Tenpin bowling and household leisure firm Ten Entertainment (TEG:AIM) stated sturdy summer time buying and selling noticed an acceleration in like-for-like gross sales progress pushed by its value-for-money proposition.

The shares nudged up 2% to 290p on the information, taking good points to greater than 50% over the past 12 months.

Ten Entertainment has held bowling costs at pre-pandemic ranges with the typical value per sport an reasonably priced £4.90. Like-for-like gross sales are 46% above 2019 ranges, pushed by over 40% quantity progress supplemented by will increase in food and drinks and different entertainments.

The firm stated its easy mannequin is a profitable system that continues to ship outcomes by offering ‘the best quality bowling experience anywhere in the UK at the best value for money, supplemented by a wide variety of additional leisure activities’.

STRONG FIRST HALF

Sales within the first half to 2 July elevated 3.3% to £65.3 million with like-for-like gross sales up 1.6% pushed by elevated footfall. Trading accelerated in the course of the summer time months with like-for-like gross sales up 12.8% within the subsequent 10 weeks to 10 September, bringing 12 months to this point progress to 4.7%.

Management stated it’s assured of delivering mid-single digit progress for the total 12 months.

Adjusted pre-tax revenue was up 0.6% to £15.8 million on a reported foundation, however grew 15.3% excluding one-off Covid advantages.

Ten Entertainment has opened three new centres in 2023 with a fourth because of open in December, with new websites hitting or exceeding the focused 30% return on funding.

INCREASED FINANCING AND HEDGING

The firm continues to develop from internally generated money and ended the interval with web money of £5.1 million. It additionally elevated its revolving credit score facility to £30 million from £25 million and prolonged the time period by three years from the earlier expiry in April 2024.

Why Ten Entertainment shares are too cheap to ignore

The interim dividend was elevated by 16.7% to three.5p per share. Ten Entertainment has additionally locked-in power costs to September 2026 at a extra aggressive value than initially deliberate.

The new contract utilizing 100% renewable power prices £1.8 million greater than the present contract however is considerably decrease than the £5 million anticipated.

EXPERT VIEWS

Liberum nudged up its 2023 adjusted pre-tax revenue forecast by 2.1% to £28.8 million. Analysts Anna Barnfather and Nishant Dahad stated: ‘The structural shift in client spending in the direction of low-cost household leisure has endured the cost-of-living disaster.

‘This, combined with Ten Entertainment’s on-going programme and funding, has seen it persistently beat expectations.’

Analysts Douglas Jack and Ivor Jones at Peel Hunt (PEEL:AIM) saved their earnings estimates unchanged however famous the firm is buying and selling above their gross sales progress assumptions.

‘Overall, we believe there is upside to forecasts and valuation. Regardless of the economic backdrop TEG should be well placed to continue growing due to its low-cost base, its increasingly attractive value for money proposition, and its net cash position.’

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Issue Date: 20 Sep 2023