Product and Service

Companies included in bowling center sector in membership club and participant sport centers industry primarily operate bowling centers earning revenue from charge for use of bowling lance and facilities and from food& beverage.

 

Demand for Product and Service

As indicated by the typical company data, the demand for bowling center has fluctuated but been increasing gradually in the past several years. The increased demand has been driven by positive changes in macro-economy and demographic factors.

The Sector

Sector’s Current, Trend, Causes behind trend, and Future

Current and Trend
  1. It seems that the demand for bowling center has fluctuated but generally been increasing in the past three years as indicated by fluctuated revenue in food& beverage of centers, which may more consistent with changes in visits.
  2. Upward pressure for price, probably as a result of increase in demand, largely eased companies’ need for promotions and thus improved their profitability.
Causes behind the trend
  • The upward trend in this industry may be consistent with what is happening in other entertainment and leisure industries, which should have been driven by improvement in economy situation.
    Demographic factors may also be positively influential.
Industry Future
  • As upward trend in this industry continues, companies may be able to continue to see growth in their revenue as macro economy recovers gradually.

Numbers

General Financial Performance of Companies In the Sector

It seems that the demand for bowling center has fluctuated but generally been increasing in the past three years as indicated by the average increase in blowing related revenue of companies in this sector in the past three years except for 2017. Fluctuated revenue in food& beverage may be an accurate reflection of visitors of those centers, which may have been influenced largely by promotions. However, increase in both bowling and food& beverage in 2018 may imply a potentially stronger demand coming in this sector
The increase in demand and thus the upward pressure in price help largely improved companies’ gross margin. The typical gross margin (including operating costs and depreciation) is about 19% in 2018, SG&A as percentage of sales is about 3%, and operating margin is about 16% in 2018.
The typical enterprise price/EBI (adjusted with tax field) ratio is 32.

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