Hollywood Bowl to raise £10.9m in placing to weather Covid-19

Hollywood Bowl said on Friday that it plans to raise around £10.9m in a share placing to further strengthen its balance sheet, working capital and liquidity position "in the current challenging environment", while its venues are closed due to the pandemic.

The ten-pin bowling operator will issue 7.5 million new ordinary shares at 145p each. The placing will be conducted through an accelerated bookbuilding process, with Investec Bank acting as sole broker and sole bookrunner.

The placing price represents a premium of approximately 1.4% to the closing mid-market price of 143p on Thursday and the amount is equivalent to 5% of the company's current issued share capital.

Hollywood Bowl said the placing proceeds will "ensure it is well placed to act on strategic organic and non-organic opportunities to strengthen the business in the aftermath of the pandemic". They will also allow the group to resume its stated capital allocation policy "at the earliest appropriate opportunity".

The company also said that as a result of the "extensive cost saving initiatives" it has implemented, it expects a total monthly net cash burn of about £1.6m while its centres remain closed.

"The group has had a strong financial and operational performance since its IPO in 2016. This strong performance continued into the first half of the 2020 financial year (pre the Covid-19 outbreak) with the group's performance notably ahead of the prior year period with near double-digit like-for-like revenue growth and significant free cash flow.

"The management team was quick to respond to the pandemic and government actions and remains focused on taking action to maintain its strong cash and liquidity position, retaining its team members throughout the centre closure period and ensuring the business is ready to welcome customers back to its centres once it is safe for them to re-open."