May 2025 UK Penny Stocks Worth Watching

The UK market has recently faced challenges, with the FTSE 100 index dropping due to weak trade data from China, highlighting concerns about global economic recovery. In such a climate, investors often seek opportunities in less conventional areas of the market. Penny stocks, despite being an older term, continue to attract attention for their potential value and growth prospects when supported by strong financials.

Top 10 Penny Stocks In The United Kingdom

Click here to see the full list of 400 stocks from our UK Penny Stocks screener.

Here's a peek at a few of the choices from the screener.

Hollywood Bowl Group (LSE:BOWL)

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: Hollywood Bowl Group plc operates ten-pin bowling and mini-golf centers in the United Kingdom and internationally, with a market cap of £515.85 million.

Operations: The company's revenue is primarily generated from its recreational activities segment, totaling £230.40 million.

Market Cap: £515.85M

Hollywood Bowl Group has demonstrated financial resilience with no debt and significant earnings growth of 27% annually over the past five years. Despite a lower current net profit margin of 13% compared to last year's 15.9%, the company maintains high-quality earnings and a stable weekly volatility rate of 4%. Recent revenue growth in H1 FY2025 shows an increase to £129.2 million, driven by strong performance in Canada, although UK short-term assets do not fully cover liabilities. The stock trades below industry average price-to-earnings ratios, suggesting potential value opportunities amid analyst consensus for price appreciation.

• Dive into the specifics of Hollywood Bowl Group here with our thorough balance sheet health report.
• Understand Hollywood Bowl Group's earnings outlook by examining our growth report.

Card Factory (LSE:CARD)

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: Card Factory plc is a specialist retailer of cards, gifts, and celebration essentials operating in the United Kingdom and internationally, with a market cap of £333.90 million.

Operations: The company's revenue is primarily generated from Cardfactory Stores (£506.8 million), with additional contributions from Partnerships (£22.2 million) and Cardfactory Online (£13.2 million).

Market Cap: £333.9M

Card Factory plc presents a mixed picture for penny stock investors. The company benefits from strong debt management, with interest payments well-covered by EBIT and a satisfactory net debt to equity ratio of 16.6%. Despite stable weekly volatility, the company's short-term assets fall short of covering liabilities, and its earnings growth has been negative in the past year. However, earnings are forecast to grow 7.8% annually, supported by experienced management and board tenure. Recent financials show increased sales to £542.5 million but slightly decreased net income year-on-year, with an upcoming dividend proposal reflecting ongoing shareholder returns focus.

• Click here to discover the nuances of Card Factory with our detailed analytical financial health report.
• Explore Card Factory's analyst forecasts in our growth report.

Luceco (LSE:LUCE)

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: Luceco plc manufactures and distributes wiring accessories, LED lighting, and portable power products across various regions including the United Kingdom, the Americas, Europe, the Middle East, Africa, and the Asia Pacific; it has a market cap of approximately £230.58 million.

Operations: The company's revenue is derived from three main segments: Wiring Accessories (£108.9 million), LED Lighting (£78.4 million), and Portable Power (£55.2 million).

Market Cap: £230.58M

Luceco plc's financial position offers a nuanced view for penny stock investors. The company's revenue grew to £242.5 million, yet net income declined to £14.6 million from the previous year, reflecting challenges in profit margins and earnings growth. Despite a high net debt to equity ratio of 70.7%, interest payments are well-covered by EBIT, indicating manageable debt levels. Luceco's dividend of 3.3 pence underscores its commitment to shareholder returns, despite being poorly covered by free cash flow. With stable weekly volatility and experienced board tenure, the stock remains under fair value estimates with potential for price appreciation according to analysts' consensus.

• Click to explore a detailed breakdown of our findings in Luceco's financial health report.
• Learn about Luceco's future growth trajectory here.

Taking Advantage

• Reveal the 400 hidden gems among our UK Penny Stocks screener with a single click here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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