Companies Reporting: Hollywood Bowl, British American Tobacco, WH Smith

Our regular look at the FTSE 350 and a selection of other companies reporting from 03 – 07 June.

• Hollywood Bowl aiming for a strike with its refurbishment game plan 
• Pricing, debt and vapes in focus for British American Tobacco 
• Will WH Smith still be in good shape for summer as pivot to travel continues?

Hollywood Bowl, Half Year Results, Monday 3 June

Guy Lawson-Johns, equity analyst, Hargreaves Lansdown: Hollywood Bowl’s LON:BOWL record revenue and growth in the UK and Canada shows consumers aren’t willing to compromise on fun, despite economic challenges.

Having expanded its Canadian presence in recent years, Hollywood Bowl now ranks as the largest ten-pin bowling brand in the UK and Canada. There are opportunities to improve its footprint, too. In addition to its refurbishment program, new centres are in the pipeline across both regions. Although resilient growth indicates early progress, it hasn’t come cheap. But with a strong cash position and free cash flow expected to grow, analysts aren’t concerned about funding the increase in spending.

Markets will be closely monitoring refurbishment updates and seeking guidance on whether capital expenditure remains on track to land within the £35 – 40mn range.

British American Tobacco, Trading Update, Tuesday 4 June

Derren Nathan, head of equity research, Hargreaves Lansdown: British American Tobacco’s LON:BATS full year guidance of low single-digit growth in both revenue and operating profit may seem unambitious. But, with the tobacco market in continuing decline, it’s down to robust pricing and increasing demand for next generation products, like vapes, to keep financial performance moving in the right direction.

• Can WH Smith use the US market to boost its share price?
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The company’s already mentioned that this year is likely to be second-half weighted, so investors will be finding out next week just how much heavy lifting will be required for the rest of the year. Progress on paying down net debt will also be in focus, which is seen as key to enabling further share buybacks.

WH Smith, Trading Statement, Wednesday 5 June

Derren Nathan: WH Smith LON:SMWH last reported that strong trading momentum had continued into the second half. That was just a month ago and, with the peak summer period still to come, investors aren’t expecting too many changes. First half profit growth was slower than revenue, so investors will be looking to see if moderating inflation is giving margins a boost.

The market’s not expecting a huge acceleration in growth in the second half, despite the growing travel hub footprint, so there is some potential scope for upside as the year progresses. There’s a substantial opportunity to take market share overseas, particularly in North America, so analysts will be looking at site openings, which were last thought to be around 110 in the current financial year. The estate totals around 1,300 travel stores, of which just under half are in the UK. Travel is now the dominant arm, with more than double the number of stores seen on the high street.

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report