
119
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Annual report on remuneration continued
Bonus awards (audited) continued
The Committee committed to reviewing the level of payout in the context of wider Group performance and the shareholder and wider
stakeholder experience. As set out in the annual statement from the Remuneration Committee Chair, the Committee is comfortable that
the formulaic outcome is fair and appropriate in this wider context.
As a result, total bonuses awarded to the Executive Directors in respect of FY2024 and reflected in the single figure of remuneration table
above were £465,423 to Stephen Burns, £305,034 to Laurence Keen and £180,600 to Melanie Dickinson.
Long-Term Incentive Plan vesting of 2022 awards
The LTIP values included in the single total figure of remuneration table for FY2024 relate to the FY2022 LTIP award. Awards with a face
value of 100 per cent of salary were granted to the Executive Directors on 4 February 2022 and, following a three-year performance period
ending on 30 September 2024, are due to vest on 4 February 2025. The performance targets, actual performance and outturn are set out
in the table below:
Measure
Description
Weighting
Threshold
Target
Max.
Actual
performance
Vesting
percentage
against
measure
Vesting
percentage of
maximum
opportunity
Adjusted EPS1,2
Adjusted EPS for the final year
of the performance period –
FY2024
70%
14.65p
(25%
payout)
15.42p
(62.5%
payout)
16.19p
(100%
payout)
18.82p
100%
70%
Return on centre
invested capital
20% return on all centre
invested capital (refurbs and
new centres, excluding
maintenance)
10%
N/A
20% return
(100% payout)
38.5%
100%
10%
UK emissions ratio for
Scope 1 and Scope 2
UK intensity ratio (IR) of
under 50
10%
N/A
IR under 100
(100% payout)
56.3
100%
10%
UK team member
development
5% of UK team members
progressed through internal
development programmes
10%
N/A
5%
(100% payout)
11.0%
100%
10%
Total % vesting
100%
1 Adjusted EPS is defined as stated in the Group’s accounts and is subject to such adjustments as the Board, in its discretion, determines are fair and reasonable.
2 Vesting on a straight-line basis between threshold and target, and target and max performance.
No discretion was used by the Remuneration Committee, as the outcome is considered appropriate in the context of overall business
performance, further detail of which is set out in the Annual Statement from the Remuneration Committee Chair.
The table below shows the number of shares vesting based on the outturn shown above, and the value of dividend equivalents for dividends
paid in the period between grant of the awards and 30 September 2024.
Director
Position
2022 LTIP
award
Overall vesting
%
Number of
share
awards to vest
Value of
vested
shares 1
Value of
dividend
equivalents 2
Total value
(shown in single
figure Table
Value
attributable to
share price
appreciation 3
Stephen Burns
Chief Executive Officer
164,015
100%
164,015 £520,621
£54,207 £574,828 £108,250
Laurence Keen
Chief Financial Officer
106,503
100%
106,503 £338,065
£35,199 £373,264
£70,292
Melanie Dickinson
Chief People Officer
63,643
100%
63,643 £202,018
£21,034 £223,052
£42,004
1 Calculated based on the three-month average share price to 30 September 2024 (317.4 pence).
2 The actual value of dividend equivalents is an estimate and will be finalised at vesting, taking into account any dividends declared between 30 September 2024 and the vesting date.
3 The share price was 251.4 pence at the grant date of 4 February 2022 and the share price therefore increased by 66.0 pence since the grant date. The proportion of value shown in
the single figure table attributable to share price appreciation is 20.8 per cent. The Remuneration Committee did not exercise discretion in respect of the share price appreciation.
Long-term incentives awarded in FY2024 (audited)
Awards were made under the LTIP scheme on 30 January 2024. The following share awards were granted in the form of nil-cost options in
accordance with the Remuneration Policy:
Director
Position
Basis of award
Face value
Number of share
awards granted
Performance period
Stephen Burns
Chief Executive Officer
150% of salary
£698,133
238,362
01/10/2023 to 30/09/2026
Laurence Keen
Chief Financial Officer
150% of salary
£457,549
156,220
01/10/2023 to 30/09/2026
Melanie Dickinson
Chief People Officer
100% of salary
£180,597
61,661
01/10/2023 to 30/09/2026
A five-day average share price prior to grant of 292.8 pence was used to calculate the number of awards granted.
120
Hollywood Bowl Group plc
Annual report and accounts 2024
The following performance targets, which were disclosed in the Directors’ remuneration report last year, apply to the FY2024 LTIP awards.
Vesting for all measures occurs on a straight-line basis between threshold and target, and target and maximum performance:
Measure
Description
Weighting
Threshold
Target
Max.
Adjusted EPS1
Adjusted EPS for the final year of the
performance period – FY2026
70%
23.10 pence
(25% payout)
24.32 pence
(62.5% payout)
25.54 pence
(100% payout)
Return on centre
invested capital
20% return on all centre invested
capital (refurbs and new centres)
10%
18% return
(50% payout)
20% return
(75% payout)
22% return
(100% payout)
UK emissions ratio for
Scope 1 and Scope 2
UK intensity ratio (IR) of under 100
10%
IR at 55
(50% payout)
IR under 52
(75% payout)
IR under 50
(100% payout)
UK team member
development
5% of UK team members
progressed through internal
development programmes
10%
4%
(50% payout)
5%
(75% payout)
6%
(100% payout)
1 Adjusted EPS is defined as stated in the Group’s accounts and is subject to such adjustments as the Board, in its discretion, determines are fair and reasonable.
Payments to past Directors (audited)
No payments were made to past Directors in the year under review.
Payments for loss of office (audited)
No payments were made for loss of office in the year under review.
Statement of Directors’ shareholdings and share interests (audited)
The number of shares of the Company in which current Directors had a beneficial interest, and details of long-term incentive interests as at
30 September 2024, are set out in the table below:
Outstanding scheme interests 30 September 2024
Beneficially owned shares3
Total of all scheme
interests and
shareholdings at
30 September
2024
Unvested LTIP
interests subject
to performance
conditions
Scheme interests
not subject to
performance
measures 1
Vested but
unexercised
scheme
interests 2
Total shares
subject to
outstanding
scheme interests
As at
1 October
2023
As at
30 September
2024
Executive Directors
Stephen Burns
658,202
4,373
—
662,575
3,175,049
3,105,709
3,768,284
Laurence Keen
430,388
4,343
—
434,731
1,368,348
1,323,322
1,758,053
Melanie Dickinson
191,483
4,120
—
195,603
464,591
440,276
635,879
Non-Executive
Directors
Peter Boddy
—
—
—
—
874,839
539,839
539,839
Rachel Addison
—
—
—
—
—
—
—
Julia Porter
—
—
—
—
—
—
—
Ivan Schofield
—
—
—
—
166,691
86,691
86,691
Nick Backhouse4
—
—
—
—
18,784
—
—
1 Sharesave awards that have not vested.
2 LTIP awards that have vested but remain unexercised.
3 Share interests of Stephen Burns, Laurence Keen, Peter Boddy and Ivan Schofield include shares held by their connected persons.
4 Stepped down as a Director with effect from 30 January 2023.
As at 16 December 2024 Peter Boddy had increased his shareholding to 639,839 through the purchase of 100,000 shares. This transaction
was announced on 13 November 2024.
The Company has not been advised of any other changes to the interests of any Directors and their connected persons as set out in the
table above.
121
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Annual report on remuneration continued
Directors’ share ownership guidelines
Shareholding requirements in operation at the Company are currently 200 per cent of base salary. Non-Executive Directors are not subject
to a shareholding requirement.
Director
Shareholding
requirement
(percentage of salary)
Current shareholding
(percentage of salary) 1
Beneficially owned
shares held as at
30 September 2024
Shareholding
requirement met?
Stephen Burns
200%
2,069%
3,105,709
Yes
Laurence Keen
200%
1,345%
1,323,322
Yes
Melanie Dickinson
200%
756%
440,276
Yes
1 The share price of 310.0 pence as at 30 September 2024 has been used to calculate the current shareholding as a percentage of salary. Unvested LTIP shares and options do not
count towards satisfaction of the shareholding guidelines.
Executive Directors’ share plan interest movements during FY2024 (audited)
The tables below set out the Executive Directors’ interests in the LTIP scheme and the Sharesave scheme.
Awards under the Sharesave scheme are not subject to any performance conditions (other than continued employment on the vesting date).
The LTIP awards are subject to performance conditions as set out in the table on page 121.
Face values for LTIP awards are calculated by multiplying the number of shares granted during FY2024 by the average share price for the five
business days preceding the awards. Face value for the Sharesave scheme is calculated by reference to the exercise price of options granted.
Date of award
Vesting,
exercise or
release date 1
No. of shares/
awards held as
at 1 October
2023
Awarded 2
Exercised/
vested
Lapsed
No. of shares/
awards held
as at
30 September
2024
Grant/award
price in pence
(exercise price
for Sharesave)
Stephen Burns
LTIP
22/07/2021
22/07/2024
165,696
16,922
182,618
—
—
—
04/02/2022
04/02/2025
164,015
—
—
—
164,015
—
31/01/2023
31/01/2026
255,825
—
—
—
255,825
—
30/01/2024
30/01/2027
—
238,362
—
—
238,362
292.9
Sharesave
08/02/2022
01/02/2025
1,265
—
—
—
1,265
—
08/02/2023
01/02/2026
1,481
—
—
—
1,481
—
09/02/2024
01/02/2027
—
1,627
—
—
1,627
285.0
Laurence Keen
LTIP
22/07/2021
22/07/2024
107,594
10,988
118,582
—
—
—
04/02/2022
04/02/2025
106,503
—
—
—
106,503
—
31/01/2023
31/01/2026
167,665
—
—
—
167,665
—
30/01/2024
30/01/2027
—
156,220
—
—
156,220
292.9
Sharesave
08/02/2022
01/02/2025
1,265
—
—
—
1,265
—
08/02/2023
01/02/2026
1,777
—
—
—
1,777
—
09/02/2024
01/02/2027
—
1,301
—
—
1,301
285.0
Melanie Dickinson
LTIP
22/07/2021
22/07/2024
58,101
5,933
64,034
—
—
—
04/02/2022
04/02/2025
63,643
—
—
—
63,643
—
31/01/2023
31/01/2026
66,179
—
—
—
66,179
—
30/01/2024
30/01/2027
—
61,661
—
—
61,661
292.9
Sharesave
08/02/2022
01/02/2025
1,898
—
—
—
1,898
—
08/02/2023
01/02/2026
2,222
—
—
—
2,222
—
09/02/2024
01/02/2027
—
1,301
—
—
1,301
285.0
1 LTIP awards are subject to a post-vesting holding period pursuant to which the shares acquired on exercise (other than any shares sold to satisfy any tax or national insurance
liability) must be retained for a period of two years following the vesting date.
2 Either LTIPs awarded in the period, or the number of dividend equivalent shares on LTIPs vested in the period.
As noted on page 120, the performance targets for the LTIP award granted in FY2022 have been met in full. The awards will vest in
February 2025. The targets that apply to the award granted in FY2024 are shown on page 121.
122
Hollywood Bowl Group plc
Annual report and accounts 2024
Chief Executive Officer historical remuneration
The table below sets out the total remuneration delivered to the Chief Executive Officer over the last eight years since IPO, valued using the
methodology applied to the single total figure of remuneration:
Chief Executive Officer
2024
2023
2022
2021
2020
2019
2018
2017
Total single figure (£’000)
1,556.5
1,524.7
1,225.9
414.8
623.2
1,061.1
536.1
514.6
Annual bonus payment level achieved
(percentage of maximum opportunity)
100%
100%
100%
0%
0%
74.3%
68.1%
100%
LTIP vesting level achieved
(percentage of maximum opportunity)
100%
100%
100%
0%
81%
100%
N/A
N/A
Performance graph
The graph below shows the total shareholder return (TSR) performance of an investment of £100 in Hollywood Bowl Group plc’s shares from
its listing in September 2016 to the end of the year under review, compared with £100 invested in the FTSE Small Cap Index and FTSE 250
Index over the same period. The FTSE Small Cap Index and FTSE 250 Index were chosen as comparators because they represent broad
equity market indices, both of which the Company was a constituent of during FY2024.
FTSE Small Cap
FTSE 250
Hollywood Bowl
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
Sep-24
Jun-24
Mar-24
Dec-23
Sep-23
Jun-23
Mar-23
Dec-22
Sep-22
Jun-22
Mar-22
Dec-21
Sep-21
Jun-21
Mar-21
Dec-20
Sep-20
Jun-20
Mar-20
Dec-19
Sep-19
Jun-19
Mar-19
Dec-18
Sep-18
Jun-18
Mar-18
Dec-17
Sep-17
Jun-17
Mar-17
Dec-16
Sep-16
123
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Annual report on remuneration continued
Change in remuneration of Directors compared to Group employees
The table below sets out the percentage change in salary, taxable benefits and annual bonus set out in the single figure of remuneration
tables (on page 119) paid to each Director in respect of FY2021, FY2022, FY2023 and FY2024, compared to that of the average change for
employees in the Group as a whole.
Executive Directors
Non-Executive Directors
All Group
employees1
Stephen
Burns
Laurence
Keen
Melanie
Dickinson
Peter
Boddy
Rachel
Addison
Julia Porter
Ivan
Schofield
Nick
Backhouse
(until
30.01.24)
Salary/fees
(% Change)
FY2023–FY2024
5.0
5.0
5.0
5.0
5.0
5.0
5.0
N/A
9.6
FY2022–FY2023
7.5
8.5
13.6
4.7
N/A
N/A
6.5
4.3
7.4
FY2021–FY2022
5.0
5.3
—
11.3
N/A
N/A
11.3
11.1
10.9
FY2020–FY2021
0.2
0.2
—
(1.6)
N/A
N/A
(1.6)
(1.6)
4.2
Taxable benefits
(% Change)
FY2023–FY2024
(6.6)
0.5
35.2
N/A
N/A
N/A
N/A
N/A
(6.2)
FY2022–FY2023
(1.7)
(1.7)
38.2
N/A
N/A
N/A
N/A
N/A
50.5
FY2021–FY2022
1,100
1,074
—
N/A
N/A
N/A
N/A
N/A
(25.0)
FY2020–FY2021
(9.1)
(2.4)
—
N/A
N/A
N/A
N/A
N/A
(2.5)
Annual bonus
(% Change)
FY2023–FY2024
5.0
5.0
5.0
N/A
N/A
N/A
N/A
N/A
(27.8)
FY2022–FY2023
7.5
8.5
7.5
N/A
N/A
N/A
N/A
N/A
(28.2)
FY2021–FY2022
100
100
—
N/A
N/A
N/A
N/A
N/A
392.4
FY2020–FY2021
—
—
—
N/A
N/A
N/A
N/A
N/A
496.7
1 For FY2022 and FY2021 this reflects the change in average pay for all UK Group employees employed in both years. For FY2023 and FY2024 this reflects all UK Group employees
employed during FY2023 and FY2024 respectively.
CEO pay ratio
The table below shows the ratio between the single total figure of remuneration of the CEO for FY2024 and the lower quartile, median and
upper quartile pay of UK employees.
Methodology
25th percentile
ratio
50th percentile
ratio
75th percentile
ratio
Year ended 30 September 2024
Option A
73
71
59
Year ended 30 September 2023
Option A
72
69
55
Year ended 30 September 2022
Option A
68
63
41
Year ended 30 September 2021
Option A
27
25
22
Year ended 30 September 2020
Option A
50
44
38
Total UK employee pay and benefits figures used to calculate the CEO pay ratio
25th
percentile pay
£’000
Median
pay
£’000
75th
percentile pay
£’000
Salary
20.8
21.0
24.8
Total employee pay and benefits
21.2
22.0
26.5
Notes
1 The Group has chosen the Option A methodology to prepare the CEO pay ratio calculation, as this is the most statistically robust method, and is in line with the general preference
of institutional investors.
2 As ratios could be unduly impacted by joiners and leavers who may not participate in all remuneration arrangements in the year of joining and leaving, the Committee has
excluded any employee not employed throughout the financial year.
3 Employee pay data is based on full-time equivalent (FTE) pay for UK employees as at 30 September 2024. For each employee, total pay is calculated in line with the single figure
methodology (i.e. fixed pay accrued during the financial year and the value of performance-based incentive awards vesting in relation to the performance year). Leavers and
joiners are excluded. Employees on maternity or other extended leave are included pro-rata for their FTE salary, benefits and short-term incentives. No other calculation
adjustments or assumptions have been made.
4 CEO pay is per the single total figure of remuneration for 2024, as set out in the table on page 119.
124
Hollywood Bowl Group plc
Annual report and accounts 2024
Supporting information for the CEO pay ratio
The calculations used to determine these figures are reflective of the Group’s pay proposition across the workforce, as all pay elements have
been included to ensure equal comparisons.
The pay ratio has increased slightly this year primarily due to the majority of the CEO’s package being linked to performance related pay with
the LTIP value being linked to share price performance. There has been no trend over the 4 years being reported with the pay ratio increasing
in some years and decreasing in others. The Committee believes that the pay ratio is consistent with the pay, reward, and progression
policies for the UK employees taken as a whole.
Relative importance of the spend on pay
The table below sets out the relative importance of the spend on pay in FY2023 and FY2024 compared with other disbursements. All figures
provided are taken from the relevant Company accounts.
Disbursements
from profit in
FY2024
£m
Disbursements
from profit in
FY2023
£m
Percentage
change
Profit distributed by way of dividend
26.18
25.34
3.3
Overall spend on pay including Executive Directors
59.4
55.6
6.8
Shareholder voting at general meetings
The following table shows the results of the advisory vote on the Directors’ remuneration report at our 2024 AGM, and the binding vote on
our current Remuneration Policy, at our 2022 AGM:
Approval of the Directors’ remuneration report
(2024 AGM)
Approval of the Directors’ Remuneration Policy
(2022 AGM)
Total number of votes
% of votes cast
Total number of votes
% of votes cast
For (including discretionary)
118,517,947
83.43
143,669,643
98.09
Against
23,534,503
16.57
2,797,661
1.91
Votes withheld
6,592
N/A
1,351,869
N/A
External board appointments
Where Board approval is given for an Executive Director to accept an outside non-executive directorship, the individual is entitled to retain
any fees received. Stephen Burns is Non-Executive Chairman of The Inn Collection for which he receives an annual fee of £75,000.
Composition and terms of reference of the Remuneration Committee
The Board has delegated to the Remuneration Committee, under the agreed terms of reference, responsibility for the Remuneration Policy
and for determining specific remuneration packages for the Chairman, Executive Directors and such other senior employees of the Group
as the Board may determine from time to time. The terms of reference for the Remuneration Committee were reviewed during the year,
and are available on the Company’s website, www.hollywoodbowlgroup.com, and from the Company Secretary at the registered office.
All members of the Remuneration Committee are Non-Executive Directors. The Remuneration Committee receives assistance from the
Chairman, CEO, CFO, CPO and Company Secretary, who attend meetings by invitation, except when issues relating to their own
remuneration are being discussed. The Remuneration Committee met five times during the year. All members attended each meeting.
Advisers to the Remuneration Committee
During the financial year, the Committee received advice from Deloitte on all aspects of the Remuneration Policy for the Executive Directors
and members of the Executive team.
The Remuneration Committee is satisfied that the advice received from Deloitte during the year was objective and independent. Deloitte is
a member of the Remuneration Consultants Group, with the voluntary code of conduct of that body designed to ensure that objective and
independent advice is given to remuneration committees.
During the year to 30 September 2024, fees of £40,800 were paid to Deloitte for its advice to the Committee.
Other than in its role as remuneration adviser, Deloitte has no other connection with the Company or any individual Directors.
125
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Annual report on remuneration continued
Implementation of Remuneration Policy in FY2025
Subject to shareholders approving the Remuneration Policy at the AGM on 30 January 2025, the intended implementation of the Policy in
FY2025 is summarised below.
Salaries and fees
The Executive Director salaries, and Non-Executive Director fees, for FY2025 (effective from 1 October 2024) are set out below.
The rationale for these increases is set out in the Annual Statement from the Remuneration Committee Chair.
Salary
Name
2025
2024
Percentage
change
Stephen Burns
£479,386
£465,423
3.0%
Laurence Keen
£314,185
£305,034
3.0%
Melanie Dickinson
£186,018
£180,600
3.0%
The Board approved the increase of fees for the Non-Executive Directors by 3.0 per cent with effect from 1 October 2024. The Committee
approved an increase to the Chairman’s fee of 3.0 per cent, also with effect from 1 October 2024.
As set out in the Remuneration Policy to be submitted to shareholders for approval at the 2025 AGM, the Board has introduced an additional
fee of £5,000 per annum payable to the Chair of the Audit Committee and Chair of the Remuneration Committee. Subject to shareholder
approval at the AGM, these additional fees will be paid effective from 1 February 2025.
Chairman fee
£153,296
Senior Independent Director fee
£5,000
Base fee
£55,106
Chair of Audit Committee fee
£5,000
Chair of Corporate Responsibility Committee fee
£5,000
Chair of Remuneration Committee fee
£5,000
Benefits and pension
No changes are proposed to benefits or pension.
Annual bonus
The maximum bonus opportunity for the CEO and CFO will be 150 per cent of salary, and for the CPO 100 per cent of salary. Annual bonus
outcomes will again be based on a scorecard of financial and non-financial performance targets which are aligned to the business strategy.
The agreed measures and weightings for the FY2025 annual bonus are as follows:
Metric
Weighting
Group adjusted EBITDA pre-IFRS 16
70%
Customer satisfaction (measured based on Group Overall Blended Index)
10%
People Blended Index scorecard
10%
Safety scorecard
10%
The Remuneration Committee considers that the detailed performance targets for the FY2025 annual bonus awards are commercially
sensitive and that disclosing precise targets for the annual bonus plan in advance would not be in shareholder interests. Actual targets,
performance against them, and the resulting awards will be disclosed in the FY2025 Annual Report so that shareholders can fully assess
the basis for any payouts under the annual bonus plan.
126
Hollywood Bowl Group plc
Annual report and accounts 2024
LTIP
Awards will be made in FY2025 under the LTIP. The LTIP awards for the Executive Directors will be as follows:
• CEO 150 per cent of salary;
• CFO 150 per cent of salary; and
• CPO 100 per cent of salary.
These awards will vest three years after grant and will be subject to a further two-year holding period.
The following performance targets will apply to the FY2025 LTIP awards, with vesting on a straight line basis between threshold and target,
and target and maximum performance:
Measure
Description
Weighting
Threshold
Target
Max
Adjusted EPS1
Adjusted EPS for the final year of the
performance period – FY2027
70%
24.78 pence
(25% payout)
26.08 pence
(62.5% payout)
27.39 pence
(100% payout)
Relative total shareholder
return (TSR)
Percentage change in share price
plus the value of dividends invested
on the ex-dividend date over the
performance period compared with
the constituents of the FTSE 250
(excluding investment trusts)
10%
Ranked at median
based on TSR
performance
(25% payout)
N/A
Ranked at or
above upper
quartile based on
TSR performance
(100% payout)
Return on centre invested
capital
Return on all centre invested capital
(refurbs and new centres), excluding
maintenance
10%
18% return
(25% payout)
20% return
(62.5% payout)
22% return
(100% payout)
Emissions ratio for Scope 1
and Scope 2
Intensity ratio (IR) of under 100
10%
IR at 67
(25% payout)
IR under 65
(62.5% payout)
IR under 60
(100% payout)
1 Adjusted EPS is defined as stated in the Group’s accounts and is subject to such adjustments as the Board, in its discretion, determines are fair and reasonable.
The Committee believes these targets to be stretching in the context of the business plan, analyst consensus forecasts and the wider
economic environment.
On behalf of the Board
Julia Porter
Remuneration Committee Chair
16 December 2024
127
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Directors’ report
The Directors present their report for the year ended 30 September 2024.
Additional information which is incorporated by reference into this Directors’ Report, including information required in accordance with
the Companies Act 2006 and the UKLR 6.6.1 of the Financial Conduct Authority’s UK Listing Rules, can be located as follows:
Disclosure
Location
Future business developments
Strategic report – pages 2 to 47
Greenhouse gas emissions
Sustainability – page 56 to 59
People, culture and employee engagement
Sustainability – pages 26 to 27 and 52 to 53
Financial risk management objectives and policies (including hedging
policy and use of financial instruments)
Note 30 to the Financial Statements – pages 169 and 170
Exposure to price risk, credit risk, liquidity risk and cash flow risk
Details can be found on pages 74 to 80 of the Strategic report
and note 30 to the Financial Statements
Statement of compliance with 2018 UK Corporate Governance Code Corporate Governance report page 86
Details of long-term incentive schemes
Annual report on remuneration – pages 119 to 127
Directors’ responsibilities statement
Page 131
Directors’ interests
Details can be found on pages 121 and 122 of the Annual Report
on Remuneration
s172 Statement
Details can be found on pages 44 to 47 of the Strategic report
Stakeholder engagement in key decisions
Details can be found on pages 44 to 47
Directors
The Directors of the Company who held office during the year and subsequent to the year end are:
Peter Boddy
(Chair)
Stephen Burns
(Chief Executive Officer)
Laurence Keen
(Chief Financial Officer)
Melanie Dickinson (Chief People Officer)
Rachel Addison
(Non-Executive Director)
Nick Backhouse
(Senior Independent Director) (stepped down at the AGM in January 2024)
Julia Porter
(Non-Executive Director)
Ivan Schofield
(Non-Executive Director)
The roles and biographies of the Directors in office as at the date of this report are set out on pages 84 and 85. Darren Shapland was
appointed a Non-Executive Director and Chair Designate on 1 December 2024. There have been no other changes to the Directors between
the year end and the date of this report. The appointment and replacement of Directors is governed by the Company’s Articles of
Association (as detailed below), the UK Corporate Governance Code and the Companies Act 2006.
Articles of Association
The rules governing the appointment and replacement of Directors are set out in the Company’s Articles of Association. The Articles
of Association may be amended by a special resolution of the Company’s shareholders. A copy of the Articles of Association can be
found on the Company’s website: www.hollywoodbowlgroup.com/investors/corporate-governance.
Results and dividend
The results for the year are set out in the Consolidated income statement on page 128. The Directors recommend the payment of
a final dividend of 8.08 pence per share on 21 February 2025 (with a record date of 31 January 2025) subject to approval at the AGM on 30
January 2025.
128
Hollywood Bowl Group plc
Annual report and accounts 2024
Share capital
Details of the Company’s share capital, including changes during the year, are set out in note 23 to the Financial Statements. As at
30 September 2024, the Company’s share capital consisted of 172,083,853 ordinary shares of one pence each.
Ordinary shareholders are entitled to receive notice of, and to attend and speak at, any general meeting of the Company. On a show of
hands, every shareholder present in person or by proxy (or being a corporation represented by a duly authorised representative) shall have
one vote, and on a poll every shareholder who is present in person or by proxy shall have one vote for every share of which he or she is the
holder. The Notice of Annual General Meeting specifies deadlines for exercising voting rights and appointing a proxy or proxies.
Other than the general provisions of the Articles of Association (and prevailing legislation), there are no specific restrictions on the size of
a holding or on the transfer of the ordinary shares.
The Directors are not aware of any agreements between holders of the Company’s shares that may result in the restriction of the transfer
of securities or of voting rights. No shareholder holds securities carrying any special rights or control over the Company’s share capital.
Shares held by the Company’s Employee Benefit Trust rank pari passu with the shares in issue and have no special rights, but voting rights
and rights of acceptance of any offer relating to the shares rest with the plan’s Trustees and are not exercisable by employees.
Authority for the Company to purchase its own shares and share buyback programme
Subject to authorisation by shareholder resolution, the Company may purchase its own shares in accordance with the Companies Act 2006.
Any shares which have been bought back may be held as treasury shares or cancelled immediately upon completion of the purchase.
At the Company’s AGM held on 29 January 2024, the Company was generally and unconditionally authorised by its shareholders to make
market purchases (within the meaning of section 693 of the Companies Act 2006) of up to a maximum of 17,171,236 of its ordinary shares.
During the year, and pursuant to the £10m Share Buyback Programme announced on 5 February 2024, the Company bought back and
cancelled a total 128,214 (with a nominal value of £1,282) of its ordinary shares at a cost of £375,000 under this authority. Accordingly the
Company has an unexpired authority to purchase up to 17,043,022 ordinary shares with a nominal value of £170,430.22.
Directors’ interests
The number of ordinary shares of the Company in which the Directors were beneficially interested as at 30 September 2024 are set out
in the Annual Report on Remuneration on page 122.
Directors’ indemnities
The Company’s Articles of Association provide, subject to the provisions of UK legislation, an indemnity for Directors and officers of the
Company and the Group in respect of liabilities they may incur in the discharge of their duties or in the exercise of their powers.
Directors’ and officers’ liability insurance
Directors’ and officers’ liability insurance cover is maintained by the Company and is in place in respect of all the Company’s Directors at
the date of this report. The Company reviews its level of cover on an annual basis.
Compensation for loss of office
The Company does not have any agreements with any Executive Director or employee that would provide compensation for loss of office
or employment resulting from a takeover except that provisions of the Company share schemes may cause options and awards outstanding
under such schemes to vest on a takeover. Further information is provided in the Directors’ Remuneration Policy set out on page 117.
Significant interests
The table below shows the interests in shares (whether directly or indirectly held) notified to the Company in accordance with the Disclosure
Guidance and Transparency Rules as at 30 September 2024 and 16 December 2024 (being the latest practicable date prior to publication
of the Annual Report):
At 30 September 2024
At 16 December 2024
Name of shareholder
Number of
ordinary shares
of 1 pence
each held
Percentage of
total voting rights
held
Number of
ordinary shares
of 1 pence
each held
Percentage of
total voting rights
held
Aggregate of abrdn plc affiliated investment
management entities with delegated voting rights
on behalf of multiple managed portfolios
23,830,585
13.88%
23,830,585
13.88%
Slater Investments Limited
9,897,058
5.75%
8,384,451
4.87%
Schroders plc
9,092,419
5.28%
9,092,419
5.28%
JP Morgan Asset Management Holdings Inc.
8,732,438
5.07%
8,732,438
5.07%
Ameriprise Financial, Inc. and its group
(Columbia Threadneedle)
8,611,524
5.00%
8,546,984
4.97%
AXA Investment Managers
8,515,529
4.95%
8,515,529
4.95%
Invesco Ltd
8,134,709
4.73%
8,134,709
4.73%
129
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Employee involvement and policy regarding disabled persons
The Group actively encourages employee involvement and consultation and places emphasis on keeping its employees informed of the
Group’s activities and financial performance by such means as employee briefings and publication (via the Group’s intranet) to all staff of
relevant information and corporate announcements. The Group also publishes a weekly staff bulletin. Regular updates on team member
engagement activity are provided to the Board by the Chief Executive Officer, Chief People Officer and Chief Operating Officer. These
included feedback from regular team member engagement sessions, operational training and induction sessions. Further information
about employees, including how they are incentivised, can be found in the Sustainability section on pages 50 and 51.
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned.
In the event of a member of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and
that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of a disabled member
of staff should, as far as possible, be identical to that of other employees.
Branches outside the UK
The Company has 13 centres outside of the UK, in Canada as at 30 September 2024.
Political donations
The Company did not make any political donations during the current or prior year.
Change of control – significant agreements
There are a number of agreements that may take effect after, or terminate upon, a change of control of the Company, such as commercial
contracts, bank loan agreements and property lease arrangements. None of these are considered to be significant in terms of their likely
impact on the business as a whole.
Audit information
Each of the Directors at the date of the approval of this report confirms that:
• so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
• the Director has taken all the reasonable steps that he/she ought to have taken as a Director to make himself/herself aware of any
relevant audit information and to establish that the Company’s auditor is aware of the information.
The confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
Auditor
KPMG has indicated its willingness to continue in office and a resolution seeking to reappoint KPMG will be proposed at the
forthcoming AGM.
Annual General Meeting
The 2025 AGM of the Company will be held on 30 January 2025 at 9.30am. The notice convening the meeting, together with details of the
business to be considered and explanatory notes for each resolution, will be published separately and will be available on the Company’s
website and distributed to shareholders who have elected to receive hard copies of shareholder information.
The Strategic report on pages 2 to 77, the Corporate governance report on pages 82 to 127 and this Directors’ Report have been drawn up
and presented in accordance with, and in reliance upon, applicable English company law and any liability of the Directors in connection with
these reports shall be subject to the limitations and restrictions provided by such law.
By order of the Board
Laurence Keen
Chief Financial Officer
16 December 2024
Directors’ report continued
130
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Annual report and accounts 2024
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law they
are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable
law and have elected to prepare the parent Company financial statements in accordance with UK accounting standards and applicable law,
including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In preparing each of the Group and parent
Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant, and reliable and, in respect of the parent Company financial statements
only, prudent;
• for the Group Financial Statements, state whether they have been prepared in accordance with UK-adopted international accounting standards;
• for the Parent Company Financial Statements, state whether applicable UK accounting standards have been followed, subject to any
material departures disclosed and explained in the Parent Company Financial Statements;
• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s
transactions, and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors’ report, Directors’
remuneration report and corporate governance statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (“DTR”) 4.1.16R, the financial statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these financial statements provides no assurance over whether the
annual financial report has been prepared in accordance with those requirements.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• the Strategic report includes a fair review of the development and performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
We consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy.
By order of the Board
Stephen Burns
Laurence Keen
Chief Executive Officer
Chief Financial Officer
16 December 2024
16 December 2024
131
Hollywood Bowl Group plc
Annual report and accounts 2024
Governance report
Financial statements
133 Independent auditor’s report
141 Consolidated income statement and
statement of comprehensive income
142 Consolidated statement of
financial position
143 Consolidated statement of
changes in equity
144 Consolidated statement of cash flows
145 Notes to the financial statements
172 Company statement of financial position
173 Company statement of changes in equity
173 Company statement of cash flows
174 Notes to the Company
financial statements
180 Company information
132
Hollywood Bowl Group plc
Annual report and accounts 2024
Independent auditor’s report
To the members of Hollywood Bowl Group plc
1. Our opinion is unmodified
We have audited the financial statements of Hollywood Bowl Group
plc (“the Company”) for the year ended 30 September 2024 which
comprise the Consolidated income statement and statement of
comprehensive income, Consolidated statement of financial
position, Consolidated statement of changes in equity, Consolidated
statement of cash flows, Company statement of financial position,
Company statement of changes in equity, Company statement of
cash flows, and the related notes, including the accounting policies
in note 2.
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the parent Company’s affairs as at 30 September
2024 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including
FRS 102, The Financial Reporting Standard applicable in the UK
and Republic of Ireland; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
are described below. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our
audit opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the directors on 2 June 2016.
The period of total uninterrupted engagement is for the nine
financial years ended 30 September 2024. We have fulfilled our
ethical responsibilities under, and we remain independent of the
Group in accordance with, UK ethical requirements including the
FRC Ethical Standard as applied to listed public interest entities.
No non-audit services prohibited by that standard were provided.
Overview
Materiality:
£2.35m (2023: £2.2m)
group financial statements
as a whole
4.9% (2023: 4.6%) of adjusted
profit before tax
Coverage
93% (2023: 97%) of Group total
profits and losses before tax
Key audit matters
vs 2023
Recurring risks
Valuation of property, plant
and equipment and right of
use assets relating to the
golfing and combined-use
centres
Recoverability of parent
company investment in
subsidiaries
2. Key audit matters: our assessment of risks of
material misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. We summarise below the key audit
matters, in decreasing order of audit significance, in arriving at our
audit opinion above, together with our key audit procedures to
address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed,
and our results are based on procedures undertaken, in the context
of, and solely for the purpose of, our audit of the financial statements
as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion
on these matters.
133
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
2. Key audit matters: our assessment of risks of material misstatement continued
The risk
Our response
Valuation of property, plant and
equipment and right of use
assets relating to the golfing
and combined-use centres
Carrying amount of golfing and
combined-use centres (the “centres”)
within property, plant and equipment of
£3.156m (2023: £6.487m) and right of
use assets of £8.125m (2023: £1.7m) with
an impairment charge for the year
Included within impairment charge:
Impairment charge related to the
centres of £2.808m for property, plant
and equipment (2023: £1.633m) and
£2.508m for right of use assets (2023:
£1.277m).
Refer to page 101 (Audit Committee
Report), page 149 (accounting policy)
and pages 153 and 159 (financial
disclosures).
Forecast based valuation:
The Group has significant property, plant and
equipment (PPE), and right of use assets held
on its consolidated balance sheet.
The estimated recoverable amount of these
assets is subjective due to the inherent
uncertainty involved in forecasting and
discounting future cash flows. The key
assumptions used in the value in use (“VIU”)
calculations for estimating the recoverable
amount are expected revenues and costs in
the short-term cash flow forecasts, the
long-term growth rate and the discount rate.
The centres have performed below budget for
three years resulting in impairment charges
being recorded in the two previous years. In
addition, future economic forecasts,
characterised by high consumer price inflation,
high interest rates and the consequent erosion
of real disposable incomes, further increases
the risk that the centres are impaired.
We also identified a potential for management
bias in relation to the impairment assessment
and the estimated recoverable amount due to
pressures to demonstrate value in the centres.
The effect of these matters is that, as part of
our risk assessment for audit planning
purposes, we determined that the value in use
of the centres had a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole. In conducting our final audit work, we
reassessed the degree of estimation
uncertainty to be less than that materiality.
The financial statements (note 12) disclose the
impairment charge recognised for the centres,
along with the key assumptions applied in the
impairment assessment.
We performed the detailed tests below rather than
seek to rely on any of the group’s controls because
the nature of the balance is such that we would
expect to obtain audit evidence primarily through
the detailed procedures described.
Our procedures included:
• Re-performance: We re-performed the
calculations that management performed in
determining the VIU of each cash generating
unit and compared data used in the model
against source information, when applicable.
• Our experience: For the centres where
indications of impairment existed, we
evaluated the assumptions used in the
forecasts and plans by management, in
particular those relating to EBITDA growth
for the centres (revenue and costs). We also
challenged management as to the
achievability of their forecasts and business
plan, taking into account the historical
accuracy of previous forecasts, wider market
factors (such as market expectation of the
Group’s performance) and other specific
evidence to support the assumptions.
• Benchmarking assumptions: We compared
management’s assumptions to externally
derived data in relation to key assumptions
such as revenue growth, long term growth
rates, cost inflation and discount rates.
• Sensitivity analysis: We performed
sensitivity analysis to stress test the key
assumptions noted above, being revenue
growth, the long term growth rate, cost
inflation and discount rates.
• Assessing disclosures: We also assessed
whether the Group’s disclosures about the
sensitivity of the outcome of the impairment
assessment to changes in key assumptions
reflected the risks inherent in the carrying
amount of PPE and right of use assets in its
centre cash generating units.
We performed an assessment of whether
an understatement of the impairment
charge identified through these procedures
was material.
Our results
We found the carrying amount of the property,
plant and equipment and right of use assets
of the centre cash generating units, and the
related impairment charge, to be acceptable
(2023: acceptable).
Independent auditor’s report continued
To the members of Hollywood Bowl Group plc
134
Hollywood Bowl Group plc
Annual report and accounts 2024
2. Key audit matters: our assessment of risks of material misstatement continued
The risk
Our response
Recoverability of parent company’s
investment in subsidiaries
Investments of £87.6m (2023: £69.7m)
Refer to page 174 (accounting policy)
and page 176 (financial disclosures).
Low Risk – High value:
The carrying amount of the parent company
investments in subsidiaries represent 52%
(2023: 41%) of the parent company’s total
assets. Their recoverability is not at a high risk
of significant misstatement or subject to
significant judgement. However due to their
materiality in the context of the parent company
financial statements, this is considered to be the
area that had the greatest effect on our overall
parent company audit.
We performed the detailed tests below rather
than seeking to rely on any of the group’s controls
because the nature of the balance is such that we
would expect to obtain audit evidence primarily
through the detailed procedures described.
Our procedures included:
• Tests of detail: Comparing the carrying
amount of investments to the net assets of the
relevant subsidiaries included within the
Group consolidation, to identify whether the
net asset value, being an approximation of
their minimum recoverable amount, was
in excess of their carrying amount of
investments and assessing whether
those subsidiaries have historically been
profit-making.
• Comparing valuations: Where carrying
amount of investments exceeded the net
asset value of the relevant subsidiary,
comparing the carrying amount of
investments with the expected value of
the business based on a value in use model
for the subsidiary.
Our results
We found the Group’s assessment of the
recoverability of the parent company’s
investment in subsidiaries to be acceptable
(2023: acceptable).
We continue to perform procedures over the valuation of acquisition-related intangible assets arising from the current year acquisitions
in both Canada and the UK. However, following consideration of the quantum of the intangible assets being recognised and from our
understanding obtained from prior year acquisitions, we have not assessed this as one of the most significant risks in our current year
audit and, therefore, it is not separately identified in our report this year.
135
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
3. Our application of materiality and an overview of the
scope of our audit
Materiality for the Group financial statements as a whole was set at
£2.35m (2023: £2.2m), determined with reference to a benchmark of
profit before tax adjusted for the items described below, of £5.3m, of
which it represents 4.9% (2023: £2.2m determined with reference to
adjusted profit before tax, of which it represents 4.6%). The item we
adjusted for in 2024 was the impairment of property, plant and
equipment and right of use assets disclosed in notes 12 and 13
respectively. Materiality for the parent company financial statements
as a whole was set at £1.05m (2023: £1.1m), determined with reference
to a benchmark of parent company total assets (2023: parent
company total assets) of which it represents 0.62% (2023: 0.65%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the financial
statements as a whole.
Performance materiality was set at 75% (2023: 75%) of materiality
for the financial statements as a whole, which equates to £1.76m
(2023: £1.65m) for the group and £0.787m (2023: £0.825m) for the
parent company. We applied this percentage in our determination
of performance materiality because we did not identify any factors
indicating an elevated level of risk.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £117,500
(2023: £110,000), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Of the group’s 10 reporting components (2023: 12) we subjected 3 to
full scope audits for group purposes (2023: 2 to full scope audits for
group purposes and 2 to specified risk-focused audit procedures).
The components within the scope of our work accounted for the
percentages illustrated opposite.
The remaining 4% (2023: 3%) of total group revenue, 7% (2023: 4%)
of total profits and losses that made up Group profit before tax and
5% (2023: 1%) of total group assets is represented by 7 (2023: 8)
reporting components, none of which individually represented more
than 4% (2023: 1%) of any of total group revenue, total profits and
losses that made up Group profit before tax or total group assets.
For these components, we performed analysis at an aggregated
group level to re-examine our assessment that there were no
significant risks of material misstatement within these.
The Group team instructed component auditors as to the significant
risk areas to be covered, including the relevant risks detailed above
and the information to be reported back. The Group team approved
the component materialities, which ranged from £0.94m to £2.115m,
having regard to the mix of size and risk profile of the Group across
the components.
The work on 1 of the 3 components (2023: 0 components) was
performed by component auditors and the rest, including the audit
of the parent Company, was performed by the Group team. The
Group team performed procedures on the items excluded from
Group adjusted profit before tax. The scope of the audit work
performed was predominately substantive as we placed limited
reliance upon the Group’s internal control over financial reporting.
The Group team visited 1 component location in Canada to assess
the audit risk and strategy. Video and telephone conference
meetings were also held with this component auditor. At these
visits and meetings, the findings reported to the Group team were
discussed in more detail, and any further work required by the
Group team was then performed by the component auditor.
Full scope for group audit
purposes 2024
Full scope for group audit
purposes 2023
Specified risk-focused audit
procedures 2023
Residual components
Adjusted group
profit before tax
£48.1m (2023: £47.7m)
Group materiality
£2.35m (2023: £2.2m)
£117,500
Misstatements reported to the
audit committee (2023: £110,000)
£2.35m
Whole financialstatements materiality
(2023: £2.2m)
£1.76m
Whole financialstatements performance
materiality (2023: £1.65m)
£2.115m
Range of materiality at 3
components (£0.940m-£2.115m)
(2023: £0.625m to £1.98m at
4 components)
Group revenue
96%
(2023: 97%)
Group total profits
and losses
93%
(2023: 96%)
Group total assets
95%
(2023: 99%)
Normalised PBT
Group materiality
90
95
96
93
7
1
92
95
7
Independent auditor’s report continued
To the members of Hollywood Bowl Group plc
136
Hollywood Bowl Group plc
Annual report and accounts 2024
4. The impact of climate change on our audit
In planning our audit, we have considered the potential impact of
risks arising from climate change on the Group’s business and its
financial statements. The Group has set out its ambition for reducing
the environmental impact of its operations, including increasing on
site generation of renewable electricity and driving energy use
efficiency throughout its operations. Further information is provided
in the Group’s Sustainability Overview on pages 48 to 63 and the
Task Force and Climate-related Financial Disclosure Statement on
pages 64 to 73.
Climate change risks could have an impact on the Group’s business
and operations, including changing customer behaviours, business
interruption, introduction of costs of carbon taxes, transitioning to
reduced energy usage and changing energy sources.
As part of our audit, we have made enquiries of management to
understand the potential impact of climate change risk on the
Group’s financial statements and the Group’s preparedness for
this. We have performed a risk assessment of how the impact of
climate change may affect the financial statements and our audit.
There was no significant impact of this on our key audit matters.
Based on the procedures performed, we did not identify any
significant risk of climate change having a material impact on the
Group’s accounting estimates in this period.
We have also read the Group’s disclosures of climate related
information in the front half of the annual report, as set out on
pages 48 to 73. We have not been engaged to provide assurance
over the accuracy of these disclosures.
5. Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
parent Company or to cease their operations, and as they have
concluded that the Group’s and the parent Company’s financial
position means that this is realistic. They have also concluded that
there are no material uncertainties that could have cast significant
doubt over their ability to continue as a going concern for at least
a year from the date of approval of the financial statements
(“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s
and parent Company’s financial resources or ability to continue
operations over the going concern period. The risk that we
considered most likely to adversely affect the Group’s and parent
Company’s available financial resources is the demand for the
Group’s services being adversely impacted by current economic
forecasts, characterised by high consumer price inflation and
high interest rates, and the potential consequent erosion of real
disposable incomes.
We considered whether these risks could plausibly affect the
liquidity in the going concern period by assessing the degree of
downside assumption that, individually and collectively, could
result in a liquidity issue, taking into account the Group’s current
and projected cash and facilities (a reverse stress test).
We considered whether the going concern disclosure in note 2
to the financial statements gives a full and accurate description
of the Directors’ assessment of going concern, including the
identified risks and, dependencies, and related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements
is appropriate;
• we have not identified, and concur with the directors’ assessment
that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant
doubt on the Group’s or parent Company’s ability to continue as
a going concern for the going concern period;
• we have nothing material to add or draw attention to in relation
to the directors’ statement in note 2 to the financial statements
on the use of the going concern basis of accounting with no
material uncertainties that may cast significant doubt over the
Group and parent Company’s use of that basis for the going
concern period, and we found the going concern disclosure in
note 2 to be acceptable; and
• the related statement under the Listing Rules set out on page 80
is materially consistent with the financial statements and our
audit knowledge.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Group or the
parent company will continue in operation.
137
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
6. Fraud and breaches of laws and regulations
– ability to detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit and
inspection of policy documentation as to the Group and the
parent company’s high-level policies and procedures to prevent
and detect fraud, including the internal audit function, and the
Group and the parent company’s channel for “whistleblowing”,
as well as whether they have knowledge of any actual, suspected
or alleged fraud.
• Reading Board minutes.
• Considering remuneration incentive schemes and performance
targets for management including the EPS target for management
remuneration under the Long Term Investment Plan scheme.
• Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the audit.
This included communication from the Group audit team to
component audit teams of relevant fraud risks identified at the
Group level and request to full scope component audit teams to
report to the Group audit team any instances of fraud that could
give rise to a material misstatement at the Group level.
As required by auditing standards, and taking into account possible
pressures to meet profit targets and our overall knowledge of the
control environment, we perform procedures to address the risk of
management override of controls, in particular the risk that Group
and component management may be in a position to make
inappropriate accounting entries and the risk of bias in accounting
estimates and judgements, such as the assumptions used in
impairment testing. On this audit we do not believe there is a fraud
risk related to revenue recognition because of the limited
opportunity due to the high correlation to cash.
We also identified a fraud risk related to the valuation of property,
plant and equipment and right of use assets relating to the golfing
and combined-use centres, in response to possible pressures to
present an optimistic outlook for the Group.
Further detail in respect of the valuation of property, plant and
equipment and right of use assets relating to the golfing and
combined-use centres is set out in the key audit matter disclosures
in section 2 of this report.
We also performed procedures including:
• Identifying journal entries and other adjustments to test for all
full scope components based on risk criteria and comparing the
identified entries to supporting documentation. These included
those posted by senior management and those posted to
unusua accounts.
• Assessing significant accounting estimates for bias.
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements from
our general commercial and sector experience and through discussion
with the directors and other management (as required by auditing
standards), and discussed with the directors and other management the
policies and procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit. This included communication from the
Group audit team to the component audit team of relevant laws
and regulations identified at the Group level, and a request for
component auditors to report to the Group audit team any
instances of non-compliance with laws and regulations that could
give rise to a material misstatement at the Group level.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation), distributable
profits legislation and taxation legislation and we assessed the
extent of compliance with these laws and regulations as part of
our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation. We identified
the following areas as those most likely to have such an effect: data
protection, health and safety, employment law, food safety and
licensing (Licensing Act and Gaming Act) recognising the nature
of the Group’s activities.
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of the
directors and inspection of regulatory and legal correspondence, if any.
Therefore if a breach of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned
and performed our audit in accordance with auditing standards.
For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of
non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Independent auditor’s report continued
To the members of Hollywood Bowl Group plc
138
Hollywood Bowl Group plc
Annual report and accounts 2024
7. We have nothing to report on the other information in
the Annual Report
The directors are responsible for the other information presented in
the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report
and the directors’ report;
• in our opinion the information given in those reports for the financial
year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with
the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and
longer‑term viability
We are required to perform procedures to identify whether there is
a material inconsistency between the directors’ disclosures in
respect of emerging and principal risks and the viability statement,
and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or
draw attention to in relation to:
• the directors’ confirmation within the viability statement on pages 80
and 81 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that
would threaten its business model, future performance, solvency
and liquidity;
• the Principal Risks disclosures describing these risks and how
emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the viability statement of how they have
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate,
and their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the viability statement, set out on
pages 80 and 81 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures
are materially consistent with the financial statements and our
audit knowledge.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements audit.
As we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were
made, the absence of anything to report on these statements
is not a guarantee as to the Group’s and parent company’s
longer‑term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
• the directors’ statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
• the section of the annual report describing the work of the Audit
Committee, including the significant issues that the Audit Committee
considered in relation to the financial statements, and how these
issues were addressed; and
• the section of the annual report that describes the review of
the effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Compliance Statement relating to the Group’s compliance with
the provisions of the UK Corporate Governance Code specified
by the Listing Rules for our review. We have nothing to report in
these respects.
8. We have nothing to report on the other matters on
which we are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
• adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
139
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Independent auditor’s report continued
To the members of Hollywood Bowl Group plc
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 131,
the statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the Group
and parent company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level
of assurance, but does not guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities
The Company is required to include these financial statements in
an annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides
no assurance over whether the annual financial report has been
prepared in accordance with those requirements.
10. The purpose of our audit work and to whom we owe
our responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body,
for our audit work, for this report, or for the opinions we have formed.
Matthew Radwell (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
20 Station Road,
Cambridge,
CB1 2JD
16 December 2024
140
Hollywood Bowl Group plc
Annual report and accounts 2024
Note
Before exceptional
items
30 September
2024
£’000
Exceptional
items (note 5)
30 September
2024
£’000
Total
30 September
2024
£’000
Before exceptional
items
30 September
2023
£’000
Exceptional
items (note 5)
30 September
2023
£’000
Total
30 September
2023
£’000
Revenue
3
230,399
—
230,399
214,829
253
215,082
Cost of goods sold
(39,178)
—
(39,178)
(37,491)
—
(37,491)
Centre staff costs
(45,723)
—
(45,723)
(40,717)
—
(40,717)
Gross profit
145,498
—
145,498
136,621
253
136,874
Other income
—
607
607
—
—
—
Administrative expenses
6
(90,169)
(2,430)
(92,599)
(80,333)
(2,456)
(82,789)
Operating profit
55,329
(1,823)
53,506
56,288
(2,203)
54,085
Finance income
9
1,722
—
1,722
1,440
—
1,440
Finance expenses
9
(12,040)
(430)
(12,470)
(10,220)
(225)
(10,445)
Profit before tax
45,011
(2,253)
42,758
47,508
(2,428)
45,080
Tax charge
10
(12,700)
(148)
(12,848)
(10,866)
(63)
(10,929)
Profit for the year attributable
to equity shareholders
32,311
(2,401)
29,910
36,642
(2,491)
34,151
Other comprehensive income
Retranslation loss of foreign
currency denominated operations
(1,057)
—
(1,057)
(544)
—
(544)
Total comprehensive income
for the year attributable to
equity shareholders
31,254
(2,401)
28,853
36,098
(2,491)
33,607
Basic earnings per share (pence)
11
17.42
19.92
Diluted earnings per share (pence)
11
17.31
19.82
The accompanying notes on pages 145 to 171 form an integral part of these Financial Statements.
Consolidated income statement and statement of comprehensive income
Year ending 30 September 2024
141
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Consolidated statement of financial position
As at 30 September 2024
Note
30 September
2024
£’000
30 September
2023
£’000
ASSETS
Non-current assets
Property, plant and equipment
12
101,936
78,279
Right-of-use assets
13
172,767
150,811
Goodwill and intangible assets
14
100,323
89,376
Deferred tax asset
22
518
1,309
375,544
319,775
Current assets
Cash and cash equivalents
16
28,702
52,455
Trade and other receivables
17
9,420
8,116
Corporation tax receivable
1,268
715
Inventories
18
2,897
2,445
42,287
63,731
Total assets
417,831
383,506
LIABILITIES
Current liabilities
Trade and other payables
19
30,427
29,109
Lease liabilities
13
14,231
12,553
44,658
41,662
Non-current liabilities
Other payables
19
7,116
5,208
Lease liabilities
13
204,011
181,652
Deferred tax liability
22
3,993
1,960
Provisions
20
5,848
5,084
220,968
193,904
Total liabilities
265,626
235,566
NET ASSETS
152,205
147,940
Equity attributable to shareholders
Share capital
23
1,721
1,717
Share premium
24
39,716
39,716
Capital redemption reserve
24
1
—
Merger reserve
24
(49,897)
(49,897)
Foreign currency translation reserve
24
(1,190)
(133)
Retained earnings
24
161,854
156,537
TOTAL EQUITY
152,205
147,940
The accompanying notes on pages 145 to 171 form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors on 16 December 2024.
Signed on behalf of the Board by:
Laurence Keen
Chief Financial Officer
Company registration number 10229630
142
Hollywood Bowl Group plc
Annual report and accounts 2024
Consolidated statement of changes in equity
For the year ended 30 September 2024
Share
capital
£’000
Capital
redemption
reserve
£’000
Share
premium
£’000
Merger
reserve
£’000
Foreign currency
translation reserve
£’000
Retained
earnings
£’000
Total
£’000
Equity at 30 September 2022
1,711
—
39,716
(49,897)
411
146,479
138,420
Shares issued during the year
6
—
—
—
—
—
6
Dividends paid (note 31)
—
—
—
—
—
(25,338)
(25,338)
Share-based payments (note 28)
—
—
—
—
—
1,204
1,204
Deferred tax on share-based
payments
—
—
—
—
—
41
41
Retranslation of foreign currency
denominated operations
—
—
—
—
(544)
—
(544)
Profit for the year
—
—
—
—
—
34,151
34,151
Equity at 30 September 2023
1,717
—
39,716
(49,897)
(133)
156,537
147,940
Shares issued during the year
5
—
—
—
—
—
5
Share buy back
(1)
1
—
—
—
(379)
(379)
Dividends paid (note 31)
—
—
—
—
—
(26,180)
(26,180)
Share-based payments (note 28)
—
—
—
—
—
1,782
1,782
Deferred tax on share-based
payments
—
—
—
—
—
184
184
Retranslation of foreign currency
denominated operations
—
—
—
—
(1,057)
—
(1,057)
Profit for the year
—
—
—
—
—
29,910
29,910
Equity at 30 September 2024
1,721
1
39,716
(49,897)
(1,190)
161,854
152,205
The accompanying notes on pages 145 to 171 form an integral part of these Financial Statements.
143
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Consolidated statement of cash flows
For the year ended 30 September 2024
Note
30 September
2024
£’000
30 September
2023
£’000
Cash flows from operating activities
Profit before tax
42,758
45,080
Adjusted by:
Depreciation of property, plant and equipment (PPE)
12
11,167
10,142
Depreciation of right-of-use (ROU) assets
13
14,752
12,965
Amortisation of intangible assets
14
935
820
Impairment of PPE and ROU assets
12, 13
5,316
2,210
Net interest expense
9
10,748
9,005
Loss on disposal of property, plant and equipment and software
88
306
Landlord settlement
5
(607)
—
Share-based payments
28
1,782
1,204
Operating profit before working capital changes
86,939
81,732
Increase in inventories
(294)
(251)
Increase in trade and other receivables
(1,183)
(2,849)
Increase in payables and provisions
2,495
2,741
Cash inflow generated from operations
87,957
81,373
Interest received
1,782
1,305
Income tax paid – corporation tax
(10,536)
(9,100)
Bank interest paid
(166)
(296)
Lease interest paid
(11,615)
(9,808)
Landlord settlement
5
607
—
Net cash inflow from operating activities
68,029
63,474
Cash flows from investing activities
Acquisition of subsidiaries
32
(13,757)
(7,716)
Subsidiary cash acquired
32
78
319
Purchase of property, plant and equipment
(37,979)
(21,801)
Purchase of intangible assets
(946)
(1,057)
Proceeds from sale of assets
—
10
Net cash used in investing activities
(52,604)
(30,245)
Cash flows from financing activities
Payment of capital elements of leases
(12,305)
(11,419)
Issue of shares
—
6
Share buy back
(379)
—
Dividends paid
(26,180)
(25,338)
Net cash used in financing activities
(38,864)
(36,751)
Net change in cash and cash equivalents for the year
(23,439)
(3,522)
Effect of foreign exchange rates on cash and cash equivalents
(314)
(89)
Cash and cash equivalents at the beginning of the year
52,455
56,066
Cash and cash equivalents at the end of the year
16
28,702
52,455
The accompanying notes on pages 145 to 171 form an integral part of these Financial Statements.
144
Hollywood Bowl Group plc
Annual report and accounts 2024
Notes to the financial statements
For the year ended 30 September 2024
1. General information
Hollywood Bowl Group plc (together with its subsidiaries, ‘the Group’) is a public limited company whose shares are publicly traded on the
London Stock Exchange and is incorporated and domiciled in England and Wales. The registered office of the Parent Company is Focus 31,
West Wing, Cleveland Road, Hemel Hempstead, HP2 7BW, United Kingdom. The registered company number is 10229630. A list of the
Company’s subsidiaries is presented in note 15.
On 2 October 2023, the Group acquired the assets and long leasehold of Lincoln Bowl. On 7 November 2023 the Group acquired
Woodlawn Bowl Inc. in Guelph, Ontario and on 11 November 2023, the assets and lease of Lucky 9 Bowling Centre Limited in Richmond,
British Columbia, as well as its associated restaurant and bar, Monkey 9 Brewing Pub Corp. On 24 June 2024 the Group acquired Stoked
Entertainment Centre Limited in Saskatoon, Saskatchewan. These four acquisitions are consolidated in Hollywood Bowl Group plc’s
Financial Statements with effect from their respective date of acquisition.
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 Directors of the Group are responsible for the consolidated Financial Statements, which comprise the Financial Statements of the
Company and its subsidiaries as at 30 September 2024.
2. Material accounting policies
The material accounting policies applied in the consolidated Financial Statements are set out below. These accounting policies have been
applied consistently to all periods presented in these consolidated Financial Statements. The financial information presented is as at and
for the financial years ended 30 September 2024 and 30 September 2023.
Statement of compliance
The consolidated Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards
(‘IFRS Accounting standards’) and the requirements of the Companies Act 2006. The functional currencies of entities in the Group are
Pounds Sterling and Canadian Dollars. The consolidated Financial Statements are presented in Pounds Sterling and all values are rounded
to the nearest thousand, except where otherwise indicated.
Basis of preparation
The consolidated Financial Statements have been prepared on a going concern basis under the historical cost convention, except for fair
value items on acquisition (see note 32).
The Company has elected to prepare its Financial Statements in accordance with FRS 102, the Financial Reporting Standard applicable in
the UK and Republic of Ireland. On publishing the Parent Company Financial Statements here together with the Group Financial Statements,
the Company has taken advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and
statement of comprehensive income and related notes that form a part of these approved Financial Statements.
Judgements made by the Directors, in the application of these accounting policies, that have significant effect on the Financial Statements
and estimates with a significant risk of material adjustment in the next year are discussed on page 153.
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 below 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.
The results of Lincoln Bowl, Woodlawn Bowl Inc., Lucky 9 Bowling Centre Limited as well as its associated restaurant and bar, Monkey 9
Brewing Pub Corp and Stoked Entertainment Centre Limited are included from the respective dates of acquisition, being 2 October 2023,
7 November 2023, 11 November 2023 and 24 June 2024.
Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue
during the year.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. The Group has two types of dilutive potential ordinary shares, being those unvested shares granted under the
Long-Term Incentive Plans and Save-As-You-Earn plans.
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Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
2. Accounting policies continued
Standards issued not yet effective
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. These are listed below:
Standard/interpretation
Content
Applicable for financial
years beginning on/after
IAS 1 Classification of
Liabilities as Current or
Non-current and
Non-current liabilities
with covenants
Amendments made to IAS 1 Presentation of Financial Statements in 2020 and 2022
clarify that liabilities are classified as either current or non-current, depending on the rights
that exist at the end of the reporting period. Classification is unaffected by the entity’s
expectations or events after the reporting date (for example, the receipt of a waiver or a
breach of covenant that an entity is required to comply with only after the reporting period).
1 October 2024
IAS 7 and IFRS 7
Supplier finance
arrangements
The amendments introduce new disclosures relating to supplier finance arrangements that
assist users of the financial statements to assess the effects of these arrangements on an
entity’s liabilities and cash flows and on an entity’s exposure to liquidity risk.
1 October 2024
IFRS 16 Lease liability in
a sale and leaseback
These amendments include requirements for sale and leaseback transactions in IFRS 16 to
explain how an entity accounts for a sale and leaseback after the date of the transaction.
Sale and leaseback transactions where some or all the lease payments are variable lease
payments that do not depend on an index or rate are most likely to be impacted.
1 October 2024
IAS 21 Lack of
exchangeability
An entity is impacted by the amendments when it has a transaction or an operation in a
foreign currency that is not exchangeable into another currency at a measurement date for a
specified purpose. A currency is exchangeable when there is an ability to obtain the other
currency (with a normal administrative delay), and the transaction would take place through
a market or exchange mechanism that creates enforceable rights and obligations.
1 October 2025
Amendments to IFRS 9
and IFRS 7
Classification and
measurement of
financial instruments
On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond
to recent questions arising in practice, and to include new requirements not only for financial
institutions but also for corporate entities. These amendments:
• clarify the date of recognition and derecognition of some financial assets and liabilities, with a
new exception for some financial liabilities settled through an electronic cash transfer system;
• clarify and add further guidance for assessing whether a financial asset meets the solely
payments of principal and interest (SPPI) criterion;
• add new disclosures for certain instruments with contractual terms that can change cash
flows (such as some financial instruments with features linked to the achievement of
environment, social and governance targets); and
• update the disclosures for equity instruments designated at fair value through other
comprehensive income (FVOCI).
1 October 2026
IFRS 18 Presentation
and disclosure in
financials statements
IFRS 18 will replace IAS 1 Presentation of financial statements and introduces the following
key requirements:
• Entities are required to classify all income and expenses into five categories in the statement
of profit or loss, namely the operating, investing, financing, discontinued operations and
income tax categories. Entities are also required to present a newly-defined operating profit
subtotal. Entities’ net profit will not change.
• Management-defined performance measures (MPMs) are disclosed in a single note in the
financial statements.
• Enhanced guidance is provided on how to group information in the financial statements.
In addition, all entities are required to use the operating profit subtotal as the starting point for
the statement of cash flows when presenting operating cash flows under the indirect
method. The Group is still in the process of assessing the impact of the new standard,
particularly with respect to the structure of the Group’s statement of profit or loss, the
statement of cash flows and the additional disclosures required for MPMs.
1 October 2027
None of the above amendments are expected to have a material impact on the Group.
Climate change
In preparing the consolidated financial statements, management has considered the impact of climate change, taking into account the
relevant disclosures in the strategic report, including those made in accordance with the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD) and the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulation 2022 set out
on pages 64 to 73 and our sustainability targets.
The expected environmental impact on the business has been modelled. The current available information and assessment did not identify
any risks that would require the useful economic life of assets to be reduced in the year or identify the need for impairment that would impact
the carrying values of such assets or have any other impact on the financial statements.
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2. Accounting policies continued
Climate change continued
For many years, Hollywood Bowl Group plc has placed sustainability at the centre of its strategy and has been working on becoming a more
sustainable business. A number of actions have been implemented to help mitigate and adapt against climate-related risks. The cost and
benefits of such actions are embedded into the cost structure of the business and are included in our five-year plan. This includes the roll-out
of Pins on Strings technology, solar panels and the move to 100 per cent renewable energy. The five-year plan has been used to support our
impairment reviews and going concern and viability assessment (see viability statement on pages 80).
Our TCFD disclosures on pages 64 to 73 include climate-related risks and opportunities based on various scenarios. When considering
climate scenario analysis, and modelling severe but plausible downside scenarios, we have used the NGFS ‘early action’ scenario as the
most severe case for climate transition risks, and the IPCC’s SSP5-8.5 as the most severe case for physical climate risk. Whilst these
represent situations where climate could have a significant effect on the operations, these do not include our future mitigating actions
which we would adopt as part of our strategy. The climate transition plan to net zero outlines that it may not be feasible to completely
abate Scope 1, 2 and 3 emissions by 2050. In this instance, the Group will offset residual emissions through actions like carbon removals
or ecosystem restoration.
The assessment with respect to the impact of climate change will be kept under review by management, as the future impacts depend
on factors outside of the Group’s control, which are not all currently known.
Going concern
In assessing the going concern position of the Group for the Consolidated Financial Statements for the year ended 30 September 2024, the
Directors have considered the Group’s cash flow, liquidity, and business activities, as well as the principal risks identified in the Group’s Risk Register.
As at 30 September 2024, the Group had cash balances of £28.7m, no outstanding loan balances and an undrawn RCF of £25m.
The Group has undertaken a review of its liquidity using a base case and a severe but plausible downside scenario.
The base case is the Board approved budget for FY2025 as well as the first three months of FY2026 which forms part of the Board
approved five-year plan. As noted above, the costs and benefits of our actions on climate change are embedded into the cost structure
of the business and included in our five-year plan. Under this scenario there would be positive cash flow, strong profit performance and
all covenants would be passed. It should also be noted that the RCF remains undrawn. Furthermore, it is assumed that the Group adheres
to its capital allocation policy. The most severe downside scenario stress tests for reasonably adverse variations in the economic
environment leading to a deterioration in trading conditions and performance.
Under this severe but plausible downside scenario, the Group has modelled revenues dropping by 3 and 4 per cent from the assumed base case
for FY2025 and FY2026 respectively and inflation continues at an even higher rate than in the base case, specifically around cost of labour in
respect of National Living and Minimum wage as well as increased National Insurance contributions.
The model still assumes that investments into new centres would continue, whilst refurbishments in the early part of FY2025 would be
reduced. These are all mitigating actions that the Group has in its control. Under this scenario, the Group will still be profitable and have
sufficient liquidity within its cash position to not draw down the RCF, with all financial covenants passed.
Taking the above and the principal risks faced by the Group into consideration, the Directors are satisfied that the Group and Company have
adequate resources to continue in operation and meet their liabilities as they fall due for the foreseeable future, a period of at least 12 months
from the date of this report.
Accordingly, the Group and Company continue to adopt the going concern basis in preparing these Financial Statements.
Revenue
Revenue from customers is the total amount receivable by the Group for goods and services supplied, excluding VAT, other sales taxes
and discounts, and excludes amounts collected on behalf of third parties. The Group’s performance obligations in respect of individual
revenue streams are outlined below.
Revenue arising from bowling and mini-golf is recognised when the customer actually plays, with deposits paid in advance being held on
the balance sheet until that time and then recognised as income.
Revenue for food and drink is recognised when the product has been transferred to the buyer at the point of sale, which is generally when
payment is received.
Revenue for amusements is recognised when the customer plays the amusement machine.
Revenue from installation of bowling equipment contracts is recognised over time using costs incurred to date relative to total estimated
costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer
of control or the enhancement of the customer’s assets. Contract costs included in the calculation are comprised of materials and
subcontracts’ costs. This is not considered to be material revenue for the Group and is not therefore a significant area of judgement.
Revenue from customers is disaggregated by major product and service lines, being bowling, food and drink, amusements, mini golf,
installation of bowling equipment and other. Disaggregated revenue from contracts with customers is disclosed in note 3 on page 154.
Given the nature of the Group’s revenue streams, recognition of revenue is not considered to be a significant area of judgement.
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Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
2. Accounting policies continued
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. The chief
operating decision-makers have been identified as the management team including the Chief Executive Officer and Chief Financial Officer.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses.
The Board considers that the Group’s activity constitutes two operating and two reporting segments, being the provision of ten-pin bowling
and mini-golf centres in the United Kingdom and the provision of ten-pin bowling and mini-golf centres and the installation of bowling equipment
in Canada, as defined under IFRS 8. Management reviews the performance of the Group by reference to total results against budget.
The total profit measures are operating profit and profit after tax for the period, both disclosed on the face of the consolidated income
statement and statement of comprehensive income. No differences exist between the basis of preparation of the performance measures
used by management and the figures in the Group’s financial information, as adjusted where appropriate.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated
services are rendered by employees of the Group.
(ii) Defined contribution plans
The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of
the Group. The annual contributions payable are charged to the income statement. The Group also contributes to the personal pension
plans of the Directors.
(iii) Share-based payments
The Group operates equity-settled share-based payment plans for its employees, under which the employees are granted equity
instruments of Hollywood Bowl Group plc. The fair value of services received in exchange for the equity instruments is determined by
reference to the fair value of the instruments granted at grant date. The fair value of the instruments includes any market performance
conditions and non-vesting conditions. The expense is recognised over the vesting period of the award taking into account any non-market
performance and service conditions.
The cost of equity-settled transactions is recognised together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award.
(iv) Save-As-You-Earn plans
The Group operates two equity-settled SAYE plans. The fair value is calculated at the grant date using the Black-Scholes pricing model.
The resulting cost is charged to the Group income statement over the vesting period. The value of the charge is adjusted to reflect
expected and actual levels of vesting.
Cash and cash equivalents
Cash and cash equivalents includes cash at bank and on hand, short-term deposits with banks and other financial institutions, and credit and
debit card receivables.
Leases
The Group as lessee
The Group assesses whether a contract is, or contains, a lease, at inception of the contract. The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which it is the lessee from the date at which the leased asset becomes
available for use by the Group, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value
assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease
unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
The lease term is the non-cancellable period for which the lessee has the right to use an underlying asset plus periods covered by an extension
option if an extension is reasonably certain. The majority of property leases are covered by the Landlord and Tenant Act 1985 (LTA) which gives
the right to extend the lease beyond the termination date. The Group expects to extend the property leases covered by the LTA. This extension
period is not included within the lease term as a termination date cannot be determined as the Group is not reasonably certain to extend the
lease given the contractual rights of the landlord under certain circumstances.
Lease liabilities are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease incentives receivable and variable lease payments that depend on an index
or a rate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because
the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made.
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2. Accounting policies continued
Leases continued
The Group as lessee continued
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the lease
payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments).
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as
described in the ‘impairment’ policy.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated
non-lease components as a single arrangement. The Group has not used this practical expedient. For contracts that contain a lease component
and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component
on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those leases that
have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term
leases and leases of low-value assets are recognised as expenses on a straight-line basis over the lease term.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to
settle that obligation. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the end of the reporting
period, and are discounted to present value where the effect is material.
Dilapidation provision
A provision will be recorded if, as lessee, the Group has a commitment to make good the property at the end of the lease, which would be for
the cost of returning the leased property to its original state. Changes to the dilapidation provision are recorded in property, plant and equipment.
Property, plant and equipment
Freehold land and building assets were included at fair value on the acquisition of Teaquinn in FY2022. Subsequent additions are recorded
at cost less accumulated depreciation and impairment charges. Freehold land is not depreciated.
All other property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item, less
accumulated depreciation and impairment losses.
Depreciation is provided to write off the cost of all property, plant and equipment evenly over their expected useful lives, calculated at the
following rates:
Freehold property
over 50 years
Leasehold improvements
lesser of lease period and 25 years
Lanes and Pins on Strings
over 30–40 years
Plant and machinery and fixtures, fittings and equipment
over 3–25 years
The carrying value of the property, plant and equipment is compared to the higher of value-in-use and the fair value less costs to sell. If the
carrying value exceeds the higher of the value-in-use and fair value less the costs to sell the asset, then the asset is impaired and its value
reduced by recognising an impairment provision. New centre landlord contributions are offset against leasehold property expenditure where
the related assets remain the property of the landlord. Refurbishment costs are included within plant and machinery and fixtures, fittings and
equipment and are depreciated over the relevant useful economic life.
Residual values, remaining useful economic lives and depreciation periods and methods are reviewed annually and adjusted if appropriate.
Assets under construction represents the construction of centres and are included in property, plant and equipment. No depreciation is
provided on assets under construction until the asset is available for use.
Goodwill and intangible assets
Goodwill arising on the acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair
value of the assets and liabilities acquired. Negative goodwill is recognised in the consolidated income statement immediately as a gain on
bargain purchase. Positive goodwill is capitalised and stated at cost less any impairment losses. Impairment tests on the carrying value of
goodwill are undertaken:
• at the end of the first full financial period following acquisition and at the end of every subsequent financial period; and
• in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.
Software which is not an integral part of hardware assets is stated at historic cost, including expenditure that is directly attributable to the
acquired item, less accumulated amortisation and impairment losses.
Other intangible assets include assets acquired in a business combination and are capitalised at fair value at the date of acquisition. Following
initial recognition, finite life intangible assets are amortised on a straight-line basis over their estimated useful lives, with the expense charged
to the income statement through administrative expenses.
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Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
2. Accounting policies continued
Goodwill and intangible assets continued
Amortisation is provided to write off the cost of all intangible assets, except for goodwill, evenly over their expected useful lives, calculated at
the following rates:
Software
over 3 years
Customer relationships
over 10–15 years
Brand names
over 5–20 years
Trademark
over 20 years
The amortisation charge is recognised in administrative expenses in the income statement.
Inventories
Inventories are carried at the lower of cost or net realisable value. Net realisable value is calculated based on the revenue from sale in the
normal course of business less any costs to sell. Due allowance is made for obsolete and slow-moving items.
Impairment
(i) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) on financial assets measured at amortised cost. The financial assets
comprises trade and other receivables. These are always measured at an amount equal to lifetime ECL as these relate to trade and other
receivables and a simplified approach can be adopted. The maximum period considered when estimating ECLs is the maximum contractual
period over which the Group is exposed to credit risk. There is limited exposure to ECLs due to the business model.
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.
This is generally the case when the Group determines that the debtor does not have the assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.
(ii) Impairment of non-financial assets
The carrying values of goodwill and intangible assets are reviewed at the end of each reporting period for impairment. Impairment is
measured by comparing the carrying values of the assets with their recoverable amounts.
The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by
reference to discounted future cash flows. These assets are grouped together into Cash Generating Units to assess impairment. A sensitivity
analysis is also performed (see note 14). An impairment loss is recognised in the income statement immediately.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a
subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the
extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss
been recognised. The reversal is recognised in the income statement immediately.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent
that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial
position differs from its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects
neither accounting nor taxable profit; and
• investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the
difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that future taxable profit will be available against which
the asset can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date
and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
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2. Accounting policies continued
Deferred taxation continued
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
• the same taxable Group company; or
• different entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered.
Equity
The following describes the nature and purpose of each reserve within equity:
• share capital: the nominal value of equity shares;
• share premium account: proceeds received in excess of the nominal value of shares issued, net of any transaction costs;
• retained earnings: all other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere;
• capital redemption reserve: the capital redemption reserve represents the ordinary shares of £0.01 each repurchased by the Group under
the share buy back;
• merger reserve: represents the excess over nominal value of the fair value consideration for the business combination which arose during
the Company’s IPO listing. This was satisfied by the issue of shares in accordance with s612 of the Companies Act 2006; and
• foreign currency translation reserve: retranslation gains and losses of foreign currency denominated operations.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised
when the Group becomes a party to the contractual provisions of the instrument.
On initial recognition, a financial asset is classified as measured at amortised cost, fair value through other comprehensive income (FVOCI)
or fair value through profit or loss (FVTPL). A financial liability is classified as measured at either amortised cost or FVTPL.
(ii) Classification and subsequent measurement
Financial assets
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing
financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change
in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are ‘solely payments of principal and interest’ (SPPI) on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
All financial assets not measured at amortised cost or FVOCI are measured at FVTPL, irrespective of the business model. On initial
recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised
cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets: business model assessment
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows.
The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in
order to collect contractual cash flows, while financial assets classified and measured at FVOCI are held within a business model with the
objective of both holding to collect contractual cash flows and selling.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
Financial assets: assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period
of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.
In assessing whether contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of
contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
• contingent events that would change the amount or timing of cash flows;
• terms that may adjust the contractual coupon rate, including variable rate features;
• prepayment and extension features; and
• terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
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Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
2. Accounting policies continued
Financial instruments continued
(ii) Classification and subsequent measurement continued
Financial assets: subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss.
Financial assets at
amortised cost
These assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.
The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and
impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
The Group’s financial assets at amortised cost include trade receivables.
Debt instruments at
FVOCI
These assets are subsequently measured at fair value. Interest income, calculated using the effective interest method,
foreign exchange revaluation and impairment losses or reversals are recognised in profit or loss and computed in the
same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in
OCI. Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss.
Financial liabilities: classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held
for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net
gains and losses, including any interest expense, are recognised in profit or loss. All other financial liabilities are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.
(iii) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does
not retain control of the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also
derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which
case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any
non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net position presented in the statement of financial position when, and only when,
the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.
Foreign currency transactions
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s subsidiaries are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Pounds Sterling,
which is the ultimate Parent Company’s functional currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into the functional currency at the exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.
Exchange gains and losses are included within administrative expenses in the income statement.
(iii) Group companies
The results and financial position of foreign operations (none of which have the currency of a hyper-inflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities are translated at the closing rate at the balance sheet date;
• income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
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2. Accounting policies continued
Exceptional items and other adjustments
Exceptional items and other adjustments 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
consolidated income statement and in the notes to the consolidated Financial Statements.
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 good sold, Group adjusted EBITDA and Group adjusted EBITDA margin.
A reconciliation between key adjusted and statutory measures, as well as notes on alternative performance measures, is provided in the
Chief Financial Officer’s review on pages 40 to 42. This also details the impact of exceptional and other adjusted items when comparing to
the non-GAAP financial measures in addition to those reported in accordance with IFRS.
Summary of other estimates and judgements
The preparation of the consolidated 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 consolidated Group
Financial Statements are discussed below.
Key sources of estimation uncertainty
There are no estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next
financial year. Set out below are certain areas of estimation uncertainty in the financial statements. There are also 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 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.
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 year of £5,316,000, the estimation uncertainty
associated with the remaining carrying amounts is significantly reduced, and whilst estimation uncertainty remains, this is no longer assessed
as being material. As such, reasonably possible changes to the assumptions in the future in four mini-golf and one combined centre would
not lead to material adjustments to the carrying values in the next financial year. The remaining carrying amount of property, plant and
equipment is £3,156,000 and right-of-use assets is £5,086,000 at these centres. Further information in respect of the Group’s property, plant
and equipment and right‑of‑use assets is included in notes 12 and 13 respectively.
Contingent consideration
Non-current other payables includes 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 Teaquinn Holdings Inc. in FY2025 or FY2026. This is
based on a multiple of 9.2x Teaquinn’s EBITDA pre-IFRS 16 in the financial period of settlement 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
Teaquinn’s forecasted EBITDA pre-IFRS 16 and the year of payment. Further information in respect of the Group’s contingent consideration
is included in note 19.
Dilapidations provision
A provision is made for future expected dilapidation costs on the opening of leasehold properties not covered by the 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.
Acquisitions
The acquisitions of Lincoln Bowl, Woodlawn Bowl Inc., Lucky 9 Bowling Centre Limited and Stoked Entertainment Centre Limited have been
accounted for using the acquisition method under IFRS 3. The identifiable assets, liabilities and contingent liabilities are recognised at their
fair value at date of acquisition. Calculating the fair values of net assets, notably the fair values of intangible assets identified as part of the
purchase price allocation, involves estimation and consequently the fair value exercise is recorded as another accounting estimate. The
amortisation charge is sensitive to the value of the intangible asset values, so a higher or lower fair value calculation would lead to a change
in the amortisation charge in the period following acquisition.
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Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
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:
Before exceptional
income UK
30 September
2024
£’000
Exceptional income
UK (note 5)
30 September
2024
£’000
Total UK
30 September
2024
£’000
Canada
30 September
2024
£’000
Total
30 September
2024
£’000
Bowling
89,347
—
89,347
14,370
103,717
Food and drink
52,316
—
52,316
7,554
59,870
Amusements
55,587
—
55,587
3,691
59,278
Mini-golf
2,360
—
2,360
189
2,549
Installation of bowling equipment
—
—
—
4,456
4,456
Other
86
—
86
443
529
199,696
—
199,696
30,703
230,399
Before exceptional
income UK
30 September
2023
£’000
Exceptional income
UK (note 5)
30 September
2023
£’000
Total UK
30 September
2023
£’000
Canada
30 September
2023
£’000
Total
30 September
2023
£’000
Bowling
86,988
192
87,180
9,765
96,945
Food and drink
50,671
—
50,671
5,265
55,936
Amusements
51,938
61
51,999
2,794
54,793
Mini-golf
2,576
—
2,576
128
2,704
Installation of bowling equipment
—
—
—
4,391
4,391
Other
183
—
183
130
313
192,356
253
192,609
22,473
215,082
The UK operating segment includes the Hollywood Bowl and Putt&Play brands. The Canada operating segment includes the Splitsville and
Striker Bowling Solutions brands.
Year ended 30 September 2024
Year ended 30 September 2023
UK
£’000
Canada
£’000
Total
£’000
UK
£’000
Canada
£’000
Total
£’000
Revenue
199,696
30,703
230,399
192,609
22,473
215,082
Group adjusted EBITDA1 pre-IFRS 16
62,308
5,441
67,749
60,570
4,485
65,055
Group adjusted EBITDA1
79,715
7,872
87,587
76,828
5,903
82,731
Depreciation and amortisation
23,490
3,364
26,854
21,973
1,954
23,927
Impairment of PPE and ROU assets
5,316
—
5,316
2,210
—
2,210
Loss on property, right-of-use assets,
plant and equipment and software
disposals
88
—
88
306
—
306
Exceptional items excluding interest
(591)
2,414
1,823
(89)
2,292
2,203
Operating profit
51,412
2,094
53,506
52,428
1,657
54,085
Finance income
(1,580)
(142)
(1,722)
(1,296)
(144)
(1,440)
Finance expense
10,425
2,045
12,470
9,291
1,154
10.445
Profit before tax
42,567
191
42,758
44,434
646
45,080
Non-current asset additions
– Property, plant and equipment
26,855
11,675
38,530
18,844
3,157
22,001
Non-current asset additions
– Intangible assets
946
—
946
1,057
—
1,057
Total assets
338,654
79,177
417,831
341,589
41,917
383,506
Total liabilities
218,814
46,812
265,626
207,798
27,768
235,566
1 Group adjusted EBITDA is defined in note 4.
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Annual report and accounts 2024
4. Reconciliation of operating profit to Group adjusted EBITDA
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 exceptional 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.
30 September
2024
£’000
30 September
2023
£’000
Operating profit
53,506
54,085
Depreciation of property, plant and equipment (note 12)
11,167
10,142
Depreciation of right-of-use assets (note 13)
14,752
12,965
Amortisation of intangible assets (note 14)
935
820
Impairment of property, plant and equipment (note 12)
2,808
1,392
Impairment of right-of-use assets (note 13)
2,508
818
Loss on disposal of property, plant and equipment, right-of-use assets and software (notes 12–14)
88
306
Exceptional items excluding interest (note 5)
1,823
2,203
Group adjusted EBITDA
87,587
82,731
Adjustment for IFRS 16
(19,838)
(17,799)
Group adjusted EBITDA pre-IFRS 16
67,749
64,932
5. Exceptional items
Exceptional 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 significance, one-off nature or amount:
Exceptional items:
30 September
2024
£’000
30 September
2023
£’000
VAT rebate1
—
253
Administrative expenses2
(15)
(2)
Acquisition fees3
(921)
(700)
Landlord settlement4
607
—
Contingent consideration5
(1,924)
(1,979)
Exceptional items before tax
(2,253)
(2,428)
Tax charge
(148)
(63)
Exceptional items after tax
(2,401)
(2,491)
1 During FY2022, HMRC conducted a review of its policy position on the reduced rate of VAT for leisure and hospitality and the extent to which it applies to bowling. Following its
review, HMRC accepts that leisure bowling should fall within the scope of the temporary reduced rate of VAT for leisure and hospitality, as a similar activity to those listed in Group
16 of Schedule 7A of the VAT Act 1994. As a result, the Group made a retrospective claim for overpaid output VAT for the period 15 July 2020 to 30 September 2021 relating to
package sales totalling £193,000 during FY2023, included within bowling revenue.
In addition, a rebate of £60,000 overpaid VAT on gaming machines for the period 1 January 2003 to 31 December 2005 was received in FY2023.
2 FY2024 relates to expenses associated with the closure of our Surrey Quays centre. FY2023 expenses were associated with the VAT rebate, relating to additional profit share
due to landlords, which are included within administrative expenses.
3 Legal and professional fees relating to the acquisition of Lincoln Bowl, Woodlawn Bowl Inc., Lucky 9 Bowling Centre Limited and Stoked Entertainment Centre Limited in the year
(note 32) (FY2023: relating to the acquisition of HLD Investments Inc. (operating as YYC Bowling & Entertainment), Mountain View Bowl Inc and Wong and Lewis Investments Inc.
(operating as Let’s Bowl)).
4 Settlement payment from the landlord resulting from the closure of Hollywood Bowl Surrey Quays.
5 Contingent consideration of £1,494,000 (FY2023: £1,754,000) in administrative expenses and £430,000 (FY2023: £225,000) of interest expense in relation to the acquisition of
Teaquinn in May 2022.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
6. Expenses and auditor’s remuneration
Included in profit from operations are the following:
30 September
2024
£’000
30 September
2023
£’000
Amortisation of intangible assets
935
820
Depreciation of property, plant and equipment
11,167
10,142
Depreciation of right-of-use assets
14,752
12,965
Impairment of property, plant and equipment
2,808
1,633
Impairment reversal of property, plant and equipment
—
(241)
Impairment of right-of-use assets
2,508
1,277
Impairment reversal of right-of-use assets
—
(459)
Operating leases
80
57
Loss on disposal of property, plant and equipment, right-of-use assets and software
88
306
Exceptional items (note 5)
2,253
2,428
Loss on foreign exchange
486
208
Auditor’s remuneration:
– Fees payable for audit of these Financial Statements
350
344
Fees payable for other services:
– Audit of subsidiaries
140
71
– Other non-audit assurance services
8
8
498
423
7. Staff numbers and costs
The average number of employees (including Directors) during the year was as follows:
30 September
2024
30 September
2023
Directors
7
7
Administration
118
112
Operations
2,701
2,668
Total staff
2,826
2,787
The cost of employees (including Directors) during the year was as follows:
30 September
2024
£’000
30 September
2023
£’000
Wages and salaries
52,824
49,988
Social security costs
4,217
3,882
Pension costs
607
543
Share-based payments (note 28)
1,782
1,204
Total staff cost
59,430
55,617
Staff costs included within cost of sales are £45,723,000 (30 September 2023: £40,717,000). The balance of staff costs are recorded within
administrative expenses.
Wages and salaries includes £1,494,000 (30 September 2023: £1,754,000) of contingent consideration in relation to the acquisition of Teaquinn
in May 2022, which is recorded within exceptional items (note 5).
8. Remuneration of Directors and key management personnel
A) Directors’ emoluments
The Directors’ emoluments and benefits were as follows:
30 September 1
2024
£’000
30 September1
2023
£’000
Salaries and bonuses
2,279
2,165
Pension contributions
48
46
Share-based payments (note 28)
1,319
906
Total
3,646
3,117
1 This includes three (FY2023: three) Executive Directors and four (FY2023: four) Non-Executive Directors.
The aggregate of emoluments of the highest paid Director was £1,615,000 (FY2023: £1,388,000) and Company pension contributions of
£23,000 (FY2023: £22,000) were made to a defined contribution scheme on their behalf. More detail is on page 119 of the Annual Report.
The aggregate gains made by Executive Directors on the exercise of share options during FY2024 was £1,144,832 (FY2023: £669,208),
which was previously not disclosed. The aggregate gains made by the highest paid Director was £572,419 (FY2023: £334,604).
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Annual report and accounts 2024
8. Remuneration of Directors and key management personnel continued
B) Key management personnel
The Directors and the executive committee of the Group are considered to be the key management personnel of the Group. The
remuneration of all key management (including Directors) was as follows:
30 September
2024
£’000
30 September
2023
£’000
Salaries and bonuses
3,023
2,871
Pension contributions
66
64
Share-based payments (note 28)
1,749
1,218
Total
4,838
4,153
9. Finance income and expenses
30 September
2024
£’000
30 September
2023
£’000
Interest on bank deposits
1,722
1,440
Finance income
1,722
1,440
Interest on bank borrowings
190
200
Other interest
22
9
Finance costs on lease liabilities
11,615
9,808
Unwinding of discount on contingent consideration
430
225
Unwinding of discount on provisions
213
203
Finance expense
12,470
10,445
10. Taxation
30 September
2024
£’000
30 September
2023
£’000
The tax expense is as follows:
– UK corporation tax
8,495
7,704
– Adjustment in respect of prior years
—
312
– Foreign tax suffered
1,252
692
Total current tax
9,747
8,708
Deferred tax:
Origination and reversal of temporary differences
1,967
1,996
Effect of changes in tax rates
(17)
161
Adjustment in respect of prior years
1,151
64
Total deferred tax
3,101
2,221
Total tax expense
12,848
10,929
Factors affecting current tax charge:
The tax assessed on the profit for the period is different to the standard rate of corporation tax in the UK of 25 per cent (30 September 2023:
22 per cent). The differences are explained below:
30 September
2024
£’000
30 September
2023
£’000
Profit excluding taxation
42,758
45,080
Tax using the UK corporation tax rate of 25% (2023: 22%)
10,690
9,918
Change in tax rate on deferred tax balances
(17)
154
Non-deductible expenses
508
60
Non-deductible acquisition related exceptional costs
510
523
Effects of overseas tax rates
34
137
Effects of capital allowances super deduction
—
(182)
Share-based payments
(28)
(57)
Adjustment in respect of prior years
1,151
376
Total tax expense included in profit or loss
12,848
10,929
The Group’s standard tax rate for the year ended 30 September 2024 was 25 per cent (30 September 2023: 22 per cent).
The UK corporation tax main rate increased from 19 per cent to 25 per cent from 1 April 2023. As such, in the prior year, the rate used to
calculate the deferred tax balances increased from a blended rate to 25 per cent.
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Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
11. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of Hollywood Bowl Group plc by the weighted
average number of shares outstanding during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. During the years ended 30 September 2024 and 30 September 2023, the Group had potentially
dilutive ordinary shares in the form of unvested shares pursuant to LTIPs and SAYE schemes (note 28).
30 September
2024
30 September
2023
Basic and diluted
Profit for the year after tax (£’000)
29,910
34,151
Basic weighted average number of shares in issue for the period (number)
171,647,892
171,468,034
Adjustment for share awards
1,154,221
833,880
Diluted weighted average number of shares
172,802,113
172,301,914
Basic earnings per share (pence)
17.42
19.92
Diluted earnings per share (pence)
17.31
19.82
12. Property, plant and equipment
Freehold
property
£’000
Long leasehold
property
£’000
Short leasehold
improvements
£’000
Lanes and
pins on strings
£’000
Plant and
machinery,
fixtures and
fittings
£’000
Total
£’000
Cost
At 1 October 2022
7,406
1,240
38,686
18,050
50,518
115,900
Additions
—
—
11,554
4,269
6,178
22,001
Acquisition (note 32)
—
—
77
74
46
197
Disposals
—
—
(451)
(222)
(1,840)
(2,513)
Effects of movement in foreign exchange
(517)
—
(102)
(8)
(34)
(661)
At 30 September 2023
6,889
1,240
49,764
22,163
54,868
134,924
Additions
—
—
23,723
3,900
10,907
38,530
Acquisition (note 32)
—
—
189
448
545
1,182
Disposals
—
—
(846)
(648)
(2,343)
(3,837)
Transfer to right-of-use assets1
—
(1,240)
—
—
—
(1,240)
Effects of movement in foreign exchange
(615)
—
(249)
(170)
(141)
(1,175)
At 30 September 2024
6,274
—
72,581
25,693
63,836
168,384
Accumulated depreciation
At 1 October 2022
24
388
18,857
4,534
23,456
47,259
Depreciation charge
63
29
3,399
740
5,911
10,142
Impairment charge
—
—
—
—
1,633
1,633
Impairment reversal
—
—
—
—
(241)
(241)
Disposals
—
—
(436)
(162)
(1,548)
(2,146)
Effects of movement in foreign exchange
(1)
—
(1)
—
—
(2)
At 30 September 2023
86
417
21,819
5,112
29,211
56,645
Depreciation charge
64
—
3,810
932
6,361
11,167
Impairment charge
—
—
1,605
—
1,203
2,808
Disposals
—
—
(834)
(589)
(2,245)
(3,668)
Transfer to right-of-use assets1
—
(417)
—
—
—
(417)
Effects of movement in foreign exchange
(10)
—
(27)
(22)
(28)
(87)
At 30 September 2024
140
—
26,373
5,433
34,502
66,448
Net book value
At 30 September 2024
6,134
—
46,208
20,260
29,334
101,936
At 30 September 2023
6,803
823
27,945
17,051
25,657
78,279
1 During the year, management reviewed the classification of long leasehold property. Subsequently, the long leasehold property previously classified as property, plant and
equipment has been reclassified as right-of-use assets (see note 13).
Short leasehold property includes £7,721,000 (30 September 2023: £845,000) of assets in the course of construction, relating to the
development of new centres.
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Annual report and accounts 2024
12. Property, plant and equipment continued
Impairment
Impairment testing is carried out at the CGU level on an annual basis at the balance sheet date, or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. A CGU is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets. Each individual centre is considered to be a CGU.
An initial impairment test was performed on all eighty five centres assessing for indicators of impairment. A detailed impairment test based
on a base case was then performed on twelve centres, where the excess of value-in-use over the carrying value calculation was sensitive to
changes in the key assumptions.
Property, plant and equipment and right-of-use assets for twelve centres have been tested for impairment by comparing the carrying value
of each CGU with its recoverable amount determined from value-in-use calculations using cash flow projections based on financial budgets
approved by the Board covering a five-year period.
The key assumptions used in the value-in-use calculations are revenue growth, cost inflation during the five year forecast period, the long
term growth rate and discount rate assumptions. The key risks to those assumptions are the potential adverse variations in the economic
environment leading to a deterioration in trading conditions and performance during FY2025 and FY2026. Cash flows beyond this two-year
period are included in the Board-approved five-year plan and assume a recovery in the economy and the performance of our centres. The
other assumptions used in the value-in-use calculations were:
2024
2023
Revenue growth rate (within five years) - UK & Canada
3.0%
3.5%
Cost inflation (within five years) - UK
3.2%
3.1%
Cost inflation (within five years) - Canada
3.7%
—
Discount rate (pre-tax) - UK
12.4%
12.7%
Discount rate (pre-tax) - Canada
10.6%
—
Growth rate (beyond five years) - UK and Canada
2.5%
2.5%
Discount rates reflect current market assessments of the time value of money and the risks specific to the industry. This is the benchmark
used by management to assess operating performance and to evaluate future capital investment proposals. These discount rates are
derived from the weighted average cost of capital for the UK and Canada. Changes in the discount rates over the years are calculated with
reference to latest market assumptions for the risk-free rate, equity risk premium and the cost of debt.
Detailed impairment testing, due to the financial performance of certain centres, resulted in the recognition of an impairment charge in the
year of £2,808,000 (FY2023: £1,633,000) against property, plant and equipment assets and £2,508,000 (FY2023: £1,277,000) against
right‑of-use assets for four (FY2023: three) mini-golf centres and one combined centre (FY2023: none) (note 13), which form part of the UK
operating segment. The impairment charge in the prior year was reduced by the reversal of an impairment charge of £241,000 against
property, plant and equipment assets and £459,000 against right-of-use assets for one combined centre. Following the recognition of the
impairment charge, the carrying value of property, plant and equipment is £3,156,000 (30 September 2023: £6,487,000) and right-of-use
assets is £5,086,000 (30 September 2023: £8,125,000) for these four (FY2023: three) UK mini-golf centres and one combined centre
(FY2023: none) (note 13).
Sensitivity to changes in assumptions
The estimate of the recoverable amounts for seven centres affords reasonable headroom over the carrying value of the property, plant and
equipment and right-of-use asset, and an impairment charge of £5,316,000 (30 September 2023: £2,910,000) for five centres under the
base case. Management have sensitised the key assumptions in the impairment tests of these twelve centres under the base case.
A reduction in revenue of three and four percentage points down on the base case for FY2025 and FY2026 respectively and a one
percentage point increase in operating costs on the base case for FY2025 and FY2026 to reflect higher inflation, would not cause the
carrying value to exceed its recoverable amount for seven centres, which include both bowling and mini-golf centres. Therefore,
management believe that any reasonable possible changes in the key assumptions would not result in an impairment charge for these seven
centres. However, a further impairment of £515,000 would arise under this sensitised case in relation to three centres where we have already
recognised an impairment charge in the year.
159
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
13. 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 eight
(FY2023: nine) 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 year:
Right-of-use assets
Property
£’000
Amusement
machines
£’000
Total
£’000
Cost
At 1 October 2022
174,260
11,239
185,499
Lease additions
2,452
5,522
7,974
Acquisition (note 32)
4,911
—
4,911
Lease surrenders
—
(1,071)
(1,071)
Lease modifications
5,418
—
5,418
Effects of movement in foreign exchange
(1,070)
—
(1,070)
At 30 September 2023
185,971
15,690
201,661
Lease additions
13,405
5,029
18,434
Acquisition (note 32)
17,641
—
17,641
Lease surrenders
—
(1,391)
(1,391)
Lease modifications
4,890
—
4,890
Transfer from property, plant and equipment1
1,240
—
1,240
Effects of movement in foreign exchange
(2,338)
—
(2,338)
At 30 September 2024
220,809
19,328
240,137
Accumulated depreciation
At 1 October 2022
31,264
6,780
38,044
Depreciation charge
10,464
2,501
12,965
Impairment charge
1,277
—
1,277
Impairment reversal
(459)
—
(459)
Lease surrenders
—
(977)
(977)
At 30 September 2023
42,546
8,304
50,850
Depreciation charge
11,577
3,175
14,752
Impairment charge
2,508
—
2,508
Transfer from property, plant and equipment1
417
—
417
Lease surrenders
—
(1,157)
(1,157)
At 30 September 2024
57,048
10,322
67,370
Net book value
At 30 September 2024
163,761
9,006
172,767
At 30 September 2023
143,425
7,386
150,811
1
During the year, management reviewed the classification of long leasehold property. Subsequently, the long leasehold property previously classified as property, plant and
equipment has been reclassified as right-of-use assets (see note 12).
160
Hollywood Bowl Group plc
Annual report and accounts 2024
13. Leases continued
Group as a lessee continued
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Lease liabilities
Property
£’000
Amusement
machines
£’000
Total
£’000
At 1 October 2022
182,550
5,819
188,369
Lease additions
2,452
5,522
7,974
Acquisition (note 32)
4,911
—
4,911
Accretion of interest
9,568
240
9,808
Lease modifications
5,418
—
5,418
Lease surrenders
—
(145)
(145)
Payments1
(17,882)
(3,167)
(21,049)
Effects of movement in foreign exchange
(1,081)
—
(1,081)
At 30 September 2023
185,936
8,269
194,205
Lease additions
13,405
5,029
18,434
Acquisition (note 32)
15,641
—
15,641
Accretion of interest
11,144
471
11,615
Lease modifications
4,890
—
4,890
Lease surrenders
—
(322)
(322)
Payments1
(19,962)
(3,805)
(23,767)
Effects of movement in foreign exchange
(2,454)
—
(2,454)
At 30 September 2024
208,600
9,642
218,242
Current
10,349
3,882
14,231
Non-current
198,251
5,760
204,011
At 30 September 2024
208,600
9,642
218,242
Current
9,304
3,249
12,553
Non-current
176,632
5,020
181,652
At 30 September 2023
185,936
8,269
194,205
1 In FY2024, £153,000 (FY2023: £179,000) of rent payments were part of the working capital movements in the year.
The maturity analysis of the future undiscounted payments due under the above lease liabilities is disclosed in note 30.
The following are the amounts recognised in profit or loss:
2024
£’000
2023
£’000
Depreciation expense of right-of-use assets
14,752
12,965
Impairment charge of right-of-use assets
2,508
818
Interest expense on lease liabilities
11,615
9,808
Expense relating to leases of low-value assets (included in administrative expenses)
80
57
Variable lease payments (included in administrative expenses)
1,285
824
Total amount recognised in profit or loss
30,240
24,472
The Group has contingent lease contracts for eight (FY2023: nine) sites. There is a revenue-based rent top-up on these sites. Variable lease
payments include revenue-based rent top-ups at eight (FY2023: eight) centres totalling £897,000 (FY2023: £619,000). It is anticipated that
top-ups totalling £1,374,000 will be payable in the year to 30 September 2025 based on current expectations.
Impairment testing is carried out as outlined in note 12. Detailed impairment testing resulted in the recognition of an impairment charge in the
year of £2,508,000 (FY2023: £1,277,000) against right-of-use assets for four UK mini-golf centres and one combined centre (FY2023: three
UK mini-golf centres). The impairment charge in the prior year was reduced by the reversal of an impairment charge of £459,000 against
right-of-use assets for one combined centre.
161
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
14. Goodwill and intangible assets
Goodwill
£’000
Brands 1
£’000
Trademark 2
£’000
Customer
relationships
£’000
Software
£’000
Total
£’000
Cost
At 1 October 2022
75,194
7,248
798
314
2,220
85,774
Additions
—
—
—
—
1,057
1,057
Acquisition (note 32)
6,865
—
—
503
—
7,368
Effects of movement in foreign exchange
(11)
—
—
(12)
—
(23)
At 30 September 2023
82,048
7,248
798
805
3,277
94,176
Additions
—
—
—
—
946
946
Acquisition (note 32)
10,668
—
—
306
—
10,974
Disposals
—
—
—
(1,320)
(1,320)
Effects of movement in foreign exchange
(3)
(19)
—
(6)
—
(28)
At 30 September 2024
92,713
7,229
798
1,105
2,903
104,748
Accumulated amortisation
At 1 October 2022
—
1,523
416
8
2,033
3,980
Amortisation charge
—
568
50
45
157
820
At 30 September 2023
—
2,091
466
53
2,190
4,800
Amortisation charge
—
568
50
73
244
935
Disposals
—
—
—
—
(1,313)
(1,313)
Effects of movement in foreign exchange
—
3
—
—
—
3
At 30 September 2024
—
2,662
516
126
1,121
4,425
Net book value
At 30 September 2024
92,713
4,567
282
979
1,782
100,323
At 30 September 2023
82,048
5,157
332
752
1,087
89,376
1 This relates to the Hollywood Bowl, Splitsville and Striker Bowling Solutions brands.
2 This relates to the Hollywood Bowl trademark only.
The components of goodwill comprise the following businesses:
30 September
2024
30 September
2023
UK
77,174
75,034
Canada
15,539
7,014
92,713
82,048
At the acquisition date, goodwill is allocated to each group of CGUs expected to benefit from the combination.
Impairment testing is carried out at the CGU level on an annual basis. A CGU is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets. Each individual centre is considered to be a
CGU. However, for the purposes of testing goodwill for impairment, it is acceptable under IAS 36 to group CGUs, in order to reflect the level
at which goodwill is monitored by management. The UK and Canada are each considered to be a CGU, for the purposes of goodwill
impairment testing. The goodwill acquisition in the year relates to the UK acquisition of Lincoln Bowl, and the three centres acquired in
Canada (note 32). The four centres are each considered a CGU but have been allocated to either the UK or Canada group of CGU for the
purpose of goodwill impairment testing. These CGUs form part of the UK and Canada operating segments respectively.
The recoverable amount of each of the CGUs is determined based on a value-in-use calculation using cash flow projections based on
financial budgets approved by the Board covering a five-year period. Cash flows beyond this period are extrapolated using the estimated
growth rates stated in the key assumptions. The key assumptions are disclosed in note 12.
Sensitivity to changes in assumptions
Management believe that any reasonable change in the key assumptions would not result in an impairment charge of the goodwill.
The goodwill on the acquisitions in the year is included in note 32.
162
Hollywood Bowl Group plc
Annual report and accounts 2024
15. Investment in subsidiaries
Hollywood Bowl Group plc’s operating subsidiaries as at 30 September 2024 are as follows:
Name
Company
number
Principal activity
Country of incorporation
Percentage
of ordinary
shares owned
Direct holdings
Kanyeco Limited1, 2
09164276
Investment holding
England and Wales
100%
Hollywood Bowl EBT Limited1, 2
10246573
Dormant
England and Wales
100%
Teaquinn Holdings Inc.1, 4
725118608
Investment holding
Canada
100%
Indirect holdings
Kendallco Limited1, 2
09176418
Investment holding
England and Wales
100%
The Original Bowling Company Limited2
05163827
Ten-pin bowling
England and Wales
100%
Original Bowling Company (NI) Limited3
NI679991
Dormant
Northern Ireland
100%
AMF Bowling (Eastleigh) Limited2
06998390
Dormant
England and Wales
100%
MABLE Entertainment Limited2
01094660
Dormant
England and Wales
100%
Milton Keynes Entertainment Limited2
01807080
Dormant
England and Wales
100%
Bowlplex Limited2
01250332
Dormant
England and Wales
100%
Bowlplex European Leisure Limited2
05539281
Dormant
England and Wales
100%
Wessex Support Services Limited2
01513727
Dormant
England and Wales
100%
Wessex Superbowl (Germany) Limited2
03253033
Dormant
England and Wales
100%
Bowlplex Properties Limited2
05506380
Dormant
England and Wales
100%
Xtreme Bowling Entertainment Corporation4
840672380
Ten-pin bowling
Canada
100%
Striker Installations Inc.4
853701399
Ten-pin bowling installations
Canada
100%
Striker Bowling Solutions Inc.4
889559019
Ten-pin bowling installations
Canada
100%
Stoked Entertainment Centre Limited5
791692510
Family entertainment centre
Canada
100%
1 These subsidiaries are controlled and consolidated by the Group and are exempt from the Companies Act 2006 requirements relating to the audit of their individual accounts by
virtue of Section 479A of the Act as this company has guaranteed the subsidiary companies under Section 479C of the Act.
2 The registered office of these subsidiaries is Focus 31, West Wing, Cleveland Road, Hemel Hempstead, Hertfordshire, HP2 7BW.
3 The registered office of this subsidiary is Cleaver Fulton Rankin, 50 Bedford Street, Belfast, BT2 7FW, Northern Ireland.
4 These subsidiaries are controlled and consolidated by the Group. The registered office of these subsidiaries is 505 Iroquois Shore Road, Suite 9, Oakville, Ontario, L6H 2R3, Canada.
5 This subsidiary is controlled and consolidated by the Group. The registered office of this subsidiary is 303 Owen Manor, Saskatoon, Saskatchewan, S7V 0P1, Canada.
6 Woodlawn Bowl Inc. was acquired on 7 November 2023 and subsequently amalgamated into Xtreme Bowling Entertainment Corporation on 1 May 2024.
16. Cash and cash equivalents
A) Reconciliation of cash and cash equivalents at the end of the reporting period
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
30 September
2024
£’000
30 September
2023
£’000
Cash and cash equivalents
28,702
52,455
Cash and cash equivalents include £4,310,000 (2023: £2,585,000) of credit and debit card payments.
163
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
16. Cash and cash equivalents continued
B) Changes in liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s
consolidated cash flow statement as cash flows from financing activities.
1 October
2023
£’000
Financing
cash flows
£’000
Lease additions,
modifications and
disposals
£’000
Accruals and
prepayments
£’000
Foreign
exchange
£’000
Interest
expense
£’000
Interest
paid
£’000
30 September
2024
£’000
Loans and borrowings
(note 21)
—
—
—
(41)
—
190
(149)
—
Lease liabilities (note 13)
194,205
(12,305)
38,643
153
(2,454)
11,615
(11,615)
218,242
Total liabilities from
financing activities
194,205
(12,305)
38,643
112
(2,454)
11,805
(11,764)
218,242
1 October
2022
£’000
Financing
cash flows
£’000
Lease additions,
modifications and
disposals
£’000
Accruals and
prepayments
£’000
Foreign
exchange
£’000
Interest
expense
£’000
Interest
paid
£’000
30 September
2023
£’000
Loans and borrowings
(note 21)
—
—
—
92
—
200
(292)
—
Lease liabilities (note 13)
188,369
(11,420)
18,158
179
(1,081)
9,808
(9,808)
194,205
Total liabilities from
financing activities
188,369
(11,420)
18,158
271
(1,081)
10,008
(10,100)
194,205
17. Trade and other receivables
30 September
2024
£’000
30 September
2023
£’000
Trade receivables
1,537
2,356
Other receivables
95
129
Prepayments
7,788
5,631
9,420
8,116
Trade receivables have an ECL against them that is immaterial. There were no overdue receivables at the end of either year.
18. Inventories
30 September
2024
£’000
30 September
2023
£’000
Goods for resale
2,897
2,445
Goods bought for resale recognised as a cost of sale amounted to £25,634,000 (FY2023: £24,400,000).
19. Trade and other payables
30 September
2024
£’000
30 September
2023
£’000
Current
Trade payables
5,494
7,025
Other payables
3,658
1,366
Accruals and deferred income
16,162
15,421
Taxation and social security
5,113
5,297
Total trade and other payables
30,427
29,109
30 September
2024
£’000
30 September
2023
£’000
Non-current
Other payables
7,116
5,208
164
Hollywood Bowl Group plc
Annual report and accounts 2024
19. Trade and other payables continued
Accruals and deferred income includes a staff bonus accrual of £3,950,000 (30 September 2023: £4,955,000). Deferred income includes
£983,000 (30 September 2023: £801,000) of customer deposits received in advance and £2,628,000 (30 September 2023: £1,870,000)
relating to bowling equipment installations, all of which will be recognised in the income statement during the following financial year.
Non-current other payables includes £3,928,000 (30 September 2023: £2,359,000) of contingent consideration and £1,759,000
(30 September 2023: £1,862,000) of deferred consideration in respect of the acquisition of Teaquinn Holdings Inc. The additional
consideration to be paid is contingent on the future financial performance of Teaquinn Holdings Inc. in FY2025 or FY2026. This is based on a
multiple of 9.2x Teaquinn’s EBITDA pre-IFRS 16 in the financial period of settlement and is capped at CAD 17m. The contingent consideration
has been accounted for as post-acquisition employee remuneration in accordance with IFRS 3 paragraph B55 and recognised over the
duration of the employment contract to FY2026. The present value of the contingent consideration has been discounted using a WACC of
13 per cent. There is a range of possible outcomes for the value of the contingent consideration based on Teaquinn’s forecasted EBITDA
pre-IFRS 16 and the year of payment. This ranges from a payment (undiscounted) in FY2025 of £6,534,000 (undiscounted) to a payment
in FY2026 of £9,146,000 (undiscounted), using the FY2024 year-end exchange rate. The fair value of the contingent consideration will be
re-assessed at every financial reporting date, with changes recognised in the income statement. In FY2024, this re-assessment resulted in
a reduction in the charge of £261,000 based on the current expectation of the final consideration payment, which has been recognised in
exceptional administrative expenses.
20. Provisions
30 September
2024
£’000
30 September
2023
£’000
Lease dilapidations provision
5,848
5,084
The dilapidations provision relates to potential rectification costs expected should the Group vacate its retail locations. There are no onerous
leases within the estate. The movements in the dilapidations provision are summarised below:
Dilapidations
£’000
As at 30 September 2022
4,682
Change in discount rate1
(67)
Provided during the year
266
Unwind of discounted amount
203
As at 30 September 2023
5,084
Change in discount rate1
326
Provided during the year
225
Unwind of discounted amount
213
As at 30 September 2024
5,848
1 There was a decrease in the discount rate from 4.64 per cent at 30 September 2023 to 4.11 per cent at 30 September 2024 (FY2023: an increase in the discount rate from
4.40 per cent at 30 September 2022 to 4.64 per cent at 30 September 2023), used in preparing the dilapidations provision for the year ended 30 September 2024. This resulted
in an increase in the provision of £326,000 (FY2023: a decrease of £67,000), and will unwind over the term of the property leases. Movements in the discount rate are driven by
the yield on UK government bonds with a maturity comparable to the remaining property lease term.
In the UK, 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. The provision in the year relates to one new centre (FY2023: one
new 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 on these centres is not considered to be probable. As at 30 September 2024, 24 UK
centres (30 September 2023: 23 centres) had a dilapidations provision. No Canadian property leases have a dilapidations provision as the lease
agreements do not contain a related dilapidation clause.
It is not anticipated that the provision will be utilised within the next 12 months as there are no sites currently earmarked for closure that
have a dilapidations provision.
21. Loans and borrowings
On 29 September 2021, the Group entered into a £25m revolving credit facility (RCF) with Barclays Bank plc. The RCF had an original
termination date of 31 December 2024. On 22 March 2024, the RCF had the termination date extended to 31 December 2025.
Interest is charged on any drawn balance based on the reference rate (SONIA), plus a margin of 1.65 per cent (30 September 2023: 1.75 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
30 September 2024 was therefore 0.5775 per cent (30 September 2023: 0.6125 per cent).
Issue costs of £135,000 were paid to Barclays Bank plc on commencement of the RCF and a further £35,000 on extension of the RCF.
These costs are being amortised over the term of the facility and are included within prepayments (note 17).
165
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
21. Loans and borrowings continued
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 covenant during the year and the previous year.
22. Deferred tax assets and liabilities
30 September
2024
£’000
30 September
2023
£’000
Deferred tax assets and liabilities
Deferred tax assets – UK
5,934
6,500
Deferred tax assets – Canada
518
244
Deferred tax liabilities – UK
(7,247)
(5,191)
Deferred tax liabilities – Canada
(2,680)
(2,204)
(3,475)
(651)
30 September
2024
£’000
30 September
2023
£’000
Reconciliation of deferred tax balances
Balance at the beginning of the year
(651)
1,647
Deferred tax credit for the year – in profit or loss
(1,950)
(2,157)
Deferred tax credit for the year – in equity
101
8
On acquisition
(20)
(148)
Effects of changes in tax rates
(17)
—
Effects of foreign exchange
213
63
Adjustment in respect of prior years
(1,151)
(64)
Balance at the end of the year
(3,475)
(651)
The components of deferred tax are:
30 September
2024
£’000
30 September
2023
£’000
Deferred tax assets
Fixed assets
5,192
6,080
Trading losses
29
15
Other temporary differences
895
649
6,116
6,744
Deferred tax liabilities
Property, plant and equipment
(8,205)
(5,857)
Intangible assets
(1,386)
(1,538)
(9,591)
(7,395)
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 30 September 2024.
23. Share capital
30 September 2024
30 September 2023
Shares
£’000
Shares
£’000
Ordinary shares of £0.01 each
172,083,853
1,721
171,712,357
1,717
The share capital of the Group is represented by the share capital of the Parent Company, Hollywood Bowl Group plc.
During the year 499,254 ordinary shares of £0.01 each were issued under the Group’s LTIP scheme and 456 ordinary shares of £0.01 each
were issued under the Group’s SAYE scheme (note 28). In addition, 128,214 ordinary shares of £0.01 each were repurchased and cancelled
under the Group’s share buy back programme at a total cost of £379,327.
The ordinary shares are entitled to dividends.
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Annual report and accounts 2024
24. Reserves
Share premium
The amount subscribed for share capital in excess of nominal value.
Retained earnings
The accumulated net profits and losses of the Group.
Merger reserve
The merger reserve represents the excess over nominal value of the fair value consideration for the business combination which arose
during the Company’s IPO listing; this was satisfied by the issue of shares in accordance with Section 612 of the Companies Act 2006.
Capital redemption reserve
The capital redemption reserve represents the value of the ordinary shares of £0.01 each repurchased by the Group under the share buy
back.
Foreign currency translation reserve
The foreign currency translation reserve represents the retranslation gains and losses of foreign currency denominated operations.
25. Lease commitments
The Group had total commitments under non-cancellable operating leases set out below:
30 September
2024
Other
£’000
30 September
2023
Other
£’000
Within 1 year
80
57
In 2 to 5 years
100
58
180
115
These operating leases are not included as IFRS 16 assets as the Group applies the low-value assets recognition exemption to leases of
office equipment.
26. Capital commitments
As at 30 September 2024, the Group had entered into contracts to fit out new and refurbish existing sites and to complete the
installation of solar panels for £5,312,000 (30 September 2023: £5,450,000). These commitments are expected to be settled in
the year to 30 September 2025.
27. Related party transactions
30 September 2024 and 30 September 2023
During the year, and the previous year, there were no transactions with related parties.
28. Share-based payments
Long-term employee incentive costs
The Group operates 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 market 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.
A summary of the movement in the LTIPs is outlined below:
Scheme name
Year of grant
Method of
settlement
accounting
Outstanding at
1 October
2023
Granted
during
the year
Lapsed/
cancelled
during the year
Exercised
during
the year
Outstanding at
30 September
2024
Exercisable at
30 September
2024
LTIP 2021
2021
Equity
452,993
46,261
—
(499,254)
—
—
LTIP 2022
2022
Equity
463,436
—
—
—
463,436
—
LTIP 2023
2023
Equity
627,678
—
—
—
627,678
—
LTIP 2024
2024
Equity
—
584,831
—
—
584,831
—
In accordance with the LTIP schemes outlined in the Group’s Remuneration Policy, the vesting of these awards is conditional upon the achievement
of an EPS target set at the time of grant, measured at the end of a three-year period ending 30 September 2024, 30 September 2025 and
30 September 2026, and the Executive Directors’ continued employment at the date of vesting. The LTIP 2022, 2023 and 2024 also have
performance targets based on return on centre invested capital, emissions ratio for Scope 1 and Scope 2 and team member development.
Further details on LTIP 2022, 2023 and 2024 are available on the Hollywood Bowl Group corporate website at www.hollywoodbowlgroup.
com/investors/regulatory-news dated 7 February 2022, 16 February 2023 and 30 January 2024.
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Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
28. Share-based payments continued
Long-term employee incentive costs continued
The awards will vest based on the following adjusted EPS targets:
LTIP 2022
LTIP 2023
LTIP 2024
Vesting
14.65
18.11
23.10
25%
14.65–16.19
18.11–20.01
23.10–25.54
Vesting determined on a straight-line basis
16.19
20.01
25.54
100%
During the year ended 30 September 2024, 631,092 (30 September 2023: 627,678) share awards were granted under the LTIP. For all LTIPs,
the Group recognised a charge of £1,749,237 (30 September 2023: £1,218,431) and related employer National Insurance of £241,395
(30 September 2023: £168,143).
During the year ended 30 September 2024, 499,254 (30 September 2023: 641,567) share awards were exercised under LTIP 2021 (30
September 2023: LTIP 2018 and 2020) and a total of 499,254 shares were issued pursuant to an existing block listing in order to satisfy
the exercise of the nil-cost options (see note 23).
The following assumptions were used to determine the fair value of the LTIPs granted:
Financial year LTIP granted
2024
2023
2022
Share price at date of grant
2.930
2.600
2.514
Discount rate/dividend yield
3%
3%
3%
The shares are dilutive for the purposes of calculating diluted earnings per share.
Save-As-You-Earn (SAYE) schemes
The Group currently operates three SAYE schemes, available to all employees of the Group. The SAYE schemes permit the grant to
employees of options in respect of ordinary shares linked to a bank SAYE contract for a term of three years with contributions from employees
of an amount between £5 and £500 per month. During the year, a new SAYE scheme (SAYE 2024) was launched with 109 employees taking
up 100,887 options with an exercise date of 1 February 2027 and an exercise price of £2.85, being equal to the market price of the shares on
the date of grant. In the prior year, 133 employees took up 186,764 options with an exercise date of 1 February 2026 and an exercise price of
£2.43. The options vest if the employee remains in employment by the Group on the exercise date; otherwise, the options lapse on the date the
employee leaves. The options are exercisable for a period of six months from the date of vesting. Employees can opt to leave the SAYE at any
time, at which point their options will lapse.
The shares are dilutive for the purposes of calculating diluted earnings per share.
In accordance with IFRS 2 Share-based payment, the values of the awards are measured at fair value at the date of the grant. The fair value is
expensed on a straight-line basis over the vesting period, based on management’s estimate of the number of shares that will eventually vest.
The fair value at grant date is estimated using a Black-Scholes pricing model, taking into account the terms and conditions upon which the
options were granted. The contractual life of each option granted is three years. The fair value of options granted during the years ended
30 September 2024, 30 September 2023 and 30 September 2022 was estimated on the date of grant using the following assumptions:
SAYE
2024
SAYE
2023
SAYE
2022
Exercise price
£2.850
£2.430
£2.845
Dividend yield
3.0%
3.0%
3.0%
Expected volatility
32.9%
35.4%
34.4%
Risk-free interest rate
4.10%
3.14%
1.10%
Life of option
3 years
3 years
3 years
Anticipated number of options to vest
50%
50%
30%
The expected volatility is based on the annualised standard deviation of the continuously compounded rates of return on the share over a
period of time. A summary of the movement in the SAYE schemes is outlined below:
Scheme name
Year of award
Outstanding at
1 October 2023
Granted during
the year
Lapsed/cancelled
during the year
Exercised during
the year
Outstanding at
30 September 2024
Exercisable at
30 September 2024
SAYE 2020
2020
1,500
—
(1,044)
(456)
—
—
SAYE 2022
2022
64,153
—
(21,589)
—
42,564
—
SAYE 2023
2023
153,223
—
(51,020)
—
102,203
—
SAYE 2024
2024
—
100,887
(15,544)
—
85,343
—
The assessed fair value of the options granted during the year ended 30 September 2024 was £0.62 (30 September 2023: £0.54).
For the year ended 30 September 2024, the Group has recognised £32,579 of share-based payment charge in the income statement
(30 September 2023: credit of £13,989).
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Annual report and accounts 2024
28. Share-based payments continued
Save-As-You-Earn (SAYE) schemes continued
During the year none of the SAYE schemes became exercisable and 456 ordinary shares of £0.01 each were issued under the SAYE 2020
at an exercise price of £2.845. During the prior year, the SAYE 2020 scheme became exercisable and no options were exercised.
The weighted average remaining contractual life of share options outstanding at 30 September 2024 was 557 days (30 September 2023:
747 days).
29. Financial instruments
Fair value hierarchy
IFRS 7 requires fair value measurements to be recognised using a fair value hierarchy that reflects the significance of the inputs used in the
value measurements:
Level 1: inputs are quoted prices in active markets.
Level 2: a valuation that uses observable inputs for the asset or liability other than quoted prices in active markets.
Level 3: a valuation using unobservable inputs (i.e. a valuation technique).
There were no transfers between levels throughout the periods under review.
Fair value
All financial assets held at the balance sheet date, which comprise trade and other receivables and cash and cash equivalents, are classified
as financial assets held at amortised cost. All financial liabilities, which comprise trade and other payables and borrowings, are classified as
financial liabilities held at amortised cost. The following table shows the fair value of financial assets and financial liabilities within the Group
at the balance sheet date. The fair value of all financial assets and liabilities are categorised as Level 2.
30 September
2024
£’000
30 September
2023
£’000
Financial assets – measured at amortised cost
Cash and cash equivalents
28,702
52,455
Trade and other receivables
1,632
2,485
Financial liabilities – measured at amortised cost
Trade and other payables
32,429
29,021
There is no difference between the carrying value and fair value of any of the above financial assets and financial liabilities.
30. Financial risk management
The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (fair value interest rate and price risk).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order to minimise
this risk the Group endeavours to deal only with companies which are demonstrably creditworthy. In addition, a significant proportion of revenue
results from cash transactions. The aggregate financial exposure is continuously monitored. The maximum exposure to credit risk is the value of the
outstanding amount of trade receivables. Management does not consider that there is any concentration of risk within either trade or other receivables.
The Group held cash and cash equivalents with banks which are rated AA- to AA+ of £26,785,000 at 30 September 2024
(30 September 2023: £50,520,000).
The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
Trade receivables have not been impaired as any ECL is deemed to be insignificant.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure, as far as is possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Cash flow and fair value interest rate risk
The Group’s borrowings are variable rate bank loans. As at 30 September 2024, £nil (30 September 2023: £nil) of the available facility has
been drawn down. The Directors monitor the Group’s funding requirements and external debt markets to ensure that the Group’s borrowings
are appropriate to its requirements in terms of quantum, rate and duration.
The Group currently holds cash balances to provide funding for normal trading activity. The Group also has access to both short-term and
long-term borrowings to finance individual projects. Trade and other payables are monitored as part of normal management routine.
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Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the financial statements continued
For the year ended 30 September 2024
30. Financial risk management continued
Cash flow and fair value interest rate risk continued
The table below summarises the maturity profile of the Group’s financial liabilities:
Within 1 year
£’000
1 to 2 years
£’000
2 to 5 years
£’000
5 to 10 years
£’000
More than
10 years
£’000
Total
£’000
2024
Trade and other payables
24,226
676
6,994
801
3,867
36,564
Lease liabilities
25,626
25,395
69,523
102,559
108,691
331,794
49,852
26,071
76,517
103,360
112,558
368,358
2023
Trade and other payables
22,916
1,182
5,233
670
3,208
33,209
Lease liabilities
21,394
21,286
59,684
87,486
97,129
286,979
44,310
22,468
64,917
88,156
100,337
320,188
Capital risk management
The Group’s capital management objectives are:
(i) to ensure the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for
other stakeholders; and
(ii) to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk.
To meet these objectives, the Group reviews the budgets and forecasts on a regular basis to ensure there is sufficient capital to meet the
needs of the Group through to profitability and positive cash flow.
The capital structure of the Group consists of shareholders’ equity as set out in the consolidated statement of changes in equity. All working
capital requirements are financed from existing cash resources and borrowings.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return on risk.
Foreign currency risk
Operating across two territories increases the Group’s exposure to currency risk. Wherever possible, overseas operations will fund their day
to day working capital requirements in local currency with cash generated from operations, naturally hedging the currency risk exposure to
the Group. Management will continually monitor the level of currency risk exposure, and consider hedging where appropriate. Currently the
Group considers the currency risk on consolidation of the assets and liabilities of its foreign entities to be of low materiality.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with
floating interest rates.
The Group manages its interest rate risk by entering into interest rate derivatives when it is considered appropriate to do so by management.
At 30 September 2024 and 30 September 2023, none of the Group’s borrowings were at fixed rates of interest.
The effect on the profit after tax of a notional one per cent increase or decrease in SONIA is £nil (30 September 2023: £nil).
31. Dividends paid and proposed
30 September
2024
£’000
30 September
2023
£’000
The following dividends were declared and paid by the Group:
Final dividend year ended 30 September 2022 – 8.53 pence per ordinary share
—
14,592
Special dividend year ended 30 September 2022 – 3.00 pence per ordinary share
—
5,132
Interim dividend year ended 30 September 2023 – 3.27 pence per ordinary share
—
5,614
Final dividend year ended 30 September 2023 – 8.54 pence per ordinary share
14,664
—
Special dividend year ended 30 September 2023 – 2.73 pence per ordinary share
4,688
—
Interim dividend year ended 30 September 2024 – 3.98 pence per ordinary share
6,828
—
Proposed for the approval by shareholders at AGM (not recognised as a liability at 30 September 2024):
Final dividend year ended 30 September 2024 – 8.08 pence per ordinary share (2023: 8.54 pence)
13,904
14,664
Special dividend year ended 30 September 2024 – nil pence per ordinary share (2023: 2.73 pence)
—
4,688
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Hollywood Bowl Group plc
Annual report and accounts 2024
32. Acquisition of Lincoln Bowl, Woodlawn Bowl Inc., Lucky 9 Bowling Centre Limited and Stoked Entertainment
Centre Limited
On 2 October 2023, the Group purchased the assets, including the long leasehold, of Lincoln Bowl. On 7 November 2023 the Group
acquired Woodlawn Bowl Inc. in Guelph, Ontario, on 11 November 2023, the assets and lease of Lucky 9 Bowling Centre Limited as well as
its associated restaurant and bar, Monkey 9 Brewing Pub Corp in Richmond, British Columbia, and on 24 June 2024 the Group acquired
Stoked Entertainment Centre Limited in Saskatoon, Saskatchewan. All four businesses are operators of ten-pin bowling centres. Stoked
Entertainment Centre Limited also operates indoor go-karts and high ropes. The purpose of the acquisitions was to grow the Group’s core
ten-pin bowling business in their respective regions.
The results of Lincoln Bowl, Woodlawn Bowl Inc., Lucky 9 Bowling Centre Limited and Stoked Entertainment Centre Limited are consolidated
into the Group financial statements from the respective dates of acquisition, being 2 October 2023, 7 November 2023, 11 November 2023
and 24 June 2024.
Since acquisition, Woodlawn Bowl Inc. has been dissolved and amalgamated into Xtreme Bowling Entertainment Corporation (note 15).
The details of the business combinations are as follows (stated at acquisition date fair values):
Lincoln Bowl
£’000
Woodlawn
Bowl Inc.
£’000
Lucky 9
Bowling Limited
£’000
Stoked
Entertainment
Centre Limited
£’000
Total
£’000
Fair value of consideration transferred
Amount settled in cash
4,474
2,784
277
6,222
13,757
Recognised amounts of identifiable net assets
Property, plant and equipment
100
289
228
565
1,182
Right-of-use assets
2,000
1,426
4,255
9,960
17,641
Intangible assets
135
171
—
—
306
Inventories
8
21
27
103
159
Trade and other receivables
91
42
22
7
162
Cash and cash equivalents
10
10
—
58
78
Trade and other payables
(10)
(62)
—
(583)
(655)
Lease liabilities
—
(1,426)
(4,255)
(9,960)
(15,641)
Deferred tax liabilities
—
(54)
—
(89)
(143)
Identifiable net assets
2,334
417
277
61
3,089
Goodwill arising on acquisition
2,140
2,367
—
6,161
10,668
Consideration for equity settled in cash
4,474
2,784
277
6,222
13,757
Cash and cash equivalents acquired
(10)
(10)
—
(58)
(78)
Net cash outflow on acquisition
4,464
2,774
277
6,164
13,679
Acquisition costs paid charged to expenses
921
Net cash paid in relation to the acquisitions
14,600
Acquisition related costs of £921,000 are not included as part of the consideration transferred and have been recognised as an expense in
the consolidated income statement within administrative expenses.
The fair value of the identifiable intangible assets acquired includes £306,000 in relation to customer relationships. The customer
relationships have been valued using the multi-period excess earnings method.
The fair value of right-of-use assets and lease liabilities were measured as the present value of the remaining lease payments, in accordance
with IFRS 16.
The fair value and gross contractual amounts receivable of trade and other receivables acquired as part of the business combination
amounted to £162,000. At the acquisition date the Group’s best estimate of the contractual cash flows expected not to be collected
amounted to £nil.
Goodwill amounting to £10,668,000 was recognised on acquisition (note 14). The goodwill relates to the locations of the bowling centres
acquired, the expected commercial opportunities of an enhanced leisure offering in an underserved market and the expected synergies
from combining the four centres into the Hollywood Bowl Group.
In the period since acquisition to 30 September 2024, the Group recognised £6,967,000 of revenue and £1,503,000 of profit before tax in
relation to the acquired businesses. Had the acquisitions occurred on 1 October 2023, the contribution to the Group’s revenue would have
been £11,513,000 and the contribution to the Group’s profit before tax for the period would have been £2,478,000.
171
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Company statement of financial position
As at 30 September 2024
Note
30 September
2024
£’000
30 September
2023
£’000
ASSETS
Non-current assets
Investments
5
87,561
69,745
Trade and other receivables
8
73,742
73,224
Deferred tax asset
7
355
244
161,658
143,213
Current assets
Cash and cash equivalents
6
8,119
24,876
Trade and other receivables
8
191
253
8,310
25,129
Total assets
169,968
168,342
LIABILITIES
Current liabilities
Trade and other payables
9
121,180
92,915
Total liabilities
121,180
92,915
NET ASSETS
48,788
75,427
Equity attributable to shareholders
Share capital
10
1,721
1,717
Share premium
10
39,716
39,716
Capital redemption reserve
10
1
—
Retained earnings
7,350
33,994
TOTAL EQUITY
48,788
75,427
These financial statements were approved by the Board of Directors on 16 December 2024.
The accompanying notes on pages 145 to 171 form an integral part of these financial statements.
Signed on behalf of the Board
Laurence Keen
Chief Financial Officer
Company registration number: 10229630
172
Hollywood Bowl Group plc
Annual report and accounts 2024
Company statement of changes in equity
For the year ended 30 September 2024
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Total
£’000
Equity as at 30 September 2022
1,711
39,716
—
59,828
101,255
Shares issued during the year
6
—
—
—
6
Share-based payments (note 5, 11)
—
—
—
1,218
1,218
Deferred tax on share-based payments
—
—
—
25
25
Dividends paid
—
—
—
(25,338)
(25,338)
Total comprehensive loss for the year
—
—
—
(1,739)
(1,739)
Equity as at 30 September 2023
1,717
39,716
—
33,994
75,427
Shares issued during the year
5
—
—
—
5
Share buy back
(1)
—
1
(379)
(379)
Share-based payments (note 5, 11)
—
—
—
1,749
1,749
Dividends paid
—
—
—
(26,180)
(26,180)
Total comprehensive loss for the year
—
—
—
(1,834)
(1,834)
Equity as at 30 September 2024
1,721
39,716
1
7,350
48,788
The accompanying notes on pages 145 to 171 form an integral part of these financial statements.
Company statement of cash flows
For the year ended 30 September 2024
30 September
2024
£’000
30 September
2023
£’000
Cash flows from operating activities
Loss before tax
(2,532)
(1,615)
Adjusted by:
Net interest income
(650)
(685)
Share-based payments (note 11)
1,110
753
Operating loss before working capital changes
(2,072)
(1,547)
Decrease in trade and other receivables
567
29
Increase/(decrease) in trade and other payables
222
(675)
Cash outflow generated from operations
(1,283)
(2,193)
Interest received
883
796
Bank interest paid
(149)
(198)
Net cash outflow from operating activities
(549)
(1,595)
Cash flows from investing activities
Acquisition of subsidiaries
—
(7,716)
Investment in existing subsidiary
(17,695)
(2,280)
Repayment of loan by subsidiary
—
966
Net cash used in investing activities
(17,695)
(9,030)
Cash flows from financing activities
Issue of shares
—
6
Share buy back
(379)
—
Dividends paid
(26,180)
(25,338)
Loan from subsidiary
28,046
15,921
Net cash flows generated from/(used in) financing activities
1,487
(9,411)
Net change in cash and cash equivalents for the year
(16,757)
(20,036)
Cash and cash equivalents at the beginning of the year
24,876
44,912
Cash and cash equivalents at the end of the year
8,119
24,876
The accompanying notes on pages 145 to171 form an integral part of these financial statements.
173
Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the Company financial statements
1. General information
Hollywood Bowl Group plc is a public limited company whose shares are publicly traded on the London Stock Exchange and is incorporated
and domiciled in England under the Companies Act 2006. The Company was incorporated on 13 June 2016, registered number 10229630.
The registered office of the Parent Company is Focus 31, West Wing, Cleveland Road, Hemel Hempstead, HP2 7BW, United Kingdom.
2. Material accounting policies
The material accounting policies are set out below. These accounting policies have been applied consistently throughout the year and prior
year. The financial information presented is as at and for the financial years ended 30 September 2024 and 30 September 2023.
Basis of preparation
The financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial
Reporting Standard 102 -‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (‘FRS 102’) and the
Companies Act 2006. The functional and presentational currency of the Company is Pounds Sterling. The financial statements are
presented in Pounds Sterling and all values are rounded to the nearest thousand, except where otherwise indicated.
The financial statements have been prepared on a going concern basis under the historical cost convention.
The financial information presented is at and for the years ended 30 September 2024 and 30 September 2023.
As the consolidated financial statements of the Company include the equivalent disclosures, the Company has taken the exemptions
under FRS 102 available in respect of the following disclosures:
• certain disclosures required by FRS 102.26 Share-based payment; and
• certain disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of
financial instruments not falling within the fair value accounting rules of paragraph 36(4) of Schedule 1.
As permitted by Section 408 of the Companies Act 2006, an entity income statement and statement of comprehensive income are not
included as part of the published consolidated financial statements of Hollywood Bowl Group plc. The loss for the financial year dealt with
in the financial statements of the Parent Company is £1,834,000 (FY2023: loss £1,739,000).
Investments in subsidiaries
Investments in subsidiary undertakings are initially recorded at cost, being the fair value of the consideration paid. Subsequently
investments are reviewed for impairment on an individual basis annually or if events or changes in circumstances indicate that the
carrying value may not be fully recoverable with any impairment charged to the income statement.
Receivables due from subsidiary undertakings
Amounts owed by subsidiaries are classified and recorded at amortised cost and reduced by allowances for ECLs. Estimated future credit
losses are first recorded on initial recognition of a receivable and are based on estimated probability of default. Individual balances are
written off when management deems them not to be collectible.
Employee benefits
Share-based payments
The Company operates an equity-settled share-based payment plan for its Directors, under which the Directors are granted equity
instruments of Hollywood Bowl Group plc. The fair value of services received in exchange for the equity instruments is determined by
reference to the fair value of the instruments granted at grant date. The fair value of the instruments includes any market performance
conditions and non-vesting conditions.
The expense is recognised over the vesting period of the award taking into account any non-market performance and service conditions.
The cost of equity-settled transactions is recognised together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award.
Financial instruments
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments together with the
disclosure and presentation requirements of sections 11 and 12 of FRS 102.
Cash and cash equivalents
Cash and cash equivalents includes cash held in short-term deposits with UK banks.
Foreign currency transactions
Transactions in foreign currencies are translated into the functional currency at the exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the
reporting date. Exchange gains and losses are included within administrative expenses in the income statement.
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Annual report and accounts 2024
2. Summary of significant accounting policies continued
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent
that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred taxation
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods
different from those in which they are recognised in the financial statements. The following timing differences are not provided for:
differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining
the tax allowances have been met; and differences relating to investments in subsidiaries, to the extent that it is not probable that they
will reverse in the foreseeable future and the reporting entity is able to control the reversal of the timing difference.
Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are
disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.
Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset
(other than goodwill) or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed
for tax. Goodwill is adjusted by the amount of such deferred tax.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or
substantively enacted at the balance sheet date. Deferred tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against
the reversal of deferred tax liabilities or other future taxable profits.
3. Directors’ remuneration
The Company has no employees other than the Directors.
The Directors’ emoluments and benefits were as follows:
30 September
2024 1
£’000
30 September
2023 1
£’000
Salaries and bonuses
2,279
2,165
Pension contributions
48
46
Share-based payments (note 11)
1,111
753
Total
3,438
2,964
1 This includes three (FY2023: three) Executive Directors and four (FY2023: four) Non-Executive Directors.
The aggregate of emoluments of the highest paid Director was £1,615,000 (FY2023: £1,388,000) and Company pension contributions of
£23,000 (FY2023: £22,000) were made to a defined contribution scheme on their behalf.
4. Taxation
30 September
2024
£’000
30 September
2023
£’000
The tax (credit)/expense is as follows:
– UK corporation tax
(587)
21
Total current tax (credit)/expense
(587)
21
Deferred tax:
Origination and reversal of temporary differences
(115)
7
Adjustment in respect of prior years
4
116
Effect of changes in tax rates
—
(20)
Total deferred tax (credit)/expense
(111)
103
Total tax (credit)/expense
(698)
124
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Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the Company financial statements continued
4. Taxation continued
Factors affecting current credit
The tax assessed on the loss for the period is different to the standard rate of corporation tax in the UK of 25 per cent (30 September 2023:
22 per cent). The differences are explained below:
30 September
2024
£’000
30 September
2023
£’000
Loss excluding taxation
(2,532)
(1,615)
Tax using the UK corporation tax rate of 25% (2023: 22%)
(633)
(355)
Change in tax rate on deferred tax balances
—
(19)
Share-based payments
(73)
(26)
Non-deductible expenses
4
(102)
Adjustments in respect of prior years
4
116
Group relief
—
510
Total tax (credit)/expense included in profit or loss
(698)
124
The Group’s standard tax rate for the year ended 30 September 2024 was 25 per cent (30 September 2023: 22 per cent).
5. Investments
Investments in subsidiary undertakings are as follows:
30 September
2024
£’000
30 September
2023
£’000
At the beginning of the year
69,745
61,125
Additions
17,816
10,461
Derecognition of contingent and deferred consideration in subsidiary1
—
(1,841)
At the end of the year
87,561
69,745
Details of the investments in subsidiary undertakings are outlined in note 15 to the consolidated financial statements.
1 In FY2022, one of the Company’s subsidiaries made an acquisition of Teaquinn Inc. which was recorded in the Company’s accounts rather than the subsidiary’s. FY2022 was not
restated on the grounds of materiality, but the prior year was adjusted to derecognise these amounts.
6. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
30 September
2024
£’000
30 September
2023
£’000
Cash and cash equivalents
8,119
24,876
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Hollywood Bowl Group plc
Annual report and accounts 2024
7. Deferred tax asset
30 September
2024
£’000
30 September
2023
£’000
Deferred tax asset
Deferred tax asset
355
244
355
244
30 September
2024
£’000
30 September
2023
£’000
Reconciliation of deferred tax balances
Balance at beginning of year
244
343
Deferred tax credit/(charge) for the year – in profit or loss
115
(124)
Deferred tax charge for the year – in equity
—
25
Adjustments in respect of prior periods
(4)
—
Balance at end of year
355
244
The components of deferred tax are:
30 September
2024
£’000
30 September
2023
£’000
Deferred tax asset
Temporary differences
355
244
355
244
The Group has a policy in relation to the payment for tax losses surrendered between Group companies under the Group relief provisions.
The Company has therefore recognised a deferred tax asset in respect of its accumulated tax losses on the basis it expects to receive
economic benefits in the form of payments for amounts surrendered as Group relief in future accounting periods.
8. Trade and other receivables
Current
30 September
2024
£’000
30 September
2023
£’000
Other receivables
79
97
Prepayments
112
156
191
253
Non-current
30 September
2024
£’000
30 September
2023
£’000
Amounts owed by Group companies
73,742
73,224
Amounts owed by and to Group companies are non-interest bearing, are repayable on demand and are not expected to be recovered within
the next 12 months.
9. Trade and other payables
Current
30 September
2024
£’000
30 September
2023
£’000
Amounts owed to Group companies
119,250
91,207
Trade and other payables
330
340
Accruals
1,600
1,368
121,180
92,915
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Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Notes to the Company financial statements continued
10. Share capital
30 September 2024
30 September 2023
Shares
£’000
Shares
£’000
Allotted, called up and fully paid
Ordinary shares of £0.01 each
172,083,853
1,721
171,712,357
1,717
During the year 499,254 ordinary shares of £0.01 each were issued under the Group’s LTIP scheme and 456 ordinary shares of £0.01 each
were issued under the Group’s SAYE scheme (note 28 of the consolidated financial statements). In addition, 128,214 ordinary shares of £0.01
each were repurchased and cancelled under the Group’s share buy back programme at a total cost of £379,327.
The ordinary shares are entitled to dividends.
11. Share-based payments
Long-term employee incentive costs
The Company operates LTIPs for the Directors. 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 market 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.
A summary of the movement in the LTIPs is outlined below:
Scheme name
Year of grant
Method of
settlement
accounting
Outstanding at
1 October
2023
Granted
during
the year
Lapsed/cancelled
during the year
Exercised
during the year
Outstanding at
30 September
2024
Exercisable at
30 September
2024
LTIP 2021
2021
Equity
273,290
27,910
—
(301,200)
—
—
LTIP 2022
2022
Equity
270,518
—
—
—
270,518
—
LTIP 2023
2023
Equity
423,490
—
—
—
423,490
—
LTIP 2024
2024
Equity
—
394,582
—
—
394,582
—
In accordance with the LTIP schemes outlined in the Group’s Remuneration Policy, the vesting of these awards is conditional upon the achievement
of an EPS target set at the time of grant, measured at the end of a three-year period ending 30 September 2024, 30 September 2025 and
30 September 2026, and the Executive Directors’ continued employment at the date of vesting. The LTIP 2022, 2023 and 2024 also have
performance targets based on return on centre invested capital, emissions ratio for Scope 1 and Scope 2 and team member development.
Further details on LTIP 2022, 2023 and 2024 are available on the Hollywood Bowl Group corporate website at www.hollywoodbowlgroup.com/
investors/regulatory-news dated 7 February 2022, 16 February 2023 and 30 January 2024.
The awards will vest based on the following adjusted EPS targets:
LTIP 2022
LTIP 2023
LTIP 2024
Vesting
14.65
18.11
23.10
25%
14.65–16.19
18.11–20.01
23.10–25.54
Vesting determined on a straight-line basis
16.19
20.01
25.54
100%
During the year ended 30 September 2024, 422,492 (30 September 2023: 423,490) share awards were granted under the LTIPs. For all
LTIPs, the Company recognised a charge of £1,110,482 (30 September 2023: £753,427) and related employer National Insurance charge
of £153,247 (30 September 2023: £103,973).
During the year ended 30 September 2024, 499,254 (30 September 2023: 641,567) share awards were exercised under LTIP 2021
(30 September 2023: LTIP 2018 and 2020) and a total of 499,254 shares were issued pursuant to an existing block listing in order to
satisfy the exercise of the nil-cost options (see note 23 of the consolidated financial statements).
The following assumptions were used to determine the fair value of the LTIPs granted:
Financial year LTIP granted
2024
2023
2022
Share price at date of grant
2.930
2.600
2.514
Discount rate/dividend yield
3%
3%
3%
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Hollywood Bowl Group plc
Annual report and accounts 2024
12. Loans and borrowings
On 29 September 2021, the Group entered into a £25m revolving credit facility (RCF) with Barclays Bank plc. The RCF had an original
termination date of 31 December 2024. On 22 March 2024, the RCF had the termination date extended to 31 December 2025.
Interest is charged on any drawn balance based on the reference rate (SONIA), plus a margin of 1.65 per cent (30 September 2023: 1.75 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
30 September 2024 was therefore 0.5775 per cent (30 September 2023: 0.6125 per cent).
Issue costs of £135,000 were paid to Barclays Bank plc on commencement of the RCF and a further £35,000 on extension of the RCF.
These costs are being amortised over the term of the facility and are included within prepayments (note 17 of the consolidated
financial statements).
The terms of the Barclays Bank plc facility include the following Group financial covenants:
(i) For the 7-month period ending 31 December 2021, the ratio of total net debt to Group adjusted EBITDA pre-IFRS 16 shall not exceed 1.75:1.
(ii) For the 12-month period ending on each reference date, commencing 31 March 2022 and each quarter thereafter, 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 year and the previous year.
13. Guarantee
The Company has given a guarantee over certain subsidiaries under Section 479A of the Companies Act 2006 such that the financial
statements of these subsidiaries for the year ended 30 September 2024 will be exempt from audit (note 15 of the consolidated
financial statements).
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Hollywood Bowl Group plc
Annual report and accounts 2024
Financial statements
Company information
Hollywood Bowl Group plc
Focus 31, West Wing
Cleveland Road
Hemel Hempstead Industrial Estate
Hemel Hempstead
Hertfordshire
HP2 7BW
Company number
10229630
Company Secretary
Bernwood Cosec Limited
E: hollywoodbowl@bernwoodcosec.co.uk
Investor relations
Teneo
85 Fleet Street
London
EC4Y 1AE
T: 020 7353 4200
E: hollywoodbowl@teneo.com
Registrar
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
T: 0871 664 0300
E: enquiries@linkgroup.co.uk
Auditor
KPMG LLP
20 Station Road
Cambridge
CB1 2JD
Financial adviser and broker
Investec
30 Gresham Street
London
EC2V 7QN
Berenberg
60 Threadneedle Street
London
EC2R 8HP
hollywoodbowlgroup.com
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Hollywood Bowl Group plc
Annual report and accounts 2024
CBP028464
Hollywood Bowl Group’s commitment to environmental issues is reflected in this Annual Report,
which has been printed on Magno Satin and Arena Smooth Extra White, both FSC® certified
materials.
This document was printed by Park Communications using its environmental print technology, which
minimises the impact of printing on the environment, with 99% of dry waste diverted from landfill.
Both the printer and the paper mill are registered to ISO 14001.
hollywoodbowlgroup.com