Enhancing

performance

through focused

investment

Hollywood Bowl Group plc

Annual report and accounts 2023

Hollywood Bowl Group plc Annual report and accounts 2023

Enhancing

performance

through focused

investment

Our unique purpose-led culture and

proven investment-led strategy are

enabling us to capitalise on the

signiﬁcant growth opportunities in

the markets we operate in.

Highlights

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.

Our ﬁnancial

performance

+4.5%

LFL revenue growth

(2022: +28.3%)

£215.1m

Revenue

(2022: £193.7m)

+11.0%

Total revenue growth

(2022: +169.5%)

£82.7m

Group adjusted EBITDA

(2022: £77.5m)

£34.2m

Proﬁt after tax

(2022: £37.5m)

£36.8m

Adjusted proﬁt after tax

(2022: £39.4m)

19.92p

Earnings per share

(2022: 21.91p)

21.48p

Adjusted earnings

per share

(2022: 23.07p)

8.54p

Final ordinary dividend

per share

2.73p

Special dividend

per share

Strategic report

1 Highlights

2 Strategic roadmap

3 Investment case

4 At a glance

6 Chairman’s statement

10 Our growth story

12 Our brands

18 Chief Executive Oﬃcer’s review

24 Our market environment

26 Business model

28 Strategy

34 Key performance indicators

36 Chief Financial Oﬃcer’s review

42 Section 172

43 Stakeholder engagement

46 Sustainability overview

60 TCFD

70 Risk management

71 Principal risks

76 Going concern and viability statement

77 Non-ﬁnancial and sustainability

information statement

Governance report

78 Chairman’s introduction to governance

80 Board of Directors

82 Corporate governance report

88 Report of the Nomination Committee

93 Report of the Audit Committee

97 Report of the Corporate Responsibility

Committee

98 Report of the Remuneration Committee

102 Annual report on remuneration

115 Directors’ report

118 Statement of Directors’ responsibilities

Financial statements

120 Independent auditor’s report

128 Consolidated income statement and statement

of comprehensive income

129 Consolidated statement of ﬁnancial position

130 Consolidated statement of changes in equity

131 Consolidated statement of cash ﬂows

132 Notes to the ﬁnancial statements

158 Company statement of ﬁnancial position

159 Company statement of changes in equity

159 Company statement of cash ﬂows

160 Notes to the Company ﬁnancial statements

166 Company information

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Strategic roadmap

Our purpose

Bringing families and friends together for

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

Continually enhancing our

customers’ experience

Building energetic and

engaging teams who share

our values and are proud

to be part of our culture

Maintaining support of

our investors to help us grow

the business and consistently

deliver returns

Delivering

like-for-like

revenue growth

Actively

refurbishing

our assets

Developing new

centres and

acquisitions

Focusing on

our people

Leveraging our

indoor leisure

experience

Read more on pages 12, 13, 16 and 17

Splitsville is our ﬁrst overseas ten-pin bowling brand

and was acquired by the Group in May 2022

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

UK Canada

Chairman’s statement

Taking us to

the next level

Hollywood Bowl Group plc

Annual report and accounts 2023

I continue to be impressed

by the clarity of purpose and

single-minded pursuit of

excellence consistently

demonstrated by all of

our team members.”

Peter Boddy, Non-Executive Chairman

Hollywood Bowl Group has once again achieved

another outstanding performance in FY2023. We

started the ﬁnancial year with real momentum, following

on from an exceptional FY2022, and we have built on

this to deliver another record revenue year.

This has been achieved in spite of the many and varied

challenges experienced by UK businesses during the

year, demonstrating the strength of our customer oﬀer,

resilience to inﬂationary pressures, robust balance sheet

and cash-generative business. I continue to be impressed

by the clarity of purpose and single-minded pursuit of

excellence consistently demonstrated by all of our team

members in executing the Group strategy which has led

to our track record of sustained proﬁtable growth.

The Group’s ﬁnancial performance in FY2023 exceeded

the Board’s expectations, driven by our focus on enhancing

the customer experience and investment in improving the

quality of our estate through our ongoing refurbishment

programme. We continue to expand our footprint, through

new centre openings and acquisitions both in the UK and

Canada. Our planned investments in technology have

supported centres’ sales and yield growth, while also

improving our customers’ digital journey.

Our operating model drove like-for-like sales growth

across our four main revenue streams and our relatively

ﬁxed cost base helped deliver another year of strong

proﬁts. We were also able to take advantage of

favourable conditions in July and August, where the

unseasonable wet weather encouraged more families to

seek out indoor leisure and entertainment activities,

leading to our busiest ever month in the UK in August.

In light of our performance, the Board is pleased to

declare a ﬁnal ordinary dividend of 8.54 pence per share

as well as a special dividend of 2.73 pence per share.

Furthermore, given our robust ﬁnancial position,

prospects and cash generation, as well as the Board’s

focus on delivering shareholder returns and capital

eﬃciency, the Board has extended the Group’s capital

allocation policy around excess cash to include share

buybacks of up to £10m in FY2024, alongside special

dividends. The Board determined that share buybacks

can provide ﬂexibility to achieve an optimal use of cash

to deliver value for shareholders and can represent an

attractive investment opportunity for the Company.

Aﬀordable fun, safe and healthy competition

We know that across, the UK families are facing cost of

living challenges and so we work hard to ensure our

customer oﬀer remains compelling and to deliver our

core purpose of bringing families and friends together

for aﬀordable fun and safe, healthy competition. A family

of four can still enjoy an outing with us for as little as £25

during peak times – the best value for money of all the

branded UK bowling operators.

Our amusement machines can still be enjoyed for as

little as £1 but operational improvements in the year

have enabled us to drive yield growth. Our simpliﬁed

menus focus on speed, quality, consistency and value

for money and although higher food and beverage costs

meant we introduced some modest price increases, our

most popular items haven’t changed in price since 2019.

Our value-for-money customer proposition has

attracted more visits over the year from new and

returning customers who are choosing to spend more

time in our centres, boosting the spend per game.

Further investment in the UK estate

We opened three new centres in the UK during the year

in Speke, Peterborough and Merry Hill, all of which are

performing in line with expectations. Our refurbishment

programme saw 13 centres receive successful upgrades

including some centres which are on their second or

third refurbishment.

Post the year end, we were also pleased to announce

the acquisition of Lincoln Bowl on 2 October, which

included the long leasehold. The centre meets our strict

investment criteria and has 20 lanes with a bar, diner

and amusements, and will be rebranded as a Hollywood

Bowl in the ﬁrst half of FY2024.

A new growth market

Canada is an exciting growth opportunity for the Group

and we have made excellent progress since we acquired

Splitsville, comprising ﬁve centres, and Striker Bowling

Solutions in May 2022. We were quick to add a sixth

centre, Kingston, in July 2022 and this year we acquired

three bowling centres in Calgary, a strategically

important location between our current centres in

British Columbia and Ontario. Post the year end, we

acquired a further two centres, and have recently

started a new build in Ontario, due to open in FY2024.

We have also commenced our refurbishment programme

in Canada, based on our UK model, with one centre

completed during the year and one currently on site due to

complete in H1 FY2024. The rebranded and refurbished

centre in Richmond Hill has been extremely well received,

attracting a broader customer base, more diverse revenue

streams and higher yields, underpinning our belief in the

long-term opportunity of the Canadian market.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Chairman’s statement continued

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-quality family-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

Hollywood Bowl Group plc

Annual report and accounts 2023

How much room is there for further growth?

We have strong growth ambitions, both in the UK and

Canada. The pace in the UK will continue as it has for the

last few years. In Canada, the situation is slightly diﬀerent

as it is still a very fragmented and under-invested market.

We have a strong pipeline of opportunities and the priority

is to pick our locations wisely and make sure that whatever

we buy or build meets our strict returns hurdle rate.

Overall, we plan to add an average of ﬁve new centres

each year across the Group.

What are your priorities for the Group for

the future?

Our biggest priority is to continue to stay relevant to our

customers by oﬀering aﬀordable fun and safe, healthy

competition. The impact of the rising cost of living is

playing on many people’s minds; therefore, it is important

that we keep oﬀering high-quality experiences in great

environments with outstanding customer service, all the

while maintaining an aﬀordable price point.

To do this we need to keep innovating and maintain our

entrepreneurial spirit throughout the business. We believe

in empowering all our people to make decisions and

innovate, and our very ﬂat structure helps us to do that.

While our leadership team gives us direction and strategy,

it is the front-line team members that are the drivers of our

performance, so maintaining our unique corporate culture

and rewarding results is key.

We ask Chairman Peter Boddy about his highlights

of FY2023 and ambitions for the coming year.

Q&A

with Peter

What has made you most proud this year?

I say it every year, but without a doubt our team members

continue to make me most proud. Their hard work has led

to this outstanding performance and I am pleased that

they are able to share in our success through generous

performance-related bonuses.

A great deal of this is also down to the eﬀorts of our

People team who have worked tirelessly on training and

development to build our talent pipeline as we continue to

grow. One big piece of work was to refresh our employer

branding, which has had great success in communicating

our employer value proposition and signiﬁcantly

increasing the number of job applicants and attracting

manager level candidates. There is very much a sense that

we have entered a new phase in our corporate

development amongst our team members, and that we

are all pulling together towards the same purpose.

What are your key achievements in the year?

We launched our net zero strategy which will determine

environmental initiatives over the coming years. This was a

considerable undertaking as we want to ensure that the

goals we set are both realistic and achievable.

We have also achieved considerable progress in Canada

where we now have 11 sites. What is particularly pleasing

is that the Canadian site that has undergone a UK-style

makeover, has performed well above expectations

since reopening.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Record growth

Our growth story

The Group was formed with 41 centres in 2010 and

over the following 13 years has signiﬁcantly grown its

presence in the markets it operates in.

FY2010

Centres

100

110

130

120

140

FY2015 FY2016

FY2020

Launch of Puttstars

UK mini-golf brand

Group lists on Main

Market of LSE

Acquisition of 11

Bowlplex centres

Group formed from the merger

of selected sites of the AMF

and Hollywood Bowl brands

Number of centres

Hollywood Bowl

Puttstars

Splitsville

We are conﬁdent that our unique blend

of inclusive leisure experiences provides

signiﬁcant growth opportunities in the UK

and Canadian markets.”

Stephen Burns, Chief Executive Oﬃcer

from

Hollywood Bowl Group plc

Annual report and accounts 2023

FY2022 FY2023 FY2030FY2025 FY2035

Acquisition of Splitsville

- a Canadian ten-pin

bowling operator

centres

at end of

FY2023

130 centres

The Group’s target scale for the UK

and Canada by 2035, reﬂecting the

growth opportunity in these markets.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our brands

The UK’s market

leading brand

1,515

Bowling lanes

(FY2022: 1,492)

£9.4m

Expansionary capital in FY2023

Centres

(FY2022: 63)

17.1m

Games bowled

(FY2022: 16.6m)

64%

Net promoter score

(FY2022: 61%)

Hollywood Bowl Group plc

Annual report and accounts 2023

8.5m

Visitors to Hollywood Bowl website in FY2023

11.8%

Growth in amusement revenue vs FY2022

The complete entertainment experience

Alongside bowling, we oﬀer food, drink and

amusements. By oﬀering a complete entertainment

experience, we give customers more reasons to visit,

increase dwell time and secondary spend.

We oﬀer excellent value and speed of service when it

comes to food and drink. Our popular and simpliﬁed at

lane menu oﬀers good quality snacks and sharer

options, alongside at lane drink ordering.

The family-friendly games and amusements areas are

constantly evolving with innovations and new product

development. A rolling centre refurbishment programme

allows us to improve the space optimisation of our

amusements oﬀering, as well as improve the quality of

our machines. The majority of our amusements can be

played for as little as £1. Nayax ‘tap to play’ provides the

option of digital coin credit as well as cash payments.

The market-leading brand

Ten-pin bowling is part of the UK’s diverse ‘out-of-home’

leisure sector. Its popularity is based around oﬀering an

inclusive, fun, aﬀordable and sociable experience for

friends, families or work colleagues, appealing to a broad

range of consumers.

Hollywood Bowl is the market leader in the UK and is our

most recognised brand. We specialise in operating large,

high-quality bowling centres which are predominantly

located in prime ‘out-of-town’ multi-use leisure parks

alongside cinemas and casual dining sites.

Experiences our customers value

We believe that 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 programmes provide valuable

insights into our customers’ preferences, by digitally

capturing satisfaction levels following each visit. As well

as understanding what our customers want and value,

we monitor our customer satisfaction and net promoter

scores carefully and are always ready to react quickly to

any operational issue or respond to customer feedback.

Team members’ bonuses are linked to the customer

satisfaction drivers, improving centre performance,

revenues and yields.

When refurbishing centres, we also consider

reconﬁguring ﬂoor areas to maximise revenue and

centre yields. For example, we introduced mini-golf in

our Hollywood Bowl Leeds centre resulting in an

enhanced customer experience and more reasons to

stay with us for longer.

Driving performance through digital investment

Our investment in technology 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, which has

resulted in an increase in website visits and sales, with

online bookings now accounting for 60 per cent of

bowling revenue.

We drive yields through dynamic pricing and targeted

digital sales and marketing. We increase engagement

and dwell time in our centres with digital content like our

hugely popular live leaderboards, and we vary-in-centre

content during the day to target speciﬁc customers. For

example, daytime content is more family focused

compared to evenings.

In FY2024 we will be launching our new in-house

developed booking system which we are creating to

meet the needs of our increasingly larger and more

diverse business. Our investment in this modern and

ﬂexible technology platform is signiﬁcant, supporting the

future development and growth of the Group.

FY2023 revenue mix

46.6% Bowling, golf and other

26.3% Food and drink

27.0% Amusements

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our brands continued

Expanding our

Canadian brand

254

Bowling lanes

Large-format centres in highly

populated locations

£2.2m

Refurbishment capital

in FY2023

Splitsville is now the largest branded

ten-pin bowling operator in Canada

15.1%

Increase in LFL revenue

Hollywood Bowl Group plc

Annual report and accounts 2023

Expanding the Splitsville estate

Splitsville is made up of nine large family entertainment

centres (at the end of FY2023) spread across the

country, with six centres in Ontario, two in British

Columbia and three in Alberta. All the centres have

ten-pin bowling lanes, a large bar and diner and an

amusements area, with some oﬀering American pool,

laser tag and indoor mini-golf.

In February 2023, the Group acquired three centres in

Calgary, Alberta, providing a strategic location between

Ontario and British Columbia. These centres are all

leasehold properties and established businesses and,

having been relaunched in their markets under the

Splitsville brand, provide the Group with a foundation for

further growth in this key market.

Post FY2023 year end, the Group has completed two

acquisitions, one in Ontario and the other in British

Columbia. Both have been relaunched in their markets

under the Splitsville brand, taking the estate to 11 centres

as at 16 December 2023..

Insight led refurbishment programme

Our refurbishment programme has begun with Richmond

Hill completed during the year and Kingston due to

complete in FY2024. We also have two further

refurbishments planned for FY2024. The renovations are

introducing many features already established in the UK.

The refurbishment concepts are backed by extensive

customer-research, which aﬃrmed that the Canadian

market is ready for an upgraded, branded, family-

friendly leisure proposition similar to Hollywood Bowl’s

UK customer-orientated operating model.

The performance of Richmond Hill is testament to this

strategy, which has exceeded revenue and proﬁtability

expectations since being refurbished and relaunching

under the Splitsville brand.

Foundations for growth

We are enhancing our technology and digital marketing

to improve the online customer journey and have

introduced a refreshed brand communications

framework and new logo.

We are also putting the structural foundations in place to

support a fast-growing business, including a new senior

leadership team, and upskilling the Centre Managers to

drive revenues and yields.

With over 190 single-owned or multi-site group-owned

bowling centres across Canada, the Group has a healthy

development and acquisition pipeline.

The opportunity for consolidation in the market is

signiﬁcant and through the growth of the estate in

FY2023, Splitsville is already the largest branded ten-pin

bowling operator in the country.

We are currently on site at one new build in Ontario and

negotiating on several other new build sites. All

acquisitions and developments are subject to the

same return on investment hurdle rate.

Our Striker Bowling Solutions operation continues to

support the industry as a supplier and installer of

bowling equipment, as well as supporting our own

expansion requirements.

Its established national network is providing us with

access to a large section of the Canadian market and an

unmatched insight into the changes that are taking

place in the industry.

New centres added in FY2023

Target Splitsville centre estate size by 2035

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our brands continued

Our UK indoor

mini-golf brand

135

Mini-golf holes

91.6%

Customers highly satisﬁed

or satisﬁed

603k

Rounds played

(FY2022: 490k)

£9.18

Spend per round (FY2022: £8.27)

Hollywood Bowl Group plc

Annual report and accounts 2023

We also introduced a new mobile-based scoring system,

an upgraded website and an updated brand

communication framework and new logo for the centres.

The enhancements from Peterborough have been adapted

and introduced into the other four Puttstars locations.

In addition to the upgraded mini-golf proposition ﬁrst

seen in Peterborough, we have further evolved the

Puttstars customer oﬀer (and optimised the space

returns) by extending the amusements area in Harrow

and adding duck-pin bowling lanes in Leeds, to look to

enhance the revenues and customer experience.

An extra oﬀer in selected bowling centres

Whilst bowling centres remain the Group’s ﬁrst choice

when entering new locations due to their heightened

returns, the market opportunity for indoor mini-golf

remains strong.

We have introduced a mini-golf course into our

Hollywood Bowl centre in Leeds and plan to include two

courses in our new Hollywood Bowl centre in Colchester

which will open in FY2024.

We are also considering adding mini-golf as an

additional oﬀer in other centres where space

conﬁguration allows.

Diversifying our revenue streams

We operate ﬁve Puttstars indoor mini-golf centres that

appeal to a broad range of consumers. The market

remains highly fragmented with more than 1,000 indoor

and outdoor locations in the UK, where independent

operators manage the vast majority.

Each of our Puttstars centres oﬀers a diverse

entertainment experience, including nine-hole courses,

bar, diner, and amusements area.

Technology and digital channels form an integral part

of the Puttstars customer journey and marketing

approach. We have a bespoke digital-scoring system

and our in-centre screen installations provide centre-wide

leaderboard information, promoting friendly competition

and heightened customer participation.

Evolving the brand experience

Our newest centre at the Queensgate Shopping Centre,

Peterborough, opened in November 2022 and incorporated

several enhancements following some extensive

customer research.

These included greater variation in course diﬃculty, for

example the introduction of larger holes and club heads

for junior players and more deﬁned course designs.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Sustainable,

proﬁtable growth

Our results reﬂect the success of

our customer-focused operating

model as well as our clear and

consistent strategy.”

Stephen Burns, Chief Executive Oﬃcer

Chief Executive Oﬃcer’s review

Hollywood Bowl Group plc

Annual report and accounts 2023

A record performance

I am delighted with the Group’s excellent performance in

FY2023, a year in which we continue to strengthen our

position as a UK market leader in competitive socialising

and as one of the largest operators of ten-pin bowling

centres in the world.

Hollywood Bowl Group continues to deliver sustainable,

proﬁtable growth, with total revenue of £215.1m, 11.0 per

cent growth on FY2022 (16.2 per cent excluding the

reduced rate (TRR) of VAT on bowling activities in

FY2022) and Group like-for-like (LFL) revenue growth of

4.5 per cent.

Our results reﬂect the success of our customer-focused

operating model as well as our clear and consistent

strategy in delivering sustainable proﬁt growth and

shareholder returns while maximising favourable

trading conditions. We oﬀer fantastic value-for-money

family-friendly entertainment experiences and the

eﬀorts of all our team members ensure our customers

enjoy consistent positive experiences, as reﬂected by

our excellent customer service scores.

Our strong ﬁnancial position allows us to invest in growing

our high-quality portfolio domestically and internationally

with new centre openings, acquisitions and our rolling

refurbishment programme and rebrands. We also

continue to invest in innovation and technology as a key

driver of the customers’ digital journey and experience.

Group adjusted proﬁt after tax was £36.8m, adjusting

for acquisition fees of £0.7m and the non-cash expense

of £2.0m related to the fair value of the earn out

consideration on the Canada acquisition in May 20222.

Statutory proﬁt after tax was £34.2m. Free cash ﬂow of

£29.5m demonstrates our cash generative business

model, and net cash of £52.5m at the end of FY2023

enables our continued investment in the business.

Growth in all revenue lines

Against an exceptionally successful prior year, UK LFL

revenue (which excludes TRR of VAT on bowling

activities in FY2022) grew by 4.1 per cent, with our main

revenue lines – bowling, food, drink and amusements –

all showing LFL growth. Whilst our trading levels were

helped by some very favourable weather in the UK, it is

due to our unrelenting customer-focused operating

model that we were able to take advantage of this and

deliver a record year.

We saw UK LFL game volumes grow by 0.7 per cent and

spend per game (excluding TRR of VAT on bowling

activities in FY2022) by 3.4 per cent to £11.06, up from

£10.69 in FY2022. Our dynamic pricing technology,

which allows us to oﬀer better value for customers at

non-peak periods, helped drive incremental volume and

carefully controlled yield enhancement, yet we still oﬀer

the best value for money and best invested product of

all the branded UK bowling operators.

Food spend in the UK was up in the year showing a 9.9 per

cent improvement, with our focus on speed, quality,

consistency and value-for-money driving this growth. New

menu items have been added in line with customer

feedback and sales data, and although we have made

some small changes to price to mitigate food inﬂationary

increases, the most popular menu items were still below

their 2019 price points. Our drinks range also oﬀers

excellent value-for-money. Spend on drink in the UK grew

on a per game basis by 2.3 per cent, underpinned by

further enhancements to the at lane ordering systems

and the national rollout of a new drinks range.

Refurbishments and space optimisation projects,

coupled with the expansion of contactless payment

technology and new game formats, helped drive LFL

sales growth of 7.3 per cent in amusements in UK

centres. We have kept the price to play at £1 for the

majority of our machines despite the signiﬁcant

improvement in the gaming experience but are utilising

new payment technology to enhance the yield on

certain games where appropriate.

We are very encouraged by the performance of our

Canadian business in the ﬁrst full trading year since the

acquisition in May 2022. LFL revenue increased by

15.1 per cent on a constant currency basis. This

underpins our belief that there is signiﬁcant longer-term

opportunity to add further value through leveraging our

customer-led

operating model, technology and digital

marketing experience.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Chief Executive Oﬃcer’s review continued

£11.06

UK LFL SPG +3.4% vs FY2022

£30.3m

Total capital expenditure, including

acquisitions, in FY2023

Growth strategy – investment and innovation

Our growth strategy remains unchanged. The new

centre opening programme is on track in both the UK

and Canada. We continue to grow LFL revenue through

the improvement of the existing estate and our

refurbishment programme continues to deliver above

our 33 per cent returns hurdle rate.

FY2023 was a record year of investment in the estate

and a very busy time for our property teams. In total, we

invested £30.3m (excluding professional fees on

acquisitions) on new centre openings, refurbishments

and acquisitions.

In the UK, we were pleased to open three new centres in

the year, Hollywood Bowl Speke, Hollywood Bowl Merry

Hill, and Puttstars Peterborough. Lincoln Bowl was acquired

on 2 October bringing our total UK estate to 71 centres.

We remain conﬁdent in our ability to deliver on our plan of

an average of three new openings a year. At present we are

on site at another new location and are planning to

commence development at three others in early Q2

FY2024. This year will see the opening of our long-

anticipated centre at the £70m Northern Gateway leisure

complex development in Colchester, combining 26 bowling

lanes, mini-golf, bar, diner and an amusement oﬀer.

We completed 13 UK centre refurbishments, introducing

the very latest design innovations and technological

improvements to the sites. These refurbishments

included retiring the AMF brand from the portfolio after

rebranding the ﬁnal two centres and space optimisation

programmes at three centres: increasing amusement

space at Puttstars Harrow, creating a six-lane duck-pin

bowling area aimed at younger families and corporates

at Puttstars Leeds and incorporating a nine-hole

Puttstars in underutilised space at Hollywood Bowl

Leeds. Combining oﬀers at centres where space

conﬁguration makes it possible, is proving popular with

customers, keeps our oﬀering fresh and supports centre

yield increases. All the refurbishments are delivering

returns in line with expectations, with the last 13 projects

averaging more than a 40 per cent return on investment.

We expect to carry out between eight and ten

refurbishments in FY2024.

The Pins on Strings rollout in the UK has continued, with

a further 13 centres beneﬁting from this cost saving

technology which also enhances our customer

experience by signiﬁcantly reducing games per stop.

54 centres now have the machines installed (83 per

cent of the Group’s UK bowling estate), delivering a

minimum 30 per cent return on invested capital. We

plan to install this technology in at least eight centres

in FY2024.

Investment in the digital customer journey has

continued, as we reﬁne our sales and marketing activity

and online booking systems. Online sales conversions,

centre yields and capacity utilisation have improved

through targeted marketing and dynamic pricing. In

FY2023 we have been developing our own bespoke

booking system.

New Pins on Strings UK installations

UK refurbishments completed

Hollywood Bowl Group plc

Annual report and accounts 2023

As our business has evolved and grown, we have

become aware of the limitations of current third-party

platforms and have decided to make the investment in a

new modern and ﬂexible technology platform that can

evolve and support our next stage of growth. Built by our

in-house development team, the open-source,

multi-channel technology will integrate with our current

CRM tools and improve the booking experience for our

customers and team members. Now nearing

completion, the new system will be launched in Q3

FY2024 in the UK and rolled out to Canada at a later

date.

Canada – expansion and acquisitions

Our Canadian operations traded ahead of expectations,

contributing CAD 37.3m (£22.5m) in revenue and over

CAD 7.4m (£4.5m) of EBITDA on a pre-IFRS 16 basis.

We have made good progress with our growth strategy

in Canada, focused on four areas:

1. investing in the existing estate;

2. acquiring existing businesses that complement

the current estate;

3. opening new centres; and

4. supporting the Canadian bowling market with

Striker’s products and services.

The refurbishment programme is also progressing well,

with one major refurbishment and rebrand to Splitsville

completed and one on site. The newly refurbished

centre has been very well received by customers with

returns on investment performing well above our hurdle

rate in Canada. Post completion, LFL revenue growth at

this centre has been over 30 per cent.

This performance in Canada has been supported by

insights gained from detailed customer research carried

out in FY2023, which in many ways echoes the UK’s

customer needs. Although there are some variances,

such as a greater corporate and educational emphasis,

the research conﬁrmed that our UK customer focused

operating model will translate well for the Canadian

market where there are signiﬁcant opportunities for

sector consolidation and growth.

Our pipeline of new site opportunities and acquisitions

is building with several centres in the diligence process.

In February 2023, we acquired three new centres in

Calgary. We also exchanged contracts on a 43,000

square feet new build in Ontario featuring 24 lanes,

scheduled to open in FY2024. Post the year end, we

have acquired two further centres, one in Ontario and

one in Vancouver, bringing us to 11 centres in Canada at

the time of writing.

The Striker business continues to grow as a result of

increased investment into bowling centres across the

country. Revenues totalled CAD 7.1m (£4.3m) and the

order book is strong with several large installation and

maintenance projects signed to commence in FY2024.

We continue to share ideas between the businesses,

adapting the UK operating model to a Canadian audience

whilst maintaining the entrepreneurial spirit of the local

management. In order to share best practice across the

Group, we were able to sponsor four UK team members

to take up permanent roles in Canada – one to head up

talent development, which will be vital to growing our

operations and evolving the business culture, two

Centre Managers and the Director of Operations. As

the Canadian operations develop, we plan to oﬀer

more opportunities for team member exchanges.

$37.3m

Revenue (CAD) from Canadian operations

30+

Splitsville centres target opportunity

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

An outstanding team

We have an excellent reputation for our positive working

culture and creating outstanding workplaces is one of

the three pillars of our sustainability strategy. In FY2023,

we refreshed our employer brand aimed at improving

communications in our business, attracting a more

diverse team and answering the key question of why a

candidate might want to work with us. The initial insight

study highlighted areas of improvement and we have

been taking action to address this. The response since

launch has been fantastic with signiﬁcant improvements

in team member engagement, social media and website

traﬃc and job applications.

For the second year running we rank amongst one of the

Top 25 UK’s Best Big Companies to Work For in 2023.

Our Hemel Hempstead oﬃce was awarded the top

3* rank for its working practices, placing us amongst

a select few businesses. Our UK net promoter score

has also increased against the previous year.

Our team members continue to impress, supported by

our industry-leading in-house training and development

programme. Although there continues to be considerable

competition for labour in the leisure market, our exposure

has been cushioned somewhat by our low exposure to

the London area. Furthermore, our refreshed employer

brand launched during the year has made a signiﬁcant

diﬀerence to our ability to attract talent. It is important

that we remain competitive and therefore we increased

average hourly pay for team members by over 9 per cent

and Centre Manager and Assistant Centre Managers

have seen salary increases of over 5 per cent during

the year.

For FY2023, we will pay out over £2.6m in centre level

management bonuses, with Centre Managers on average

receiving over 64 per cent base pay and Assistant

Centre Managers receiving over 14 per cent of base pay.

Also, more than half of our hourly rate team members

received bonuses measured against ﬁnancial,

environmental and customer satisfaction criteria,

equating to £0.6m in total.

Sustainable growth

Running our business in a sustainable manner is a key

focus for the Group and is integral to our decision

making. Good progress was made across all

sustainability metrics and we met our key FY2023

targets across our three sustainability pillars. The solar

panel rollout bringing the total to 27 centres, further

reducing our reliance on purchased electricity.

Our indirect Scope 3 emissions are published for the

ﬁrst time this year, which has helped us to develop our

pathway to the net zero strategy and enabled us to set

science-based targets (SBTs) from FY2024, using

FY2023 as a baseline year.

Over the next two years, we will be aligning our Canadian

operations with our UK sustainability strategy so that

from FY2025 we can collectively report our

environmental and social progress across the Group.

Outlook

After another year of exceptional performance, we

remain focused on sustainable proﬁtable growth and

continued investment across all areas of the business. It

is anticipated that the increases to national minimum

(living) wage rates, which were announced in the Autumn

Statement, will be c. £0.6m for H2 FY2024 (c. £1.2m

annualised), whilst the other changes, such as business

rates, are expected to have minimal impact. We are

conﬁdent that our high-quality leisure experience oﬀers

great value for money, which is why families and friends

are continuing to choose our inclusive and aﬀordable

oﬀerings for their leisure spending.

With a strong balance sheet and a highly cash generative

business model, we see the potential in the future to

grow our business to at least 130 centres in the UK

and Canada.

I would like to thank all our team members in the UK and

Canada for their continued dedication to our customers

and Hollywood Bowl Group and look forward to another

successful and exciting year ahead.

Stephen Burns

Chief Executive Oﬃcer

17 December 2023

Chief Executive Oﬃcer’s review continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Where do you see the future growth of the

UK business?

We now have 71 centres in the UK, and believe there is still

signiﬁcant room for long-term sustainable growth. We

have an exciting pipeline of new centres and are on track

to deliver an average of three new centre openings a year

by the end of FY2026. We are an attractive tenant so while

we see a large number of opportunities for new centres,

we remain very selective and focus on quality locations

that meet our clear returns policy.

Our growth also comes from our refurbishment programme

and by improving our existing operations and customer

experience, increasing our revenue streams. Technology

is a key driver of this, and I am excited about our new

booking system due to launch in FY2024 which will

improve our customers’ digital journey and forms a key

part of our wider digital transformation programme.

What are you excited about next year?

I am extremely excited about the opportunity in Canada.

Our research indicates that there are a large number of

similarities between the Canadian and UK markets which

gives us conﬁdence that applying our UK model, with some

minor adjustments, will work well. We have started to

introduce Hollywood Bowl Group ways of working and have

seen impressive results so far. The market itself is highly

fragmented and under-invested and we have a

solid foundation of 11 centres from which to continue to roll

out the established Splitsville brand across our growing

pipeline of excellent new site opportunities and acquisitions.

We ask CEO Stephen Burns about the Group’s

performance in FY2023 and future growth opportunities.

Q&A

with Stephen

With another record year, what challenges

has the Group faced in FY2023?

UK business has experienced a number of challenges this

year with cost inﬂation and a cost-of-living crisis. Although

we haven’t been immune to these challenges, our success

this year has demonstrated the strength of demand for

fun, aﬀordable family-friendly leisure activities and the

resilience of our business model to rising costs.

Are you ﬁnding it hard to attract and retain talent?

It’s always a challenge to ﬁnd and keep good people but we

perform well above the hospitality and leisure industry

average thanks to our people strategies. Our approach

cuts across all areas of HR. We have a strong employer

value proposition and work culture, and have thought

carefully about a candidate’s journey – from ﬁrst contact,

through to training and development and onto our talent

management programmes. We pride ourselves on the

range of employment opportunities, whether ﬂexible, part

time or full time, to suit individual needs and oﬀer excellent

beneﬁts regardless of what type of contract you are on.

What is the future of Puttstars?

It is still at an early stage in its journey and we continue to

test and develop new ways to evolve the oﬀer, including

introducing duck-pin bowling into our Leeds centre. It’s

clear that the business doesn’t oﬀer the same returns that

we can achieve from comparable bowling centres, but it

demonstrates our ability to apply our customer-led

operating model to new indoor leisure activities. We have

also started to introduce mini-golf courses into bowling

centres where we have underutilised ﬂoor areas, giving

customers reasons to spend more time with us.

Q Q

A A

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our market environment

Responding to an

evolving landscape

Our position as the established ten-pin bowling and competitive socialising market leader in the UK, and

now the ten-pin bowling market leader in Canada, enhances our ability to respond to evolving market

dynamics. There are a number of market trends and opportunities which are important for the Group.

Popularity of

competitive

socialising

Opportunity

The ‘competitive socialising market’ evolved due to

strong consumer appetite for unique and inclusive

experiences, including updated takes on traditional

activities such as bowling, mini-golf, table tennis

and bingo.

Response

With our active refurbishment programme and the

introduction of innovations like our scoring systems,

leaderboards and mini-golf concepts, we continue

to set the standard for competitive socialising in

the UK, enabling us to successfully compete with

increased numbers of new entrants attracted to

the market.

Link to strategy

Combined retail

and leisure

experiences

Opportunity

Numerous retail property landlords and developers

are responding to this by looking to expand their

leisure oﬀering and create a wider destination

customer experience to increase footfall and

extend dwell time.

Response

Our strong record of successful partnerships with

landlords and our unique customer experiences,

mean we are considered key existing and potential

new anchor tenants alongside cinema and casual

dining operators in the UK. We are also starting to

gain good traction with landlords in Canada.

Macro trends

Consumers are

increasingly preferring to

create and share social

experiences rather than

accumulating material

items, which is shaping

how they allocate their

discretionary budgets

and leisure time.

High street, and

out-of-town, traditional

retail outlets and

development schemes

are under increasing

pressure from online

channels and the rise of

the ‘experience economy’.

Link to strategy

Hollywood Bowl Group plc

Annual report and accounts 2023

Key to strategy

Driving like-for-like revenue growth

Actively refurbishing our assets

Developing new centres and acquisitions

Focusing on our people

Leveraging our indoor leisure experience

See our strategy on pages 28 to 33

Low UK market

penetration

Outlook

In the UK, the activities of ten-pin bowling and

mini-golf enjoy a wide demographic appeal and high

level of participation interest when compared to

other oﬀerings in the competitive socialising sector.

Response

We continue to work closely with agents and

landlords to further strengthen our new centre

pipeline which will enable us to accelerate the

expansion of our market coverage into prime

locations for the Hollywood Bowl brand.

Opportunity

This trend and the associated opportunities

accelerated due to the COVID-19 pandemic and the

subsequent trading and liquidity pressures

experienced by many operators in the leisure and

hospitality sectors.

Response

The wider Canadian leisure market remains highly

fragmented with many independent operators

in existence.

Within the bowling sector there are more than 190

centres. With 11 centres, Splitsville is already the

largest branded operator in Canada.

Market opportunities

In the UK, ten-pin bowling

has historically been a

relatively low-frequency

activity, and with fewer

than 350 centres, has

lower levels of location

accessibility when

compared to cinema.

Well-capitalised businesses

like Hollywood Bowl Group

can increase their share of

the leisure market as

ﬁnancially challenged

operators become less

competitive and seek to

exit the market.

Canadian sector

consolidation

Link to strategy

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Business model

Our business model creates value by

continually investing in enhancing the

customer experience

What sets us apart

Our centres oﬀer a complete entertainment experience for customers of all ages.

Alongside our core oﬀer of bowling or mini-golf, they can also enjoy amusements

and food and drink. These additional oﬀerings not only enhance their experience

and increase reasons to visit, but also increase dwell time and secondary spend.

Multiple revenue streams

Successful brands

We operate an extensive portfolio of

bowling and mini-golf centres across

the UK and Canada, under our

Hollywood Bowl, Splitsville and

Puttstars brands.

High-quality estate

Our centres are predominantly in prime

locations, in out-of-town, multi-use

leisure and retail parks, alongside

cinema and casual dining sites.

Motivated and engaged teams

Our teams are the face of our business

and are focused on delivering the best

brand experience for our customers.

Landlord relationships

Excellent relationships with developers,

agents and landlords ensure that we

maintain a strong pipeline of potential

new high-quality sites.

Strong balance sheet

By driving revenues, continuing to

achieve healthy margins and

maintaining a strong balance sheet, we

are able to invest appropriately in all

areas of our business and create value

for our stakeholders.

Bowling

Mini-golf

Amusements

Food Beverages

What we do

Hollywood Bowl Group plc

Annual report and accounts 2023

What we do

Where we invest Value creation

Our customers

We strive to deliver the best possible

experience through exceptional

service, in unique, contemporary, safe

and exciting environments, at a highly

accessible price point.

Our people

Our team members are highly focused

on commercial, satisfaction and

sustainability measures to ensure our

customers enjoy the best possible

experience whilst we minimise our

impact on the environment.

Management programmes are in place

to attract, retain and nurture top talent.

Our partners

We support a wide ecosystem of

partners and suppliers through

commercial arrangements designed

to build mutually beneﬁcial

long-term relationships.

Our communities

The inclusive nature of bowling and

mini-golf makes them an important

contributor to social wellbeing. We oﬀer

subsidised access for concessionary

users and educational groups.

Our investors

We are focused on sustainable,

proﬁtable growth by driving revenues,

and managing our margins and cash

position to provide attractive returns.

Investment

Customer experience

• Safe and secure environments

• Technology to enhance the wider customer journey

• Centre maintenance and upgrades

• Centre refurbishments and reconﬁgurations

• Customer insight programmes

Link to strategy

Delivering like-for-like revenue growth

Actively refurbishing our assets

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

Focusing on our people

Growth

• New centre developments

• Broadening the appeal to new and existing customers through digital

marketing programmes and environment upgrades

• Acquisitions

• UK and international market expansion

Link to strategy

Developing new centres and acquisitions

Leveraging our indoor leisure experience

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our proven

growth strategy

Driving like-for-like

revenue growth

Actively refurbishing

our assets

Focusing on our people Developing new centres

and acquisitions

Leveraging our indoor

leisure experience

Strategy

Key to risks

Economic environment

Covenant breach

Expansion and growth

Core systems

Food and drink suppliers

Amusement supplier

Management recruitment

and retention

Food safety

Cyber security and GDPR

Compliance

Climate change

See our risks on pages 70 to 75

See our markets on pages 24 and 25

Hollywood Bowl Group plc

Annual report and accounts 2023

Drivinglike-for-like

revenue growth

We do this by

• Focusing on sales, service and safety superiority, and improving

centre yields

• Providing an outstanding customer experience focusing on four

critical customer satisfaction drivers of value for money,

cleanliness, team friendliness and service speed

• Increasing dwell time through a diverse entertainment experience

• Investing in technology and improving the digital customer journey

to drive sales and engagement

• Maximising customer awareness and engagement through

targeted digital marketing to a variety of customer groups

• Improving food and beverage menus and removing barriers

to ordering

• Enhancing the amusement oﬀering, making it aﬀordable and

accessible to all

• Minimising bowling-lane downtime due to mechanical failure

through the rollout of Pins on Strings technology

What we achieved in FY2023

• Net promoter score of 64.4 per cent

• 60.4 per cent of customers were highly satisﬁed

• Linked team member bonus schemes to our four critical

customer satisfaction drivers

• Improved engagement rates and revenue generation through our

customer data platform, using insights to improve the

eﬀectiveness of digital marketing

• Reﬁned our website and booking engine functionality to simplify

the customer journey, and improve the presentation of products,

promotions and dynamic pricing

15.1%

Canada LFL revenue growth

4.5%

Group LFL revenue growth

4.1%

UK LFL revenue growth

We grow our LFL revenue by attracting new customers and increasing the

frequency of existing customer visits and stimulating higher spend per game.

Economic environment

Amusement supplier

Management recruitment and retention

• Reﬁned our value snacks and sharers food menu, increasing at

lane food and beverage orders

• Carried out space optimisation to add extra bowling lanes and

extend amusement areas where possible

What’s next?

• Continue refurbishment programme in the UK (c. 33 per cent ROI)

and Canada (c. 25 per cent ROI)

• Continue to focus on innovation and investment in technology

• Launch our new in-house developed booking system, which will

support further business growth in the UK and Canada

Links to risks

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Actively refurbishing

ourassets

Strategy continued

Investment in our centres improves the customer experience and drives sales and proﬁtability.

Our upgrades attract new customers, enhance customer satisfaction and increase revenues.

We do this by

• Running a ﬁve-to seven-year centre refurbishment programme

with an average spend of c. £400k, keeping our centres looking

their best, optimising space and introducing innovations

• Reconﬁguring centres to optimise space and drive revenues and

yields, for example combining the bar and diner areas to create

more amusement space and introducing mini-golf courses into

underutilised spaces

• Increasing the space, density and quality of family games and

amusement machines, driving ancillary revenues

• Upgrading in-centre digital content systems to improve customer

engagement, and encourage food and beverage spend

• Investing in solar panels to reduce our impact on the environment

and our exposure to energy price increases

What we achieved in FY2023

• Completed the refurbishment or rebrand of 15 centres – 13 in the

UK and two in Canada, investing £6.3m on improvements

• Added extra amusements space during refurbishments – creating

on average eight new machine places and adding a total of 86 new

amusement pieces in our refurbished centres

• Continued to rollout our in-centre digital installations with

enhanced content – now in 36 centres

• Continued to rollout Nayax ‘tap to play’

• Completed rollout of Pins on Strings in 13 more centres – now in

54 centres at end of FY2023

• Installed solar panels at ﬁve centres to bring the total to 27 centres

• Retired the AMF brand, with all bowling centres in the UK now

rebranded to Hollywood Bowl

• Rebranded all new Canadian centres to the Splitsville brand

What’s next?

• At least eight refurbishments to be completed in FY2024

• Continued rollout of Pins on Strings to improve games per stop (GPS)

• Ongoing negotiation with landlords to continue solar panel rollout

Links to risks

Economic environment

Amusement supplier

Climate change

Centres refurbished or rebranded in FY2023

17.4%

LFL spend growth in ﬁrst year after refurbishment

50%+

Average ROI on UK refurbishment capital expenditure

Hollywood Bowl Group plc

Annual report and accounts 2023

Developing newcentres

andacquisitions

We actively explore growth opportunities in new markets through the build of new centres

and via the acquisition of existing sites or leisure operators.

We do this by

• Focusing on quality openings and setting minimum 19 per cent

ROI on net capital expenditure

• Looking to international markets that are fragmented and

under-invested, and ripe for consolidation

• Seeking acquisitions meeting strict investment criteria, overseas

or in the UK, where we can add value and where there is signiﬁcant

potential for sustainable, proﬁtable growth

What we achieved in FY2023

• Opened two new Hollywood Bowl centres and one new

Puttstars centre

• Acquired three centres in Calgary, Canada

• Commenced construction on a new build centre in Ontario

What’s next?

• At least ten further centres scheduled to open in the UK and

Canada by the end of FY2025

• Continue to leverage our customer-led operating model,

technology and digital marketing experience to add value to the

Canadian business

• Continue to develop a pipeline of new Canadian site

opportunities, with more than ten additional sites or acquisitions

planned in the next ﬁve years

Links to risks

Covenant breach

Expansion and growth

Management recruitment and retention

New centres opened in UK

Centres acquired in Calgary, Canada

10+

New Group centres targeted by end of FY2025

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Strategy continued

Focusing on

ourpeople

We do this by

• Having a positive, fun, high-performance Group culture

• Having a clear purpose that is well understood and that underpins

the way our teams work

• Providing industry-leading training and development programmes

• Giving all team members the opportunity to progress and develop

their careers

• Oﬀering highly competitive pay, beneﬁts, and bonus schemes to

all our team members

• Engaging and communicating with all team members

What we achieved in FY2023

• Increased salaried teams’ remuneration by over ﬁve per cent

• Rewarded more than 50 per cent of our hourly paid team

members with performance-related bonuses

• Developed our employer value proposition which guides how we

talk about the Group as an employer and what it means to work

with us

• Launched the new employer brand aimed at attracting the best

talent, a more diverse workforce and increasing the number of

job applicants

• Launched a new careers website

• Developed our employer social media strategy

• Increased the number of Assistant Centre Manager in Training

and Centre Manager in Training programmes, and held talent

programmes for our technicians and contact centre teams

• Enrolled 14 team members onto the Senior Leadership

Development Programme

• Filled 45 per cent of management vacancies from our internal

talent pipeline

• Recognised as the number 12 ranked UK’s Top 25 Best Big

Companies to Work For in 2023

What’s next?

• Continue to run market-leading incentive schemes for our teams

• Welcome our ﬁrst cohort of graduates onto our Graduate

Training Programme

• Extend our employer brand across the Group

Links to risks

Core systems

Management recruitment and retention

Our dedicated, dynamic and diverse teams enable us to deliver on our

Group purpose. Attracting and retaining top talent is a priority.

£3.3m

Bonuses paid to centre teams

52%+

Of hourly paid team members received performance-

related bonuses

45%

Of management vacancies ﬁlled from internal talent pool

Hollywood Bowl Group plc

Annual report and accounts 2023

Leveraging our indoor

leisure experience

We believe there are potential sustainable and proﬁtable growth

opportunities in the indoor leisure sector in international markets.

We do this by

• Conducting extensive research into leisure market opportunities

• Applying strict investment criteria before entering new markets

• Conducting trials to test centre environments and

customer propositions

• Insight-led brand positioning

What we achieved in FY2023

• Acquired a well operated, asset backed Canadian business

in FY2022 that provides the Group with a strategic platform

for growth

• Extended the Splitsville brand from ﬁve to eleven centres (two

added post FY2023 year end) to become the largest branded

ten-pin bowling operator in the Canadian market

• Customer research project completed to enhance the customer

proposition and centre environments to drive customer

satisfaction and sales

• Launched a new brand framework and logo

• Refurbished our largest centre and rebranded all new centres

• Completed the formation of a new senior leadership team and

ongoing upskilling programme of Centre Managers

• UK team members recruited to support roles in Canadian team to

facilitate cross-learnings and ways of working

What’s next?

• Leverage our customer-led operating model, technology and

digital marketing experience to add value to the Canadian business

• Continue to develop a pipeline of new Canadian site

opportunities, with more than ten additional sites or acquisitions

planned in the next ﬁve years

• Continue to evaluate opportunities for further international

market expansion through the acquisitions of indoor leisure

operators with high-quality locations

Links to risks

Covenant breach

Expansion and growth

Core systems

30+

Target size of Canadian estate by 2035

Splitsville is now the market leading ten-pin bowling

brand in Canada

New Canadian centres acquired in FY2023

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Key performance indicators

We monitor our performance by regularly reviewing KPI metrics

We use these to gain a thorough understanding of the drivers of

our performance, of our operations and of our ﬁnancial condition.

Financial KPIs

Revenue (£m)

+11.0%

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 11.0 per cent, to

£215.1m, driven through LFL growth, new

centre performance and the full-year eﬀect

of our Canadian business, Teaquinn.

 

 

 

 

  

 



 

 

 

  

 

 

 

 

() 

 

   





 

 

   



Proﬁt before tax (£m)

-3.4%

Deﬁnition

Proﬁt before tax as shown in the ﬁnancial

statements.

Comment

Proﬁt before tax decreased to £45.1m due in

the main to TRR of VAT amount of £8.6m

received in FY2022, oﬀset in part by LFL

revenue growth and the performance of the

Canadian centres.

Revenue generating capex (£m)

+10.2%

Deﬁnition

Capital expenditure on refurbishments,

rebrands and new centres (excluding

maintenance capex).

Comment

Revenue generating capex increased by

10.2 per cent, to £13.8m, due to a higher spend

on refurbishments in the year, up £3.4m

compared to FY2022, that was partially

oﬀset by lower spend on new centres.

Group adjusted EBITDA (£m)

+6.8%

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 39.

Comment

Group adjusted EBITDA increased by

£5.2m to £82.7m, largely due to revenue

growth as well as the Canadian business

being owned for the full ﬁnancial year.

Like-for-like revenue growth (%)

+4.5%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.

Comment

LFL revenue has increased 4.5 per cent (on

a constant currency basis) when compared

to FY2022.

Net cash/(debt) (£m)

-6.4%

Deﬁnition

Net cash/(debt) is deﬁned as cash and cash

equivalents (£52.5m) less borrowings from

bank facilities (£nil) excluding issue costs.

Comment

The Group is in a net cash position as at

year end due to the strong trading during the

year and tight cost controls.

Hollywood Bowl Group plc

Annual report and accounts 2023

 

 

 

 

 

 

 

 

 

 

     

   

 

 

 

   

Adjusted gross proﬁt margin (%)

-2.2%pts

Deﬁnition

Adjusted gross proﬁt margin 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 decreased

year on year due to a combination of higher

LFL revenue growth in amusements than

other revenue lines and TRR of VAT in

FY2022, as well as the lower margin in the

Canadian business as guided on acquisition.

Group adjusted operating cash ﬂow (£m)

-6.9%

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 40.

Comment

Group adjusted operating cash ﬂow

decreased due to a combination of higher

corporation tax payments and a negative

movement in working capital.

Group adjusted EBITDA margin (%)

-1.5%pts

Deﬁnition

Group adjusted EBITDA margin is

calculated as Group adjusted EBITDA

divided by total revenue.

Comment

Group adjusted EBITDA margin was 38.5 per

cent, in line with management expectations.

Group adjusted EBITDA margin on a

pre-IFRS 16 basis was 30.2 per cent.

Total average spend per game (£)

+1.4%

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

1.4 per cent, to £10.82, due to customers

continuing to spend more during their visits.

Group operating proﬁt margin (%)

-3.5%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 25.4 per cent, due in the main to

TRR of VAT amount of £8.8m received in

FY2022 (4.8 per cent of Group revenue)

compared to only £0.2m in FY2023 (0.1 per

cent of Group revenue).

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.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Chief Financial Oﬃcer’s review

Delivering growth

and strong returns

Hollywood Bowl Group plc

Annual report and accounts 2023

On the back of record revenues

in FY2022, it was pleasing to see

continued growth for our UK and

Canadian operations.”

Laurence Keen, Chief Financial Oﬃcer

Group ﬁnancial results

FY FY

FY

(excluding TRR of

VAT on bowling)



Movement

FY vs

FY

(excluding TRR of

VAT on bowling)

Revenue m



m



m 

Adjusted gross proﬁt



m m m 

Adjusted gross proﬁt margin



   -bps

Administrative expenses m m m 

Group adjusted EBITDA



m m m 

Group adjusted EBITDA



pre-IFRS  m m m 

Group proﬁt before tax m m m 

Group proﬁt after tax m m m 

Group adjusted proﬁt before tax



m m m 

Group adjusted proﬁt after tax



m m m 

Free cash ﬂow



m m m -

Total dividend per share p p p 

1 Adjusted gross proﬁt margin is calculated as revenue less directly attributable cost of goods sold and excludes any payroll costs.

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 on page 39.

3 Adjusted group proﬁt before / after tax is calculated as group proﬁt before / after tax, adding back acquisition fees of £0.7m (FY2022: £1.6m) and the non-cash expense of £2.0m

(FY2022: £0.4m) related to the fair value of the earn out consideration on the Teaquinn acquisition in May 2022. Also, in FY2022 it included the deduction of the non-cash credit

in relation to the Teaquinn bargain purchase of £39,075.

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 FY2022 included a total of £8.8m relating to the reduced rate (TRR) of VAT on bowling. £5.8m of this was in respect of prior years and £3.0m for FY2022.

FY2023 includes £0.3m in respect of TRR of VAT.

6 FY2022 consolidated income statement included the following in respect of TRR of VAT on bowling in the UK: Revenue £8.8m, gross proﬁt £8.8m, administrative expenses £0.1m,

Group adjusted EBITDA £3.0m, Group proﬁt before tax £8.8m, Group proﬁt after tax of £6.6m and Group adjusted proﬁt after tax of £6.6m.

7 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, as well as a measure that investors use to

consider the underlying business performance. 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.

Further details on the alternative performance measures used are

at the end of this report.

Revenue

On the back of record revenues in FY2022, it was pleasing to see

continued growth, with UK LFL growth of 4.1 per cent in FY2023.

UK LFL revenue growth was a combination of spend per game

growth of 3.4 per cent, taking LFL average spend per game to £11.06,

as well as LFL game volume growth of 0.7 per cent. The LFL growth,

alongside the performance of the new UK centres, resulted in record

UK revenues of £192.4m and growth of 7.6 per cent compared to the

underlying revenues in FY2022 (excluding the impact of TRR of VAT

on bowling of £8.8m in FY2022). It is worth noting that UK centres

beneﬁted from the unseasonable wet weather in July and August,

with both months recording strong revenue and August achieving a

record month (£20.2m).

Canadian LFL revenue growth, when reviewing in Canadian Dollars to

allow for disaggregating the foreign currency eﬀect, was 15.1 per cent.

Total statutory revenue for FY2023 was £215.1m, 11.0 per cent growth on

FY2022 (16.2 per cent growth excluding TRR of VAT on bowling in

FY2022).

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Adjusted gross proﬁt

Adjusted gross proﬁt is calculated as revenue less directly

attributable cost of good sold and does not include any payroll

costs. Gross proﬁt was £177.6m, 8.1 per cent growth on FY2022 (14.0

per cent growth excluding TRR of VAT on bowling in FY2022), with

gross proﬁt margin at 82.6 per cent.

Adjusted gross proﬁt for the UK business was £161.2m with a margin

of 83.7 per cent. The trend of amusements growing at a higher rate

than bowling continued, producing a higher gross proﬁt overall, albeit

at a reduced gross proﬁt margin (amusements has a lower gross

proﬁt margin).

Adjusted gross proﬁt for the Canadian business was in line with

expectations at CAD 27.2m (£16.4m), with a margin of 73.1 per cent.

The lower margin rate when compared to the UK business is as

expected due to the lower gross proﬁt margin of the Striker bowling

equipment and installations business, the higher food and drink mix

in the Canadian bowling centres and the lower contractual

amusement gross proﬁt margin. Splitsville centres contributed CAD

25.2m (£15.2m) of gross proﬁt.

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 on a statutory basis were £123.5m.

On a pre-IFRS 16 basis, administrative expenses were £130.0m,

compared to £114.1m in FY2022.

Employee costs in centres increased to £40.7m, an increase of

£7.0m when compared to FY2022, due to a combination of salary

increases and the impact of higher LFL revenues, new UK centres,

as well as the full-year eﬀect of employee costs in Canadian centres,

which resulted in an increase of CAD 7.0m (£4.1m).

Total property-related costs, accounted for under pre-IFRS 16, were

£36.6m, with £33.9m for the UK business (FY2022: £33.3m). Rent

costs in the UK accounted for £17.6m in FY2023, an increase of

£0.4m compared to the prior year. Underlying business rates in the

UK increased year on year by £1.6m as the COVID-19 concessions

were removed during FY2023. However, due to business rate

reduction claims made in respect of the 2015 revaluation ﬁnally

being agreed, the Group received £2.3m in refunds (net of

professional fees), resulting in an overall decrease in UK business

rates of £0.7m. Total property costs in the UK increased by £1.1m,

with new centre costs increasing by £0.9m. Canadian property

centre costs were in line with expectations at CAD 4.5m (£2.7m).

Our current UK electricity hedge runs out at the end of FY2024. We

are therefore pleased to have agreed a new hedge up to the end of

FY2027, with FY2025 seeing a modest increase of 33 per cent

(£1.0m) compared to our current FY2024 hedge rate, whilst we

would still be able to take advantage of lower costs should such

market conditions prevail during this period. At the end of FY2023,

we had 27 centres with solar panels installed, resulting in over 38 per

cent of our UK estate beneﬁting from this technology, which aids in

the Group’s ESG strategy as well as some level of protection against

higher energy costs.

Total property costs, under IFRS 16, were £39.6m, including £10.4m

accounted for as property lease assets depreciation and £9.8m in

implied interest relating to the lease liability.

Corporate costs include all central costs as well as the out-performance

bonus for centres. Total corporate costs increased by £3.2m to

£25.3m when compared to FY2022. UK corporate costs increased

by £1.3m to £22.8m with the main driver of this being increased

marketing spend. As we continue to build out our support team in

Canada for growth, this, combined with a full year of ownership,

resulted in corporate costs increasing by CAD 3.3m to CAD 3.9m

(£2.3m). The additional people in Canada included a Director of

Operations as well as leaders in marketing, people and property.

The statutory depreciation, amortisation and impairment charge for

FY2023 was £26.1m compared to £25.7m in FY2022. Excluding

property lease assets depreciation, this charge in FY2023 was

£14.9m. This is due to the continued capital investment programme,

including new centres and refurbishments, as well as the full year

impact of Canada.

We undertook detailed impairment testing which resulted in an

impairment charge in the year of a total of £2.2m (FY2022: £4.3m).

The discount rate used for the weighted average cost of capital

(WACC) was 12.7 per cent pre-tax (FY2022: 16.0 per cent).

See note 12 to the Financial Statements for more information.

Canadian performance

Following the Teaquinn acquisition in May 2022, the Group has

continued to grow its footprint in Canada. During FY2023 the Group

acquired three entertainment centres in Calgary, with one new build

in Ontario signed and due to open in early 2024.

The business continues to trade in line with expectations, with total

revenues in Canada of CAD 37.3m (£22.5m), and just over CAD

7.4m (£4.5m) of EBITDA on a pre-IFRS 16 basis. Of this, Striker, the

bowling equipment and installations business, contributed CAD 7.1m

(£4.3m) of revenue and CAD 0.9m (£0.8m) of EBITDA. On a LFL

basis revenue grew by 15.1 per cent.

Adjusted gross proﬁt (which excludes payroll costs) was in line with

expectations at CAD 27.2m (£16.4m), with a margin of 73.1 per cent.

The lower margin rate when compared to the UK business is in line

with expectations because of the lower gross proﬁt margin of the

Striker bowling equipment and installations business, higher food

and drink mix and the lower contractual amusement gross

proﬁt margin.

Exceptional costs

Exceptional costs relate in the main to two areas. The ﬁrst is the

acquisition costs in relation to the acquisition of three entertainment

centres in Calgary and acquisitions in progress at year end, which

totalled £0.7m. The second is the earn out consideration for

Teaquinn President Pat Haggerty, which is an exceptional cost of

£2.0m in FY2023 (of which £1.8m is in administrative expenses and

£0.2m is in interest expenses). See the table on page 39 for

exceptional items included in the Group adjusted EBITDA and

operating proﬁt reconciliation.

As noted in the FY2022 full-year results, the earn out consideration

is considered a post-acquisition employment expense and not in the

scope of IFRS 3, but instead is accounted for under IAS 19. The earn

out has a cost impact in the following ﬁnancial years up to and

including at least FY2025. More detail on these exceptional costs is

shown in note 5 to the Financial Statements.

Chief Financial Oﬃcer’s review continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Group adjusted EBITDA and operating proﬁt

Group adjusted EBITDA pre-IFRS 16 increased to a record £64.9m

and includes a contribution of £4.5m (CAD 7.4m) from the

Canadian business.

Compared to FY2022 pre-IFRS 16, this was an increase of 7.1 per

cent. When excluding the impacts of TRR of VAT (£3.0m in FY2022)

this increase is 12.7 per cent.

FY

’

FY

’

Operating proﬁt



 

Depreciation  

Amortisation  

Loss on property, right-of-use assets, plant and equipment and software disposal  

Exceptional items  ()

Group adjusted EBITDA under IFRS   

IFRS  adjustment () ()

Group adjusted EBITDA pre-IFRS   

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.

The increase is primarily due to the strong LFL revenue

performance, the new UK centre performance, the Group’s relatively

ﬁxed cost base, and the Canadian business. 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 above.

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 scheme (SAYE) for all team members. The LTIP

awards vest in three years providing continuous employment during

the period, and attainment of performance conditions relating to

earnings per share (EPS), as outlined on page 103 of the Annual

Report. The Group recognised a total charge of £1.2m (FY2022:

£0.9m) in relation to the Group’s share-based arrangements.

Share-based costs are not classiﬁed as exceptional costs.

Financing

Finance costs increased to £9.0m in FY2023 (FY2022: £8.8m)

comprising mainly of implied interest relating to the lease liability

under IFRS 16 of £9.8m. Bank interest costs in relation to the Group’s

undrawn revolving credit facility of £0.2m were oﬀset by the interest

received (£1.4m) on the Group’s bank balances.

The Group’s bank borrowing facilities are a revolving credit facility

(RCF) of £25m at a margin rate of 1.75 per cent above SONIA and an

agreed accordion of £5m. The loan term runs to the end of

December 2024, and the RCF remains fully undrawn.

Cash ﬂow and liquidity

The liquidity position of the Group remains strong, with a net cash

position of £52.5m as at 30 September 2023, compared to £56.1m

at 30 September 2022. Detail on the cash movement in the year is

shown in the table on page 40.

Capital expenditure

During the ﬁnancial year, the Group invested net capex of £30.3m,

including £7.4m on the acquisition of three centres in Calgary.

A total of £7.0m was invested into the refurbishment programme,

with 15 UK centres and two Canadian centres, some of which were

still be completed at the end of FY2023. This included a rebrand of

Splitsville Richmond Hill, Canada and the ﬁnal two rebrands of AMF

to Hollywood Bowl, in Torquay and Worthing. Despite inﬂationary

pressures, returns on the UK refurbishments continue to exceed the

Group’s hurdle rate of 33 per cent.

New UK centre capital expenditure was a net £6.8m. This relates, in

the main, to three centres opened in the year – Hollywood Bowl in

Speke and Merry Hill Birmingham and Puttstars Peterborough.

The Group’s strong balance sheet ensures that it can continue to

invest in proﬁtable growth with plans to open more locations during

FY2024 and beyond.

The Group spent £9.1m on maintenance capital in the UK, including

continued spend on the rollout of Pins on Strings technology and

solar panel installations. At the end of FY2023, Pins on Strings were

in 56 centres and solar panels on 27 centres.

Technology investment was £0.8m as we continue to enhance the

digital customer journey ahead of the launch of our in-house core

reservations platform in FY2024. We also upgraded the website,

payment platform and customer data platform, and maintained a

continued focus on our cyber security.

Considering the rolling refurbishment programme, maintenance

capital, and the new centres in the UK and Canada, we expect

capital expenditure, including acquisitions to be in the region of

£35m to £40m in FY2024.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Cash ﬂow and net debt

FY

’

FY

’

Group adjusted EBITDA under IFRS   

Movement in working capital () 

Maintenance capital expenditure () ()

Taxation () ()

Payment of capital elements of leases () ()

Adjusted operating cash ﬂow (OCF)



 

Adjusted OCF conversion  

Expansionary capital expenditure



() ()

Disposal proceeds  

Net bank interest received/(paid)  ()

Lease interest paid () ()

Free cash ﬂow (FCF)



 

Exceptional items () 

Acquisition of Teaquinn Holdings Inc — ()

Cash acquired in Teaquinn Holdings Inc — 

Acquisition of Calgary centres () —

Cash acquired in Calgary centres  —

Dividends paid () ()

Equity placing (net of fees)  

Net cash ﬂow () 

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.

Taxation

The Group’s tax charge for the year is £10.9m arising on the proﬁt

before tax generated in the period. The increase in the Group’s

eﬀective rate of tax to 24.2 per cent is a combination of the increase

in the UK corporation tax rate from 19 per cent to 25 per cent from

April 2023 as well as the eﬀect of the disallowable element, for tax

purposes, of the earn out provision charged in FY2023.

Earnings

Statutory proﬁt before tax for the year was £45.1m and 3.4 per cent

lower than FY2022. It is worth noting that FY2022 included a proﬁt

before tax beneﬁt of £8.6m due to TRR of VAT.

The Group delivered proﬁt after tax of £34.2m (FY2022: £37.5m) and

basic earnings per share was 19.92 pence (FY2022: 21.91 pence).

Group adjusted proﬁt before tax is £47.8m, whilst Group adjusted

proﬁt after tax is £36.8m.

The adjustments are made to reﬂect the underlying trade of the

Group. These adjustments are adding back acquisition fees of

£0.7m and the non-cash expense of £2.0m related to the fair value

of the earn out consideration on the Canadian acquisition in May

2022. For more detail see note 5 to the Financial Statements.

Dividend and capital allocation policy

The Group’s highly cash generative business model and strong

balance sheet mean the business is well placed to continue to invest

in its customer-led, UK and international growth strategy and to take

advantage of opportunities as they arise, while delivering attractive

shareholder returns.

The Board has reviewed its capital allocation policy with the updated

priorities for cash as follows:

• capital investment into the existing centres through an eﬀective

maintenance and refurbishment programme;

• investments into new centre opportunities, including expansion in

both the UK and Canada;

• to pay and grow the ordinary dividend in line with adjusted proﬁt

after tax. Given the Group’s continued strong performance and

the cash balance, the ordinary dividend will be based on a payout

of 55 per cent of adjusted proﬁt after tax;

• any excess cash will be available for distribution to shareholders

as the Board deems appropriate, without impacting on investment

in the growth of the business.

The FY2023 ordinary dividend will be based on a payout of 55 per

cent of adjusted proﬁt after tax, in line with the revised capital allocation

policy and reﬂecting the Board’s conﬁdence in the Group’s strategy,

strong balance sheet and focus on delivering shareholder returns.

Chief Financial Oﬃcer’s review continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Therefore, the Board has declared a ﬁnal ordinary dividend

of 8.54 pence per share, based on an adjusted proﬁt after tax

of £36.8m (adjusted earnings per share of 21.48 pence).

In line with the Group’s capital allocation policy, the Board has

proposed a special dividend of 2.73 pence per share be paid to

shareholders alongside the ordinary dividend, bringing the full-year

dividend to 14.54 pence per share (FY2022: 14.53 pence per share).

Furthermore, given the surplus cash at the end of FY2023, the

Group announces a share buyback programme of up to £10m, which

is intended to commence shortly after the AGM.

The Board will periodically assess the progress of this share

buyback programme in light of the Group’s capital allocation needs.

Investing in the Group’s proﬁtable growth remains the priority use of

cash and any future returns to shareholders will be subject to

operational capital requirements, ﬁnancial performance and other

available strategic growth opportunities.

Subject to approval from shareholders at the AGM, the ex-dividend

date is 1 February 2024, with a record date of 2 February 2024 and a

payment date of 23 February 2024.

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.

Post-year-end events

We were pleased to complete three acquisitions in early FY2024.

In the UK, on 2 October, we purchased the assets, including the long

leasehold, of Lincoln Bowl for total consideration of £4.4m.

In Canada we completed two acquisitions. The ﬁrst is the acquisition

of a successful family entertainment centre in Guelph, Ontario called

Woodlawn Bowl Inc, for CAD 4.71m, which on a proforma EBITDA

pre-IFRS 16 basis, generated CAD 1.07m. The second is the

acquisition of the assets and lease of a family entertainment centre

in Vancouver, called Lucky 9 Bowling Centre Limited as well as its

associated restaurant and bar, Monkey 9 Brewing Pub Corp, for a

total consideration of CAD 425,000.

Laurence Keen

Chief Financial Oﬃcer

17 December 2023

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.

UK like-for-like (LFL) revenue for FY2023 is calculated as:

• Total Group revenues £215.1m, less

• New UK centre revenues for FY2022 and FY2023 that have not

annualised £6.3m, less

• VAT rebates of £0.3m relating to prior periods, less

• Canada revenues for FY2023 of £22.5m

New centres are included in the LFL revenue after they complete the

calendar anniversary of their opening date. LFL UK comparatives for

FY2022 are £178.7m.

Adjusted gross proﬁt margin is calculated as total revenue less directly

attributable cost of goods sold. Management do not consider it helpful

to include any payroll costs in the gross margin because although these

costs do vary to some extent with volume, it is in no way linear. These

amounts are presented separately on the consolidated income

statement.

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 evaluation cash from normalised trading.

LFL spend per game is deﬁned as LFL revenue in the year excluding

any revenues relating to TRR of VAT for prior years (£5.8m) and TRR of

VAT for FY2022 (£3.0m) 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, 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.

Adjusted proﬁt after tax is calculated as statutory proﬁt after tax,

adding back the acquisition fees in Canada of £0.6m and the non-cash

expense of £2.0m related to the fair value of the earn out consideration

on the Canadian acquisition in May 2022. 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.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Read more on the Business model

on pages 26 and 27

Read more on Sustainability on pages 46 to 59

Read more on Governance on pages 78 to 87

Section 172

Working with

ourstakeholders

Eﬀective engagement and collaboration with

all of our stakeholder groups.

Considering all of our stakeholders is a vital part of the Board’s

strategic decision making. Engaging our stakeholders in a way

that aligns with our culture and supports our goal of remaining an

industry leader is fundamental to the long-term sustainable success

of the Group.

Section 172 of the Companies Act 2006 requires directors to always

act in good faith and in a way that would most likely promote the

success of the company for the beneﬁt of its stakeholders.

As part of this, the Board must always consider how decisions

balance the needs of our diﬀerent stakeholders, as well as the

consequences on long-term performance. The nature of operating

a large-scale business means it is not always possible to provide

positive outcomes for every stakeholder. In these situations, the

Board has to make decisions despite competing stakeholder priorities.

Our stakeholder engagement processes allow us to better

understand what matters to stakeholders, consider all relevant

factors and select the best course of action for the Group’s

long-term business 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.

As well as our ongoing engagement

activities, we also regularly receive and

respond to speciﬁc feedback as well as

provide updates on important issues to

our stakeholders.

However, the Board does reserve certain

matters for its own decision making. These

are outlined on page 82.

In response to COVID-19 we took steps to

increase our communication, collaboration

and information sharing with stakeholders

regarding our actions and the potential

impacts on them, as well as the information

we have considered.

We have continued this approach in the UK

and are looking to extend these engagement

and collaboration methods to our Canadian

operations as our Group ways of working

become more embedded in this business.

Here are the details of the activities we

undertook in FY2023 and the outcomes of

the engagement with our stakeholder groups.

Our key

stakeholders

The Board considers the Group’s key

stakeholders to be:

• Team members (employees)

• Customers

• The communities in which it operates

• The environment

• Investors

• Suppliers, partners and

lending banks

Hollywood Bowl Group plc

Annual report and accounts 2023

Our team Our customers

Our team members are key 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 options

• Attractive salary, beneﬁts and opportunities to share in the success

of the Group

• An inclusive employer who embraces diversity at all levels

How the Board considers the interests of the

stakeholder group

• All 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 of the Board’s succession planning

How we engaged them during FY2023

• Fourth Engage in the UK enables us to communicate key messages

instantly, with the opportunity for the team to interact (there were over 10k

posts in the year), and we have also used the platform to deliver wellbeing

initiatives to support our team

• We have undertaken employee engagement surveys and pulse surveys

• The Company has a Whistleblowing policy in place, which enables

employees to raise concerns on any areas of the business. All cases are

reported on at every Board meeting

• We publish our Gender Pay Gap report once a year

Outcomes of engagement during FY2023

• Fourth Engage enabled us to deliver our internal training and wellbeing

initiatives to support our team

• We have updated our learning platform to include more user-generated

content and encourage self-led learning. This content has also been

shared through Fourth Engage

• The outputs of the engagement surveys were considered by the Board

and senior leadership team, resulting in actions being identiﬁed and put

in place

• We were delighted to be recognised as one of the UK’s Top 25 Best Big

Companies to Work For in 2023, the second year in succession

Providing a great experience every time our customers visit is a

core focus for the Board. Ongoing feedback remains our best

indicator for whether we are delivering on this.

What is important to them

• A great value visit every time

• A clean and safe environment

• Excellent customer service from friendly team members

• Fully working, fault-free equipment

How the Board considers the interests of the

stakeholder group

• The Board reviews customer satisfaction scores at every meeting

• Customer satisfaction scores form part of all bonus schemes from team

members to senior leadership

• The senior leaders use customer feedback to identify improvements

to ways of working and ongoing investments into new centres

and refurbishments

How we engaged with them during FY2023

• Post-visit customer satisfaction surveys

• Qualitative market research programmes

• Quantitative market research programmes

• Social media and customer queries submitted via the contact centre

• Regular feedback and monitoring ensured safety standards and

expectations were being met

Outcomes of engagement during FY2023

• We saw improved overall satisfaction scores from our UK customer visits

compared to FY2022

• Enhancements to the Hollywood Bowl and Puttstars brand and

service propositions

• Enhancements to the Splitsville brand and service proposition

Stakeholder engagement

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Stakeholder engagement continued

Our communities and

the environment

Our investors

We our proud to be an active part of our communities, with

school outreach programmes, concession discounts and

charity fundraising.

We always take into account the short and longer-term

environmental impacts of business operations and strategy.

What is important to them

• A positive contribution to local communities through employment and

amenity provision

• Energy eﬃciency, and minimising environmental impacts

• Sustainable working practices

• Ongoing support for local and national charities

How the Board considers the interests of the

stakeholder group

• The Board considers the longer-term impact of its operations as part of its

sustainability strategy

• The Board continues to focus on improving its energy eﬃciency

How we engaged with them during FY2023

• Our Sustainability report details our ESG strategy, activities undertaken

and future initiatives. This can be found on pages 48 and 49

Outcomes of engagement during FY2023

• We continued with our investment into solar panels, with ﬁve installations

completed or nearing completion

• 83 per cent of UK bowling centres now have energy eﬃcient Pins on

Strings technology installed

• Increase in uptake of UK concessionary discount rates versus FY2022

• Support for Barnardo’s as our UK national charity partner and other

community-based charities

• We have made further progress in our ESG strategy and initiatives (read

more on pages 46 to 55)

Our investors are an important source of feedback on our

business model and plans for future growth.

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 data

• Our capital allocation policy

• Information on ESG strategy and performance

• Information on Remuneration policy

How the Board considers the interests of the

stakeholder group

• The Board receives feedback from shareholder meetings and through the

Group’s brokers, Investec and Berenberg

• The Board welcomes questions from our shareholders at any time

• The Remuneration Committee Chair continues to consult shareholders

on any future major changes to its Policy. The Report of the Remuneration

Committee can be found on pages 98 to 114

• The Board remains focused on the Group’s ESG initiatives;

the Sustainability report is on pages 46 to 59 and the Corporate

governance report is on pages 78 to 87

How we engaged with them during FY2023

• The AGM was held in January 2023

• Investor relations during the year consisted of meetings with our current

and prospective shareholders and presentations given to shareholders

upon the release of annual or interim results

• Attendance and presentations given at investor conferences

• Disclosure of our climate reduction performance via CDP

Outcomes of engagement during FY2023

• The Board’s view on dividends is outlined in the Chief Financial Oﬃcer’s

review on pages 40 and 41

• The Group’s capital allocation policy is outlined on pages 40 to 41

• We have made further progress in our ESG strategy and initiatives

including the publication of our climate transition plan on pages 58 and 59

• Investor Relations Society Best Practice Award Winner - Small Cap

PLC Website

Hollywood Bowl Group plc

Annual report and accounts 2023

Our suppliers and partners Our lending banks

Our partnerships are concentrated on a number of key

suppliers we have for IT services, amusements, food and

beverages and also encompass our landlords.

What is important to them

• Clear and concise communication to our suppliers and partners that

shows integrity and reliability at all times

• Strong listed covenant

• Acting as a responsible tenant

How the Board considers the interests of the

stakeholder group

• The Board is committed to high standards of ethics

• We expect high ethical standards from every supplier and partner we

work with

• Executive Directors hold regular discussions directly with our main suppliers

• The Board takes a zero-tolerance approach to bribery, corruption and

modern slavery and reviews supplier and partner policies in these areas

How we engaged with them during FY2023

• The Executive Directors continued to closely engage with landlords to

agree extensions and revised terms as required

• We actively manage our supplier relationships and have worked with our

major suppliers to carefully manage costs and supply chain disruption

• We publish our Payment Practices Report twice a year

• Our suppliers are audited annually on their compliance with modern

slavery and human traﬃcking legislation

Outcomes of engagement during FY2023

• We maintained positive relationships with our major suppliers and

landlords throughout FY2023

Our lending banks provide funds for growth and working

capital as required.

What is important to them

• Regular monthly reporting, including rolling 12-month forecasts

• Regular invitations to new openings and refurbishment launches

How the Board considers the interests of the

stakeholder group

• Bank representatives are able to attend half-year and full-year

results presentations

• Forward-looking forecasts are provided at every monthly Board meeting

to ensure covenant compliance

How we engaged with them during FY2023

• We provided regular monthly updates on Company performance and

reported on debt covenant look forwards

Outcomes of engagement during FY2023

• The £25m revolving credit facility (RCF) remains in place for the Group

until December 2024

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Sustainability overview

Sustainability is embedded

in everything we do

Hollywood Bowl Group is a people-focused business with social aims and responsibility at its heart.

We have a key focus on employment and the communities where our centres are located. We also

aim to reduce our environmental impact, both at a local level and in the context of our contribution

to climate change.

Safe and inclusive destinations

We bring friends and families together in our

welcoming centres where we prioritise

health and safety, a responsible approach to

eating and drinking, accessibility for all and

positive local community relations.

Outstanding workplaces

We focus on developing and training our

team members, supporting their wellbeing

and maintaining a diverse and inclusive

Company culture in which they can thrive.

Sustainable centres

The centres we operate for playing, working

and socialising are increasingly more energy

eﬃcient, low-emission, sustainably sourced

and recycling-orientated places.

Our purpose:

Bringing families

and friends together

for aﬀordable fun

and safe, healthy

competition

Read more on pages 48 and 49 Read more on pages 50 and 51 Read more on pages 52 and 53

Hollywood Bowl Group plc

Annual report and accounts 2023

Highlights

Oversight and strategy

• The Board established a Corporate Responsibility Committee (CRC) which

reviewed performance and set targets across our three sustainability pillars

• The Group has developed a UK pathway to net zero transition plan and

associated targets (see pages 58 and 59)

• Our sustainability strategy is starting to be introduced into our Canadian

operations and we will be reporting on progress in FY2024

This sustainability report refers to UK operations only, unless where stated

269

Team members took part in top talent

development programmes

• 2,454 team members attended face

to face academy learning courses

• 65 team members were internally

promoted to management positions

• We refreshed our employer brand and

redesigned our careers website

963,000

Concessionary discount games

were played

• Our centre teams raised over

£58,000 for our national charity

partner Barnardo’s

• More than 50 per cent of the soft

drinks we sold were zero sugar

• 98.5 per cent of our centres

successfully met our food and drink

audit standards

12,749

Solar panels now installed across 27 of

our UK centres

• We met our target for on-site

renewable electricity generation with

27 centres now with solar panels

• 100 per cent of our directly

purchased electricity now comes

from renewable sources

• We calculated our baseline Scope 3

emissions for the UK

Outstanding workplaces

Safe and inclusive leisure destinations

Sustainable centres

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Accessibility, wellbeing and community relations

We provide inclusive and sociable activities that enable families and

friends of all ages and abilities to spend quality time together, in an

environment that is fun and welcoming, while actively promoting

wellbeing. We work hard to make bowling accessible to everyone.

All of our centres have disabled access, moveable ramps to access

lanes and to aid bowling, and disabled toilet facilities. We foster

excellent community relations through concessionary discounts and

local community engagement which includes charity fundraising

events and school partnerships.

We continued to support the children’s charity Barnardo’s as our

national charity partner, with team members and Centre Managers

raising a record £58,000 through their own centres and our central

support centre for this worthy cause.

Health and safety

The health and safety of our teams and customers is an ongoing

priority, and we demonstrate our commitment to this area by

measuring and monitoring performance across all centres and

locations. Ensuring healthy and safe environments is critical to our

business performance and the experience we oﬀer our customers,

and is integral to our promise to deliver an outstanding workplace.

We continue to refresh and reinforce our policies and practices, and

comply with all safety legislation and act on all reported incidents. As

part of our internal audit reviews, we undertake safety audits, and

any incident reports are reviewed by the Board on a monthly basis.

Priority issues:

• Accessibility, wellbeing and community relations

• Health and safety

• Responsible food and beverage

Supports strategic objectives:

Delivering like-for-like revenue growth

Actively refurbishing our assets

Focusing on our people

Leveraging our indoor leisure experience

Helps mitigate principal risks:

Food safety and compliance

Stakeholder value for:

Customers, people, communities and investors

Links to SDGs

Sustainability overview continued

Safe and

inclusive

destinations

Hollywood Bowl Group plc

Annual report and accounts 2023

50.5%

Of soft drinks sold were sugar free

FY target 

FY 

98.5%

Of centres passed food

and drink audits

FY target 

FY 

98%

Of team members completed

food safety and allergen training

FY target 

FY 

£58,000

Raised for national charity

partner Barnardo’s

FY target 

FY 

963,000

Concessionary discount

games played

FY target  

FY 

Target progress

Read more online at hollywoodbowlgroup.com

Responsible food and beverage

We consider the impact of the food and drink options we oﬀer and are

committed to clearly providing customers with the facts they need,

including allergen information, so they can make fully informed choices.

We collaborate with our suppliers to oﬀer healthier alternatives as part

of our range, which may include reducing the salt and sugar content

of the food and beverages we serve. We actively promote a range of

sugar-free soft drinks, with fresh water readily available.

Last year we removed 4,500 food and drink deliveries by consolidating

our suppliers and moving away from single item suppliers.

Health and safety is strictly embedded in our daily operations, and

our team members must complete food safety and allergen

awareness training. Our centres are audited regularly, often on an

unannounced basis, by internal food safety auditors or environmental

health oﬃcers, and we consistently achieve high food hygiene ratings.

Inclusivity in action

IBSA World Games

The games were held from 18-27 August 2023, based at the

University of Birmingham. The games are the largest

high-level international event for athletes with visual

impairments, with more than 1,000 competitors from more

than 70 nations.

Hollywood Bowl Broadway Plaza proudly hosted the ten-pin

bowling element of the games, with competitors from all over

the world participating.

The country representatives battled it out in a highly

competitive, supercharged atmosphere. The general public

was able to attend and watched in awe at the incredible talent

on display.

Image credit: Richard Hall

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Talent attraction and retention

Our team members are the lifeblood of our business and are key to

our success. Our people initiatives are designed to attract and retain

the best talent in a competitive labour market. While recruitment and

retention continue to be a challenge in our sector, our industry-leading

training programmes, and limited exposure to EU labour and the

London market enable us to perform better than our hospitality and

leisure peers in terms of staﬀ turnover rates.

Our team members have been instrumental to our outstanding

performance in FY2023. We have a high-performance and purpose-

led culture that recognises individuals. A generous perks and beneﬁts

programme includes team member discounts, top talent development

programmes and performance-related pay. In FY2023, we paid out

£600k in bonuses to centre teams and 52 per cent of our hourly paid

team members received an extra 50 pence per hour bonus in

recognition of excellence.

With inﬂation putting a squeeze on team members’ ﬁnances, we

increased average pay in April for our salaried team members by

9.2 per cent and by 5.3 per cent for our Centre Managers and Assistant

Centre Managers. We are committed to paying a living wage to our

hourly-rate team members.

Training and development

Working with us is more than ‘just a job’ – it is a high-performance

culture, where teams are nurtured through exceptional training and

where deﬁned behaviours are rewarded.

With many roles ﬁlled internally in FY2022, coupled with new centre

openings, we increased the number of Assistant Manager in Training

and Centre Manager in Training programmes. Consequently, 45 per

cent of management vacancies were ﬁlled internally. We also

sponsored three team members to take up HR and Centre Manager

roles in our Canadian business – something we hope to oﬀer more in

the future.

We believe anyone with the right drive and training can become a

Centre Manager, and have launched a graduate training programme

which will see 11 graduates joining in October 2023. This fast-track

programme aims to develop graduates into Centre Managers within

three years of joining. In addition, our Senior Leadership Development

Programme (SLDP), which provides future leaders with the

management skills and business knowledge to become a member

of the senior leadership team, currently has 14 colleagues enrolled.

Team wellbeing

Team wellbeing is of vital importance to us and we have well

established initiatives in place. This includes ﬁve 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 a free

support service and ideas for physical and mental health, wellbeing,

ﬁnancial, legal or bereavement issues.

Outstanding

workplaces

Priority issues:

• Talent attraction and retention

• Training and development

• Team wellbeing

• Diversity and inclusion

Supports strategic objectives:

Delivering like-for-like revenue growth

Focusing on our people

Helps mitigate principal risks:

Employee retention and compliance

Stakeholder value for:

Customers, people, communities and investors

Links to SDGs

Sustainability overview continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Diversity and inclusion

Diﬀerence is valued and celebrated, 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 and commit to no one being discriminated

against on the grounds of gender, race, ethnicity, religious belief,

political aﬃliation, sexual orientation, age or disability. Our new careers

website is designed to reach and appeal to a broad range of talent.

In FY2023, we hosted focus groups to make our business more

attractive to a diverse workforce. We invited team members 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 evolve

our diversity strategy and we have appointed representatives for

each group. Next year we will also introduce groups focused on

those with disabilities.

We continue to encourage women to apply for senior roles by

oﬀering ﬂexibility in 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 106

Assistant Managers in Training, six Centre Managers in Training and

four on our SLDP.

Our new employer brand – Let’s Roll

In FY2023, we refreshed our employer brand, updating it to

reﬂect what Hollywood Bowl Group stands for as an

employer. The new look and feel builds on everything that is

great about our business, giving us a new way to current and

future team members why they want to work with us.

We developed a compelling employer value proposition

(EVP) set around four pillars which exempliﬁes our culture.

We are: experience-makers, opportunity-explorers,

growth-leaders, and team-supporters.

The EVP has shaped our new dynamic careers website,

improving a candidate’s journey. We have seen more than a

400 per cent increase in users in the ﬁrst seven months, a

7,000 increase in the number of job applications, a decrease

in time to hire, and a reduction in our reliance on agencies.

This was supported by a social media strategy which focuses

on three key recruitment objectives: awareness,

consideration and conversion.

Since launching Let’s Roll we have seen a 3 per cent increase in

our Best Companies ‘Be Heard’ employee engagement score.

Read more online at hollywoodbowlgroup.com

Target progress

45%

Of our management appointments

from internal candidates

FY target 

FY 

11%

Of our team members participating

in development programmes

FY target 

FY 

94%

Of our team completing online

development modules

FY target 

FY 

5.29

(Out of 7) in our team wellbeing survey

FY target 

FY 

1 star

Rating in Best Companies team

survey, ranking us #12 in the Top

25 Big UK Companies To Work For

FY target  star

FY  star

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Sustainable

centres

UK waste management

We continue to improve waste reduction and recycling through

behavioural change incentives including aligning waste management

to team members’ bonus allocations. Over time we have increased

the percentage of waste recycled, in the centres where we control

waste, from 67.3 per cent in FY2019 to 82.7 per cent in FY2023 with

100 per cent of this diverted from landﬁll.

Overall we have also reduced the amount of waste produced, and

this year we have a calculated our waste ‘intensity’ as the total

amount of waste per number of centres, which has fallen by 22 per

cent since FY2017.

We have a good track record in reducing food and drink wastage,

targeting less than 1 per cent food and drink waste as a percentage

of revenue. In FY2023 we were pleased to achieve 0.65 per cent,

highlighting our progress.

Energy eﬃciency

Our strategy for reducing the environmental impact of our business

focuses on increasing on-site generation of renewable electricity

and improving energy eﬃciency.

To reduce our usage, we are:

• driving behaviour change within our teams;

• rolling out energy eﬃcient air handling systems; and

• installing more solar panels on centre roofs.

In FY2023, we installed solar panels in ﬁve more UK centres, with

38 per cent of our centres now generating 4,923 kWp of solar and

generating 5,518,817 kWh per year. 12 per cent of our electricity used

was generated from our own renewable sources (FY2022: 8.2 per

cent). 83.1 per cent of our bowling centres are now using energy

eﬃcient Pins on Strings technology (FY2022: 65 per cent).

The number of solar panel installations fell short of our FY2023 target

due to planning restrictions on several target centres. We continue

to negotiate with landlords where we believe there is an opportunity

and we are planning to add extra panels where possible to centres

where we already have installations.

Priority issues:

• Waste management

• Energy eﬃciency

• Greenhouse gas emissions

• Climate change

Supports strategic objectives:

Talent attraction and retention

Training and development

Helps mitigate principal risks:

Compliance and climate change

Stakeholder value for:

Environment, customers, people, communities,

investors, partners and suppliers

Links to SDGs

Sustainability overview continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Greenhouse gas emissions

UK Scope 1 and 2 emissions

68 per cent (441.88 tCO

e) of our Scope 1 emissions are from natural

gas used for heating, hot water and cooking. All refrigerant (F) gas

losses were from the UK and amounted to 205.57 tCO

e. We do not

have any ICE company cars in the UK.

Scope 2 emissions in FY2023 were made up of electricity (3,460.87

tCO

e), electric vehicles (UK only) 7.52 tCO

e, and a saving of 91.4

tCO

e from electricity exported to the grid from our solar arrays.

A key target for FY2023 was to transition all the electricity we

directly purchased in the UK to 100 per cent from renewable

resources, which we have achieved.

We reduced our emissions intensity for Scope 1 and 2 by 0.7 per cent

to 61 tCO

e/centre in FY2023, in pursuit of our target to bring our

intensity ratio down to 55.0 tCO

e/centre by the end FY2025.

Canada Scope 1 and 2 emissions

In the ﬁrst full year of reporting our Canadian operation, our Scope 1

emissions were 473.76 tCO

e and Scope 2 emissions were 402.64

tCO

e equating to an intensity ratio of 97.4 tCO

e/centre.

UK Scope 3 emissions

For the ﬁrst time in FY2023 we calculated our Scope 3 indirect

emissions. This showed our baseline to be 40,760.7 tCO

e, with an

intensity ratio of 590.7 tCO

e/centre. Scope 3 makes up 91 per cent

of our total greenhouse gas emissions, of which 76 per cent is

generated from the purchased goods and services category.

Climate change and net zero

Details of climate-related risk and mitigations under TCFD are shown

on pages 60 to 69. Our UK climate transition plan is outlined on pages

58 and 59. ‘Net zero’ is deﬁned in this report as the point where the

Group is able to reduce its net GHG emissions to zero. In the case

where is it not feasible to abate Scope 1, 2 and 3 emissions completely

by 2050, the Group would look to oﬀset the residual emissions

through actions like carbon removals or ecosystem restoration.

Building sustainable centres

Our development teams have long taken a sustainable-ﬁrst approach

to estate additions and upgrades and have well-established

partnerships with contractors to help deliver greener and more

eﬃcient buildings. The challenge to reach net zero places an ever

greater focus on us to build better, from taking a re-use, re-cover and

recycle approach wherever we can, to ﬁtting carbon neutral carpets

and 100 per cent recycled vinyl ﬂooring in our refurbishments.

When it comes to new builds we ﬁt out all our new centres using 100

per cent renewable energy, take a fabric-ﬁrst approach to make our

properties as energy eﬃcient as possible and improve our EPC

ratings, and install technologies which help reduce our longer-term

environmental impacts.

Read more online at hollywoodbowlgroup.com

Target progress

82.7%

Of waste generated was recycled,

with 100 per cent diverted from landﬁll

FY target 

FY  

0.65%

Food and drink wastage as a percentage

of revenue

FY target 

FY 

12%

Of our electricity generated from

onsite renewables

FY target 

FY 

100%

Of directly purchased electricity in the UK

from renewable sources

FY target 

FY

Of UK centres with solar arrays installed

FY target 

FY 

83%

Of the UK estate using energy eﬃcient

Pins on Strings technology

FY target 

FY 

UK Intensity ratio Scope 1 and 2 emissions

FY Target 

FY 

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Sustainability overview continued

UK performance against targets

Safe and inclusive leisure destinations

FY

actual

FY

target

FY

actual

FY

vs target

FY

target

Concessionary discount games played     

Funds raised for national charity partner     *

Centres passed food and drink audit    — 

Soft drinks sold that are sugar free    pts 

Team in food and drink-related roles to have completed food safety

and allergen training within three months of passing probation    pts 

* FY2024 target includes an additional £5,000 for other fundraising.

Outstanding workplaces

FY

actual

FY

target

FY

actual

FY

vs target

FY

target

Management appointments from internal candidates    — 

Team members participating in development programmes    pts 

Team members completing online development modules    -pts 

Rating in Best Companies team survey * * * — *

Annual team wellbeing survey score out of     pts 

Outstanding workplaces - background data

Male  Female 

Board  

Senior managers  

Centre managers  

Assistant managers/technicians  

Contact centre team  

Team members  

Total  

Sustainable centres

FY

actual

FY

target

FY

actual

FY

vs target

FY

target

Waste recycled percentage with  diversion from landﬁll    pts 

Food and drink wastage as a percentage of food and drink revenue    -pts 

Number of centres with solar arrays    - 

Electricity usage generated from on-site renewables    — 

Directly purchased electricity from renewable sources    — 

UK estate percentage of bowling centres with Pins on Strings  

by FY

 -pts N/A

Scopes  and  intensity ratio (tCO



e/number of centres)  

by FY

 -pts 

Sustainable centres – background data

UK waste

General waste

tonnes

Recycled waste

tonnes

Total waste

tonnes

Percentage of total

waste recycled

Waste intensity

(total waste/centre)

FY*     

FY*     

FY     

FY     

FY     

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.

Hollywood Bowl Group plc

Annual report and accounts 2023

UK and Canada greenhouse gas emissions

Shown below is the electricity and gas data used for Scopes 1 and 2

emissions calculations.

Electricity excludes solar generated electricity exported to the grid.

Data from centres where the landlord supplies electricity/gas has

been excluded.

UK electricity

kWh

UK gas

kWh

FY  

FY*  

FY*  

FY  

FY  

Canada

electricity

kWh

Canada

gas

kWh

FY  

FY  

UK Scope 1 and 2 emissions

Scope 

tCO



Scope 

tCO



Scope  and 

tCO



Intensity ratio

tCO



e/centre

FY    

FY*    

FY*    

FY

   

FY    

* Impacted by COVID-19 shutdowns.

This is made up of natural gas, company cars (no company cars in

UK), refrigerant gas losses (F gas losses), electricity, electric

company vehicles and solar export.

Natural gas:

Total natural gas consumption = 2,415,585 kWh.

Emission factor = 0.182928926 kgCO

e per kWh.

Emissions = 441.88 tCO

F gas losses:

Emissions = 205.57 tCO

Total Scope 1:

Emissions = 647.45 tCO

Electricity (location based):

Total electricity consumption = 16,713,202 kWh.

Emission factor = 0.207074289 kgCO

e per kWh. In the 2023 GNEZ

Greenhouse gas conversion factors update, the UK electricity CO

factor has increased by 7 per cent (compared to the 2022 update)

due to an increase in natural gas use in electricity generation and a

decrease in renewable generation.

Emissions = 3,460.87 tCO

Electric company vehicles:

Total mileage is 203,631 miles x 0.03692133 kgCO

e per mile =

7.52 tCO

Solar export:

441,370.7 kWh electricity exported back to the grid as a result of the

solar arrays on our roofs. This equates to a saving of 91.4 tCO

Total Scope 2:

Emissions = 3,377 tCO

Total Scope 1 and 2:

Emissions = 4,024.44 tCO

Greenhouse gas (GHG) emissions for FY2023 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 have been provided by Schneider Electric, IMServ and Total.

Conversion factors are taken from https://www.gov.uk/government/

publications/greenhouse-gas-reporting-conversion-factors-2023.

UK Scope 3 emissions

Scope 

tCO



Intensity ratio

tCO



e/centre

FY baseline  

All relevant categories were measured (excluding categories, 8, 9, 10,

13, 14 and 15). Data analysis for category 1 (purchased goods and

services) and 2 (capital goods) is based on SIC codes against

current spend.

Canada Scope 1 and 2 emissions

Scope 

tCO



Scope 

tCO



Scope  and 

tCO



Intensity ratio

tCO



e/centre

FY    

FY    

Total natural gas consumption = 245,416 m³.

Emissions = 473.76 tCO

Total Scope 1:

Emissions = 473.76 tCO

Electricity (location based):

Total electricity consumption = 3,619,113 kWh

Emissions = 402.64 tCO

Total Scope 2:

Emissions = 402.64 tCO

Total Scope 1 and 2:

Emissions = 876.4 tCO

FY

Total (Scope  and Scope ) (tCO



e) 

Number of centres 

Intensity ratio (tCO



e per centre) 

Emissions data for our Canadian centres includes data from post

purchase in May 2022. Note that Canadian data for emissions is

provided in CO

for gas and no data is provided that makes up the

other greenhouse gases so this number is also used as CO

e. The

conversion factors for Canada are taken from Emission Factors and

Reference Values – Canada.ca.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Our ambition

The Group is dedicated to achieving net zero by 2050 in the UK and Canada,

to align with the climate change net zero target year commitments made by

both of these countries.

We plan to reach this goal by reducing GHG emissions through our new centre

design and refurbishment programmes, enhancing energy eﬃciency in our

operations, continuing to transition to self-generated and renewable energy

sources, and collaborating with our supply chain partners to reduce GHG

emissions in their operations.

Sustainability overview continued

Climate transition plan

Hollywood Bowl Group plc

Annual report and accounts 2023

As part of our journey to net zero, we are committed to achieving

science based targets (SBTs) based on the 1.5°C pathway from our

2023 baseline, and delivering intensity-based reductions across all

our direct and indirect sources of GHG emissions across our value

chain, contributing to the mitigation of climate change impacts.

We will continue to document our progress in relation to our

transition plan in our annual reports. We will record alterations to our

comprehension of climate change risks, our methodologies, the data

we can access, and the actions we are implementing.

We will reassess our transition plan in FY2024 as we integrate our

Canadian operations, and then at a minimum of every ﬁve years to

ensure it aligns with our evolving understanding and reﬂects any

factors that could impact its deliverability, including changes to wider

political and regulatory frameworks, technology developments and

consumer preferences and demands.

We do not foresee signiﬁcant changes to our existing business

model in order to fulﬁl our net zero commitments.

Metrics and targets

Our stated UK targets are shown on pages 58 and 59. Progress

against these targets is tracked on an ongoing basis via the CRSG

and CRC.

Using a science-based approach, we aim to reduce our Scope 1, 2

and 3 emissions intensity ratios by 42 per cent by 2030 (from a

2023 baseline) and 90 per cent by 2045.

In FY2024, we will be looking to commit to science based target

initiative (SBTi) and obtaining validation of our FY2023 baseline and

future intensity ratio targets, ensuring that our eﬀorts align with what

is required to prevent a temperature rise greater than 1.5°C.

We will monitor and report our progress against our intensity ratio

targets, which are the key measures of performance in our climate

transition plan, on an annual basis.

In FY2025, we will set targets for our Canadian operations to enable

us to create a combined Group pathway to net zero transition plan.

Opportunities and initiatives

We believe that reducing emissions in our own operations is the

most eﬀective way to lead by example in combating climate change.

We began the de-carbonisation process of our UK operations in

2016 and have since reduced our own emissions intensity ratio by

62 per cent.

As referenced in the energy sources, carbon taxes and cost of

transition to net zero opportunities outlined in our TCFD statement,

and the initiatives outlined on page 58, we aim to achieve further

reductions in Scopes 1 and 2 by adhering to a science-based

reduction pathway and continuing to implement our internal

operations strategy in both the UK and Canadian operations, which

focuses on team member behavioural change (focused on minimising

energy usage and recycling), investment in energy-saving equipment

like Pins on Strings, phasing out gas heating and cooking equipment

by 2030 in the UK and renewable source energy procurement.

As an integral part of our net zero goal for 2050, we will also address

emissions from our upstream supply chain by ensuring that our

purchased goods and services (Scope 3 category 1, which

represents 76 per cent of our Scope 3 emissions), align with the

transition to a low-carbon economy. Meeting targets in this area is

the biggest factor in the Group’s ability to deliver the wider climate

transition plan.

To assess the current alignment of our supplier base, we have

calculated the percentage of our suppliers with science-based

targets based on our spend with them. Our plan is to increase this

percentage in the coming years with the majority of our spend going

to a limited number of key suppliers where we have greater

inﬂuence, and which are aligned to climate transition commitments

in line with current UK government targets.

In the short term, we will focus on establishing a supplier

engagement programme to promote the adoption of science-based

targets and climate transition plans amongst our suppliers.

This will encourage the wider adoption of GHG emissions

measurement and reduction strategies across our supply chain,

which we expect will improve data availability and data quality from

our suppliers in the coming years. We also work closely with UK

Hospitality’s Sustainability Committee to ensure we collaborate with

the wider sector on carbon reduction initiatives.

We do not envisage signiﬁcant changes to our product sales mix in

order to fulﬁl our net zero commitments.

Investments in climate initiatives like solar panel installation and

energy-saving technology are included in our ﬁnancial planning and

outlined in the Financial Statements (see page 136). Further ﬁnancial

modelling relating to the delivery of the transition plan will be

undertaken in FY2024, alongside analysis of our Canadian business,

with the ambition to have Canadian climate targets integrated into a

Group transition plan for FY2025.

Governance

Sustainability in our business operations and minimising our impact

on the environment are embedded in our culture and are key

commitments for the Group. The governance structure we have

established for climate-related topics allows the Board and senior

management to integrate climate-related risks and opportunities

into strategy, decision making, operational processes and

remuneration policy.

The Board is accountable for the transition plan and its delivery, and

delegates responsibility for oversight of the transition plan and

associated risks to the Group Corporate Responsibility Committee

(CRC) (see page 97).

The eﬀorts required for us to become a net zero company by 2050

involve diﬀerent parts of the Group executing and monitoring

emissions reduction activities. To achieve this, the CRC is supported

by the Corporate Responsibility Steering Group (CRSG). This group

is made up of executive members from all the relevant Group

functions including our in-house Energy Manager and Energy

Analyst, and provides updates to the CRC on a bi-annual basis.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

All text and images to be supplied

Scope 1 and 2 (UK operations)

Sustainability overview continued

Per Centre intensity

Pathway to net zero

The Group is committed to achieving net zero by 2050 in the UK and Canada.

Our transition plan outlines our targets and initiatives to reduce Scope 1, 2 and 3 emissions.

What we’ve achieved so far

2016

• In-house Energy Manager appointed

• Eco-eﬃciency programme launched for

centre teams - reduced energy consumption

through behavioural change

• Commenced annual reporting on progress

2019

• 67.3 per cent of waste recycled

• Solar panel install programme started

• Capital expenditure programme aligned to

Scope 1 and 2 emissions reduction plan

• CR steering group established

• No gas supply in new build centres

• Gas equipment (heating, water, cooking)

phasing out programme commences

• Waste recycling targets included in centre

manager incentive scheme

2022

• 77.7 per cent of waste recycled

• Climate performance linked to executive

compensation via intensity ratio targets

• 22 centres with solar panels

• In-house Energy Analyst appointed

• First TCFD disclosure

• Third-party climate consultants engaged

• EV car scheme for support team members

2023 – 2025: FY2023 performance and short-term targets

Per Centre intensity

700

600

500

400

300

200

100

* Striker Bowling Solutions will be reported separately due to the diﬀerent nature of this business.

2024

• Commitment to SBTI and

validation of 1.5°C pathway

targets from 2023 baseline

• Solar panel rollout continues

• Extended centre manager

eco-eﬃciency incentive scheme

• Increased eﬃciency of plant in

new builds

• Carbon neutrality achieved

(based on market-based

intensity ratio)

2025

• Combined Group reporting of Scope

1 and 2 emissions for UK and Canadian

bowling centre operations*

2023

100%

Renewable electricity

83%

Of waste recycled

• CR Board Committee

established

• 27 centres with

solar panels

• First CDP disclosure

• EV car scheme

extended to

centre managers

2025

50%

Target of UK supplier spend to

suppliers committed to SBTi pathway

or have net zero climate transition

plans in place

• Combined Group reporting of Scope

3 emissions for UK and Canadian

bowling centre operations*

2023

• Measured all relevant categories (excluded 8, 9,

10, 13, 14 and 15)

• This initial data analysis for categories 1 and 2 has

been based on SIC codes against current UK

supplier spend

• We estimate that 91 per cent of our total emissions

are from Scope 3 sources

• 92 per cent of our Scope 3 emissions are in

the purchased goods and services and capital

goods categories

2024

• Commitment to SBTi and

validation of 1.5°C pathway

targets from 2023 baseline

• Launch supplier engagement

programme to encourage

increased participation in SBTi

and commitments to net zero

transition plans

Scope 3 (UK operations)

Hollywood Bowl Group plc

Annual report and accounts 2023

Scope 1 and 2 (UK operations)

2045

90%

Target reduction versus

2023 base

Our Canadian operation

2026 – 2050: medium and long-term ambitions

2050

Net zero

Achieved

2050

Net zero

Achieved

• Oﬀsetting activity to

mitigate residual

emissions

2024

• Eco-eﬃciency programme launched for centre

teams, targeting reduced energy consumption

through behavioural change

• LED lighting upgrades

• Enhanced energy usage and reporting tools

• Energy eﬃcient Pins on Strings rollout

• Energy procurement strategy deﬁned

• Scope 3 analysis

Scope 3 (UK operations)

2030

42%

Target reduction versus

2023 base

2025

• Commitment to ‘Canada Net Zero’ initiative and

targets (in line with SBTi)

• Combine Scope 1 and 2 targets with

UK operations

• Scope 3 baseline established and targets set

• Launch supplier engagement programme to

encourage increased participation in SBTs and

commitment to climate transition plans

We will employ similar initiatives related to eco-eﬃciency, emissions reduction and

waste management in Canada, as we have implemented in our UK operations.

2045

90%

Target reduction versus

2023 base

2030

Zero

Gas usage in estate

42%

Target reduction versus

2023 base

2026

• Anticipated improved

supplier data availability -

review historic data with

restatement of baseline year

2026

100%

Renewable gas

100%

UK centres with Pins on Strings

Strategic report

Task Force on

Climate-related Financial

Disclosures statement

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 2023 TCFD compliance statement and conﬁrm that we have made climate-related ﬁnancial disclosures for the year

ended 30 September 2023 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.

TCFD

Hollywood Bowl Group plc

Annual report and accounts 2023

Summary of our TCFD compliance statement

TCFD recommended

disclosure

Summary of compliance

response and next steps

Cross-reference for the

disclosure in the report

Governance

a) Board oversight The Group has introduced an updated process and

framework for the Board to set the Group’s transition

plan strategy and to monitor and oversee progress

against targets to mitigate climate-related issues

Page 62

b) Management’s role Consistent with TCFD recommendation Page 62

Risk management

a) Risk identiﬁcation and assessment

process

Consistent with TCFD recommendation Page 63

b) Risk management process Consistent with TCFD recommendation Pages 63 and 70

c) Integration into overall risk

management

Consistent with TCFD recommendation Pages 63 and 70

Strategy

a) Climate-related risks and

opportunities

Consistent with TCFD recommendation Pages 64 to 68

b) Impact on the Company’s businesses,

strategy, and ﬁnancial planning

The Group’s UK Scope 1 and 2 reduction initiatives i.e.,

solar panels and Pins on Strings, are built into the

ﬁnancial plans and future cash ﬂow forecasts. As our

Canadian Scope 1 and 2 reduction initiatives become

fully deﬁned, we will include these in our ﬁnancial plans

alongside Scope 3 transition plan ﬁnancial impacts for

the Group

Pages 64 to 68

c) Resilience of the Company’s strategy Consistent with TCFD recommendation Pages 63 to 68

Metrics and targets

a) Climate-related metrics in line with

strategy and risk management

process

Consistent with TCFD recommendation Page 69

b) Scope 1 and 2, (and 3) GHG metrics

and the related risks

Partially compliant with TCFD recommendation Pages 65 to 69

c) Climate-related targets and

performance against targets

The CRC met in May 2023 to review progress against

FY2023 targets and approved the UK transition plan and

related FY2024 metrics and targets, in September 2023

Page 69

Hollywood Bowl Group plc

Annual report and accounts 2023

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.

The CRC, chaired by Non-Executive Director Ivan Schoﬁeld (see page

97) is responsible for updating the Board on climate issues on a

bi-annual basis.

The ﬁrst Board meeting with ‘climate change’ as a standing agenda item

was held on 21 October 2022, and the Board discussed climate change

topics, including progress against relevant pre-existing goals (e.g.,

renewable energy sources) and future planned activities and targets.

As part of the bi-annual ‘climate change’ agenda item at the Board

meeting on 22 June 2023, the Board 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, that 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 development of a Group transition plan.

The ﬁrst CRC meeting was held on 4 May 2023 where updates were

given on half-year performance against FY2023 metrics and targets

and progress with the ongoing analysis of Scope 3 emissions.

Discussions also took place on the progress of the creation of UK and

Group transition plans.

An extensive Board member workshop and training session, delivered

by external consultants, took place on 22 May 2023 to upskill all Board

members on climate change alongside other ESG areas.

The second CRC meeting was held on 27 September 2023, where the

Committee discussed and agreed the Group’s pathway to net zero

transition plan strategy, associated targets and alignment with SBTi

targets. The pathway is outlined on pages 58 and 59. The Committee

also reviewed the progress against its FY2023 targets.

The Chair of the CRC provides updates to the main Board on the

discussions, decisions and actions arising at its 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 our Long Term Incentive Plans,

relating to the achievement of UK emission intensity ratios for Scope 1

and 2. For more detail see pages 103 and 114..

Priorities for FY2024

• On the basis of materiality, the Group’s Canadian business did not

form part of the scenario analysis conducted in FY2022 and the

initial development of the transition plan in FY2023.

• However, as the Canadian operation expands, the Board will review

Canadian climate-related matters and conduct a qualitative

scenario analysis as well as agree targets for inclusion in a combined

Group transition plan.

• 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 FY2025 combined Group transition

plan and associated targets.

Corporate Responsibility Committee

Board of Directors

Corporate Responsibility

Steering Group

Operational departments

Audit Committee

(Risk)

Organisation and reporting

structure for climate governance

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.

Good progress was made in the year against our climate-related

operational and capital investment targets for the UK business and in

delivering increasingly energy eﬃcient new centre builds. We

completed our initial UK Scope 3 emissions analysis which has helped

shape our transition plan.

We have started to gather climate-related data for our Canadian

operations, which at its current estate size was not material to the

Group business in FY2023. It is planned to grow in the coming years,

and resultantly will form a greater part of the CRSG priorities in FY2024

with Canadian management attending the CRSG from Q2 FY2024.

Priorities for FY2024

• Detailed analysis of our Canadian business including Scope 3

emissions, and qualitative risk and opportunity analysis with the

ambition to have Canadian climate targets integrated into the Group

transition plan for FY2025.

• Launch an operational behavioural change programme for our

Canadian team members and continue to roll out energy eﬃcient

Pins on Strings technology.

• Validation of our UK transition plan targets from SBTi.

• Additional ﬁnancial modelling to include Canada, the cost of

transitioning to net zero and linkages to our pathway to net zero

transition plan.

• Launch an engagement programme to promote the adoption of

science-based targets among our suppliers.

• Further analysis of Scope 3 emissions data as more supplier primary

data becomes available.

Hollywood Bowl Group plc

Annual report and accounts 2023

Risk management

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

available in the Risk management section on pages 70 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, were engaged to support and assist us

with this process; however, we retained ownership over the

assessment, process and output.

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.

Following a presentation from the CRSG at the Board meeting

in June 2023, the Board determined that as there had been no

material changes to the business since the scenario analysis

was undertaken, the climate risk proﬁle identiﬁed in FY2022

was still relevant to the Group and could therefore be relied on

for FY2023 reporting.

Our recently acquired Canadian business was not considered

material in FY2023, but due to its planned expansion in FY2024

and beyond, we will undertake a qualitative scenario analysis in

FY2024 before including Canadian operations in a Group-wide

quantitative scenario analysis in FY2025.

The Board reviews identiﬁed risks and impacts (including

climate) on a bi-annual item basis. The Group plans to update

its climate scenario analysis on a three-yearly basis, with the

next assessment planned for FY2025.

Priorities for FY2024

Review the identiﬁed climate risks and opportunities and

transition plan and update where necessary. This will be done in

line with our wider risk management and monitoring processes.

Integrate Canadian operations into climate risks and

opportunities analysis, given its materiality, and develop an

ongoing processes for monitoring speciﬁc risks relating to the

Canadian business. In the next TCFD report, we will report on

how the Canadian business is considered in both our

governance and risk management processes.

Strategy

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:

• 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

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 had the potential to be material for the UK business

over the short, medium and long term.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

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 FY2023 reporting.

Our Canadian business was not considered material in FY2023, but due to its planned expansion, we will identify its climate-

related risks and opportunities in FY2024.

Risk/opportunity

TCFD

category

Description and potential impact

on the business

Our response/actions we are

taking/how it is managed

Time

horizon

Changing customer

behaviours

in reaction to

increasingly warmer

summers and

potential resultant

growth of outdoor

leisure market

Metric – revenue

reduction in

high-temperature

periods

No material revenue

impacts identiﬁed in

FY2023

Chronic Based on observed historical trends

within data held by the Group, warmer

weather has the potential to result in

reduced footfall

As the UK begins to experience drier

weather in the spring and summer

months, customer behaviours may

change, spending less time on

indoor leisure

This could lead to a loss in revenue as

footfall decreases, or a reduction in proﬁt

margins if the price of bowling is reduced

to drive footfall

Scenario analysis was conducted 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 FY2023 revenues were boosted due to

a prolonged unseasonable period of wet

weather in the 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

We will continue to monitor this risk going

forward and our annual ﬁnancial planning

will take these ﬁndings into account

Business

interruption and

damage to assets

due to increased

frequency and

severity of extreme

weather events

(e.g. ﬂooding/

extreme heat)

Metric – proportion

of revenue located

in areas subject

to ﬂooding

No ﬂood impacts in

FY2023 and no new

centres opened in

ﬂood risk areas

Acute 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. 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

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 FY2023 no centres suﬀered business

interruption or damage due to ﬂood

events and no new UK centres were

developed in areas of high ﬂood risk

Key to time horizon:

Short Medium Long

Hollywood Bowl Group plc

Annual report and accounts 2023

Risk/opportunity

TCFD

category

Description and potential impact

on the business

Our response/actions we are

taking/how it is managed

Time

horizon

Carbon taxes

increasing costs due

to pricing of GHG

emissions being

applied to own

operations and

embodied carbon in

supply chain and

transportation/

distribution

Metric – % of total UK

electricity generated

from on-site

renewables

Target – 12% by end

of FY2023

Achieved 12% in

FY2023

Metric – % of energy

purchased from

renewable sources

Target – 100% by end

of FY2025

Policy and

legal

While the scope and level of carbon

pricing to date have had little impact on

the Group, it is possible that future

increases in scope for the UK Emissions

Trading Scheme could impact our

operations and supply chain by:

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

We continue 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 have undertaken analysis of our UK

Scope 3 emissions and established a

baseline for FY2023

We are working with suppliers to further

reduce the emissions of our supply chain

and are launching an engagement

programme in FY2024 to encourage

more of our major partners to adopt SBTi

or develop transition plans

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

Cost of transitioning

operations to net

zero in order to be

compatible with the

UK’s net zero carbon

targets

Metric – Scope 1 and

2 emissions intensity

ratio

Target – 55 by end of

FY2025

Achieved 61 in

FY2023

Metric – % of goods

for resale supply

chain expenditure

that have a carbon

reduction plan and

net zero target

deﬁned

Target – 50% of

supplier spend to

suppliers committed

to SBTi pathway or

with net zero

transition plans in

place by end of

FY2025

Technology The UK’s commitment 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

These include increased operational

costs associated with upgrading buildings

and assets to incorporate more energy

eﬃcient technology

We are working towards developing a

Group transition plan in FY2024 which will

include our Canadian operations

The Group is committed to operating

sustainably and to ﬁnding ways, over time,

to reduce our carbon emissions. In

FY2023, we undertook analysis of our UK

Scope 3 emissions

Our purchased goods and services

(Scope 3 category 1) accounts for 76 per

cent of our Scope 3 emissions and it is

essential that we align this 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 has enabled us to

develop a pathway to net zero transition

plan and we have agreed 2050 as the

target year to achieve net zero. Further

details of the targets and initiatives to help

us achieve this are outlined on pages 56

to 59.

We will continue to gather Scope 3 data

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

Key to time horizon:

Short Medium Long

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

TCFD continued

Risk/opportunity

TCFD

category

Description and potential impact

on the business

Our response/actions we are

taking/how it is managed

Time

horizon

Energy sources:

increased investment

in and use of lower

emission sources of

energy, reducing

exposure to volatility

in fossil fuel and

energy prices, and

future carbon taxes

Metric – % of total UK

electricity generated

from on-site

renewables

Target – 12% by end

of FY2023

Achieved 12% in

FY2023

Metric – % of energy

purchased from

renewable sources

Target – 100% by end

of FY2025

Energy

source

As the UK 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

As we continue our investment

programme in solar installations, this is an

opportunity to reduce reliance on fossil

fuels and therefore reduce exposure to

ﬂuctuating energy prices, reducing

operational costs and emissions

We have installed operational solar panels

in 27 of our UK sites and were pleased to

achieve our on-site renewable target of 12

per cent in FY2023

We are working hard to achieve our target

of 30 solar panel installations (and adding

extra panels to existing installations where

possible) in our UK estate by the end of

FY2024 and contracting 100 per cent

renewable energy (electricity and gas) by

the end of FY2025

Scenario analysis

The results described below relate to the assessment carried out in FY2022. Additional analysis has not been performed in FY2023 as there

have been no signiﬁcant changes to the climate risk proﬁle

Following our assessment of climate-related risks and opportunities, three were selected for further quantitative assessment via scenario

analysis based on their assessed potential materiality

These climate risks and opportunities were evaluated across a range of climate scenarios to understand how they could evolve under certain

situations, helping us to assess and improve our climate resilience

Publicly available 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 below

Climate risk/opportunity Scenarios Data sources

Transition risk/opportunity

Energy sources NGFS scenarios:

Scenario 1: Early action

Scenario 2: Late action

Scenario 3: No additional action

IEA

– Carbon intensities

NGFS

– Carbon prices

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

Key to time horizon:

Short Medium Long

Hollywood Bowl Group plc

Annual report and accounts 2023

Changing customer behaviours Scenario 3: SSP5 - 8.5 (>4°C) World Meteorological Organization

– temperature, wind

speed and precipitation (historical data)

Climate Analytics

– 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.

Changing customer behaviours

The relative impacts of chronic weather events on revenue were examined for three IPCC scenarios (RCP2.6, RCP 4.5 and RCP 8.5).

A statistical model that was developed to identify how weather (wind, temperature and precipitation) has historically impacted daily revenue

at each of the 67 sites was used to forecast relative changes in sales under climate scenarios, compared to a baseline of 2018 to 2020 for the

time periods 2030 to 2050.

Key assumptions, outputs and sensitivities

• Analysis is based on existing UK sites and does not allow for the addition of sites in the future

• The historical relationship between weather and sales will continue to be observed in the future

• No adjustments were made to revenue during modelling to account for growth or inﬂation

• Historical sales data was selected to remove any potential impacts of COVID-19

While all chronic weather events, particularly increasing temperatures, were found to result in some changing customer behaviours across all

examined scenarios, the impacts of these changing behaviours on revenue were not found to be signiﬁcant and no clear seasonal trends

were identiﬁed.

Scenario analysis continued

Business interruption and damage to assets

Scenario analysis modelled the potential exposure to business interruption and resulting ﬁnancial impact due to ﬂuvial and coastal ﬂooding

on each of our UK sites.

Key assumptions, outputs and sensitivities

• Analysis is based on existing UK centres

• The historical relationship between weather and sales is assumed to continue

• All sites located on the ground ﬂoor/basement ﬂoors are exposed to both refurbishment and access downtime. Sites located on the ﬁrst

ﬂoor and above are only exposed to access downtime where ﬂoodwaters exceed 3m. Property and equipment damage are not included

in this analysis

• Flood defences, including regional ﬂood defences, are assumed to remain unchanged from 2022 until 2050

The analysis found that the potential impact from ﬂoods increases over time across all of the scenarios examined. The impacts under RCP 8.5,

as represented in the 95th percentile, were found to be the largest and reﬂect the most challenging scenario examined. Under this scenario,

our UK sites located in Brighton, Norwich and Basingstoke are the most at risk, with an additional six sites expected to be at risk of ﬂooding

between 2022–2050. The impacts of the potential exposure to ﬂooding was not found to be signiﬁcant in the context of the overall business.

Energy sources

Scenario analysis was performed to understand the potential carbon tax savings as a result of existing and planned future solar panel

installations, compared to sourcing all electricity from the national grid. In FY2022, 22 of our UK sites had solar panels, with further

installations planned for FY2023. The potential carbon cost savings resulting from these sites were examined over the period of 2022–2050

by applying IEA carbon intensities (tCO

/MWh) associated with three diﬀerent scenarios (‘early action’, ‘late action’, and ‘no additional action’)

and NGFS carbon prices (£/tCO

) to internal energy consumption data.

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

TCFD continued

Key assumptions, outputs and sensitivities

• The average percentage of electrical consumption drawn from solar panels across all installed sites was applied (32.9 per cent)

• Electricity consumption of each site remains static until 2050

• As IEA carbon intensity ﬁgures are provided in ﬁve-year increments, a linear interpolation is assumed to provide an annual view

• The analysis assumes the implementation of either new or more stringent carbon prices

on the consumption of fossil fuel-based

electricity from 2023 as outlined below

5 NGFS carbon prices. All carbon prices are expressed in £2010. IEA carbon prices were converted from USD to GBP using an exchange rate of 1.2658.

Scenario 2030 (£/tCO

) 2040 (£/tCO

) 2050 (£/tCO

)

Early action £122 £186 £568

Late action £0 £198 £747

No additional action £0 £2 £4

Under the most challenging scenario, the NGFS ‘early action’ scenario, the aggregate carbon savings realised from the 32 sites between

2023–2050, represent a signiﬁcant ﬁnancial impact. However, there also remains a signiﬁcant exposure to carbon taxes from purchased

electricity during this period. In response, we have put in place the following mitigation: by the end of FY2023, we purchased 100 per cent

renewable electricity in centres where we directly contract, and by the end of FY2025 all of our purchased gas will also be from renewable

sources. Therefore, our expected carbon emissions exposure, and carbon tax exposure, from purchased energy, is zero.

Priorities for FY2024

• Further priorities for FY2024 include advancing data gathering activities for those risks and opportunities that were not able to be

quantitatively assessed via scenario analysis at this stage

• We will look to re-evaluate our scenario analysis results in response to signiﬁcant events that may aﬀect business strategy (i.e., in the case

of a major acquisition) as recommended by the TCFD

• Our climate risk assessment was performed for the UK business. We will look to assess the impacts and materiality of climate-related

risks and opportunities across our Canada business in the future, at the point it becomes material in size

Hollywood Bowl Group plc

Annual report and accounts 2023

Metrics and targets

The Group has a range of UK 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.

Two new measures have been introduced this year following the analysis of Scope 3 emissions and the development of our transition plan

for the UK business. These are Scope 3 emissions intensity ratio and % of supplier spend with suppliers committed to SBTi pathways or

which have transition plans in place. Progress will be reported on these in FY2024.

Metrics and targets for our Canadian business are being developed to allow us to set Group targets from FY2025.

Climate-related metrics

TCFD cross-

industry metric

category

Unit of

measure

Metric Metric target set and reported? Linked to identiﬁed

climate risks and

opportunities

GHG emissions Total tCO

centre

UK average carbon energy intensity

ratio by centre

Yes – 55 by end of FY2025

61 achieved in FY2023

Carbon taxes and

cost of transitioning

operations to net zero

GHG emissions tCO

e NEW UK Scope 3 emissions

intensity ratio

Yes – reductions in line with SBTi

pathway, leading to net zero in 2050.

42% reduction from FY2023 baseline

by 2030, 90% reduction by 2045

Carbon taxes and

cost of transitioning

operations to net zero

GHG emissions % of spend

with suppliers

of good and

services

NEW % of supplier spend with

suppliers committed to SBTi

pathway or have net zero transition

plans in place

Yes – 50% by end of FY2025

Will report on progress in FY2024

Carbon taxes and

cost of transitioning

operations to net zero

Transition risks % % of total UK directly purchased

electricity from renewable sources

Yes – 100 % of total UK directly

purchased electricity from renewable

sources by end of FY2023

Target met in FY2023

Energy sources

Transition risks % % of total UK electricity generated

from onsite renewable sources

Yes – 15% of total UK electricity

generated from on-site renewable

sources by end of FY2024

Target met in FY2023 (12%)

Energy sources

Transition risks % % of total gas directly purchased in

the UK from renewable sources

Yes – 100% renewable gas purchased in

UK by end of FY2025

Energy sources

Transition risks kWh Gas usage in the UK Yes – zero by end of FY2030 Energy sources

Transition risks % % of UK estate using energy eﬃcient

Pins on Strings technology

Yes – 100% by end of FY2028

83% achieved in FY2023

Cost of transitioning

operations to net zero

Physical risks % of annual

revenue

% of UK revenue located in an area

subject to high risk of ﬂooding

No – periodic monitoring to feed into

risk assessment process

Business interruption

and damage to assets

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Risk management

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:

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 26 and 27

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.

1 2 3

Financial risks

1 – Economic environment

2 – Covenant breach

3 – Expansion and growth

Operational risks

4 – Core systems

5 – Food and drink suppliers

6 – Amusement supplier

7 – Management retention

and recruitment

8 – Food safety

Technical risks

9 – Cyber security

and GDPR

Regulatory risks

10 – Compliance

11 – Climate change

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.

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.

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.

Read more on pages 76 and 77

Likelihood

Impact

4 5 6

3 2

8119

Low

High

Hollywood Bowl Group plc

Annual report and accounts 2023

Principal risks

1. Economic environment Links to strategy:

Risk and impact Mitigating factors Risk change

• Change in economic conditions,

in particular a recession, as well as

inﬂationary pressures and the war

in Ukraine.

• Adverse economic conditions,

including but not limited to,

increases in interest rates/inﬂation

may aﬀect Group results.

• 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 coupled with the low price point, the majority of centre

locations are based in high-footfall locations which should better

withstand a recessionary decline.

• 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.

• We have an unrelenting focus on service, costs and value, along

with electricity 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.

2. Covenant breach Links to strategy:

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 175bps above SONIA as well

as an accordion of £5m. Net leverage covenants are 1.75x and

are tested quarterly. The facility is currently undrawn, which under

the agreement results in a cost of less than £200k per annum.

• Net cash position was £52.5m at the end of September 2023.

• 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 70. 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

Driving like-for-like revenue growth

Actively refurbishing our assets

Developing new centres and acquisitions

Focusing on our people

Leveraging our indoor leisure experience

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Principal risks continued

3. Expansion and growth Links to strategy:

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.

• The Group uses multiple agents to seek out opportunities across

the UK and Canada.

• We met with the top ﬁve landlords in Canada in July 2023 with

positive feedback and a number of opportunities in negotiation.

• Continued focus with landlords on initial investment, innovation,

as well as refurbishment and maintenance capital.

• Strong ﬁnancial covenant provides forward-looking landlords

with both value and comfort.

New

4. Core systems Links to strategy:

Risk and impact Mitigating factors Risk change

• Failure in the stability or availability

of information through IT systems

could aﬀect Group business

and operations.

• 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 (non-cloud based) are backed up to our

disaster recovery centre.

• The reservation systems, provided by a third party, are hosted

by Microsoft Azure Cloud for added resilience and performance.

This also has full business continuity provision and scalability for

peak trading periods.

• Our new Compass reservations system will be rolled out to the

Group estate from FY2024 Q3. This system has been built in house

and will have improved performance, resilience and future

development ﬂexibility compared to the existing system. It will also

remove the reliance on an external partner.

• 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 still server based and moving

towards cloud based over the next 12 months in line with the

platforms adopted by our UK operation.

• 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:

Risk and impact Mitigating factors Risk change

• Operational business failures from

key suppliers.

• Unable to provide customers with

a full experience.

• 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 risk and its resolution. This process was

updated in November 2022 with substitute products available in all

scenarios. 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.

• 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.

Financial risksOperational risks

Hollywood Bowl Group plc

Annual report and accounts 2023

6. Amusement supplier Links to strategy:

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.

• Regular key supplier meetings between our Head of Amusements,

and Namco. There are half-yearly meetings between the CEO, CFO

and the Namco UK leadership team.

• Namco is a long-term partner that has a strong UK presence

and supports the Group with trials, initiatives and discovery visits.

• Namco also has strong liquidity which should allow for a continued

relationship during or post any consumer recession.

• The Canadian supplier is Player 1 which is a subsidiary of Cineplex

Inc. which is listed on the Canadian stock market. Quarterly

meetings are held with Player 1.

7. Management retention and recruitment Links to strategy:

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 competitive recruitment

landscape due to Brexit impact

of reduced hospitality

worker availability.

• More diﬃcult to execute business

plans and strategy, impacting

on revenue and proﬁtability.

• 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 bonus schemes were reviewed for the estate reopening in

May 2021 and again at the end of FY2022, to ensure they were still

a strong recruitment and retention tool. The management bonuses

were introduced into the Canadian business for FY2023 and we

are reviewing how to implement a team member hourly scheme

in Canada for FY2024.

• The hourly scheme has paid out to an average of c.52 per cent of

the UK team in each month in FY2023.

8. Food safety Links to strategy:

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 (May 2023).

• All food menus have an allergen disclaimer.

• All food menus have a 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. An Allergen Control Policy is being drafted in line with

the launch of the new menu and with the new Head of Food and

Drink. This will be reviewed by the UK before going live.

Operational risks

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

Principal risks continued

9. Cyber security and GDPR Links to strategy:

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 and 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 an

additional retained service to work with the Group on a priority

basis should a breach occur.

• 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.

• There is active protection of the network against a DDoS attack.

• Payment systems have been upgraded to use P2PE payment

devices, greatly reducing PCI DSS risks with cardholder present

transactions in centres. New payment technology for ecommerce

ensures that no card data passes through Group networks. 98 per

cent of transactions operate in a PCI DSS secure environment.

There are plans to address the remaining 2 per cent of transactions

that occur through the contact centre by implementing pay-by-link.

• Quarterly vulnerability scanning is being implemented against

the PCI standard. Annual penetration testing is conducted through

a third-party cyber security company.

• Advanced data loss protection is also now in place to limit

unauthorised, undisclosed, or unidentiﬁed migration or movements

of data outside of our control on unsecured and unmanaged

devices, including mobile phones.

• Cyber Essentials certiﬁcation has been achieved and was

successfully externally audited in September 2023.

• A Data Protection Oﬃcer has been in position for a number of

years in the UK and we have a dedicated Cyber Security Manager

who oversees our strategy, applications and activity in this area

with periodic updates given to the Board.

• A training course on GDPR awareness is on STARS (online training

tool) and all team members have to complete this before being

able to work on shift.

• In FY2024 we are continuing to upgrade the IT infrastructure and

networks in our Canadian business to move from centre-based

operations to centrally hosted and managed services.

Technical risks

Hollywood Bowl Group plc

Annual report and accounts 2023

10. Compliance Links to strategy:

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:

Risk and impact Mitigating factors Risk change

• Increasing carbon taxes.

• Business interruption and damage

to assets.

• Cost of transitioning operations

to net zero.

• Signiﬁcant progress already made with solar panel installations

and transitioning energy contracts to renewable sources.

• 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.

• The range of climate-related targets has been extended for

FY2024.

• The Group’s UK net zero transition plan and milestone targets are

on pages 58 and 59.

Regulatory risk

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

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 2023, the

Directors have considered the Group’s cash ﬂow, liquidity, and

business activities, as well as the principal risks identiﬁed in the GRR.

As at 30 September 2023, the Group had cash balances of £52.5m,

no outstanding loan balances and an undrawn RCF of £25m, giving

an overall liquidity of £77.5m.

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 FY2024 as well as

the ﬁrst three months of FY2025 which forms part of the Board

approved 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 adhere to its capital

allocation policy as outlined on pages 40 and 41.

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 three per cent and four per cent for FY2024

and FY2025 respectively 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

new centres would continue, whilst refurbishments in FY2024 would

be reduced. These are all mitigating factors 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 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 2028. The Directors have

determined that a ﬁve-year period, as opposed to the three-year

period previously adopted, 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 principal risks facing the Group, as at 30 September 2023 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 increase

in inﬂation and slowing GDP growth and the potential impact on our

businesses in the UK and Canada. 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 28 to 33 of this Annual Report. Particular regard

was paid to the potential impacts of a rise in inﬂation and slowing

GDP growth in FY2024 and FY2025.

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 quantiﬁcations do not therefore represent a likely

ﬁnancial forecast and are not directly incorporated into any

projections of our long-term cash ﬂows.

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 FY2024 and

FY2025 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 FY2024,

in line with the Group’s dividend policy.

Hollywood Bowl Group plc

Annual report and accounts 2023

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 three and four percentage points on the base case for

FY2024 and FY2025 respectively and an increase in operating

costs to reﬂect higher inﬂation. It is then forecasted that revenue will

return to base case forecasts for FY2026, FY2027 and FY2028.

The impact of inﬂation in FY2024 and FY2025 is a one percentage

point increase in operating costs, with higher labour costs per hour

oﬀset partially by a reduction in the number of hours worked due to

lower revenues.

Whilst the assumptions of an increase in inﬂation and slowing

economic growth in this scenario is plausible, it does not represent

our view of the likely out-turn in the FY2024 and FY2025 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 26-27 An explanation of the Group’s business model is

given on pages 26 and 27

Principal risks Principal risks and uncertainties 70-75 The Board has a process for considering the

principal risks as outlined on pages 70-75

Non-ﬁnancial KPIs Strategic report 1-77 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

52-59

60-69

Our environmental strategy and climate transition

plan is set out on pages 52-59

Employees Chief Executive Oﬃcer’s statement

S172 statement/stakeholder engagement

Sustainability overview

Principal risks and uncertainties

18-22

42-43

50-51

Our employee related policies and procedures

which include our privacy notice and all work-

related policies, are available to all employees on

HAPI (our intranet)

Our social sustainability strategy is set out on

pages 46-51

Human rights, anti-corruption

and anti-bribery

Sustainability overview

S172 statement/stakeholder engagement

46-59

42-45

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

46-51

42-45

Our social sustainability strategy is set out on

pages 46-51

Hollywood Bowl Group plc

Annual report and accounts 2023

Strategic report

A year of strong

performance

Chairman’s introduction to governance

Hollywood Bowl Group plc

Annual report and accounts 2023

Our continued focus on

high standards of corporate

governance supports this strategic

delivery and the long-term success

of the Group ”

Peter Boddy, Non-Executive Chairman

Read full biography on page 80

Dear shareholders,

On behalf of the Board, I am pleased to present our Corporate

governance report for the year ended 30 September 2023. 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.

FY2023 has been another year of strong performance for the

business, as we continue to deliver against our key strategic pillars

(which are the subject of regular monitoring and discussion by the

Board). We have delivered positive like-for-like revenue growth,

made good progress on the integration (and expansion) of our

Canadian business, while continuing to invest in and develop our UK

estate, and maintained our focus on our team (as evidenced through

maintaining our 1* rating in the Best Companies Survey).

Our continued focus on, and promoting of, high standards of

corporate governance supports this strategic delivery and the

long-term success of the Group. We are not complacent. The Board

recognises that the regulatory and governance environment in which

we operate continues to develop, and therefore our governance

framework must also develop to ensure we can continue to meet

and exceed the required standards. During FY2023, key areas of

focus in terms of our governance framework have included:

• continued development of our ESG approach with the constitution

of our Corporate Responsibility Committee, increased focus on

future energy usage, and review of our climate-related disclosures

(including TCFD and our net zero pathway);

• progressing our Board succession plans with the appointment

of Rachel Addison as a Non-Executive Director and to succeed

Nick Backhouse as Chair of our Audit Committee and Senior

Independent Director (SID); and

• implementing actions arising from our ﬁrst externally facilitated

Board performance evaluation.

The culture and values of our business are key drivers of success.

The Board continues to receive regular reports from the Executive

team around team members, customer engagement and supplier

and stakeholder relationships. These reports, coupled with the

Board’s direct interaction with team members, form the basis by

which we monitor how our culture is embedded across the business.

A positive and high-performance culture permeates the Group,

and is reﬂected in the way we conduct ourselves as a Board.

We reported last year on our ﬁrst externally facilitated Board evaluation,

which was conducted in the Autumn of 2022. The Board has reﬂected

on the output from that process, which generally validated our view

that our Board operates eﬀectively and encourages open participation

and debate. Our FY2023 Board evaluation was conducted internally

by way of a questionnaire, and is described in more detail on page

86. I’m pleased that the responses were again positive, indicating

good relationships at Board level and an environment where

constructive challenge is encouraged and well received. There was

also positive feedback on some of the actions arising from the 2022

evaluation, including subtle changes to our meeting processes to

support increased time to discuss and debate strategic and other

key topics.

We report for the ﬁrst time this year against the Listing Rules

diversity targets (see the Nomination Committee report on page 93

for more detail). I’m pleased to note that we have made good

progress in terms of gender diversity through our Board succession

plans, will achieve the target of 40 per cent women on our Board and

also have a female SID, following our 2024 AGM. The need to

continue to promote diversity (and not just gender diversity) in future

Board recruitment and succession planning is a key consideration

for the Nomination Committee.

As noted above, we have conducted a successful NED recruitment

process (described in detail in the Nomination Committee report on

page 90) during the year as the second phase of our NED

succession plan. We were delighted to welcome Rachel Addison to

the Board in September 2023. Rachel has been provided with a

tailored induction programme to get her up to speed with the

business (see page 92 for more detail), and has been working with

Nick Backhouse to ensure a smooth handover of Audit Committee

Chair and SID responsibilities. Nick will not seek re-election at the

2024 AGM, and on behalf of the Board I would like to place on

record our thanks for his service to the Group since our IPO in 2016.

Peter Boddy

Non-Executive Chairman

17 December 2023

Governance report

Hollywood Bowl Group plc

Annual report and accounts 2023

Appointment

Peter joined the Group as

Non-Executive Chairman

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 (Chairman 2015–2018),

Xercise4less (Chairman

2013–2019) and the Harley

Medical Group (Chairman

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 Chairman 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

Committee key

Audit committee

Nomination committee

Remuneration committee

Corporate Responsibility committee Committee chair

Peter Boddy

Non-Executive

Chairman

Stephen Burns

Chief Executive

Oﬃcer

Laurence Keen

Chief Financial Oﬃcer

Melanie Dickinson

Chief People Oﬃcer

N CR CR CR

Board of Directors

Hollywood Bowl Group plc

Annual report and accounts 2023

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 and software 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 (UCaaS) as a

Service into Western European

markets; Wates Group, the

UK’s leading family-owned

development, building and

property services company;

and Florida-based Mango

Publishing Group.

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 their subscriptions and

customer data strategies as

well as a major subscriptions

technology project.

Julia is a Trustee at Worldwide

Cancer Research. Previously

she has been a Non-Executive

Director of Freeview (the UK’s

largest free to air digital TV

platform), Safestyle Plc and

Origin Housing. She holds

an MBA from London

Business School.

Top bowling score

139

A AA A

Appointment

Nick joined the Group as Senior

Independent Non-Executive

Director in June 2016.

Skills and experience

Nick has extensive experience

at board level. He is currently

Chairman of the Giggling Squid

restaurant group and the Senior

Independent Director of

Loungers plc. He has previously

held positions as Senior

Independent Director of Hyve

Group plc (2019–2023) and

Guardian Media Group plc

(2007–2017) and was Non-

Executive Director of Marston’s

PLC (2012–2018) and All3media

Limited (2011–2014). In his

executive career, Nick was the

Deputy Chief Executive Oﬃcer

of the David Lloyd Leisure Group

and was previously Group

Finance Director of NCP, Chief

Financial Oﬃcer of the Laurel

Pub Company and CFO of

Freeserve PLC. Prior to that, he

was a Board Director of Baring

Brothers International. Nick is a

Trustee of Chichester Harbour

Trust and a fellow of the Institute

of Chartered Accountants in

England and Wales. He has an

MA in economics from

Cambridge University.

Top bowling score

203

Nick Backhouse

Senior Independent

Non-Executive Director

Rachel Addison

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

is also 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

Ivan Schoﬁeld

Independent

Non-Executive Director

Julia Porter

Independent

Non-Executive Director

N NN NR RR R CR CR

Governance report

Hollywood Bowl Group plc

Annual report and accounts 2023

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

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 2023, 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, developing 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 26 to 33 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 & Technology Oﬃcer, Chief Operations

Oﬃcer, President and Managing Director-Canada.

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 pages 93

to 96

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 report

pages 98 to 101

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

pages 88 to 92

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 page 97

Board

Key responsibilities:

• Overall leadership of the Group

• Promoting strong corporate governance

• Approving ﬁnancial statements and

dividend policy

• Set 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

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Individual Board roles and responsibilities

There is a clear division of responsibilities between the Chairman

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 80 and 81.

Non-Executive Chairman

Peter Boddy

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 Chairman 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)

Nick Backhouse

The SID provides a valuable sounding board for the Chairman and

leads the Non-Executive Directors’ annual appraisal of the Chairman.

The SID is available to shareholders if they have concerns which are

not resolved through the normal channels of the CEO or Chairman,

or where such contact is inappropriate.

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, Nick Backhouse, Julia Porter and Ivan Schoﬁeld

Rachel, Nick, 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

151

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.

Pat Haggerty

President and Managing Director Canada

Top bowling score

214

Pat joined the Group in May 2022 upon the acquisition of his

business. He has over 30 years of experience in the bowling

industry. In 2000 Pat became the exclusive distributor for

Brunswick in Canada and in 2005 he began building and

operating his own bowling centres under the Splitsville brand,

growing the estate to ﬁve centres at the time of the acquisition

by Hollywood Bowl Group.

The Board and Executive Committee

The Board and Executive Committee work closely together to

ensure the robust governance of the business and successful

execution of our strategy.

Hollywood Bowl Group plc

Annual report and accounts 2023

Corporate governance report continued

Board independence

The Board consists of eight Directors (including the Chairman),

four of whom are considered to be independent as indicated in the

table below:

Non-Independent

Peter Boddy (Chairman)

Stephen Burns (Chief Executive Oﬃcer)

Laurence Keen (Chief Financial Oﬃcer)

Melanie Dickinson (Chief People Oﬃcer)

Independent

Rachel Addison (appointed 1 September 2023)

Nick Backhouse (SID)

Julia Porter

Ivan Schoﬁeld

Board and Committee attendance

The Board met formally on eight occasions during FY2023. 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* / N/A N/A / /

Stephen Burns / N/A N/A N/A /

Laurence Keen / N/A N/A N/A N/A

Melanie

Dickinson / N/A N/A N/A /

Rachel

Addison / / / / N/A

Nick

Backhouse / / / / N/A

Julia Porter** / / / / /

Ivan Schoﬁeld / / / / /

Claire Tiney / / / / N/A

* Peter Boddy was unable to attend the Board meeting held in June 2023 at short

notice due to the sudden death of an executive at one of Peter’s other businesses.

Nick Backhouse stood in as Chair of the meeting.

** Julia Porter was unable to attend the Board meeting held in October 2022 due to a

prior commitment which was known to the Board at the time of Julia’s appointment

as a Non-Executive Director.

In addition to the Chief Executive and Chief Financial 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, and the President and Managing

Director Canada also attended Board meetings on three occasions

during FY2023.

Where Non-Executive Directors are unable to attend a Board or

Committee meeting, they are encouraged to submit any comments

or questions on the matters to be discussed to the Chairman (or

Committee Chair, as appropriate) in advance to ensure that their

views are recorded and taken into account.

The Non-Executive Directors remain in regular contact with the

Chairman, 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 page 95).

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 letter 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 Rachel Addison,

and the re-election of all other Directors (with the exception of Nick

Backhouse who will step down from the Board at the AGM) at the

Company’s AGM on 29 January 2024. 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 109.

A formal Non-Executive Director recruitment process was

conducted during the year, and resulted in the appointment of

Rachel Addison as a Non-Executive Director with eﬀect from

1 September 2023. A detailed summary of the process is set out in

the Nomination Committee report on page 90.

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

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 FY2023 is shown in the table below:

Board agenda for year to  September  Oct Dec Jan Mar Apr May Jun 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 recruitment updates/fees

Compliance and risk

Reviewing 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 & Share Dealing Code

Delegated authorities

Group insurances

Operations, customers and suppliers

Reviewing customer experience measures

Customer research feedback (Canada)

Utilities/energy review

People

Review results of team engagement survey

Team member incentives review

Support centre structure

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

Strategy

IT projects update

Review of progress on strategic projects

Hollywood Bowl Group plc

Annual report and accounts 2023

Corporate governance report continued

Induction

All new Directors appointed to the Board undertake a tailored induction programme, the purpose of which is to help new Directors develop

a sound understanding and awareness of the Group, focusing on its culture, operations and governance structure.

Rachel Addison’s induction programme commenced shortly after her appointment to the Board, and in addition to the provision of relevant

documentation included a combination of meetings with Executive Committee, senior management and other team members, attendance

at Company events and site visits. Rachel’s induction is summarised 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 (organisation,

culture and HR policies)

CMIT graduation Head of Finance meeting

(covering non-audit services,

business planning, management

reporting and tax)

CMTO meeting (covering Group

supporting functions, oﬃce

network structure, IR and

communications programme)

Cultural induction Company conference Centre visit with Head of

Internal Audit

Wheel roadshow Centre visits with the COO,

and Regional Support Manager

Board strategy day

Performance evaluation

As reported last year, our FY2022 Board evaluation process was externally facilitated by Parsons Talent Consulting (led by Annabel Parsons),

with feedback presented to our Board meeting in December 2022. The Board discussed speciﬁc ﬁndings, and agreed certain actions to take

forward in FY2023, at our meetings in January and March 2023. Some of the actions identiﬁed and how they have been implemented are

summarised in the table below.

Our FY2023 Board evaluation process was internally facilitated and conducted by way of detailed questionnaires completed by all Board

members and regular attendees. Some of the questions were designed to gather feedback on the impact of the implementation of actions

arising from the FY2022 evaluation (summary feedback noted in the table below). Overall, the feedback from both the externally facilitated

(FY2022) and internal (FY2023) Board evaluations was that the Board is eﬀective and performing well. The culture of the business is

evidenced in the Board’s interactions, and internal relationships are strong.

Action (from FY2022 externally

facilitated evaluation) Implementation in FY2023

Impact (feedback from FY2023

internally facilitated evaluation)

Increase time spent discussing strategic

matters through:

• Additional time allotted for

Board meetings

• Balancing agendas in favour of strategic

rather than operational matters

Additional time added to all Board meetings

from March 2023 onwards

Agendas weighted and reordered in favour

of strategic items

Rebalanced agendas and longer meetings

have been well received, with the Board

agreeing that focus on strategic matters

has increased

Provide opportunity to reﬂect

on eﬀectiveness of Board meetings

on an ongoing basis

From March 2023, meetings are concluded

with a discussion to review the meeting

The focus on ongoing review has improved

eﬀectiveness of meetings, and provided an

open forum for suggestions to drive

continuous improvement

Develop a mentoring programme for

executives and managers

Senior management below Executive

Committee level have been assigned an

Executive Committee mentor

N/A

Increase frequency of Non-Executive

Director meetings (without executives

present)

Intend to increase from one meeting per

year to two from FY2024 onwards

N/A

Introduce KPIs to help to measure

discharge of Non-Executive Director time

commitment

KPIs agreed around number of Company

and competitor site visits to be conducted

by Non-Executive Directors per annum

Promotes Non-Executive Director time in the

business, engagement with team members,

and monitoring of culture

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

The evaluation of individual Director performance was conducted

by the Chairman, who has established a programme of regular

one-to-one meetings with all Directors. As well as discussing wider

business matters, these sessions also include 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 speciﬁc questions in the Board evaluation process,

all individual Directors were shown to be contributing eﬀectively.

The evaluation of the Chairman’s performance in FY2023 was led by

the Senior Independent Director (SID), and conducted by way of a

questionnaire completed by each Non-Executive and follow up

discussions. The review found that the Chairman continues to

perform well in his role, leads the Board eﬀectively, and promotes an

open environment whereby all individuals are able to contribute and

provide constructive challenge where appropriate.

In line with the approach established in recent years, it is anticipated

that the FY2024 Board performance evaluation will be led by the

Chairman and conducted by way of one-to-one interviews with all

Board members and regular attendees.

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 new external appointments taken on by Stephen Burns

and Peter Boddy during the year. Given that Stephen Burns stepped

down from his role at The Club Company prior to taking up the

Non-Executive Director position at Inn Collection Group, the Board

was satisﬁed that the role would not impact Stephen’s focus and

commitment to the Company. The Board was similarly satisﬁed that

Peter Boddy’s appointment as Chair of Impact Food Group, and

Non-Executive Director of Just Pay Ltd, would not restrict his time

commitment to 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 Chairman 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 Board receives regular presentations from the Chief Operating

Oﬃcer on the output and feedback from centre management and

team member listening sessions. The Chairman and Non-Executive

Directors are also invited to attend the annual conference, which

provides further opportunity to engage with team members.

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.

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 Monday 29 January 2024 at

30 Gresham Street, London, EC2V 7QP. 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.

Hollywood Bowl Group plc

Annual report and accounts 2023

Report of the Nomination Committee

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 twice 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  September 

Board succession

planning

Review of Non-Executive succession

planning matrix

Identiﬁed need to start process to recruit

Audit Committee Chair successor

Reviewed Executive and senior

management succession plans

Board appointments Oversaw search process for new NED

and Audit Committee Chair successor

(described in detail below)

Recommended the appointment

of Rachel Addison

Diversity Policy Reviewed Board Diversity policy

Reviewed Board diversity, and

discussed approach to diversity

in succession planning

Discussed internal initiatives to promote

diversity and equality

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

Performance

evaluation

Review of results from Committee

performance evaluation and discussion

on related actions

Review of the Committee’s terms of reference

Report of the

NominationCommittee

Peter Boddy

Nomination Committee Chair

Read full biography on page 80

Nomination Committee

Chair Peter Boddy

Committee members Rachel Addison



Nick Backhouse

Julia Porter

Ivan Schoﬁeld

Number of meetings

held in the year 

1 Appointed as a member of the Committee with eﬀect from 1 September 2023.

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.

Hollywood Bowl Group plc

Annual report and accounts 2023

Succession planning

A previously reported, the Nomination Committee has established

a Non-Executive succession planning matrix as a tool to support

consideration of the timing for future appointments, and to identify

key search criteria (including skills, experience and diversity). The

matrix is reviewed at each meeting of the Committee, and I regularly

discuss Board succession with the other Non-Executive Directors

between meetings to ensure alignment on plans and timings.

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). In accordance with that

plan, the Committee agreed it was appropriate to commence the

search for a new Non-Executive Director, speciﬁcally with audit

committee experience, as a potential successor to Nick Backhouse

who will step down from the Board at the AGM in January 2024. The

search process, and subsequent appointment of Rachel Addison,

is described in more detail below. We were delighted to welcome

Rachel to the Board in September 2023, and her induction has

included a detailed handover process with Nick for the Chair of

Audit Committee role which Rachel will assume from that

Committee’s ﬁrst meeting in 2024. The Board has also agreed that

Rachel will succeed Nick as Senior Independent Director from the

date of the 2024 AGM.

The Non-Executive succession plan is 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.

We have 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. The Executive Team maintains a detailed

succession planning matrix identifying potential internal successors,

and potential gaps in skills and experience which may need to be

addressed through development programmes or external recruitment.

Through the Board’s annual programme of activity, we aim to make

sure that potential executive successors are given opportunities

to meet and present to the Board on their areas of expertise and

to further their development. We also received regular updates on

other team member development initiatives across the Group, with

such development (through our Assistant and Centre Manager

training programmes, and our senior leadership development

programme) being a key area of focus for our management teams.

Board composition and tenure

Governance report

Gender Diversity Independence (exc. Chair) NED Tenure (at year end)

Male

Female

Independent

Non-Independent

 to  years

 to  years

 to  years

Hollywood Bowl Group plc

Annual report and accounts 2023

Appointment of Rachel Addison

As noted above, through its succession planning process the Committee identiﬁed the need to commence a search for a new Non-Executive

Director and Audit Committee Chair successor during the year. The table below summarises the process, and key considerations at each

step in the NED search which ultimately led to the appointment of Rachel Addison as a Non-Executive Director on 1 September 2023.

Step Key considerations/decisions

Develop role/candidate proﬁle • Recent, up-to-date and relevant ﬁnancial experience

• PLC board experience, ideally as a Non-Executive Director and Audit Committee Chair

• Commercial background

• Character aligned with the culture of the Company

• The need to continue to promote gender diversity at Board level

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 Women on Boards (which is not an executive search ﬁrm, but provides

services to support the identiﬁcation of a diverse pool of Non-Executive Director candidates) to

support the search process. Women on Boards does not have any other connection with the Company

or any individual Directors

Shortlisting candidates • Women on Boards provided a shortlist of candidates matching the role/candidate proﬁle

• The Chair and Audit Committee Chair reviewed and interviewed shortlisted candidates, identifying

a reduced shortlist of four candidates

• A summary of shortlisted candidates was discussed with Nomination Committee members

Interviews • The Chair and CEO met the shortlisted candidates

• Preferred candidates were interviewed by the Audit Committee Chair and CFO

Recommendation and

appointment

• Having discussed preferred candidates, the members of the Nomination Committee agreed

to recommend to the Board that Rachel Addison be appointed

• The Board formally approved Rachel Addison’s appointment as a Non-Executive Director and as

a member of the Audit, Remuneration and Nomination Committees, with eﬀect from 1 September 2023

Diversity

The Committee reviews the Board Diversity Policy on an annual basis and continues to be responsible for monitoring compliance with

the objectives of that Policy. The Policy recognises the beneﬁts of greater diversity, including gender 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 longer-term aspirations to

achieve no less than 40 per cent female representation on the Board, and at least one Director being 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 that and the other objectives during the year is set out in the policy is summarised below:

Objective/responsibility Progress/activity in FY

Maintain a balance such that:

• At least two members of the Board are female, with a long-term

aspiration to achieve no less than 40 per cent women on the

Board

• In the longer term, at least one Director to be from a non-white

ethnic minority background

At least two members of the Board have been female throughout

FY2023. The current proportion of women on the Board is 38 per

cent. This will increase to 43 per cent when Nick Backhouse steps

down at the 2024 AGM.

Both the gender and ethnic diversity objectives were considered as

part of the recruitment process for Rachel Addison, 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

– Ensure that non-executive shortlists include at least 50 per

cent female candidates

– Consider candidates who may not have previous board

experience in executive and non-executive directorship

leadership roles

Women on Boards is not a traditional executive search ﬁrm, and

therefore is not a signatory to the Voluntary Code of Conduct.

However the Committee felt that Women on Boards was able to

oﬀer the broadest and most diverse pool of candidates.

A suitably detailed brieﬁng was provided to Women on Boards to

ensure that identiﬁed candidates met our key criteria.

Given the important role of the Audit Committee Chair, the

Committee agreed it would not be appropriate to consider

candidates with no previous board experience on this occasion.

Report of the Nomination Committee continued

Hollywood Bowl Group plc

Annual report and accounts 2023

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 a meeting in September 2023.

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) is

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 2023 with no changes proposed.

As at 30 September 2023, the Board did not meet the diversity targets set out in Listing Rule 9.8.6(9), as less than 40 per cent of the Board

Directors were women, none of the roles of the Chair, CEO, CFO or Senior Independent Director were held by a woman, and we did not have a

Director from a minority ethnic background. There have been no changes to the Board between the ﬁnancial year end and the date of the

Annual Report which change this position, however we will exceed the 40 per cent target, and have a female SID, following our 2024 AGM

(when Nick Backhouse steps down as a Director and is succeeded by Rachel Addison as SID).

As described above in relation to succession planning and the application of the Board Diversity Policy, we are in the process of a cycle

of Non-Executive Director succession planning. As part of our succession plans, and Non-Executive Director recruitment processes, the

Committee is aware of the need to promote gender and ethnic diversity. We have made good progress in improving gender diversity at Board

level. We have speciﬁed a desire to see candidates from ethnic minority backgrounds in our recent search processes, and will continue to do

so going forwards.

As required under Listing Rule 9.8.6(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 2023 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

Men     

Women   —  

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     

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.

Overall gender diversity across the business is good with the Committee and the Executive team recognising the need to support the

development of women into senior management roles.

Governance report

Hollywood Bowl Group plc

Annual report and accounts 2023

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 2023, 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 monitored progress against actions identiﬁed

in the 2022 externally facilitated Board evaluation process during

the year (as described more fully on page 86). Some of these

actions were further assessed through speciﬁc questions in our

internally facilitated Board evaluation process in 2023 (also

described on page 86).

The Committee has reviewed its own performance in 2023 by way

of a questionnaire completed by Committee’s members and other

attendees, with the results discussed at the Committees’ meetings

in December 2023. In general, the evaluation conﬁrmed that the

Nomination Committee continues to operate eﬀectively and that the

agreed succession plan is progressing well.

Peter Boddy

Chair of the Nomination Committee

17 December 2023

Report of the Nomination Committee continued

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Report of the Audit Committee

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 by the Committee

during the year and no changes were proposed.

Dear shareholders,

On behalf of the Board, I am pleased to present the Audit

Committee report for the year ended 30 September 2023.

As you will have read in the Strategic report, the business has

delivered another year of strong ﬁnancial performance in FY2023

showing LFL revenue growth of 4.5 per cent versus FY2022. We

have continued to expand and improve our estate in the UK, and

to integrate and develop our business in Canada following the

Teaquinn acquisition in FY2022.

The activity of the Committee during FY2023 is described in the

report that follows. Our key role is in monitoring the integrity of

annual and half-year ﬁnancial statements, and in particular ensuring

that appropriate consideration is given to key accounting judgements

and estimates. In that context, we have reviewed the accounting

treatment for the acquisition of additional Canadian centres in

Calgary, as well as the accounting policy for revenue recognition in

relation to Striker Bowling Solutions (which supplies and installs

bowling equipment across Canada). We have also considered the

accounting policy for IT cost capitalisation in connection with Group

digital initiatives.

We have continued to review and monitor potential asset

impairment. At the half year end, we again concluded that there

was no need for a full impairment review at the half year end given

the positive trading performance of our centres in the ﬁrst half. Prior

to the ﬁnancial year end, the Committee reviewed the impairment

model and underlying assumptions, and in line with required

accounting standards a full impairment review has been conducted

at the year end.

The Committee has an established formal schedule of annual

activity which ensures that we consider all relevant matters within

our remit at the appropriate time during the year. In accordance with

that activity schedule, we have continued to regularly review our

documented internal controls matrix (challenging management to

gain assurance over the eﬀectiveness of those controls), and to

receive six-monthly updates from our Internal Audit function (as

described in the report below).

Report of the

AuditCommittee

Audit Committee

Chair Nick Backhouse

Committee members Rachel Addison



Julia Porter

Ivan Schoﬁeld

Number of meetings

held in the year 4

1 Appointed as a member of the Committee with eﬀect from 1 September 2023.

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.

Nick Backhouse

Audit Committee Chair

Read full biography on page 81

Hollywood Bowl Group plc

Annual report and accounts 2023

Report of the Audit Committee continued

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.

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 2023, and I’m pleased to

report that the ﬁndings indicate that the Committee continues to

operate eﬀectively.

We were pleased to welcome Rachel Addison as a member of

the Committee on her appointment as a Non-Executive Director

in September. Rachel will succeed me as Chair of the Committee

when I step down from the Board at the 2024 AGM, and I am

delighted to be able to hand over the reins to such an experienced

and capable colleague. The Committee has comprised wholly of

independent Directors throughout the year, and the Board has

conﬁrmed that it is satisﬁed that both Rachel Addison and I have

recent and relevant ﬁnancial experience as recommended under

the Code by virtue of our qualiﬁcation as Chartered Accountants,

our executive background in ﬁnance roles, and our experience as

audit committee chairs 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.

Nick Backhouse

Chair of the Audit Committee

17 December 2023

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 FY2023. The names of the attendees of the Audit Committee meetings are set out in the table on page 93.

The external auditor has the right to attend meetings, and the Chair of the Board, Chief Executive Oﬃcer, Chief Financial Oﬃcer and Head

of 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 FY2023 included the topics set out below:

Activities of the Committee during the year to  September  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

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

The key areas of focus of the Committee are discussed in more detail in the rest of this report.

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 2023 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

£2.2m (£1.4m for PPE and £0.8m for ROU assets) was appropriate.

Valuation of acquisition-related

intangible assets arising from the

acquisition of assets in Canada.

The Committee reviewed the calculation methodology to support the valuation of intangible assets

acquired in relation to the acquisition of additional centres in Canada during FY2023. The Committee was

comfortable with the approach adopted by management, which included engaging an external specialist

to determine the fair value of the separately identiﬁable intangible assets.

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. The Board has,

however, 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, have been communicated throughout

the Group. Internal controls have been implemented in respect of

the key operational and ﬁnancial processes of the business. These

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;

• scheduling annual Board reviews of strategy including 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; and

• reviewing regular reports containing detailed information regarding

ﬁnancial performance, rolling forecasts, actual and forecast

covenant compliance, and ﬁnancial and non-ﬁnancial KPIs.

During FY2023 the Board’s established programme of deep dive

presentations on speciﬁc risks has continued. The programme of

deep dives is informed through the wider review of the Group risk

with the schedule of topics agreed early in the ﬁnancial year. The

deep dives have assisted in developing a broader understanding of

the risks, any change in risk level, and the mitigations and controls

implemented (and an assessment of their eﬀectiveness). Speciﬁc

risks covered by these deep dives in FY2023 included

concentration risk relating to amusements suppliers, the expansion

risk linked to new centre openings, supply chain, cyber security and

targeted IT threat risks, and climate-related risks (including the risk

of business interruption, and net-zero transition). The deep dive

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:

• regularly reviewing the detailed internal controls matrix which

addresses and tracks actions against items such as control

deﬁciencies identiﬁed by KPMG;

• receiving updates from the Group’s Internal Audit function on

reviews of key processes and controls;

• 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.

Internal audit

As previously reported, the remit of the Group’s Internal Audit

function (which was originally focused primarily on monitoring and

supporting compliance with in-centre processes and controls) has

evolved over time and now covers other operational processes such

as supplier on-boarding, employee expenses, the issuance of

customer refunds, and any other areas that the Audit Committee or

management identify as being appropriate for review (often

informed by the internal controls matrix). Speciﬁc areas covered in

the Internal Audit function’s reports to the Audit Committee during

FY2023 have included a review of team member loyalty beneﬁts,

zero deposit bookings in centre and through our customer contact

centres, internal security and team member safety (CCTV coverage

and access), and centre-based audits around food hygiene

and safety.

In accordance with the established centre audit programme, the

internal audit function performs regular testing of the detailed

processes and controls required to be applied by centre teams.

Findings are presented to the relevant centre manager and the Chief

Financial Oﬃcer for review, with a focus on ensuring that centre

management and team members are supported to meet the

required standards. Detailed summaries of centre performance

against the required standards are presented to the Audit

Committee twice per year.

Hollywood Bowl Group plc

Annual report and accounts 2023

Report of the Audit Committee continued

Internal audit continued

A member of the internal audit team attends Audit Committee

meetings at least once per year to provide updates on the activities

of the internal audit function. The internal audit team has also begun

to work with our Canadian business to assist in the development of

an appropriate centre-based audit programme in Canadian centres.

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 Committee reviewed the eﬀectiveness of the external audit

process following completion of the FY2022 audit. 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

May 2023, and in making its assessment the Committee also took

into account its own interactions with the external auditor. The

report noted that the FY2022 audit process had been eﬀective,

with improvements over the prior year, and highlighted opportunities

to further improve the process in FY2023, in particular by bringing

forward the audit timetable. The Committee concluded 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 2023, KPMG was engaged to

provide permitted non-audit services relating to EBITDA certiﬁcation

and turnover rent certiﬁcates for a fee of £7.5k, representing 1.8 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 Audit Committee continues to be satisﬁed with the scope of the

external auditor’s work and the eﬀectiveness of the external audit

process, and that KPMG continues to be independent and objective.

The Committee is therefore pleased to recommend that KPMG be

reappointed as the Group’s auditor at the 2024 AGM.

During the year, the Committee considered the appropriate timing

for putting the external audit contract out to tender in the context of

the requirement to do so 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). The

Committee remains mindful of the requirement to tender the audit

no later than FY2026 and of the beneﬁts of audit rotation. However,

given the Committee’s assessment of KPMG’s performance to date,

and the recent rotation of the lead audit partner, it has concluded

that there is no need to conduct an audit tender at this time.

Nick Backhouse

Chair of the Audit Committee

17 December 2023

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Report of the Corporate Responsibility Committee

Report of the Corporate

Responsibility Committee

Dear shareholders,

In recognition of the importance that we place on environmental and

social considerations in our decision making, we established a

Corporate Responsibility Committee (CRC) consisting of fellow

Board members, Executive Committee members and me.

I was pleased to chair the ﬁrst two CRC meetings in FY2023.

These meetings highlighted the pivotal role that the Committee will

have in supporting the Board in setting ESG strategies, and providing

oversight to the long-established Corporate Responsibility Steering

Group in driving change in our business.

Our sustainability strategy is based on three pillars: operating safe

and inclusive leisure destinations, creating outstanding workplaces

and operating sustainable centres. The Group has made good

progress this year and has taken some signiﬁcant steps forward in

many areas including community accessibility, team member

attraction and retention, team wellbeing, diversity and inclusion,

solar panel rollout and energy eﬃciency. Further details of our

achievements can be found on pages 48 to 55.

High on the CRC’s agenda this year was the sharpening of the

Group’s net zero strategy and UK transition plan which is set out on

pages 58 and 59. Until now, our focus had been on reducing carbon

emissions over which we have direct control (Scopes 1 and 2), with

clear strategies and targets to achieve this. We have made excellent

progress in this area with our UK emission intensity ratio falling by 62

per cent since we began reporting in 2016 and using a market-based

measurement approach, due to our procurement of renewable

electricity and self-generated energy sources, we are close to

achieving carbon neutrality for Scopes 1 and 2.

However, we were aware that in order to achieve net zero, we

needed to turn our attention towards our indirect value chain

emissions – Scope 3 – which we estimate make up approximately 91

per cent of our total emissions.

We publish our Scope 3 emissions here for the ﬁrst time, giving us a

FY2023 baseline to set reduction goals from FY2024. We have also

disclosed our environment and climate impact through the CDP,

which runs a global disclosure system for investors, companies,

cities, states, and regions to manage their environmental impacts.

Looking forward, we are starting work to overlay our ESG strategy in

our Canadian business so that all of our operations will be fully

aligned with consistent sustainability reporting.

We will continue to drive our sustainability agenda across all of our

operations as we continue to evolve and push forward with our

Group net zero strategy.

Ivan Schoﬁeld

Chair of the Corporate Responsibility Committee

17 December 2023

Corporate Responsibility Committee

Chair Ivan Schoﬁeld

Committee members Peter Boddy

Julia Porter

Stephen Burns

Melanie Dickinson

Mathew Hart

Number of meetings

held in the year 

Speciﬁc duties of the Committee include:

• reviewing, challenging, and overseeing the content of and

approach to, the ESG strategy and to ensure 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 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, keeping under review the Group’s external

reporting of relevant ESG performance (including the

Company’s application of the recommendations of the Task

Force on Climate-related Financial Disclosures (TCFD).

Ivan Schoﬁeld

Chair of the Corporate Responsibility Committee

Read full biography on page 81

Hollywood Bowl Group plc

Annual report and accounts 2023

Report of the

Remuneration Committee

Julia Porter

Remuneration Committee Chair

Read full biography on page 81

Report of the Remuneration Committee

Remuneration Committee

Chair Julia Porter

Committee members Rachel Addison



Nick Backhouse

Ivan Schoﬁeld

Number of meetings

held in the year 

1 Appointed as a member of the Committee with eﬀect from 1 September 2023.

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, Chairman 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 2023, my ﬁrst having succeeded Claire Tiney as

Remuneration Committee Chair when she stepped down from the

Board at our 2023 AGM.

This report, 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 Listing Rules and the Code, sets out how

the Policy has been applied during FY2023. The report consists of:

• my annual statement as the Chair of the Remuneration Committee;

• the annual report on remuneration, which sets out payments

made to the Directors and details the link between Company

performance and remuneration for FY2023. The annual report

on remuneration is subject to an advisory shareholder vote at the

2024 AGM; and

• a summary of the Policy, including how the Committee intends

to implement it in 2024.

Performance in FY2023 and remuneration outcomes

As detailed in the Strategic report, the Group delivered another very

strong year of ﬁnancial and operational performance, with LFL revenue

growth of 4.5 per cent and Group adjusted EBITDA pre-IFRS 16 of

£64.9m. The Group’s ﬁnancial performance in FY2023 exceeded

the Board’s expectations, particularly on the back of an exceptional

FY2022. We have made good progress in both integrating and

expanding our Canadian business, which traded ahead of expectations

in FY2023, and our UK centres have continued to deliver strong

operational performance against both ﬁnancial and non-ﬁnancial

metrics (including customer satisfaction and waste recycling).

FY2023 was also a record year of investment in the estate and we

opened three new centres in the UK. Our refurbishment programme

saw 13 centres receive successful upgrades and are delivering

above our return hurdle rate. In addition to ﬁnancial and operational

performance, running our business in a sustainable manner is a key

focus for the Group and is integral to our decision making. Good

progress was made across all key metrics and we met our key

FY2023 targets across our three sustainability pillars.

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

As set out earlier in this Annual Report, the Group will be paying a

ﬁnal ordinary dividend of 8.54 pence per share and a special dividend

of 2.73 pence per share, as well as commencing a £10m share

buyback programme in FY2024.

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 9.2 per cent, and for salaried team members

was 5.3 per cent. We continue to incentivise team members through

our centre management bonus schemes, with metrics aligned to

those that apply for the Executive Directors. In FY2023, we paid out

over £2.6m in centre level bonuses (with Centre Managers receiving

over 64 per cent base of pay and Assistant Managers receiving over

14 per cent base of pay) and over £600k in hourly team member

bonuses. We have also maintained our reputation for our positive

working environment, evidenced by our rank amongst one of

‘The UK’s 25 Best Big Companies to Work For’ again in 2023.

The FY2023 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 Overall

Blended Index (OBI) and waste recycling. A detailed breakdown of

the measures is set out on page 105. 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 July 2021, which vests by

reference to Group adjusted, diluted EPS performance in FY2023.

Our strong performance in FY2023 resulted in an adjusted EPS

out-turn of 21.48 pence per share, exceeding the maximum target

and therefore the awards will vest in full in July 2024, followed by a

two-year holding period.

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 very strong ﬁnancial performance, share

price performance including the share price increase following the

trading update in October 2023, the level of dividends proposed to

be paid to shareholders including the special dividend, the approach

to wider workforce pay, the integration and development of the

Canadian business, and the continued operational focus on

delivering a fantastic product for our customers (evidenced through

continually positive customer engagement scores). In addition,

Hollywood Bowl delivered a shareholder return of more than 27 per

cent over FY2023, outperforming the FTSE Small Cap index (which

delivered c.0.1 per cent return during the period). Over the three-year

performance period under the 2021 LTIP award, Hollywood Bowl

delivered a shareholder return of more than 69 per cent, again

outperforming the FTSE Small Cap index (which delivered a c.32 per

cent return 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 operated

as intended in the year under review.

FY2024 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. As noted above,

the overall average pay increase for the wider workforce in FY2023

was 7.4 per cent. 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 5.0 per cent for the Executive Directors.

The resulting salaries all remain below the FTSE SmallCap median.

FY2024 variable pay

There are no proposed changes to the maximum bonus opportunity

and LTIP award level for Executive Directors in FY2024, with the

bonus opportunity remaining at 100 per cent of salary and the LTIP

award level at 150 per cent of salary for the CEO and CFO and 100

per cent for the CPO. There are also no proposed changes to the

performance measures, further detail of which is set out later in

this report.

The Committee will review the remuneration framework during

FY2024 ahead of a new Policy being put forward to a shareholder

vote at the 2025 AGM, in line with the normal three-year cycle. This

review will cover all aspects of the remuneration package to ensure

that it continues to be aligned to our business strategy and culture.

We will consult with shareholders on the new Policy ahead of the

2025 AGM.

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 more generally in relation to the

Group’s Remuneration Policy.

Julia Porter

Chair of the Remuneration Committee

17 December 2023

Hollywood Bowl Group plc

Annual report and accounts 2023

As part of its oversight of the application of the Remuneration Policy during the year, the Committee has considered the factors set out in

provision 40 of the Code. In our view, the 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 was

set out in our FY2021 Annual Report (which is available on the Company’s website, with

a summary of key points set out on pages 110 and 111).

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.

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 approved

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.

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.

Report of the Remuneration Committee continued

100

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

The Remuneration Committee met on four 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  September  Nov Dec Mar Sep

Review of FY2022 performance and the formulaic bonus outcome, and approval of Directors’ bonuses

for FY2022

Review/approval of Directors’ bonus KPIs/targets for FY2023 and FY2023 pay

Review/agree 2023 LTIP performance targets

Agree approach to FY2024 bonus targets

Agree approach to FY2024 LTIP performance targets

Approve FY2024 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 engagement and feedback from shareholders

Consideration of pay and conditions across the Group

Update on market practice

Review of 2023 AGM and proxy advisory comments

Review of the Committee’s terms of reference

Discussion of Committee evaluation results

101

Hollywood Bowl Group plc

Annual report and accounts 2023

Annual report on remuneration

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 FY2023. Comparative

ﬁgures for FY2022 have been provided. Figures provided have been calculated in accordance with the UK disclosure requirements.

Name

Salary

’

Beneﬁts



’

Pension

’

Bonus

’

LTIP

’

, 

Total

’

Total

ﬁxed

pay

’

Total

variable

pay

’

Stephen Burns

        

        

Laurence Keen

        

        

Melanie Dickinson

        

        

1 Beneﬁts include private medical insurance and car allowance.

2 The 2022 LTIP ﬁgures were calculated based on the three-month average share price to the end of FY2022. The 2022 LTIP ﬁgure in the table above has therefore been adjusted

to reﬂect the actual share price of 261.5 pence (being the closing share price on 3 February 2023, the trading day before the vesting date of 6 February 2023).

3 The 2023 LTIP ﬁgures were calculated based on the three-month average share price to 30 September 2023 (231.3 pence), plus the value of dividend equivalents for the period

from the 2021 LTIP grant to 30 September 2023. No amount of the value disclosed in the single ﬁgure table above is 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:

 

Name

Fees

’

Taxable

beneﬁts

’

Total

’

Fees

’

Taxable

beneﬁts

’

Total

’

Peter Boddy – Chairman  —   — 

Rachel Addison



 —  — — —

Nick Backhouse, Senior Independent Director; Chair – Audit Committee

 —   — 

Julia Porter



 —   — 

Ivan Schoﬁeld  —   — 

Claire Tiney



– Chair – Remuneration Committee  —   — 

1 Rachel Addison was appointed as a Director with eﬀect from 1 September 2023. Therefore, only her remuneration from that date is shown in the table above.

2 Julia Porter was appointed as a Director with eﬀect from 1 September 2022. Therefore, only her remuneration from that date is shown in the table above.

3 Claire Tiney stepped down as a Director with eﬀect from the AGM on 30 January 2023. Therefore, only her 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 FY2023 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 average overall customer satisfaction (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

( of max)

On target

( of max) Maximum

Group adjusted EBITDA pre-IFRS   m m m m  

Average Group OBI  — —    

Waste recycling  — —    

Total  

The Committee considers that the targets were set at stretching levels taking into account the business plan, market conditions at the time

the targets were set and the fact that FY2022 was an exceptional trading year for the Group coming out of the COVID-19 pandemic. 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 FY2023 and reﬂected in the single ﬁgure of remuneration table

above were £443,260 to Stephen Burns, £290,509 to Laurence Keen and £172,000 to Melanie Dickinson.

102

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Long-Term Incentive Plan vesting of 2021 awards

The LTIP values included in the single total ﬁgure of remuneration table for 2023 relate to the 2021 LTIP award. Awards with a face value

of 100 per cent of salary were granted to the Executive Directors on 22 July 2021 and, following a three-year performance period ending on

30 September 2023, are due to vest on 22 July 2024. The performance targets are set out below:

Adjusted EPS for the ﬁnal year of the performance period Vesting

 pence 

 pence –  pence Vesting determined on a straight-line basis

 pence 

Actual performance achieved was 21.48 pence (audited); therefore, based on performance at the end of the vesting period, the awards

will vest in full. 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.

Long-term incentives awarded in 2023 (audited)

Awards were made under the LTIP scheme on 31 January 2023. 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  of salary   // to //

Laurence Keen Chief Financial Oﬃcer  of salary   // to //

Melanie Dickinson Chief People Oﬃcer  of salary   // to //

A ﬁve-day average share price prior to grant of 259.9 pence was used to calculate the number of awards granted.

The following performance targets, which were disclosed in the Directors’ Remuneration Report last year, apply to the FY2023 LTIP awards:

Measure Description Weighting Threshold Target



Max

Adjusted EPS



Adjusted EPS for the ﬁnal year of the

performance period – FY

 p

( payout)

p

( payout)

p

( payout)

Return on centre

invested capital

 return on all centre invested

capital (refurbs and new centres,

excluding maintenance)

  return

( payout)

 return

( payout)

 return

( payout)

UK emissions ratio for

Scope  and Scope 

UK intensity ratio (IR) of under   IR under 

( payout)

IR under 

( payout)

IR under 

( payout)

UK team member

development

 of UK team members

progressed through internal

development programmes

 

( payout)



( payout)



( 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.

2 Vesting on a straight-line basis between threshold and target, and target and max performance.

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.

103

Hollywood Bowl Group plc

Annual report and accounts 2023

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 2023, are set out in the table below:

Outstanding scheme interests  September  Beneﬁcially owned shares



Total of all scheme

interests and

shareholdings at

 September



Unvested LTIP

interests subject

to performance

conditions

Scheme interests

not subject to

performance

measures



Vested but

unexercised

scheme

interests



Total shares

subject to

outstanding

scheme interests

As at

 October



As at

 September



Executive Directors

Stephen Burns



  —    

Laurence Keen



  —    

Melanie Dickinson   —    

Non-Executive

Directors

Peter Boddy



— — — —   

Rachel Addison — — — — — — —

Nick Backhouse — — — —   

Julia Porter — — — — — — —

Ivan Schoﬁeld



— — — —   

Claire Tiney



— — — —  — —

1 Sharesave awards that have not vested, and deferred bonus shares subject to holding period.

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 spouses.

4 Stepped down as a Director with eﬀect from 30 January 2023.

Directors’ share ownership guidelines (audited)

Shareholding requirements in operation at the Company are currently 200 per cent of base salary. Executive Directors are required to build

their shareholdings over a ﬁve-year period from appointment. Upon departure, individuals will be required to retain 100 per cent of their

shareholding requirement (or full actual holding if lower) for a period of two years post cessation. Non-Executive Directors are not subject to a

shareholding requirement.

Director

Shareholding

requirement

(percentage of

salary)

Current

shareholding

(percentage

of salary)



Beneﬁcially

owned shares

held as at

 September



Shareholding

requirement met?

Stephen Burns    Yes

Laurence Keen    Yes

Melanie Dickinson    Yes

1 The share price of 247.5 pence as at 30 September 2023 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.

Annual report on remuneration continued

104

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Executive Directors’ share plan interest movements during

FY2023 (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).

Deferred shares are not subject to any performance conditions or continued employment. The LTIP awards are subject to performance

conditions as set out in the table on pages 103 and 114.

Face values for LTIP awards are calculated by multiplying the number of shares granted during FY2023 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 in 2023.

Date of award

Vesting,

exercise or

release date



No. of shares/

awards held as

at  October

 Awarded

Exercised/

vested Lapsed

No. of shares/

awards held

as at

 September



Grant/award

price in pence

(exercise price

for Sharesave)

Face value

of awards

granted

during

FY

Stephen Burns

LTIP // //  —  — — — —

// //  —  — — — —

// //  — — —  — —

// //  — — —  — —

// // —  — —   

Sharesave // //  — —  — — —

// //  — — —  — —

// // —  — —   

Laurence Keen

LTIP // //  —  — — — —

// //  —  — — — —

// //  — — —  — —

// //  — — —  — —

// // —  — —   

Sharesave

// //  — —  — — —

// //  — — —  — —

// // —  — —   

Melanie Dickinson

LTIP // //  —  — — — —

// //  —  — — — —

// //  — — —  — —

// //  — — —  — —

// // —  — —   

Sharesave // //  — — —  — —

// // —  — —   

1 LTIP awards from 2019 onwards 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. LTIPs awarded in February 2020 were exercised by the Executive Directors in

February 2023. Due to an administrative error, each Executive Director sold the shares acquired on exercise. In order to rectify this administrative error, they have agreed in writing

that an amount of their own beneﬁcial shareholding equivalent to the number of shares that should have been subject to the two-year holding period will be subject to the same

restrictions and terms and conditions as would have applied under the original holding period.

The LTIP awarded in 2021 vested on the basis of adjusted EPS performance measured in the ﬁnal year of the performance period. As noted

on page 103, the EPS target for the award made in 2021 has been met, and therefore the awards will vest in full on 22 July 2024. The targets

that apply to the award made in 2023 are shown on page 103.

105

Hollywood Bowl Group plc

Annual report and accounts 2023

Chief Executive Oﬃcer historical remuneration

The table below sets out the total remuneration delivered to the Chief Executive Oﬃcer over the last seven years since IPO, valued using the

methodology applied to the single total ﬁgure of remuneration. The Remuneration Committee does not believe that the remuneration paid in

earlier years as a private company bears any comparative value to that paid in its time as a public company and, therefore, the Remuneration

Committee has chosen to disclose remuneration only for the seven most recent ﬁnancial years:

Chief Executive Oﬃcer       

Total single ﬁgure (’)       

Annual bonus payment level achieved

(percentage of maximum opportunity)       

LTIP vesting level achieved (percentage of

maximum opportunity)      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 over the same

period. The FTSE Small Cap Index was chosen as a comparator because it represents a broad equity market index of which the Company is

a constituent.

FTSE Small CapHollywood Bowl

240

220

200

180

160

140

120

100

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

Annual report on remuneration continued

106

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

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 106) paid to each Director in respect of FY2021, FY2022 and FY2023, compared to that of the average change for

employees in the Group as a whole.

Change  (FY to FY) Change  (FY to FY) Change  (FY to FY)

Salary

and fees

Taxable

beneﬁts

Annual

bonus

Salary

and fees

Taxable

beneﬁts

Annual

bonus

Salary

and fees

Taxable

beneﬁts

Annual

bonus

Executive Directors

Stephen Burns  ()      () —

Laurence Keen        () —

Melanie Dickinson



   — — — — — —

Non-Executive Directors

Peter Boddy  N/A N/A  — — () — —

Rachel Addison N/A N/A N/A — — — — — —

Nick Backhouse  N/A N/A  — — () — —

Julia Porter N/A N/A N/A — — — — — —

Ivan Schoﬁeld  N/A N/A  — — () — —

Claire Tiney (until

 January )  N/A N/A  — — () — —

All Group employees



  ()  ()   () 

1 For FY2022 and FY2021 this reﬂects the change in average pay for all UK Group employees employed in both years. For FY2023 this reﬂects all UK Group employees employed

during FY2023.

2 Melanie Dickinson was appointed as an Executive Director with eﬀect from 21 October 2021, therefore the ﬁxed pay increases are impacted by not being an Executive Director for the

whole of FY2022.

CEO pay ratio

The table below shows the ratio between the single total ﬁgure of remuneration of the CEO for FY2023 and the lower quartile, median and

upper quartile pay of UK employees.

Methodology

th percentile

ratio

th percentile

ratio

th percentile

ratio

Year ended  September  Option A   

Year ended  September  Option A   

Year ended  September  Option A   

Year ended  September  Option A   

Total UK employee pay and beneﬁts ﬁgures used to calculate the CEO pay ratio

th

percentile pay

’

Median

pay

’

th

percentile pay

’

Salary   

Total employee pay and beneﬁts   

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 2023. 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 2023, as set out in the table on page 106.

107

Hollywood Bowl Group plc

Annual report and accounts 2023

CEO pay ratio continued

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 FY2022 and FY2023 compared with other disbursements. All ﬁgures

provided are taken from the relevant Company accounts.

Disbursements

from proﬁt in

FY

m

Disbursements

from proﬁt in

FY

m

Percentage

change

Proﬁt distributed by way of dividend   

Overall spend on pay including Executive Directors   

Shareholder voting at General Meetings

The following table shows the results of the advisory vote on the Directors’ Remuneration Report at our 2023 AGM, and the binding vote on

our current Remuneration Policy, at our 2022 AGM:

Approval of the Directors’ Remuneration Report

( AGM)

Approval of the Directors’ Remuneration Policy

( AGM)

Total number of votes  of votes cast Total number of votes  of votes cast

For (including discretionary)    

Against    

Votes withheld  N/A  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 £70,000. Laurence

Keen served as a Non-Executive Director (and Senior Independent Director and Chair of the Audit Committee) of Tortilla Mexican Grill plc

until 16 May 2023, for which he received an annual fee of £40,000.

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 Remuneration Committee’s policy for setting notice periods is that a six-month period will apply for Executive Directors. The Remuneration

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  June   

Laurence Keen CFO  June   

Melanie Dickinson CPO  October   

The Non-Executive Directors of the Company (including the Chairman) 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 29 January 2024

and to re-election at any subsequent AGM at which the Non-Executive Directors stand for re-election. In line with our agreed Non-Executive

Director succession plans, Nick Backhouse will not seek re-election at the 2024 AGM.

Annual report on remuneration continued

108

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Service agreements and letters of appointment continued

The details of each Non-Executive Director’s current terms are set out below:

Name Date of appointment Commencement date of current term

Unexpired term as at

 December 

Peter Boddy  June   September   year,  months

Rachel Addison  September   September   years,  months

Nick Backhouse  June   June   year,  months

Julia Porter  September   September   year,  months

Ivan Schoﬁeld  October   October   years,  months

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 four 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 2023, fees of £30,900 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.

Consideration of conditions elsewhere in the Company

The Remuneration Committee considers pay and employment conditions across the Company when reviewing the remuneration of the

Executive Directors and other senior employees. In particular, the Remuneration 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 Remuneration Committee considers shareholder feedback received in relation to the AGM each year and guidance from shareholder

representative bodies more generally.

The Committee has not had cause to engage directly with shareholders on executive remuneration matters during FY2023. Our Directors’

Remuneration Policy is due to be submitted to shareholders for approval at our 2025 AGM. The Committee will review the Policy during

FY2024, and will engage with shareholders in the event that any material changes are proposed.

109

Hollywood Bowl Group plc

Annual report and accounts 2023

Summary of Remuneration Policy and Implementation in FY2024

The key features of the Directors’ Remuneration Policy approved by shareholders at our 2022 AGM, and the intended implementation

of the policy in FY2024, are summarised below. The full Policy can be found on the Company’s website, www.hollywoodbowlgroup.com,

in the ‘Investors’ section, under ‘Reports and presentations’, in our FY2021 Annual Report.

Salary

Executive Director salaries

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.

Operation

Salaries are normally reviewed annually and any changes are eﬀective from 1 October. When determining an

appropriate level of salary, the Remuneration Committee considers:

• remuneration practices within the Company;

• the performance of the individual Executive Director;

• the individual Executive Director’s experience and responsibilities;

• the general performance of the Company;

• salaries within the ranges paid by companies in the comparator group used for remuneration benchmarking; and

• the economic environment.

Opportunity

Base salaries will be set at an appropriate level with a comparator group of comparably sized companies and will

normally increase with increases made to the wider employee workforce.

Individuals who are recruited or promoted to the Board may, on occasion, have their salaries set below the targeted

Policy level until they become established in their role. In such cases subsequent increases in salary may be higher

than the average until the target positioning is achieved.

Performance metrics

used, weighting and

time period applicable

None.

Chairman and Non-Executive Director fees

Provides a level of fees to support recruitment and retention of Non-Executive Directors with the necessary experience to advise and

assist with establishing and monitoring the Company’s strategic objectives.

Operation

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.

Non-Executive Directors are paid a base fee. An additional payment is paid to the Senior Independent Director in

respect of the additional duties of this role. No additional fees are paid to Non-Executive Directors or the Chairman of

the Company for the membership or chairmanship of Committees.

Fees are reviewed annually, based on equivalent roles in an appropriate comparator group used to review salaries

paid to the Executive Directors.

Non-Executive Directors do not participate in any variable remuneration or beneﬁts arrangements.

Opportunity

The base fees for Non-Executive Directors are set with reference to the market rate.

In general, the level of fee increase for the Non-Executive Directors will be set taking account of any change in

responsibility and will take into account the general rise in salaries across the UK workforce.

The Company will pay reasonable expenses incurred by the Chairman and Non-Executive Directors.

Performance metrics

used, weighting and

time period applicable

None.

Annual report on remuneration continued

110

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Beneﬁts and pension

Beneﬁts

Provides a competitive level of beneﬁts.

Operation

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 Remuneration 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 Remuneration

Committee would expect to be able to adopt beneﬁts such as relocation expenses, tax equalisation and support

in meeting speciﬁc costs incurred by the Directors.

Opportunity

The maximum will be set at the cost of providing the beneﬁts described.

Performance metrics

used, weighting and

time period applicable

None.

Pensions

Provides market competitive retirement beneﬁts.

Operation

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.

Opportunity

The current Executive Directors receive pension funding equal to 5 per cent of base salary.

Future incoming Executive Directors will receive pension funding in line with the level received by the wider employee

workforce.

Performance metrics

used, weighting and

time period applicable

None.

FY2024 implementation

No changes are proposed to beneﬁts or pension.

FY2024 implementation

The Executive Director salaries, and Non-Executive Director fees, for FY2024 (eﬀective from 1 October 2023) are set out below.

The rationale for these increases is set out in the Annual Statement from the Remuneration Committee Chair:

Salary

Name  

Percentage

change

Stephen Burns   

Laurence Keen   

Melanie Dickinson   

The Board approved the increase of fees for the Non-Executive Directors by 5.0 per cent with eﬀect from 1 October 2023, with this

increase being below the average increase for the wider workforce. The Committee approved an increase to the Chairman’s fee of

5.0 per cent, also with eﬀect from 1 October 2023.

Chairman fee 

Senior Independent Director fee 

Base fee 

Chair of Audit Committee fee No additional fee

Chair of Remuneration Committee fee No additional fee

111

Hollywood Bowl Group plc

Annual report and accounts 2023

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. Provides market competitive retirement beneﬁts.

Operation

The Remuneration Committee will determine the bonus payable after the year end based on performance against

objectives and targets. Bonus payments per individual will be both proportionate to the overall size of the bonus pot

and each individual’s performance versus their personal objectives.

Annual bonuses are paid part in cash and part in shares deferred for two years. The maximum proportion of an annual

bonus which may be paid in cash is 65 per cent.

It should be noted that the Remuneration Committee has taken the view that due to their considerable shareholdings

in the Company, automatic deferral of annual bonuses into shares is unnecessary for the current Executive Directors.

As such the Remuneration Committee intends to pay annual bonuses to the current Executive Directors in cash, but

will retain the ability to apply an appropriate level of deferral following any material sell down to ensure that shareholding

requirements continue to be met.

On change of control, the Remuneration Committee may pay bonuses on a pro-rata basis measured on performance

up to the date of change of control.

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 resulting in an adjustment to the audited consolidated accounts of the

Company or action or conduct which, in the reasonable opinion of the Board, amounts to employee misbehaviour, fraud

or gross misconduct.

Opportunity

The maximum bonus opportunity is 100 per cent of base salary.

Performance metrics

used, weighting and

time period applicable

The annual bonus outcomes will be determined based on achievement of a scorecard of ﬁnancial and strategic targets,

with at least half of the bonus being based on ﬁnancial performance.

The Remuneration Committee retains discretion in exceptional circumstances to change performance measures

and targets and the weightings attached to performance measures part-way through a performance year if there

is a signiﬁcant and material event which causes the Remuneration Committee to believe that the original measures,

weightings and targets are no longer appropriate. Discretion may also be exercised in cases where the Remuneration

Committee believes that the bonus outcomes are not a fair and accurate reﬂection of business performance.

The Remuneration Committee considers that the detailed performance targets used for the 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 achieved, and awards made will be disclosed at the end of the

performance period so that shareholders can fully assess the basis for any payouts under the annual bonus plan.

FY2024 implementation

The maximum bonus opportunity for the Executive Directors will remain at 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 FY2024 annual bonus are as follows:

Metric Weighting

Group adjusted EBITDA 

Average Group OBI 

Waste recycling 

The Remuneration Committee considers that the detailed performance targets for the FY2024 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 FY2024 Annual Report so that shareholders can fully assess

the basis for any payouts under the annual bonus plan.

Annual report on remuneration continued

Summary of Remuneration Policy and Implementation in FY2024

continued

112

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Annual report and accounts 2023

Governance report

Long-Term Incentive Plan (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.

Operation

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

• satisfaction of the performance conditions.

A further two-year holding period will apply post vesting.

The Remuneration Committee may award dividend equivalents on awards to the extent that these 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 resulting in an adjustment to the audited consolidated accounts

of the Company or action or conduct which, in the reasonable opinion of the Board, amounts to employee misbehaviour,

fraud or gross misconduct.

Opportunity

Award maximum of 150 per cent of base salary.

Performance metrics

used, weighting and

time period applicable

The majority of awards will be subject to ﬁnancial performance targets, with the balance based on strategic metrics.

The Remuneration Committee retains discretion in exceptional circumstances to change performance measures

and targets and the weightings attached to performance measures part-way through a performance period if there

is a signiﬁcant and material event which causes the Remuneration Committee to believe the original measures,

weightings and targets are no longer appropriate.

Discretion may also be exercised in cases where the Remuneration Committee believes that the vesting outcome

is not a fair and accurate reﬂection of business performance.

113

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Annual report and accounts 2023

FY2024 implementation

Awards will be made in FY2024 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 FY2024 LTIP awards:

Measure Description Weighting Threshold Target Max

Adjusted EPS



Adjusted EPS for the ﬁnal year of the

performance period – FY

  pence

( payout)

 pence

( payout)

 pence

( payout)

Return on centre

invested capital

 return on all centre invested

capital (refurbs and new centres)

  return

( payout)

 return

( payout)

 return

( payout)

UK emissions ratio for

Scope  and Scope 

UK intensity ratio (IR) of under   IR at 

( payout)

IR at 

( payout)

IR at 

( payout)

UK team member

development

 of UK team members

progressed through internal

development programmes

 

( payout)



( payout)



( 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. Vesting

occurs on a straight-line basis between threshold and target, and target and max performance.

The Committee believes these targets to be stretching in the context of the business plan, analyst consensus forecasts and the wider

economic environment. As disclosed last year, the Committee moved from cliﬀ vesting to a threshold to maximum range for the return on

centre invested capital, intensity ratio and team member development measures so that additional stretch could be built in and reducing

the pay-out for target performance. The Committee is of the view that retaining the current structure, measures and weightings is

appropriate for the 2024 LTIP, but will review this as part of the wider Remuneration Policy review next year.

On behalf of the Board

Julia Porter

Chair of the Remuneration Committee

17 December 2023

Annual report on remuneration continued

114

Hollywood Bowl Group plc

Annual report and accounts 2023

Governance report

Directors’ report

The Directors present their report for the year ended 30 September 2023.

Additional information which is incorporated by reference into this Directors’ Report, including information required in accordance with

the Companies Act 2006 and the Listing Rule 9.8.4R of the UK Financial Conduct Authority’s Listing Rules, can be located as follows:

Disclosure Location

Future business developments Strategic report – pages  to 

Greenhouse gas emissions Sustainability – page 

People, culture and employee engagement Sustainability – pages  and 

Financial risk management objectives and policies (including hedging

policy and use of ﬁnancial instruments)

Note  to the Financial Statements – pages  and 

Exposure to price risk, credit risk, liquidity risk and cash ﬂow risk Details can be found on pages  to  of the Strategic report

and note  to the Financial Statements

Statement of compliance with  UK Corporate Governance Code Corporate Governance report page 

Details of long-term incentive schemes Annual report on remuneration – pages  to 

Directors’ responsibilities statement Page 

Directors’ interests Details can be found on pages  and  of the Annual Report

on Remuneration

s Statement Details can be found on pages  to  of the Strategic report

Stakeholder engagement in key decisions Details can be found on pages  to 

Directors

The Directors of the Company who held oﬃce during the year are:

Peter Boddy (Chairman)

Stephen Burns (Chief Executive Oﬃcer)

Laurence Keen (Chief Financial Oﬃcer)

Melanie Dickinson (Chief People Oﬃcer)

Rachel Addison (Non-Executive Director) (appointed 1 September 2023)

Nick Backhouse (Senior Independent Director)

Julia Porter (Non-Executive Director)

Ivan Schoﬁeld (Non-Executive Director)

Claire Tiney (Non-Executive Director) (stepped down on 30 January 2023)

The roles and biographies of the Directors in oﬃce as at the date of this report are set out on pages 80 and 81. There have been no 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 8.54 pence per share and a special dividend of 2.73 pence per share on 23 February 2024 (with a record date of

2 February 2024) subject to approval at the AGM on 29 January 2024.

115

Hollywood Bowl Group plc

Annual report and accounts 2023

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 2023, the Company’s share capital consisted of 171,712,357 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

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 30 January 2023, 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 17,107,009 of its ordinary shares. The Company

has not repurchased any of its ordinary shares under this authority, which is due to expire at the AGM to be held on 29 January 2024, and

accordingly has an unexpired authority to purchase up to 17,107,009 ordinary shares with a nominal value of £171,070.09.

Directors’ interests

The number of ordinary shares of the Company in which the Directors were beneﬁcially interested as at 30 September 2023 are set out

in the Annual Report on Remuneration on page 104.

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 our Directors’ Remuneration Policy approved by shareholders

at the 2022 AGM, and can be found on page 78 of our FY2021 Annual Report which is available on our website.

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 2023 and 15 December 2023 (being the latest practicable date prior to publication

of the Annual Report):

At  September  At  December 

Name of shareholder

Number of

ordinary shares

of  pence

each held

Percentage of

total voting rights

held

Number of

ordinary shares

of  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    

Slater Investments Limited    

Schroders plc    

Ameriprise Financial, Inc. and its group

(Columbia Threadneedle)    

JP Morgan Asset Management Holdings Inc.    

Invesco Ltd    

AXA Investment Managers    

Directors’ report continued

116

Hollywood Bowl Group plc

Annual report and accounts 2023

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 9 centres outside of the UK, in Canada as at 30 September 2023.

Political donations

The Company did not make any political donations during the 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 2024 AGM of the Company will be held on 29 January 2024 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 78 to 118 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

17 December 2023

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Hollywood Bowl Group plc

Annual report and accounts 2023

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, reliable and 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 4.1.14R, the ﬁnancial statements will form part of the annual ﬁnancial report

prepared using the single electronic reporting format under the TD ESEF Regulation. The Auditor’s report on these ﬁnancial statements

provides no assurance over the ESEF format.

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

17 December 2023 17 December 2023

118

Hollywood Bowl Group plc

Annual report and accounts 2023

Financial statements

120 Independent auditor’s report

128 Consolidated income statement and statement

of comprehensive income

129 Consolidated statement of ﬁnancial position

130 Consolidated statement of changes in equity

131 Consolidated statement of cash ﬂows

132 Notes to the ﬁnancial statements

158 Company statement of ﬁnancial position

159 Company statement of changes in equity

159 Company statement of cash ﬂows

160 Notes to the Company ﬁnancial statements

166 Company information

119

Hollywood Bowl Group plc

Annual report and accounts 2023

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 2023 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 2023

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 eight ﬁnancial

years ended 30 September 2023. 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: m (: m)

Group ﬁnancial statements

as a whole

 (: ) of adjusted

proﬁt before tax

Coverage  (: ) of group proﬁt

before tax

Key audit matters vs 

Recurring risks Valuation of property, plant

and equipment and right of

use assets relating to the

golﬁng centres

Recoverability of parent

company investment in

subsidiaries / amounts

due from group entities

Event driven New: Valuation of acquisition-

related intangible assets

arising from the current year

acquisition in Canada

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.

120

Hollywood Bowl Group plc

Annual report and accounts 2023

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 centres

Carrying amount of golﬁng centres

within property, plant and equipment of

£2.2m (2022: £3.5m) and right of use

assets of £1.7m (2022: £3.2m)

Included within impairment charge:

Impairment charge related to golﬁng

centres of £1.6m for property, plant and

equipment (2022: £2.5m) and £1.3m for

right of use assets (2022: £1.8m).

Refer to page 95 (Audit Committee

Report), page 137 (accounting policy),

pages 145 and 148 (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 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 golﬁng centres have performed below

budget for the year and future economic

forecasts, characterised by high consumer

price inﬂation, high interest rates and the

consequent erosion of real disposable

incomes, increases this risk further.

The eﬀect of these matters is that, as

part of our risk assessment for audit planning

purposes, we determined that the VIU of the

golﬁng 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.

We performed the detailed tests below rather

than seek to rely on any of the group’s controls

because our knowledge of the design of these

controls indicated that we would not be able to

obtain the required evidence to support reliance

on controls.

Our procedures included:

• Assessing principles: We evaluated whether

the inputs used in the Group’s assessment of

impairment indicators were suitable, through

discussions with management, our own

knowledge of the business and market,

inspection of Board minutes and other

management information.

• Re-performance: We re-performed the

calculations that management performed for

the initial trigger test 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 golﬁng 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. 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 inputs such

as projected economic growth, cost inﬂation

and discount rates.

• Sensitivity analysis: We performed

sensitivity analysis to stress test the

assumptions noted above.

• 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

golﬁng centre cash generating units.

Our results

We found the carrying amount of PPE and right of

use assets in the golﬁng centre cash generating

units to be acceptable (2022: acceptable).

Financial statements

121

Hollywood Bowl Group plc

Annual report and accounts 2023

Independent auditor’s report continued

To the members of Hollywood Bowl Group plc

2. Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Valuation of acquisition-related

intangible assets arising from the

current year acquisition in Canada

Acquisition-related intangible assets:

£0.5m

Refer to page 95 (Audit Committee

Report), page 136 (accounting policy),

pages 148 and 157 (ﬁnancial disclosures).

Subjective estimate:

During the year, the Group acquired 100% of

the issued share capital of HLD Investments Inc.

(operating as YYC Bowling & Entertainment),

Mountain View Bowl Inc and Wong and Lewis

Investments Inc. (operating as Let’s Bowl), based

in Canada, for total consideration of £7.7m.

The determination of the fair value estimate

for the valuation of the separately identiﬁable,

acquisition-related intangible assets involves

subjective estimates or uncertainties, which

requires special audit consideration because

of the likelihood and potential magnitude

of misstatements relating to the valuation of

intangible assets and subsequent valuation

of goodwill.

The eﬀect of these matters is that, as part of our

risk assessment for audit planning purposes, we

determined that the measurement of identiﬁed

intangible assets had a high degree of

estimation uncertainty.

We performed the detailed tests below rather

than seek to rely on any of the group’s controls

because our knowledge of the design of these

controls indicated that we would not be able to

obtain the required evidence to support reliance

on controls.

Our procedures included:

• Inspection: We inspected the purchase

agreement for the transaction.

• Assessing the assumptions: With assistance

from our corporate ﬁnance valuation specialists,

we assessed the valuation of the intangible assets

acquired and challenged the appropriateness

of key assumptions and the appropriateness

of any cash ﬂow forecasts used in calculating

the fair value of the intangible assets identiﬁed

by management.

• Sensitivity analysis: We performed sensitivity

analysis on the key assumptions within the

cash ﬂow forecasts used to support the

intangible assets recognised. This included

sensitising the cash ﬂow forecasts in the

model. We critically assessed the extent to

which a change in these assumptions both

individually or in aggregate would result in

an adjustment to fair values and considered

the likelihood of such events occurring.

• Assessing transparency: Assessing

whether the group’s disclosures in relation

to the acquisition and associated balances

are appropriate.

Our results

We found the acquisition accounting in respect

of the current year acquisition in Canada to

be acceptable.

122

Hollywood Bowl Group plc

Annual report and accounts 2023

2. Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Recoverability of parent

company’s investment in

subsidiaries / amounts due

from group entities

£143m (2022: £135m), consisting of

£69.7m within Investments and £73.2m

within Trade and other Receivables

Refer to page 160 (accounting policy)

and page 162 (ﬁnancial disclosures).

Low Risk – High value:

The carrying amount of the parent company

investments in subsidiaries and amounts due

from group entities represent 85% (2022: 74%)

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 seek to rely on any of the company’s

controls because our knowledge of the design

of these controls indicated that we would not be

able to obtain the required evidence to support

reliance on controls.

Our procedures included:

• Tests of detail: Comparing the carrying

amount of investments and amounts due

from group entities 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 amounts due from group entities and

assessing whether those subsidiaries

have historically been proﬁt-making.

• Comparing valuations: Where carrying

amount of investments and -amounts due

from group entities exceeded the net asset

value of the relevant subsidiary, comparing

the carrying amount of investments and

amounts due from group entities 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 and amounts due from group

entities to be acceptable (2022: acceptable).

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

£2.2m (2022: £2.0m), determined with reference to a benchmark of

proﬁt before tax adjusted for the items described below, of £1.8m, of

which it represents 4.6% (2022: £2m determined with reference to

adjusted proﬁt before tax, of which it represents 4.3%). The items we

adjusted for in 2023 were the impairment of property, plant and

equipment and right of use assets disclosed in notes 12 and 13

respectively, acquisition-related costs from the current year

acquisition in Canada disclosed in note 32, and the one-oﬀ income

associated with the VAT reclaim relating to the prior year disclosed in

note 5. Materiality for the parent company ﬁnancial statements as a

whole was set at £1.1m (2022: £1m), determined with reference to a

benchmark of parent company total assets (2022: parent company

total assets) of which it represents 0.65% (2022: 0.5%).

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% (2022: 75%) of materiality for the

ﬁnancial statements as a whole, which equates to £1.65m (2022 : £1.5m)

for the group and £0.825m (2022 : £0.75m) 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 £110,000

(2022: £100,000), in addition to other identiﬁed misstatements

that warranted reporting on qualitative grounds.

Of the group’s 12 reporting components (2022: 16) we subjected 2

to full scope audits for group purposes and 2 to speciﬁc risk-focused

audit procedures, as the latter 2 components were not individually

ﬁnancially signiﬁcant enough to require a full scope audit for group

purposes, but did present speciﬁc individual risks that needed to be

addressed (2022: 2 to full scope audits for group purposes and 1

to speciﬁed risk-focused audit procedures).

The components within the scope of our work accounted for the

percentages illustrated opposite.

The remaining 3% (2022: 3%) of total group revenue, 4% (2022: 2%)

of total proﬁts and losses that made up Group proﬁt before tax and

1% (2022: 4%) of total group assets is represented by 8 (2022: 13)

reporting components, none of which individually represented more

than 1% (2021: 2%) 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.

Financial statements

123

Hollywood Bowl Group plc

Annual report and accounts 2023

Independent auditor’s report continued

To the members of Hollywood Bowl Group plc

3. Our application of materiality and an overview

of the scope of our audit continued

The work on all components (2022: all components) was performed

by the Group team, including the audit of the parent company. 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.

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 46 to 59 and the

Task Force and Climate-related Financial Disclosure Statement

on pages 60 to 69.

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 46 to 68. 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.













Full scope for group audit purposes 2023

Speciﬁed risk-focused audit procedures 2023

Full scope for group audit purposes 2022

Speciﬁed risk-focused audit procedures 2022

Residual components

Adjusted group

proﬁt before tax

£47.7m (2022: £47.0m)

Group materiality

£2.2m (2022: £2.0m)

£110,000

Misstatements reported to the

audit committee (2022: £100,000)

£2.2m

Whole ﬁnancial statements materiality

(2022: £2.0m)

£1.65m

Whole ﬁnancial statements

performance materiality (2022: £1.5m)

£1.98m

Range of materiality at 4

components (£0.625m–£1.98m)

(2022: £0.5m to £1.8m at

3 components)

Group revenue

97%

(2022: 97%)

Group proﬁt before tax

96%

(2022: 98%)

Group total assets

99%

(2022: 96%)

Normalised PBT

Group materiality

124

Hollywood Bowl Group plc

Annual report and accounts 2023

5. Going concern continued

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 76

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.

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.

As required by auditing standards, and taking into account possible

pressures to meet proﬁt targets, 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 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

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 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

revenue and cash journals posted to unusual or unexpected

accounts, postings containing the names or initials of senior

management, and assessed individuals who typically do not make

journals entries or are not authorised to post journals.

• Assessing signiﬁcant accounting estimates for bias.

Financial statements

125

Hollywood Bowl Group plc

Annual report and accounts 2023

Independent auditor’s report continued

To the members of Hollywood Bowl Group plc

6. Fraud and breaches of laws and regulations –

ability to detect continued

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.

We communicated identiﬁed laws and regulations throughout our

team and remained alert to any indications of non-compliance

throughout the audit.

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.

We discussed with the audit committee other matters related

to actual or suspected fraud, for which disclosure is not necessary,

and considered any implications for our audit.

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.

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 page 76

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

page 76 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.

126

Hollywood Bowl Group plc

Annual report and accounts 2023

7. We have nothing to report on the other information

in the Annual Report continued

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

Statement relating to the Group’s compliance with the provisions of

the UK Corporate Governance Code speciﬁed by the Listing Rules

for our review and to report to you if a corporate governance

statement has not been prepared by the Company. We have nothing

to report in these respects.

Based solely on our work on the other information described above:

• with respect to the Corporate Governance Statement disclosures

about internal control and risk management systems in relation to

ﬁnancial reporting processes and about share capital structures:

– we have not identiﬁed material misstatements therein; and

– the information therein is consistent with the ﬁnancial

statements; and

• in our opinion, the Corporate Governance Statement has been

prepared in accordance with relevant rule of the Disclosure

Guidance and Transparency Rules of the Financial Conduct Authority.

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.

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 118, the

directors are responsible for: the preparation of the ﬁnancial

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 using the single electronic reporting

format speciﬁed in the TD ESEF Regulation. This auditor’s report

provides no assurance over whether the annual ﬁnancial report

has been prepared in accordance with that format.

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

17 December 2023

Financial statements

127

Hollywood Bowl Group plc

Annual report and accounts 2023

Note

Before exceptional

items

30 September

2023

£’000

Exceptional

items (note 5)

30 September

2023

£’000

Total

30 September

2023

£’000

Before exceptional

items re-presented

30 September

2022

£’000

Exceptional

items (note 5)

30 September

2022

£’000

Total

re-presented

30 September

2022

£’000

Revenue 3 214,829 253 215,082 187,949 5,792 193,741

Cost of goods sold (37,491) — (37,491) (29,392) — (29,392)

Centre staff costs

(40,717) — (40,717) (33,713) — (33,713)

Gross profit 136,621 253 136,874 124,844 5,792 130,636

Gain on bargain purchase — — — — 39 39

Administrative expenses

6 (80,333) (2,456) (82,789) (73,083) (2,143) (75,226)

Operating profit 56,288 (2,203) 54,085 51,761 3,688 55,449

Finance income 9 1,440 — 1,440 12 — 12

Finance expenses 9 (10,220) (225) (10,445) (8,774) (22) (8,796)

Profit before tax 47,508 (2,428) 45,080 42,999 3,666 46,665

Tax charge 10 (10,866) (63) (10,929) (8,135) (1,079) (9,214)

Profit for the year attributable

to equity shareholders 36,642 (2,491) 34,151 34,864 2,587 37,451

Other comprehensive income

Retranslation (loss)/gain of foreign

currency denominated operations (544) — (544) 411 — 411

Total comprehensive income

for the year attributable to

equity shareholders 36,098 (2,491) 33,607 35,275 2,587 37,862

Basic earnings per share (pence) 11 19.92 21.91

Diluted earnings per share (pence) 11 19.82 21.78

The Directors have reviewed their presentation of the Financial Statements and have now disclosed centre staff costs within gross profit.

Centre staff costs were previously disclosed within administrative expenses. Comparatives have also been re-presented.

The accompanying notes on pages 132 to 157 form an integral part of these Financial Statements.

Consolidated income statement and statement of comprehensive income

Year ending 30 September 2023

128

Hollywood Bowl Group plc

Annual report and accounts 2023

Consolidated statement of financial position

As at 30 September 2023

Note

30 September

2023

£’000

30 September

2022

£’000

ASSETS

Non-current assets

Property, plant and equipment 12 78,279 68,641

Right-of-use assets 13 150,811 147,455

Goodwill and intangible assets 14 89,376 81,794

Deferred tax asset 22 1,309 1,647

319,775 299,537

Current assets

Cash and cash equivalents 16 52,455 56,066

Trade and other receivables 17 8,116 5,130

Corporation tax receivable 715 271

Inventories 18 2,445 2,148

63,731 63,615

Total assets 383,506 363,152

LIABILITIES

Current liabilities

Trade and other payables 19 29,109 28,681

Lease liabilities 13 12,553 11,557

41,662 40,238

Non-current liabilities

Other payables 19 5,208 3,000

Lease liabilities 13 181,652 176,812

Deferred tax liability 22 1,960 —

Provisions 20 5,084 4,682

193,904 184,494

Total liabilities 235,566 224,732

NET ASSETS 147,940 138,420

Equity attributable to shareholders

Share capital 23 1,717 1,711

Share premium 24 39,716 39,716

Merger reserve 24 (49,897) (49,897)

Foreign currency translation reserve 24 (133) 411

Retained earnings 24 156,537 146,479

TOTAL EQUITY 147,940 138,420

The accompanying notes on pages 132 to 157 form an integral part of these Financial Statements.

These Financial Statements were approved by the Board of Directors on 17 December 2023.

Signed on behalf of the Board by:

Laurence Keen

Chief Financial Officer

Company registration number 10229630

Financial statements

129

Hollywood Bowl Group plc

Annual report and accounts 2023

Consolidated statement of changes in equity

For the year ended 30 September 2023

capital

£’000

premium

£’000

Merger

reserve

£’000

Foreign currency

translation reserve

£’000

Retained

earnings

£’000

Total

£’000

Equity at 30 September 2021 1,706 39,691 (49,897) — 113,187 104,687

Shares issued during the year 5 25 — — — 30

Dividends paid — — — — (5,132) (5,132)

Share-based payments (note 28) — — — — 944 944

Deferred tax on share-based payments — — — — 29 29

Retranslation of foreign currency

denominated operations — — — 411 — 411

Profit for the year — — — — 37,451 37,451

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 — — — — (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

The accompanying notes on pages 132 to 157 form an integral part of these Financial Statements.

130

Hollywood Bowl Group plc

Annual report and accounts 2023

Consolidated statement of cash flows

For the year ended 30 September 2023

Note

30 September

2023

£’000

30 September

2022

£’000

Cash flows from operating activities

Profit before tax 45,080 46,665

Adjusted by:

Depreciation of property, plant and equipment (PPE) 12 10,142 8,721

Depreciation of right-of-use (ROU) assets 13 12,965 12,010

Amortisation of intangible assets 14 820 624

Impairment of PPE and ROU assets 12, 13 2,210 4,321

Net interest expense 9 9,005 8,784

Loss on disposal of property, plant and equipment and software 306 18

Gain on bargain purchase — (39)

Share-based payments 28 1,204 944

Operating profit before working capital changes 81,732 82,048

Increase in inventories (251) (423)

Increase in trade and other receivables (2,849) (1,248)

Increase in payables and provisions 2,741 9,963

Cash inflow generated from operations 81,373 90,340

Interest received 1,305 12

Income tax paid – corporation tax (9,100) (6,616)

Bank interest paid (296) (115)

Lease interest paid (9,808) (8,452)

Net cash inflow from operating activities 63,474 75,169

Cash flows from investing activities

Acquisition of subsidiaries 32 (7,716) (8,099)

Subsidiary cash acquired 32 319 415

Purchase of property, plant and equipment (21,801) (21,653)

Purchase of intangible assets (1,057) (178)

Proceeds from sale of assets 10 2

Net cash used in investing activities (30,245) (29,513)

Cash flows from financing activities

Payment of capital elements of leases (11,419) (14,450)

Issue of shares 6 30

Dividends paid (25,338) (5,132)

Net cash used in financing activities (36,751) (19,552)

Net change in cash and cash equivalents for the year (3,522) 26,104

Effect of foreign exchange rates on cash and cash equivalents (89) 20

Cash and cash equivalents at the beginning of the year 56,066 29,942

Cash and cash equivalents at the end of the year 16 52,455 56,066

The accompanying notes on pages 132 to 157 form an integral part of these Financial Statements.

Financial statements

131

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements

For the year ended 30 September 2023

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 15 February 2023, the Group acquired HLD Investments Inc. (operating as YYC Bowling & Entertainment), Mountain View Bowl Inc and

Wong and Lewis Investments Inc. (operating as Let’s Bowl), three Canadian-based ten-pin bowling businesses. These three companies are

consolidated in Hollywood Bowl Group plc’s Financial Statements with effect from 15 February 2023.

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 2023.

2. Accounting policies

The principal 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 2023 and 30 September 2022.

Statement of compliance

The consolidated Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards and the

requirements of the Companies Act 2006. The functional currency 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 140.

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 HLD Investments Inc. (operating as YYC Bowling & Entertainment), Mountain View Bowl Inc and Wong and Lewis Investments

Inc. (operating as Let’s Bowl), are included from the date of acquisition on 15 February 2023.

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.

132

Hollywood Bowl Group plc

Annual report and accounts 2023

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

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to

specify the requirements for classifying liabilities as current or non-current.

1 October 2023

IAS 1 Presentation of

financial statements and

IFRS Practice Statement 2

making materiality

judgements-disclosure of

accounting policies

The amendments change the requirements in IAS 1 with regard to disclosure of

accounting policies. The amendments replace all instances of the term ‘significant

accounting policies’ with ‘material accounting policy information’.

1 October 2023

IAS 8 Definition of

accounting estimates

The amendments replace the definition of a change in accounting estimates with a new

definition of accounting estimates. Under the new definition, accounting estimates are

‘monetary amounts in financial statements that are subject to measurement uncertainty’.

1 October 2023

IAS 12 Deferred tax

related to assets and

liabilities arising from a

single transaction

The amendments introduce a further exception from the initial recognition exemption.

Under the amendments, an entity does not apply the initial recognition exemption for

transactions that give rise to equal taxable and deductible temporary differences.

Following the amendments to IAS 12, an entity is required to recognise the related

deferred tax asset and liability.

1 October 2023

IFRS 17 Insurance

contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive

new accounting standard for insurance contracts covering recognition and measurement,

presentation and disclosure. Once effective, IFRS 17 will replace IFRS 4 Insurance

Contracts (IFRS 4) that was issued in 2005.

1 October 2023

IAS 12 International tax

reform pillar two model

rules

These amendments give companies temporary relief from accounting for deferred taxes

arising from the Organisation for Economic Co-operation and Development’s (OECD)

international tax reform. The amendments also introduce targeted disclosure

requirements for affected companies.

1 October 2023

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

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 58 to 59 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.

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 76 and 77).

Financial statements

133

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

2. Accounting policies continued

Our TCFD disclosures on pages 60 to 69 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 quantifications do not therefore represent a likely financial forecast and are not directly incorporated into

any projections of our long-term cash flows.

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 2023, 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 2023, the Group had cash balances of £52.5m, no outstanding loan balances and an undrawn RCF of £25m, giving an

overall liquidity of £77.5m.

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 FY2024 as well as the first three months of FY2025 which forms part of the Board

approved five-year plan. As noted above, the cost 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 adhere to its

capital allocation policy as outlined on pages 40 and 41. 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 c.3 and 4 per cent from the assumed base

case for FY2024 and FY2025 respectively 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 new centres would continue, whilst refurbishments in the early part of FY2024 would be

reduced. These are all mitigating factors 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 141.

Given the nature of the Group’s revenue streams, recognition of revenue is not considered to be a significant area of judgement.

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 review the performance of the Group by reference to total results against budget.

134

Hollywood Bowl Group plc

Annual report and accounts 2023

2. Accounting policies continued

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 held at centres, short-term deposits with banks and other financial institutions, and credit card

payments received within 72 hours.

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 are 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. 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.

Financial statements

135

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

2. Accounting policies continued

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. 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 property 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

Pinspotters up to 10 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.

136

Hollywood Bowl Group plc

Annual report and accounts 2023

2. Accounting policies 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.

Financial statements

137

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

2. Accounting policies 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;

• 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).

138

Hollywood Bowl Group plc

Annual report and accounts 2023

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 has 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.

Financial statements

139

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

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 debt, Group operating cash flow, 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 36 to 41. 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 critical accounting 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.

Critical accounting judgements

Dilapidation 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.

Key sources of estimation uncertainty

The key estimates are discussed below:

Property, plant and equipment and right-of-use asset impairment reviews

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 expenses, and discount rates. The carrying value

of property, plant and equipment and right-of-use assets have been assessed to reasonable possible changes in key assumptions and the

sensitivity of these assumptions is disclosed in note 12. Reasonable possible changes to the assumptions in the future in three mini-golf

centres may lead to material adjustments to the carrying amount. The carrying amount of property, plant and equipment is £2,210,000 and

right-of-use assets is £1,719,000 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.

140

Hollywood Bowl Group plc

Annual report and accounts 2023

Other estimates

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) has 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 (note 32). The fair value of the net assets identified

were determined with assistance from independent experts using professional valuation techniques appropriate to the individual category of

asset or liability. 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. These estimates are not considered key sources of estimation uncertainty as a material

adjustment to the carrying value is not expected in the following financial year.

3. Segmental reporting

Management consider that the Group consists of 2 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 segment there are multiple revenue streams which consist of the following:

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

Before exceptional

income UK

30 September

2022

£’000

Exceptional income

UK (note 5)

30 September

2022

£’000

Total UK

30 September

2022

£’000

Canada

30 September

2022

£’000

Total

30 September

2022

£’000

Bowling 86,409 5,792 92,201 2,253 94,454

Food and drink 46,660 — 46,660 1,067 47,727

Amusements 46,510 — 46,510 773 47,283

Mini-golf 1,973 — 1,973 — 1,973

Installation of bowling equipment — — — 2,040 2,040

Other 176 — 176 88 264

181,728 5,792 187,520 6,221 193,741

The UK operating segment includes the Hollywood Bowl and Puttstars brands. The Canada operating segment includes the Splitsville and

Striker Bowling Solutions brands.

Year ended 30 September 2023 Year ended 30 September 2022

£’000

Canada

£’000

Total

£’000

Canada

£’000

Total

£’000

Revenue 192,609 22,473 215,082 187,520 6,221 193,741

Group adjusted EBITDA as defined in

note 4 76,828 5,903 82,731 76,289 1,166 77,455

Operating profit 52,428 1,657 54,085 54,673 776 55,449

Finance income 1,296 144 1,440 — 12 12

Finance expense 9,291 1,154 10,445 8,541 255 8,796

Depreciation and amortisation 21,973 1,954 23,927 20,965 390 21,355

Impairment of PPE and ROU assets 2,210 — 2,210 4,321 — 4,321

Profit before tax 44,434 646 45,080 46,132 533 46,665

Non-current asset additions

– Property, plant and equipment 18,844 3,157 22,001 21,750 322 22,072

Non-current asset additions

– Intangible assets 1,057 — 1,057 108 70 178

Total assets 341,589 41,917 383,506 338,278 24,874 363,152

Total liabilities 207,798 27,768 235,566 208,930 15,802 224,732

Financial statements

141

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

4. Reconciliation of operating profit to Group adjusted EBITDA

30 September

2023

£’000

30 September

2022

£’000

Operating profit 54,085 55,449

Depreciation of property, plant and equipment (note 12) 10,142 8,721

Depreciation of right-of-use assets (note 13) 12,965 12,010

Amortisation of intangible assets (note 14) 820 624

Impairment of property, plant and equipment (note 12) 1,392 2,535

Impairment of right-of-use assets (note 13) 818 1,786

Loss on disposal of property, plant and equipment, right-of-use assets and software (notes 12–14) 306 18

Exceptional items (note 5) 2,203 (3,688)

Group adjusted EBITDA 82,731 77,455

4. Reconciliation of operating profit to Group adjusted EBITDA continued

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.

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

2023

£’000

30 September

2022

£’000

VAT rebate

253 5,792

Administrative expenses

(2) (144)

Acquisition fees

(700) (1,557)

Gain on bargain purchase

— 39

Contingent consideration

(1,979) (464)

Exceptional items before tax (2,428) 3,666

Tax charge (63) (1,079)

Exceptional items after tax (2,491) 2,587

1 During the prior year, 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 now 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, (30 September 2022: £5,792,000 relating to leisure bowling) 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 the year (30 September 2022: £nil).

2 Expenses associated with the VAT rebate, relating to additional profit share due to landlords, (30 September 2022: relating to additional turnover rent, profit share due to landlords

and also professional fees), which are included within administrative expenses.

3 Legal and professional fees 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) during the year (note 32) and Lincoln Bowl post year end (note 33). (30 September 2022: acquisition of Teaquinn).

4 Prior year, gain on bargain purchase in relation to the acquisition of Teaquinn in May 2022.

5 Contingent consideration of £1,754,000 in administrative expenses and £225,000 of interest expense (30 September 2022: £442,000 in administrative expenses and £22,000

of interest expense) in relation to the acquisition of Teaquinn in May 2022.

142

Hollywood Bowl Group plc

Annual report and accounts 2023

6. Expenses and auditor’s remuneration

Included in profit from operations are the following:

30 September

2023

£’000

30 September

2022

£’000

Amortisation of intangible assets 820 624

Depreciation of property, plant and equipment 10,142 8,721

Depreciation of right-of-use assets 12,965 12,010

Impairment of property, plant and equipment 1,633 2,535

Impairment reversal of property, plant and equipment (241) —

Impairment of right-of-use assets 1,277 1,786

Impairment reversal of right-of-use assets (459) —

Operating leases 57 57

Loss on disposal of property, plant and equipment, right-of-use assets and software 306 18

Exceptional items (note 5) 2,428 (3,666)

Loss on foreign exchange 208 154

Auditor’s remuneration:

– Fees payable for audit of these Financial Statements 344 317

Fees payable for other services:

– Audit of subsidiaries 71 66

– Other services 8 16

423 399

7. Staff numbers and costs

The average number of employees (including Directors) during the year was as follows:

30 September

2023

30 September

2022

Directors 7 7

Administration 112 91

Operations 2,668 2,432

Total staff 2,787 2,530

The cost of employees (including Directors) during the year was as follows:

30 September

2023

£’000

30 September

2022

£’000

Wages and salaries 49,988 42,808

Social security costs 3,882 3,600

Pension costs 543 475

Share-based payments (note 28) 1,204 944

Total staff cost 55,617 47,827

Staff costs included within cost of sales are £40,717,000 (30 September 2022: £33,713,000). The balance of staff costs are recorded within

administrative expenses.

Wages and salaries includes £1,754,000 (30 September 2022: £442,000) of contingent consideration in relation to the acquisition of Teaquinn in May 2022.

8. Remuneration of Directors and key management personnel

A) Directors’ emoluments

The Directors’ emoluments and benefits were as follows:

30 September

2023

£’000

30 September

2022

£’000

Salaries and bonuses 2,165 2,004

Pension contributions 46 41

Share-based payments (note 28) 906 691

Total 3,117 2,736

1 This includes three (FY2022: three) Executive Directors and four (FY2022: four) Non-Executive Directors.

The aggregate of emoluments of the highest paid Director was £1,388,000 (FY2022: £1,211,000) and Company pension contributions of

£22,000 (FY2022: £21,000) were made to a defined contribution scheme on their behalf. More detail is on page 102 of the Annual report.

Financial statements

143

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

8. Remuneration of Directors and key management personnel continued

B) Key management personnel

The Directors and the senior managers 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

2023

£’000

30 September

2022

£’000

Salaries and bonuses 2,871 2,673

Pension contributions 64 58

Share-based payments (note 28) 1,218 940

Total 4,153 3,671

9. Finance income and expenses

30 September

2023

£’000

30 September

2022

£’000

Interest on bank deposits 1,440 12

Finance income 1,440 12

Interest on bank borrowings 200 199

Other interest 9 2

Finance costs on lease liabilities 9,808 8,452

Unwinding of discount on contingent consideration 225 46

Unwinding of discount on provisions 203 97

Finance expense 10,445 8,796

10. Taxation

30 September

2023

£’000

30 September

2022

£’000

The tax expense is as follows:

– UK corporation tax 7,704 6,436

– Adjustment in respect of prior years 312 10

– Foreign tax suffered 692 250

– Effects of foreign exchange — 3

Total current tax 8,708 6,699

Deferred tax:

Origination and reversal of temporary differences 1,996 2,431

Effect of changes in tax rates 161 95

Adjustment in respect of prior years 64 (11)

Total deferred tax 2,221 2,515

Total tax expense 10,929 9,214

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 22 per cent (30 September 2022:

19 per cent). The differences are explained below:

30 September

2023

£’000

30 September

2022

£’000

Profit excluding taxation 45,080 46,665

Tax using the UK corporation tax rate of 22% (2022: 19%) 9,918 8,866

Change in tax rate on deferred tax balances 154 95

Non-deductible expenses 60 388

Non-deductible acquisition related exceptional costs 523 296

Effects of overseas tax rates 137 66

Effects of capital allowances super deduction (182) (577)

Share-based payments (57) 81

Adjustment in respect of prior years 376 (1)

Total tax expense included in profit or loss 10,929 9,214

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10. Taxation continued

Factors affecting current tax charge: continued

The Group’s standard tax rate for the year ended 30 September 2023 was 22 per cent (30 September 2022: 19 per cent).

The UK corporation tax main rate increased from 19 per cent to 25 per cent from 1 April 2023. As such, the rate used to calculate the deferred

tax balances has increased from a blended rate depending on when the deferred tax balance would have been released, to 25 per cent.

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 2023 and 30 September 2022, the Group had potentially dilutive

ordinary shares in the form of unvested shares pursuant to LTIPs and SAYE schemes (note 28).

30 September

2023

30 September

2022

Basic and diluted

Profit for the year after tax (£’000) 34,151 37,451

Basic weighted average number of shares in issue for the period (number) 171,468,034 170,949,286

Adjustment for share awards 833,880 963,218

Diluted weighted average number of shares 172,301,914 171,912,504

Basic earnings per share (pence) 19.92 21.91

Diluted earnings per share (pence) 19.82 21.78

12. Property, plant and equipment

Freehold

property

£’000

Long leasehold

property

£’000

Short leasehold

property

£’000

Lanes and

pinspotters

£’000

Plant and

machinery,

fixtures and

fittings

Total

£’000

Cost

At 1 October 2021 — 1,240 29,663 13,310 42,157 86,370

Additions — — 8,127 5,238 8,707 22,072

Acquisition of Teaquinn Holdings Inc. 7,061 — 872 284 237 8,454

Disposals — — (24) (796) (595) (1,415)

Effects of movement in foreign exchange 345 — 48 14 12 419

At 30 September 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

Accumulated depreciation

At 1 October 2021 — 340 13,746 4,613 18,635 37,334

Depreciation charge

24 48 3,047 706 4,896 8,721

Impairment charge — — 2,088 — 447 2,535

Disposals — — (24) (785) (522) (1,331)

At 30 September 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

Net book value

At 30 September 2023 6,803 823 27,945 17,051 25,657 78,279

At 30 September 2022 7,382 852 19,829 13,516 27,062 68,641

Plant and machinery, fixtures and fittings includes £845,000 (30 September 2022: £2,916,000) of assets in the course of construction,

relating to the development of new centres.

Financial statements

145

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Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

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 seventy eight centres assessing for indicators of impairment. A detailed impairment test

based on a base case was then performed on ten 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 ten 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 and cost inflation assumptions and 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 FY2024 and FY2025. 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:

2023 2022

Discount rate (pre-tax) 12.7% 16.0%

Growth rate (beyond five years) 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 Group’s weighted average cost of capital. 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 £1,633,000 (FY2022: £2,535,000) against property, plant and equipment assets and £1,277,000 (FY2022: £1,786,000) against

right-of-use assets for three mini-golf centres (note 13), which form part of the UK operating segment. The impairment charge in the year was

reduced by the reversal of a charge in a previous period of £241,000 against property, plant and equipment assets and £459,000 against

right-of-use assets for one bowling centre. Following the recognition of the impairment charge, the carrying value of property, plant and

equipment is £2,210,000 (30 September 2022: £3,456,000) and right-of-use assets is £1,719,000 (30 September 2022: £3,151,000) for

these three UK mini-golf centres (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 £2,910,000 (30 September 2022: £4,321,000) for three centres under the

base case. Management have sensitised the key assumptions in the impairment tests of these ten centres under the base case.

A reduction in revenue of three and four percentage points down on the base case for FY2024 and FY2025 respectively and a one

percentage point increase in operating costs on the base case for FY2024 and FY2025 to reflect higher inflation, would not cause the

carrying value to exceed its recoverable amount for these 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 £530,000 would arise under this sensitised case in relation to three centres where we have already

recognised an impairment charge in the year, but this could be as high as £1,788,000 if the revenue reduction were 10 percentage points.

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 nine

(FY2022: ten) 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.

146

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Annual report and accounts 2023

13. Leases continued

Group as a lessee continued

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 2021 148,722 8,109 156,831

Lease additions 7,805 3,462 11,267

Acquisition of Teaquinn Holdings Inc. 11,510 — 11,510

Lease surrenders — (332) (332)

Lease modifications 5,640 — 5,640

Effects of movement in foreign exchange 583 — 583

At 30 September 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

Accumulated depreciation

At 1 October 2021 19,632 4,857 24,489

Depreciation charge 9,846 2,164 12,010

Impairment charge 1,786 — 1,786

Lease surrenders — (241) (241)

At 30 September 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

Net book value

At 30 September 2023 143,425 7,386 150,811

At 30 September 2022 142,996 4,459 147,455

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 2021 168,530 5,410 173,940

Lease additions 7,805 3,462 11,267

Acquisition of Teaquinn Holdings Inc. 11,510 — 11,510

Accretion of interest 8,354 98 8,452

Lease modifications 5,640 — 5,640

Lease surrenders — (157) (157)

Payments

(19,873) (2,994) (22,867)

Effects of movement in foreign exchange 584 — 584

At 30 September 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)

Payments

(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

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

Current 9,027 2,530 11,557

Non-current 173,523 3,289 176,812

At 30 September 2022 182,550 5,819 188,369

1 In FY2023, £179,000 (FY2022: £35,000) of rent payments were part of the working capital movements in the year.

Financial statements

147

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

13. Leases continued

Group as a lessee continued

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:

2023

£’000

2022

£’000

Depreciation expense of right-of-use assets 12,965 12,010

Impairment charge of right-of-use assets 818 1,786

Interest expense on lease liabilities 9,808 8,452

Expense relating to leases of low-value assets (included in administrative expenses) 57 57

Variable lease payments (included in administrative expenses) 824 788

Total amount recognised in profit or loss 24,472 23,093

The Group has contingent lease contracts for nine (FY2022: ten) sites. There is a revenue-based rent top-up on these sites. Variable lease

payments include revenue-based rent top-ups at eight (FY2022: ten) centres totalling £619,000 (FY2022: £716,000). It is anticipated that

top-ups totalling £962,000 will be payable in the year to 30 September 2024 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 £1,277,000 (FY2022: £1,786,000) against right-of-use assets for three UK mini-golf centres (FY2022: three UK mini-golf centres). The

impairment charge in the year was reduced by the reversal of a charge in a previous financial period of £459,000 against right-of-use assets

for one bowling centre.

14. Goodwill and intangible assets

Goodwill

£’000

Brands

£’000

Trademark

£’000

Customer

relationships

£’000

Software

£’000

Total

£’000

Cost

At 1 October 2021 75,034 3,360 798 — 2,112 81,304

Additions 70 — — — 108 178

Acquisition of Teaquinn Holdings Inc. 90 3,888 — 314 — 4,292

At 30 September 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

Accumulated amortisation

At 1 October 2021 — 1,188 366 — 1,802 3,356

Amortisation charge — 335 50 8 231 624

At 30 September 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

Net book value

At 30 September 2023 82,048 5,157 332 752 1,087 89,376

At 30 September 2022 75,194 5,725 382 306 187 81,794

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

2023

30 September

2022

UK 75,034 75,034

Canada 7,014 160

82,048 75,194

At the acquisition date, goodwill is allocated to each group of CGUs expected to benefit from the combination.

148

Hollywood Bowl Group plc

Annual report and accounts 2023

14. Goodwill and intangible assets continued

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 Group is considered to be the CGU, for the purposes of goodwill impairment testing,

on the basis that the goodwill relates mainly to the UK operating segment. The goodwill acquisition in the year relates to the three centres

acquired in Canada (note 32). These three centres are considered a CGU for the purpose of goodwill impairment testing for Canada. 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 used in the value-in-use calculations are:

2023 2022

Discount rate (pre-tax) 12.7% 16.0%

Growth rate (beyond five years) 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 Group’s weighted average cost of capital. 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.

Sensitivity to changes in assumptions

Management has sensitised the key assumptions in the impairment tests of the CGU under the base case scenario. The key assumptions

used and sensitised were forecast growth rates and the discount rates, which were selected as they are the key variable elements of the

value-in-use calculation. The combined effect of a reduction in revenue of 3.5 percentage points on the base case for FY2024 and FY2025,

an increase in the discount rate applied to the cash flows of the CGU of one per cent and a reduction of one per cent in the growth rate

(beyond five years), would reduce the UK headroom by £52.2m. This scenario would not cause the carrying value to exceed its recoverable

amount. Therefore, management believes that any reasonable possible change in the key assumptions would not result in an impairment

charge.

The goodwill on the Canada acquisition in the year is included in note 32. Management believe that any reasonable change in the key

assumptions would not result in an impairment charge.

15. Investment in subsidiaries

Hollywood Bowl Group plc’s operating subsidiaries as at 30 September 2023 are as follows:

Name

Company

number Principal activity Country of incorporation

Percentage

of ordinary

shares owned

Direct holdings

Kanyeco Limited

1, 2

09164276 Investment holding England and Wales 100%

Hollywood Bowl EBT Limited

1, 2

10246573 Dormant England and Wales 100%

Teaquinn Holdings Inc.

1, 4

725118608 Investment holding Canada 100%

Indirect holdings

Kendallco Limited

1, 2

09176418 Investment holding England and Wales 100%

The Original Bowling Company Limited

05163827 Ten-pin bowling England and Wales 100%

Original Bowling Company (NI) Limited

NI679991 Dormant Northern Ireland 100%

AMF Bowling (Eastleigh) Limited

06998390 Dormant England and Wales 100%

MABLE Entertainment Limited

01094660 Dormant England and Wales 100%

Milton Keynes Entertainment Limited

01807080 Dormant England and Wales 100%

Bowlplex Limited

01250332 Dormant England and Wales 100%

Bowlplex European Leisure Limited

05539281 Dormant England and Wales 100%

Wessex Support Services Limited

01513727 Dormant England and Wales 100%

Wessex Superbowl (Germany) Limited

03253033 Dormant England and Wales 100%

Bowlplex Properties Limited

05506380 Dormant England and Wales 100%

Xtreme Bowling Entertainment Corporation

840672380 Ten-pin bowling Canada 100%

Striker Installations Inc.

853701399 Ten-pin bowling installations Canada 100%

Striker Bowling Solutions Inc.

889559019 Ten-pin bowling installations Canada 100%

1 These subsidiaries are controlled and consolidated by the Group and the Directors have taken the exemption from having an audit of their financial statements for the year ended

30 September 2023. This exemption is taken in accordance with Section 479A of the Companies Act 2006.

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.

Financial statements

149

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

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

2023

£’000

30 September

2022

£’000

Cash at bank and in hand 52,455 56,066

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

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

1 October

2021

£’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

2022

£’000

Loans and borrowings

(note 21) — — — (84) — 199 (115) —

Lease liabilities (note 13) 173,940 (14,450) 28,260 35 584 8,452 (8,452) 188,369

Total liabilities from

financing activities 173,940 (14,450) 28,260 (49) 584 8,651 (8,567) 188,369

17. Trade and other receivables

30 September

2023

£’000

30 September

2022

£’000

Trade receivables 2,356 836

Other receivables 129 245

Prepayments 5,631 4,049

8,116 5,130

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

2023

£’000

30 September

2022

£’000

Goods for resale 2,445 2,148

Goods bought for resale recognised as a cost of sale amounted to £24,400,000 (2022: £18,700,000).

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Hollywood Bowl Group plc

Annual report and accounts 2023

19. Trade and other payables

30 September

2023

£’000

30 September

2022

£’000

Current

Trade payables 7,025 5,306

Other payables 1,366 1,310

Accruals and deferred income 15,421 17,000

Taxation and social security 5,297 5,065

Total trade and other payables 29,109 28,681

30 September

2023

£’000

30 September

2022

£’000

Non-current

Other payables 5,208 3,000

Accruals and deferred income includes a staff bonus accrual of £4,955,000 (30 September 2022: £7,758,000) and deferred consideration

of £nil (30 September 2022: £164,000) in relation to the acquisition of Teaquinn Holdings Inc. Deferred income includes £801,000

(30 September 2022: £983,000) of customer deposits received in advance and £1,870,000 (30 September 2022: £160,000) relating

to bowling equipment installations, all of which is recognised in the income statement during the following financial year.

Non-current other payables includes £2,359,000 (30 September 2022: £464,000) of contingent consideration and £1,862,000

(30 September 2022: £1,841,000) 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 £9,084,000 (undiscounted) to a payment in

FY2026 of £10,300,000 (undiscounted), using the FY2023 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 FY2023, this re-assessment resulted in an

additional charge of £485,000 being recognised in exceptional administrative expenses.

20. Provisions

30 September

2023

£’000

30 September

2022

£’000

Lease dilapidations provision 5,084 4,682

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 2021 3,635

Change in discount rate

(480)

Provided during the year 1,430

Unwind of discounted amount 97

As at 30 September 2022 4,682

Change in discount rate

(67)

Provided during the year 266

Unwind of discounted amount 203

As at 30 September 2023 5,084

1 There was an increase in the discount rate from 4.40 per cent at 30 September 2022 to 4.64 per cent at 30 September 2023 (FY2022: an increase in the discount rate from 1.22

per cent at 30 September 2021 to 4.40 per cent at 30 September 2022), used in preparing the dilapidations provision for the year ended 30 September 2023. This resulted in a

decrease in the provision of £67,000 (FY2022: a decrease of £480,000), and will unwind over the term of the property leases.

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 (FY2022: three new

centres). 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.

It is not anticipated that the provision will be utilised within the foreseeable future as there are no sites currently earmarked for closure

that have a dilapidations provision.

Financial statements

151

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

21. Loans and borrowings

On 29 September 2021, the Group entered into a £25m revolving credit facility (RCF) with Barclays Bank plc. The RCF has a termination date

of 31 December 2024.

Interest is charged on any drawn balance based on the reference rate (SONIA), plus a margin of 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 2023 and 30 September 2022 was therefore 0.6125 per cent.

Issue costs of £135,000 were paid to Barclays Bank plc on commencement of the RCF. These costs are being amortised over the term of the

facility and are included within prepayments (note 17).

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.

22. Deferred tax assets and liabilities

30 September

2023

£’000

30 September

2022

£’000

Deferred tax assets and liabilities

Deferred tax assets - UK 6,500 7,050

Deferred tax assets - Canada 244

Deferred tax liabilities - UK (5,191)

Deferred tax liabilities - Canada (2,204) (5,403)

(651) 1,647

30 September

2023

£’000

30 September

2022

£’000

Reconciliation of deferred tax balances

Balance at the beginning of the year 1,647 6,290

Deferred tax credit for the year – in profit or loss (2,157) (2,543)

Deferred tax credit for the year – in equity 8 (29)

On acquisition (148) (2,040)

Effects of foreign exchange 63 (43)

Adjustment in respect of prior years (64) 12

Balance at the end of the year (651) 1,647

The components of deferred tax are:

30 September

2023

£’000

30 September

2022

£’000

Deferred tax assets

Fixed assets 6,080 6,314

Trading losses 15 —

Other temporary differences 649 736

6,744 7,050

Deferred tax liabilities

Property, plant and equipment (5,857) (3,694)

Intangible assets (1,538) (1,709)

(7,395) (5,403)

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 2023.

152

Hollywood Bowl Group plc

Annual report and accounts 2023

23. Share capital

30 September 2023 30 September 2022

Shares £’000 Shares £’000

Ordinary shares of £0.01 each 171,712,357 1,717 171,070,790 1,711

The share capital of the Group is represented by the share capital of the Parent Company, Hollywood Bowl Group plc.

During the year 641,567 ordinary shares of £0.01 each were issued under the Group’s LTIP scheme (note 28).

The ordinary shares are entitled to dividends.

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.

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

2023

Other

£’000

30 September

2022

Other

£’000

Within 1 year 57 57

In 2 to 5 years 58 115

115 172

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 2023, the Group had entered into contracts to fit out new and refurbish existing sites and to complete the installation of

solar panels for £5,450,000 (2022: £4,728,000). These commitments are expected to be settled in the year to 30 September 2024.

27. Related party transactions

30 September 2023 and 30 September 2022

During the year, and the previous year, there were no transactions with related parties.

Financial statements

153

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

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

2022

Granted

during

the year

Lapsed/

cancelled

during the year

Exercised

during

the year

Outstanding at

30 September

2023

Exercisable at

30 September

2023

LTIP 2018 2018 Equity 282,760 — — (282,760) — —

LTIP 2020 2020 Equity 358,809 — — (358,809) — —

LTIP 2021 2021 Equity 452,993 — — — 453,993 —

LTIP 2022 2022 Equity 463,436 — — — 463,436 —

LTIP 2023 2023 Equity — 627,678 — — 627,678 —

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 2020, 30 September 2022,

30 September 2023, 30 September 2024 and 30 September 2025, and the Executive Directors’ continued employment at the date of

vesting. The LTIP 2022 and 2023 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 and 2023 are available on the Hollywood Bowl Group corporate

website at www.hollywoodbowlgroup.com/investors/regulatory-news dated 7 February 2022 and 16 February 2023.

The awards will vest based on the following adjusted EPS targets:

LTIP 2021 LTIP 2022 LTIP 2023 Vesting

13.91 14.65 18.11 25%

13.91–15.37 14.65 – 16.19 18.11 – 20.01 Vesting determined on a straight-line basis

15.37 16.19 20.01 100%

During the year ended 30 September 2023, 627,678 (30 September 2022: 463,436) share awards were granted under the LTIP. For all LTIPs,

the Group recognised a charge of £1,218,431 (30 September 2022: charge of £939,812) and related employer National Insurance of £168,143

(30 September 2022: credit of £129,694).

During the year ended 30 September 2023, 641,567 (30 September 2022: 428,113) share awards were exercised under LTIP 2018 and

2020 and a total of 641,567 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 2023 2022 2021

Share price at date of grant 2.600 2.514 2.370

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 SAYEs 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 2023) was launched with 133 employees taking up 186,764

options with an exercise date of 1 February 2026 and an exercise price of £2.430, being equal to the market price of the shares on the date of

grant. In the prior year, 115 employees took up 158,778 options with an exercise date of 1 February 2025 and an exercise price of £2.845. 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.

154

Hollywood Bowl Group plc

Annual report and accounts 2023

28. Share-based payments continued

Save-As-You-Earn (SAYE) schemes continued

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 2023, 30 September 2022 and 30 September 2020 was estimated on the date of grant using the following assumptions:

SAYE

2023

SAYE

2022

SAYE

2020

Exercise price £2.430 £2.845 £2.880

Dividend yield 3.0% 3.0% 3.0%

Expected volatility 35.4% 34.4% 56.1%

Risk-free interest rate 3.14% 1.10% 0.00%

Life of option 3 years 3 years 3 years

Anticipated number of options to vest 50% 30% 0%

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 SAYEs is outlined below:

Scheme name Year of award

Outstanding at

1 October 2022

Granted during

the year

Lapsed/cancelled

during the year

Exercised during

the year

Outstanding at

30 September 2023

Exercisable at

30 September 2023

SAYE 2019 2019 1,109 — (1,109) — — —

SAYE 2020 2020 36,209 — (34,709) — 1,500 1,500

SAYE 2022 2022 124,499 — (60,346) — 64,153 —

SAYE 2023 2023 — 186,764 (33,541) — 153,223 —

The assessed fair value of the options granted during the year ended 30 September 2023 was £0.54 (30 September 2022: £0.55).

For the year ended 30 September 2023, the Group has recognised £13,989 of share-based payment credit in the income statement

(30 September 2022: charge of £3,813).

During the year, the SAYE 2020 scheme became exercisable and no options were exercised (30 September 2022: 11,494 ordinary shares of

£0.01 each were issued at an exercise price of £2.27 each). The weighted average share price at the date of exercise relating to the share

options exercised in the prior year was £2.63.

The weighted average remaining contractual life of share options outstanding at 30 September 2023 was 747 days (30 September 2022:

690 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).

Financial statements

155

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

29. Financial instruments continued

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

2023

£’000

30 September

2022

£’000

Financial assets – measured at amortised cost

Cash and cash equivalents 52,455 56,066

Trade and other receivables 2,485 1,081

Financial liabilities – measured at amortised cost

Trade and other payables 29,021 26,616

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 £50,520,000 at 30 September 2023 (30 September 2022:

£53,862,000).

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 2023, £nil (30 September 2022: £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.

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

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

2022

Trade and other payables 22,544 361 3,224 934 3,163 30,226

Lease liabilities 19,461 18,355 51,514 75,934 91,593 256,857

42,005 18,716 54,738 76,868 94,756 287,083

156

Hollywood Bowl Group plc

Annual report and accounts 2023

30. Financial risk management continued

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 2023 and 30 September 2022, 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 2022: £nil).

31. Dividends paid and proposed

30 September

2023

£’000

30 September

2022

£’000

The following dividends were declared and paid by the Group:

Interim dividend year ended 30 September 2022 – 3.00 pence per ordinary share — 5,132

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 —

Proposed for the approval by shareholders at AGM (not recognised as a liability at 30 September 2023):

Final dividend year ended 30 September 2023 – 8.54 pence per ordinary share (2022: 8.53 pence) 14,664 14,592

Special dividend year ended 30 September 2023 – 2.73 pence per ordinary share (2022: 3.00 pence) 4,688 5,132

During the year to 30 September 2024, the Group is considering a share buyback of up to £10m if it falls in line with the Group’s cash

allocation policy.

Financial statements

157

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the financial statements continued

For the year ended 30 September 2023

32. 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)

On 15 February 2023, the Group acquired 100 per cent of the issued share capital and voting rights of HLD Investments Inc. (operating as

YYC Bowling & Entertainment), Mountain View Bowl Inc and Wong and Lewis Investments Inc. (operating as Let’s Bowl), based in Canada. All

three businesses are operators of ten-pin bowling centres. The purpose of the acquisition was to grow the Group’s core ten-pin bowling

business in the region.

HLD Investments Inc. (operating as YYC Bowling & Entertainment), Mountain View Bowl Inc and Wong and Lewis Investments Inc. (operating as

Let’s Bowl) are consolidated in Hollywood Bowl Group plc’s interim financial statements with effect from the completion of the acquisition on

15 February 2023.

Since acquisition, these three entities have been dissolved and amalgamated into Xtreme Bowling Entertainment Corporation (Note 15).

The details of the business combination are as follows (stated at acquisition date fair values):

£’000

Fair value of consideration transferred

Amount settled in cash 7,716

Recognised amounts of identifiable net assets

Property, plant and equipment 197

Right-of-use assets 4,911

Intangible assets 503

Inventories 46

Trade and other receivables 178

Cash and cash equivalents 319

Trade and other payables (276)

Lease liabilities (4,911)

Deferred tax liabilities (116)

Identifiable net assets 851

Goodwill arising on acquisition 6,865

Consideration for equity settled in cash 7,716

Cash and cash equivalents acquired (319)

Net cash outflow on acquisition 7,397

Acquisition costs paid charged to expenses 453

Net cash paid in relation to the acquisition 7,850

Acquisition related costs of £453,000 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 £503,000 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 £178,000. 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 £6,865,000 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 three centres into the Hollywood Bowl Group.

In the period since acquisition to 30 September 2023, the Group recognised £2,956,000 of revenue and £1,330,000 of profit before tax in

relation to the acquired businesses. Had the acquisition occurred on 1 October 2022, the contribution to the Group’s revenue would have

been £5,407,000 and the contribution to the Group’s profit before tax for the period would have been £2,406,000.

33. Events after the reporting date

Three acquisitions were completed in early FY2024. In the UK, on 2 October 2023, the Group purchased the assets, including the long

leasehold, of Lincoln Bowl for total consideration of £4.375m.

In Canada, the Group completed two acquisitions. The first was the acquisition of a family entertainment centre in Guelph, Ontario, called

Woodlawn Bowl Inc, for CAD 4.71m on 7 November 2023. The second was the acquisition of the assets and lease of a family entertainment

centre in Vancouver, called Lucky 9 Bowling Centre Limited as well as its associated restaurant and bar, Monkey 9 Brewing Pub Corp, for a

total consideration of CAD 0.425m on 11 November 2023.

158

Hollywood Bowl Group plc

Annual report and accounts 2023

Company statement of financial position

As at 30 September 2023

Note

30 September

2023

£’000

30 September

2022

£’000

ASSETS

Non-current assets

Investments 5 69,745 61,125

Trade and other receivables 8 73,224 74,190

Deferred tax asset 7 244 343

143,213 135,658

Current assets

Cash and cash equivalents 6 24,876 44,912

Trade and other receivables 8 253 256

25,129 45,168

Total assets 168,342 180,826

LIABILITIES

Current liabilities

Trade and other payables 9 92,915 77,266

92,915 77,266

Non-current liabilities

Other payables 9 — 2,305

— 2,305

Total liabilities 92,915 79,571

NET ASSETS 75,427 101,255

Equity attributable to shareholders

Share capital 10 1,717 1,711

Share premium 10 39,716 39,716

Retained earnings 33,994 59,828

TOTAL EQUITY 75,427 101,255

These financial statements were approved by the Board of Directors on 17 December 2023.

The accompanying notes on pages 160 to 165 form an integral part of these financial statements.

Signed on behalf of the Board

Laurence Keen

Chief Financial Officer

Company registration number: 10229630

Financial statements

159

Hollywood Bowl Group plc

Annual report and accounts 2023

Company statement of changes in equity

For the year ended 30 September 2023

capital

£’000

premium

£’000

Retained

earnings

£’000

Total

£’000

Equity as at 30 September 2021 1,706 39,691 69,220 110,617

Shares issued during the year 5 25 — 30

Share-based payments (note 5, 11) — — 940 940

Dividends paid — — (5,132) (5,132)

Total comprehensive loss for the year — — (5,200) (5,200)

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

The accompanying notes on pages 160 to 165 form an integral part of these financial statements.

Company statement of cash flows

For the year ended 30 September 2023

30 September

2023

£’000

30 September

2022

£’000

Cash flows from operating activities

Loss before tax (1,615) (5,030)

Adjusted by:

Net interest (income)/expense (685) 453

Share-based payments (note 11) 753 567

Operating loss before working capital changes (1,547) (4,010)

Decrease/(increase) in trade and other receivables 29 (1,295)

(Decrease)/increase in trade and other payables (675) 1,059

Cash outflow generated from operations (2,193) (4,246)

Interest received 796 —

Bank interest paid (198) (115)

Net cash outflow from operating activities (1,595) (4,361)

Cash flows from investing activities

Acquisition of subsidiaries (7,716) (8,099)

Investment in existing subsidiary (2,280) —

Repayment of loan by subsidiary 966 —

Net cash used in investing activities (9,030) (8,099)

Cash flows from financing activities

Issue of shares 6 30

Dividends paid (25,338) (5,132)

Loan from subsidiary 15,921 51,515

Net cash flows used in financing activities (9,411) 46,413

Net change in cash and cash equivalents for the year (20,036) 33,953

Cash and cash equivalents at the beginning of the year 44,912 10,959

Cash and cash equivalents at the end of the year 24,876 44,912

The accompanying notes on pages 160 to 165 form an integral part of these financial statements.

160

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the Company financial statements

1. General information

Hollywood Bowl Group plc is a public limited company which is listed on the London Stock Exchange and is domiciled and incorporated in

the United Kingdom under the Companies Act 2006. The Company was incorporated on 13 June 2016, registered number 10229630.

2. Summary of significant accounting policies

A summary of the significant accounting policies is set out below; these have been consistently applied throughout the period.

Basis of preparation

The financial statements have been prepared in accordance with Financial Reporting Standard 102, the Financial Reporting Standard

applicable in the UK and Republic of Ireland (FRS 102) as issued in August 2014. The amendments to FRS 102 issued in July 2015 and

effective immediately have been applied. 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 2023 and 30 September 2022.

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 period dealt with

in the financial statements of the Parent Company is £1,739,000 (FY2022: loss £5,200,000). See note 5.

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.

Financial statements

161

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the Company financial statements continued

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

2023

£’000

30 September

2022

£’000

Salaries and bonuses 2,165 1,697

Pension contributions 46 34

Share-based payments (note 11) 753 567

Total 2,964 2,298

1 This includes three (FY2022: two) Executive Directors and four (FY2022: four) Non-Executive Directors.

The aggregate of emoluments of the highest paid Director was £1,388,000 (FY2022: £1,211,000) and Company pension contributions of

£22,000 (FY2022: £21,000) were made to a defined contribution scheme on their behalf.

4. Taxation

30 September

2023

£’000

30 September

2022

£’000

The tax expense is as follows:

– UK corporation tax 21 —

Total current tax 21 —

Deferred tax:

Origination and reversal of temporary differences 7 443

Adjustment in respect of prior years 116 —

Effect of changes in tax rates (20) (272)

Total deferred tax 103 171

Total tax expense 124 171

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Annual report and accounts 2023

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 22 per cent (30 September 2022:

19 per cent). The differences are explained below:

30 September

2023

£’000

30 September

2022

£’000

Loss excluding taxation (1,615) (5,030)

Tax using the UK corporation tax rate of 22% (2022: 19%) (355) (956)

Change in tax rate on deferred tax balances (19) 70

Share-based payments (26) —

Non-deductible expenses (102) 255

Adjustments in respect of prior years 116 —

Group relief 510 802

Total tax expense included in profit or loss 124 171

The Group’s standard tax rate for the year ended 30 September 2023 was 22 per cent (30 September 2022: 19 per cent).

The corporation tax main rate would increased from 19 per cent to 25 per cent from 1 April 2023. As such, the rate used to calculate the deferred

tax balances has increased from a blended rate depending on when the deferred tax balance would have been released, to 25 per cent.

5. Investments

Investments in subsidiary undertakings are as follows:

30 September

2023

£’000

30 September

2022

£’000

At the beginning of the year 61,125 50,672

Additions 10,461 10,453

Derecognition of contingent and deferred consideration in subsidiary

(1,841) —

At the end of the year 69,745 61,125

Details of the investments in subsidiary undertakings are outlined in note 15 to the consolidated financial statements.

In the prior year, 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:

• within additions of £10,453,000 above, an amount of £1,841,000;

• within other payables an amount of £464,000 related to contingent consideration and an amount of £1,841,000 related to deferred

consideration (see note 9); and

• within profit and loss, contingent consideration of £464,000 related to post-acquisition employee remuneration.

The prior year has not been restated on the grounds of materiality but the current year has been 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

2023

£’000

30 September

2022

£’000

Cash and cash equivalents 24,876 44,912

Financial statements

163

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Annual report and accounts 2023

Notes to the Company financial statements continued

7. Deferred tax asset

30 September

2023

£’000

30 September

2022

£’000

Deferred tax asset

Deferred tax asset 244 343

244 343

30 September

2023

£’000

30 September

2022

£’000

Reconciliation of deferred tax balances

Balance at beginning of year 343 514

Deferred tax charge for the year - in profit or loss (124) (171)

Deferred tax charge for the year - in equity 25 —

Balance at end of year 244 343

The components of deferred tax are:

30 September

2023

£’000

30 September

2022

£’000

Deferred tax asset

Temporary differences 244 343

244 343

The Group will shortly be implementing 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

2023

£’000

30 September

2022

£’000

Other receivables 97 66

Prepayments 156 190

253 256

Non-current

30 September

2023

£’000

30 September

2022

£’000

Amounts owed by Group companies 73,224 74,190

Amounts owed by and to Group companies are non-interest bearing and are repayable on demand.

9. Trade and other payables

Current

30 September

2023

£’000

30 September

2022

£’000

Amounts owed to Group companies 91,207 75,286

Trade and other payables 340 538

Accruals 1,368 1,442

92,915 77,266

Non-current

30 September

2023

£’000

30 September

2022

£’000

Other payables — 2,305

See note 5 for details on non-current other payables.

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Annual report and accounts 2023

10. Share capital

30 September 2023 30 September 2022

Shares £’000 Shares £’000

Allotted, called up and fully paid

Ordinary shares of £0.01 each 171,712,357 1,717 171,070,790 1,711

During the year 641,567 ordinary shares of £0.01 each were issued under the Group’s LTIP scheme (note 28 of the consolidated financial statements).

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

2022

Granted

during

the year

Lapsed/cancelled

during the year

Exercised

during the year

Outstanding at

30 September

2023

Exercisable at

30 September

2023

LTIP 2018 2018 Equity 177,252 — — (177,252) — —

LTIP 2020 2020 Equity 221,208 — — (221,208) — —

LTIP 2021 2021 Equity 273,290 — — — 273,290 —

LTIP 2022 2022 Equity 270,518 — — — 270,518 —

LTIP 2023 2023 Equity — 423,490 — — 423,490 —

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 2020, 30 September 2022, 30

September 2023, 30 September 2024 and 30 September 2025, and the Executive Directors’ continued employment at the date of vesting.

The LTIP 2022 and 2023 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 and 2023 are available on the Hollywood Bowl Group corporate website at

www.hollywoodbowlgroup.com/investors/regulatory-news dated 7 February 2022 and 16 February 2023.

The awards will vest based on the following adjusted EPS targets:

LTIP 2021 LTIP 2022 LTIP 2023 Vesting

13.91 14.65 18.11 25%

13.91–15.37 14.65–16.19 18.11–20.01 Vesting determined on a straight-line basis

15.37 16.19 20.01 100%

During the year ended 30 September 2023, 423,490 (30 September 2022: 270,518) share awards were granted under the LTIPs. For all

LTIPs, the Company recognised a charge of £753,427 (30 September 2022: £567,148) and related employer National Insurance charge of

£103,973 (30 September 2022: £78,266).

The following assumptions were used to determine the fair value of the LTIPs granted:

Financial year LTIP granted 2023 2022 2021

Share price at date of grant 2.600 2.514 2.370

Discount rate/dividend yield 3% 3% 3%

Financial statements

165

Hollywood Bowl Group plc

Annual report and accounts 2023

Notes to the Company financial statements continued

12. Loans and borrowings

On 29 September 2021, the Group entered into a £25m revolving credit facility (RCF) with Barclays Bank plc. The RCF has a termination date

of 31 December 2024.

Interest is charged on any drawn balance based on the reference rate (SONIA), plus a margin of 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 2023 and 30 September 2022 was therefore 0.6125 per cent.

Issue costs of £135,000 were paid to Barclays Bank plc on commencement of the RCF. These costs are being amortised over the term of the

facility and are included within prepayments (note 17).

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 2023 will be exempt from audit (note 15 of the consolidated

financial statements).

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Annual report and accounts 2023

CBP022435

Hollywood Bowl’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.