The FTSE 250’s Hollywood Bowl (LSE: BOWL) has come a great distance because the lows of the 2020 pandemic.

Each the enterprise and the share price have been recovering nicely. However at present’s (3 June) interim outcomes report suggests the corporate has now turn into a robust progress story. Moreover, it’s paying beneficiant dividends alongside the best way.

Within the six months to 31 March, the corporate had 71 tenpin bowling and leisure centres within the UK. Nonetheless, it’s additionally rising quick in Canada, with 11 centres on the finish of the interval and a powerful income advance of just about 47% 12 months on 12 months.

Increasing nicely

A lot of the progress comes from acquisitions. So I see the agency as a consolidator and improver in its sector. Certainly, refurbishment and enterprise optimisation is an enormous a part of the administrators’ game-plan right here.

Income rose by simply over 8% within the interval and that delivered an nearly 8% enchancment in free money stream and nearly 12% in adjusted revenue earlier than tax. All of that filtered down to spice up adjusted earnings by simply over 6%, and the administrators elevated the interim shareholder dividend by almost 22%.

In the meantime, with the inventory price close to 337p, the forward-looking yield is slightly below 4% for the buying and selling 12 months to September 2025. That appears like a possible revenue value having in my share account whereas ready for additional progress in operations to materialise.

However there are dangers, in fact. Probably the most distinguished is the simple cyclicality within the enterprise. We solely want have a look at the collapse of earnings, dividends and the share price within the pandemic to see the reality of that.

Companies like this are sometimes simply the following common financial shock away from inflicting shareholders to lose cash. The difficulty is, we by no means know when, or if, that shock will come.

On high of that, I’d control the agency’s debt ranges if holding this one. Borrowings appear to be beneath management proper now, and the enterprise enjoys sturdy money stream when the financial instances are good. Nonetheless, generally acquisitive corporations can turn into carried away and fund progress by over-extending their funds.

A constructive outlook

The outlook assertion is constructive and optimistic. Metropolis analysts count on normalised earnings to enhance by simply over 6% subsequent buying and selling 12 months to September 2025.

That’s not a shocking price of progress. However I reckon the continued growth programme and the excessive dividend yield make the inventory value consideration.

Nonetheless, Hollywood Bowl isn’t the one FTSE 250 firm on my record. I’m additionally eager on workers recruitment enterprise SThree, and molten metallic stream engineering and know-how firm Vesuvius.

Others I’m specializing in embrace warmth remedy and thermal processing companies supplier Bodycote, and vertically built-in building supplies enterprise Breedon.

Optimistic funding outcomes will not be sure for any of the shares talked about right here. Nonetheless, all of them have a decent-looking dividend yield and prospects for progress in earnings forward. As such, I see all of them as value deeper research and consideration for my diversified portfolio.