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Remember Essenden? It’s back under a new name with growth avenues it previously struggled to find
Thursday 20 Apr 2017 Author: Daniel Coatsworth

The boss of newly-floated tenpin bowling group Ten Entertainment (TEG) insists the business is completely different than when it traded on AIM under the name of Essenden.

He says the £107m business now has a competitive advantage through the use of technology and a clear path to achieve the growth it has long desired.

Essenden was taken private in 2015 by its major shareholder Harwood Capital.

‘It required a capital injection to accelerate growth. The shares were illiquid so they traded on a low rating,’ claims Alan Hand who joined Essenden in 2010 and is now chief executive of the renamed business.

Previously said market oversupplied

Former Essenden CEO – and now Ten Entertainment chairman – Nick Basing told Shares three years ago that tenpin bowling was in over-supply.  As such, he said Essenden would have to diversify to achieve growth.

He suggested making acquisitions to have a second business stream with multiple sites potentially including cinema, bingo and holiday parks. That failed to materialise.

What's changed?

Since being taken private, the business has acquired 10 tenpin bowling sites from rivals and spent money on technology to facilitate operational efficiencies.

For example, it now has an electronic system that places reserved lanes next to each other, rather than spread apart.

Hand says this helps walk-in customers to immediately see if there is availability. He claims this system has already helped to improve utilisation rates from 70% to 85%-90%.

Customers no longer have to swap their footwear for bowling shoes. Employees even take food and drink orders from players at the bowling lane with a handheld terminal.

‘We want to speed up getting people on the lanes and then not have to leave,’ says Hand.

Additional facilities populate its bowling sites such as table tennis and games machines to drive extra revenue and keep customers on site.

Buying up weaker rivals

The Ten Entertainment boss says he’s identified up to 170 under-invested and under-managed bowling sites in the UK.

‘We’re trying to get into dialogue with north of 60 of these sites,’ he reveals. ‘We view them as lower risk growth as we would be buying profitable market share.

‘We believe we can buy sites generating between £150,000 and £400,000 EBITDA (earnings before interest, tax, depreciation and amortisation) and bring their standards up.’

Harwood Capital last week sold a chunk of its shares at the IPO (13 Apr) but still retains a very dominant 69.4% of the business; directors hold a further 5.6%. (DC)

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