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Sunday share tips: Hollywood Bowl, Schroders European Real Estate Investment Trust

Sun 12 December 2021 17:56 | A A A

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(Sharecast News) - The Sunday Times's Sabah Meddings told investors to 'buy' shares of Hollywood Bowl, telling them looked recent sales growth looked "promising" - "barring significant further Covid restrictions".

Britain's biggest bowling operator was expected to report a 15% jump in revenues for the year ending on 30 September in comparison to pre-pandemic 2019, to reach £149.5m.

And analysts believed that it would soon be able to restart its dividend payouts, he said.

Did it seem risky tipping a leisure stock just as restrictions were being tightened?

Well, the company had some insulation, Meddings argued.

It did not rely on the festive season to draw in the bulk of sales and profits, its alleys were hardly the first choice for large Christmas parties and the company had limited exposure to London. Lane dividers had also been put in place and clients were encouraged to use the same ball.

Yet like-for-like sales growth for the weeks open from its 64 venues was running at 29%.

"Despite the hit from Covid, Hollywood Bowl and its rivals are well placed to benefit from the structural shift towards experiences.

"The company is expected to open 14 new Puttstars and bowling alleys in the next couple of years. It also has plenty of liquidity - net cash of £30 million at its year end."

The Financial Mail on Sunday's Midas column labelled shares of Schroders European Real Estate Investment Trust a "long-term buy" for income investors.

Since floating on the London Stock Exchange in 2015, the company had been hit first by Brexit and then by the pandemic, leaving it trading at a 17.5% discount to the current value of its assets.

Most of the 13 assets in its portfolio were trading well, with 12 of them located in France, Germany and the Netherlands. Another asset, a shopping mall in Seville, Spain had been written off.

The REIT recently sold a property in Paris which was expected to yield a net profit of €28m, at least some of which was expected to be funneled into expanding the firm's portfolio until it reached about 17 assets.

Existing properties had potential too, the tipster added.

A total dividend of 7.12 euro cents had been declared during the previous week for the year to September 2021, together with a special payout of 4.75cents and with a further special dividend scheduled for the following year.

Furthermore, investors on the register as of 24 December would be eligible for the most recent dividend of 1.85cents and the first special payout.

Indeed, the shares were yielding nearly 6% - even without the special payment.

"Looking ahead, ordinary dividends should increase and so should the share price. A long-term buy for income investors."

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.


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