Canada is the second-largest country in the world, covering almost four million square miles, 40 times bigger than the UK.
Not many people live in the land of moose and maple syrup, however – less than 40 million, compared to almost 70 million here.
These statistics matter to a company such as Hertfordshire-based Hollywood Bowl, Britain’s top ten-pin bowling group.
In May 2022, when many firms were still recovering from the pandemic, Hollywood Bowl made a move into Canada, acquiring five established sites for £10.6 million.
Growing: Hollywood Bowl expanded into Canada in the aftermath of the pandemic
Today, there are 13 centres with two more coming on stream by February. Revenues have tripled and growth is on the agenda.
Chief executive Stephen Burns has been at the Hollywood helm for ten years, along with finance director Laurence Keen. Their track record inspires confidence.
Hollywood listed on the stock market eight years ago with 54 centres and a valuation of £240 million.
Today, there are 85 sites and the business has more than doubled in value to £570 million. More venues are opening in the coming months and there are plans to build up to 130 centres in the coming years, 95 here with the rest in Canada.
Sites have to be carefully selected. Bowling centres work best when close to where people live, shop or have fun. That is relatively straightforward here but less so in a country where the nearest town can be hours away.
Hollywood Bowl already has sites in Toronto, Vancouver and Calgary. As it becomes better-known, more attractive locations come on offer, leading to expansion and sales growth.
Last week, Burns said revenues for the year to September 30 will exceed £230 million, fuelled by a strong performance from Canada.
Full year results will be published just before Christmas but brokers expect a 3 per cent profits uplift to £49.3 million and a dividend of 12p.
Special payouts are a feature with Burns and Keen so extra cash may be forthcoming in the next few months, as both are confident about long-term prospects.
Bowling is a wholesome past-time, appealing to families as well as workmates. It’s cheap too, less than £7 for adults and under £6 for children. Food, drinks and arcade games take average expenditure to just over £11 – still less than the hourly national living wage.
Midas verdict: Midas recommended Hollywood Bowl in 2017 when the shares were £1.89. Covid-19 pummelled the stock but it has bounced back since to £3.30. There should be more to come.
Burns and Keen know what they are about, there is a clear strategy for growth and bowling offers fun for all at a time when doom and gloom seem all too pervasive.
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