Tenpin bowling alleys operator Ten Entertainment this morning unveiled its first half-year results since floating on the stock exchange, with the cost of its IPO hitting profits despite a rise in sales.
Revenue edged up two per cent to £35m, but the one-off costs of the firm's IPO hit the bottom line.
Exceptional spending of more than £3m meant pre-tax profits dropped from £3.9m to just £596,000.
Adjusted underlying earnings came in just above the previous year at £9.37m. The group also said that when exceptional items were taken out, its adjusted post-tax profits showed a 24 per cent jump.
Ten's confidence in its growth prospects was evidenced by a 3p dividend, which it said it would pay for the whole financial year rather than pro rata, despite only listing in April.
Why it's interesting
Aside from the IPO costs, Ten's results show a robust company in the consumer leisure sector, which has taken a battering from lower spending as many customers worry about inflation weighing on their finances.
Anna Barnfather, an analyst at Liberum, said the group's results also showed "a clear weather impact, thus supporting our contention that this was the biggest factor causing the late summer dip in trading for many pub & restaurant companies". Ten's sales growth has picked up since the sunny weather came to an end and families have begun looking for indoor activities.
Ten's rival Hollywood Bowl experienced a similar hit to profits after floating, but went on to recover and most recently reported an 18.5 per cent rise in profits.
What Ten Entertainment said
Chief executive Alan Hand told City A.M. this morning that he was not worried about a slowdown in the consumer sector.
"We're not seeing any downturn because of certain strategies we use in the company. Spend per head is up 1.2 per cent at 14.37, and we're an experienced business," he said.
Hand said he was especially pleased with an improved Net Promoter Score, a measure used by brands to gauge customer experience through how likely consumers are to recommend the service.
Plans to open between two and four sites a year are well underway, with three opened already this year. Meanwhile new technology has been added to bowling lanes at certain branches including Croydon, which reduces the need for repairs.
"We're a modern business," concluded Hand. "We're relevant to today's consumers, entertainment is very different to the 70s and 80s. We put families at the heart of our strategy."