Hollywood Bowl : Annual Report - Year Ending 30 September 2023

Highlights

Our financial performance

1 Definitions for these measures are in the key performance indicators section (pages 34 and 35). 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 36 to 41). 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.

Strategic report

1. Highlights
2. Strategic roadmap
3. Investment case
4. At a glance

1. Chairman's statement

1. Our growth story

1. Our brands

1. Chief Executive Officer's review

1. Our market environment

1. Business model

1. Strategy

1. Key performance indicators

1. Chief Financial Officer's review

1. Section 172
2. Stakeholder engagement

1. Sustainability overview

1. TCFD

1. Risk management
2. Principal risks

1. Going concern and viability statement

77 Non-financial and sustainability information statement

Governance report

1. Chairman's introduction to governance

1. Board of Directors

1. Corporate governance report

1. Report of the Nomination Committee

1. Report of the Audit Committee

1. Report of the Corporate Responsibility Committee
2. Report of the Remuneration Committee

1. Annual report on remuneration

1. Directors' report

1. Statement of Directors' responsibilities

Financial statements

120 Independent auditor's report

1. Consolidated income statement and statement of comprehensive income
2. Consolidated statement of financial position
3. Consolidated statement of changes in equity
4. Consolidated statement of cash flows
5. Notes to the financial statements

1. Company statement of financial position

1. Company statement of changes in equity

1. Company statement of cash flows
2. Notes to the Company financial statements

1. Company information

Strategic report

Delivering

like-for-like

revenue growth

Actively

refurbishing

our assets

Our strategy…

Developing new

centres and acquisitions

Read more on pages 28 to 33

Focusing on

our people

Leveraging our indoor leisure experience

Safe and inclusive leisure destinations

Outstanding workplaces

Read more on pages 46 to 59

Sustainable

centres

Growth of competitive

socialising

Read more on pages 24 to 25

Sector consolidation

opportunities

Continually enhancing our

customers' experience

Building energetic and

engaging teams who share our values and are proud to be part of our culture

Read more on pages 26 to 27

Maintaining support of

our investors to help us grow the business and consistently deliver returns

Investment case

Reasons to invest

Hollywood Bowl Group is the UK's established market leader with national scale, and the second largest operator of ten-pin bowling centres in the world. We operate a high-quality,well-invested estate with diverse revenue streams and multiple levers, including our expansion into Canada, to drive further growth.

Strategic report

People and leadership

Our highly motivated and engaged operational teams deliver our customer-focused experiences, and are led by a stable and experienced management team who are committed to sustainable growth

  Read more on pages 50 to 51

#12

Our 2023 ranking in the UK's 'Best Big Companies to Work For' awards

Market opportunities

As the leader in the UK ten-pin bowling and competitive socialising markets, and the Canadian ten-pin bowling market, we are best placed and have the experience to capitalise on the growth opportunities available

  Read more on pages 24 to 25

6

Centres added to the Group estate in FY2023

Exciting growth pipeline

Alongside our ongoing centre refurbishment programme, we are targeting more new centres for our Hollywood Bowl and Splitsville brands, which is backed by our rigorous and disciplined location selection process

  Read more on pages 10 to 11

15

Target of new openings before end of FY2025

Customer focus

Our ten-pin bowling and mini-golf centres provide fun and safe environments for customers of all ages, with their experiences being enhanced by research led insight and a culture of continuous improvement

  Read more on pages 12 to 17

64%

UK net promoter score +3%pts versus FY2022

Our brands

  Read more on pages 12 and 13

  Read more on pages 14 and 15

  Read more on pages 16 and 17

UK market leader

in ten-pin bowling

Our UK ten-pin bowling brand, with centres typically offering 24 bowling lanes, situated in prime locations on leisure or retail parks.

Centres

65

Canadian market leader

in ten-pin bowling

Our Canadian ten-pin bowling brand with centres typically offering 29 bowling lanes, located in standalone locations or co-located with retail or leisure units.

Centres

9

UK brand

in the indoor mini-golf market

Our mini-golf brand with centres offering mini-golf courses, situated in locations on leisure or retail parks.

Centres

5

79

Centres at the end of FY2023

3

New centres opened between

1 October 2023 and 16 December 2023

Our locations

UK

Hollywood Bowl is the UK's largest ten-pin bowling brand with 66 centres nationwide. Puttstars is our indoor mini-golf brand, which opened its first centre in 2020

  Hollywood Bowl: 65

  Puttstars: 5

  Central support office: 1

Read more on pages 12, 13, 16 and 17

Canada

Splitsville is our first overseas ten-pin bowling brand and was acquired by the Group in May 2022

  Splitsville: 9

  Central support office: 1

Read more on pages 14 and 15

Strategic report

A new growth market continued

Our initial strategic rationale for entering Canada is being reaffirmed the more we learn. The market, whilst very well established, remains highly fragmented and often under-invested, with many centres single-owned or small-group-owned businesses, providing an excellent runway for growth.

The Canadian market shares many similarities with the UK and in FY2023, we undertook a large customer research project to understand fully how we should adapt our UK operating model for the Canadian market. The results solidified our view that our operating model would be very well received and that customers are open to our high-qualityfamily-friendly offering to sit alongside competitive bowling leagues. Where differences exist, we are able to tailor our offering accordingly. For example, there are more opportunities for the corporate offering due to a higher expectation of frequent socialising amongst work colleagues, and for school-age students in the winter months where cold weather encourages activities indoors.

Integration with the wider Group is going well with the ongoing sharing of knowledge and innovation between our UK and Canadian colleagues. Both sides make regular visits to gain greater understanding of the differing operating models, and how we can introduce 'best practice' whilst maintaining the entrepreneurial spirit that initially attracted us.

We have been developing a new Centre Manager pipeline and putting the structures in place to allow rapid development in Canada, including transferring four of our UK team members, one to help introduce our training and development programmes, two Centre Managers and one of our UK Regional Managers who started as Director of Operations in October 2023.

Board changes

In July 2023, we appointed Rachel Addison to the Board as a Non-Executive Director and as a member of the Audit, Remuneration and Nomination Committees. With c.30 years of finance and operational management experience, Rachel has held a number of senior leadership and board positions across media and technology businesses, bringing financial and operational experience, including in digital media, which will be of great value to the Group. Rachel's appointment comes at a time of change for the Board and is part of our succession planning programme. Nick Backhouse, who has been a member of the Board and Chair of the Audit Committee since the Group's listing in 2016, is due to retire by rotation at our Annual General Meeting (AGM) in January 2024. He has been a real asset to the Group and his consistent, steady advice, as well as his wise counsel, has been of great value to Hollywood Bowl Group's development.

Sustainable growth

In recognition of the importance we place on environmental and social considerations in our decision making, in FY2023 the Board formed a Corporate Responsibility Committee (CRC) consisting of Board and Executive Committee members, and chaired by Non-Executive

Director Ivan Schofield. During the year the CRC established its terms of reference and worked with the long-standing Corporate Responsibility Steering Group to set the Group's net zero strategy. Having already made an early start to how we manage our direct environmental impacts - we have reduced our UK direct emissions by 62 per cent since 2016 - this year we report on our indirect Scope 3 emissions for the first time, which we estimate makes up around 90 per cent of our total emissions. It is from this baseline year that we will set science-based targets in our commitment to reach net zero by 2050. Our pathway to net zero strategy will see us build on our progress to date and continue to make sustainability-led improvements across the Group. We look forward to working closely with our UK and Canadian colleagues, and our suppliers, to make our plan a reality.

Investing in our people

Our People team has worked extremely hard this year to develop our next generation of Centre Managers, senior leaders and technicians, doubling the number of our industry-leading training and development programmes. I was delighted when the Group was once again recognised as one of The UK's 25 Best Big Companies to Work For in 2023, rising up the ranks to 12th position, and that our Hemel Hempstead support centre was given the highest 3* standard for workplace engagement.

Exciting growth opportunity

Like all businesses, we have experienced a number of external challenges in recent years, however, the Group has emerged stronger than ever and I am excited about the opportunities ahead.

Our operating model, multiple revenue streams and strong balance sheet, which includes no debt, gives us plenty of headroom to keep investing in our growth strategy. Although we are not immune from inflationary pressures, we are well insulated given our relatively fixed cost base with over 72 per cent of Group revenues not subject to cost of goods inflation.

Our unwavering focus is on keeping our leisure experiences fresh, relevant and affordable to our customers and on generating further attractive returns through investment in our customer experience. Technology continues to play a big part in this, and I am looking forward to seeing the launch of our new self-developed customer booking system later in the coming year. FY2024 will see further investment in growing and improving the quality of our estate in the UK and Canada, enhancing the customer experience through refurbishments and investment in our proprietary technology that will support the next stages of growth across both countries.

I would like to thank all our team members, suppliers, landlords, partners and investors for their support and contributions to delivering yet another outstanding year, and I look forward to sharing in our continued success.

Peter Boddy

Non-Executive Chairman

17 December 2023