Insider: two £100k director buys at multi-month lows

The cheapest Hollywood Bowl Group (LSE:BOWL) shares in over a year have drawn the interest of a long-serving director after he spent £102,000 increasing his stake for the second time in a month.

The investment by leisure industry boss Ivan Schofield took place on Thursday at a price of 273p. He also spent £78,000 on the shares on 3 February at 277p, which compares with a trading level of 340p in mid-December and the 440p target of Berenberg analysts.

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The independent non-executive director, who has held senior roles at Yum Brands and joined the Hollywood Bowl board in 2017, now holds a stake worth £422,000.

Fears over payroll costs and the consumer outlook mean Hollywood shares have fallen sharply, even though the ten pin bowling business posted more strong trading figures before its AGM on 30 January.

Last Tuesday, the FTSE 250-listed company unveiled plans to buy back another £10 million of its shares in the next year, a move equivalent to 2% of its market value.

This also failed to inspire a turnaround for the shares, which dipped as far as 269p on Thursday night before rallying to reach the weekend at 277p.

Given the year-to-date fall in the shares, Berenberg said it viewed the buyback as an opportunistic way of returning cash to shareholders and growing earnings per share (EPS). It described Hollywood Bowl as a “top pick in the space”.

The City firm said last week: “The robust, cash-generative nature of the business model is one of the key factors underpinning our Hollywood Bowl investment thesis.

“The model allows the company to invest internally and drive strong returns, look for potential inorganic growth, and return cash to shareholders via dividends and buybacks.”

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The shares trade on about 12 times forecast earnings and with a dividend yield of 4.5%.

Shore Capital said current valuation metrics were low versus historic levels, especially when set against the momentum of new openings and the progress being made on Canada expansion.

The broker also highlighted the management’s strong track record and the £100 million earnings outlook from a target of 130 centres by 2035. It has a Buy recommendation.

In the recent AGM update, the company recorded its highest ever monthly revenue in December and its biggest ever day of trading on New Year's Eve. Revenues for the first part of the financial year between 1 October and 12 January showed growth in line with hopes at 11.3%.

Chief executive Stephen Burns said: “This successful start to the year underlines the continued strength of our value-for-money, family-friendly customer proposition.”

The statement also said that the company is well placed to mitigate the impact of increases to National Insurance contributions and the Living Wage, pointing to a strong cost culture and relatively low labour-to-revenue ratio of under 20% in the UK.

The business was created in 2010 with 41 UK centres and listed on the main market in 2016 before joining the FTSE 250 index in 2024. It now has 72 UK outlets, as well as 13 in Canada.

Not just a stock for the lads

LBG Media Ordinary Shares (LSE:LBG) chief executive Solly Solomou and two other directors have spent £125,000 buying the LADbible firm’s shares after they traded at their lowest level since July.

Solomou’s £25,000 investment took place last week at a price of 112p, a move that has increased his interest in the business he co-founded in 2012 to 41.63%. His dealings followed purchases of £50,000 by executive chair Dave Wilson and non-executive director Carol Kane.

The Manchester-based company floated on AIM in December 2021 at a price of 175p, only to fall to 54p by the following October. It finished last year at 130p.

The recent reverse has come despite “good momentum” at the start of its new financial year, including double-digit revenues growth. It also said it may consider further investment to accelerate its US growth strategy.

LBG Media has grown from a single Facebook page to a global digital entertainment business encompassing a portfolio of youth focused brands and channels.

It creates bespoke content for blue-chip advertisers that gives them access to a young adult audience that is hard to reach for traditional media players.

This is distributed across social media platforms and the company’s owned and operated websites. Third parties – such as social media platforms – also generate indirect revenues by placing advertising next to the company’s content.

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Solomou said recently that 2024 had been transformational for the group after it ran more campaigns for more blue-chip brands, particularly in the world’s largest advertising market of the US.

He added: “More than half a billion people globally, including Gen Z and Millennials, see us as the go-to destination for digital content.

“The biggest brands and the biggest celebrities therefore want to partner with us to access the growing buying power and influence of this hard-to-reach demographic.”

In the wake of January’s annual results, house broker Peel Hunt retained its 150p target price and said that further investment this year should sustain the positive momentum.

In November, Shore Capital initiated coverage with a Buy rating and fair value estimate of 159p.

It said: "We believe that LBG’s proven ability to connect brands with Gen Z consumers via targeted and purpose driven content means it is strongly positioned to capitalise on a range of growth drivers.

“We forecast substantial EPS growth and strong cash generation, bolstering an already cash-rich balance sheet and creating the opportunity to accelerate organic growth via acquisitions.”