The bowling alley operator reported a pre-tax profit of £23.9mln for the year, up 13.4% on the year before while revenues climbed 5.8% to £120.5mln.
The group also said its existing estate was on track to outperform its return on investment (ROI) target of 33%, having rebranded 13 sites and refurbishing three others, while average spends per game had risen 6.1% to £9.22 and like-for-like sales were up 1.8%.
As a result of the strong performance, the group proposed a special dividend of 4.33p per share, 30% higher than last year’s special dividend, while the final dividend was raised 7.1% to 4.23p.
The increases brought the total dividend for the year to 10.59p per share, 16.6% higher than last year.
The company had previously mulled returning surplus cash to shareholders in a trading update in October when it said it was benefitting from significant cash generation.
In its outlook for the coming financial year, Hollywood Bowl’s chief executive Stephen Burns said the company would continue its “strong growth trajectory”, adding that the group would continue a capital investment plan to refurbish its estate, open new centres and invest in technology to boost its proposition.
In a note to clients, analysts at City broker Peel Hunt maintained their 250p price target on the stock, saying the company, as well as its rival Ten Entertainment Group PLC (LON:TEG), “have substantial scope to grow through self-help, increasing their dominance of the bowling sector… They both have attractive demand-supply dynamics, limited cost pressure (labour costs equate to under 20% of revenue), and great scope to benefit from innovation”.
Shares were up 7.9% at 198p.