Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Hollywood Bowl: strong revenue growth & balance sheet
Hollywood Bowl LON:BOWL has issued a trading update for the year ending 30th September. Total revenues are 42.3% up from pre-pandemic levels, with like for like growth of 28.3% over the same period. EBITDA growth is now expected to be above market expectations and shareholders are being rewarded with the dividend reinstated. The company acknowledges that customers are facing challenging times ahead, but with a cash balance of £56m and undrawn credit of £25m, it’s at least going into the latest headwinds on a solid footing.
#2. Quiz: optimism that value proposition will support seasonal revenue
Fashion brand Quiz LON:QUIZ has a trading update for the six months to 30th September out today. The company benefitted from the ongoing removal of COVID restrictions, with total revenues up 37% from a year ago. Liquidity headroom has also improved over the last year so again it enters the current economic cycle with a stronger balance sheet. Management acknowledge that full year performance will be dictated by Christmas sales and whilst there’s uncertainty here, they believe the brand’s value proposition will continue to appeal.
#3. Unite: 99% of student beds sold, strong EPS forecast
There’s a Q3 update out from student accommodation provider Unite LON:UTG today, noting that 99% of beds have been sold for the current academic year, up from 94.1% a year ago. Rental growth guidance has been increased to 4.5%-5% for the 23/24 academic year, which is clearly some way below inflation and could attract a degree of criticism from investors given the strength of student demand. EPS for the current year is tipped to come in at the top end of guidance and despite the underlying economic situation, growing student numbers and a shortage of high quality housing should keep the company well positioned.
