REG - XP Factory PLC - AGM Statement

XP FactoryAnnouncement

29/06/2022 07:01

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RNS Number : 5196Q  XP Factory PLC  29 June 2022

29 June 2022

XP Factory Plc

("XP Factory", the "Company" or the "Group")

AGM statement

 

XP Factory (AIM: XPF.), a group of leading UK experiential leisure businesses
operating under the Escape Hunt™ and Boom Battle Bar™ ("Boom") brands, is
pleased to provide an update on trading ahead of its Annual General Meeting
which is being held at 10.00am today at the offices of Irwin Mitchell LLP, 40
Holborn Viaduct, London EC1N 2PZ.

Results for the year to 31 December 2021 were announced on 31 May 2022 and
included an update on trading. Further progress has been made since then.

·      A further two Boom sites have opened in June 2022.  Our newest
owner-operated site opened in Manchester and a further franchise site opened
in Ealing. The Boom estate today comprises 17 sites of which four are owner
operated and 13 are franchised.

·      We have commenced build on a further two Boom sites. There are
currently, in aggregate, six Boom sites in build; three of which are to be
owner operated and three will be franchised.

·      Eight Boom sites are in the advanced pipeline with more than 20
other Boom sites under active consideration, underpinning a strong pipeline

·      As a result, the Board remains confident of achieving its target
of having 27 Boom sites open and trading by the end of the calendar year.
Within this number, the Company now expects at least nine owner-operated sites
- an increase from the seven initially targeted.

·      The performance at our owner operated Boom sites continues to
develop positively, providing confidence that the range of target site level
turnover and profitability for different size mature sites previously
indicated will be achieved.

·      Boom franchise sites are performing in line with the Board's
expectations, providing further confidence in the concept and commercial model

·      The return on capital expected from Boom owner operated sites
remains highly attractive, notwithstanding inflationary pressures to fit out
costs, with target cash on cash returns in excess of 50% still achievable
taking account of landlord contributions and rent-free periods

·      Escape Hunt owner operated sites have continued to perform well.
The UK owner operated estate traded ahead of the Board's expectations in Q1
2022 and has performed in line with expectations to date in Q2 2022.

·      A new owner operated Escape Hunt site opened in Exeter in April
2022, co-located with Boom

·      Three further owner operated Escape Hunt sites are in build in
Edinburgh (co-located with Boom), Norwich and Bournemouth

·      Further Escape Hunt sites are currently under consideration,
providing a pipeline for continued growth

·      Total cash at the end of May 2022 was £6.8m

 

The pipeline for both Escape Hunt and Boom Battle Bar sites planned to be
opened in 2022 is under-pinned by sites in build and the advanced pipeline.
Evidence to date supports the range of target box economics driven by strong
returns on capital.  As a result, the Board is confident that the targeted
run-rate sales and EBITDA for sites open by the end of the year will be in
line with its expectations.

Within the context of the significant progress that has been and continues to
be made, the timing and order in which sites open is very difficult to predict
given the many parties involved and complexity of the process.
Owner-operated sites have so far opened broadly in line with the timing
expected by the Board, with the exception of Oxford Street, where the landlord
has required a significantly more onerous process than for other sites,
leading to a delay of 4-5 months against original expectations.  Similarly,
the timing of franchise site openings is not entirely within the Company's
control and several openings have been a few weeks later than initially
indicated.  Notwithstanding this, as set out above, the Board still expects
to open the target number of sites in 2022.

2022 is the year for XPF to build on its foundations and become a major
leisure operator within the UK. Since the target number of sites is on target
to be opened within the year, and the target box economics are expected to be
met, any in-year delays to site openings are not expected to impact the exit
run-rate or the Group's financial performance in 2023.

Commenting on the update, Richard Harpham, Chief Executive of XP Factory plc,
said: "We are delighted with the progress we have made so far in building a
business for the future.  The Boom estate is now a substantial business in
its own right and we have a secured pipeline to deliver on our targets for
2022. Escape Hunt has continued to perform well and we are excited about
opening further venues, including those co-located with Boom.  Whilst we are
not immune to inflationary pressures in our build costs, the return on capital
metrics across both our existing brands remains highly attractive and provides
the potential to deliver significant growth in shareholder value. As a result,
we remain optimistic about the future prospects for the Group."

 

Enquiries:

 XP Factory Plc                                                          +44 (0) 20 7846 3322

 https://www.xpfactory.com/ (https://www.xpfactory.com/)

 Richard Harpham (Chief Executive Officer)

 Graham Bird (Chief Financial Officer)

 Kam Bansil (Investor Relations)

 Shore Capital, NOMAD and Broker                                         +44 (0) 20 7408 4050

 https://www.shorecap.co.uk/ (https://www.shorecap.co.uk/)

 Tom Griffiths/David Coaten (Corporate Advisory)

 IFC Advisory - Financial PR                                             +44 (0) 20 3934 6630

 https://www.investor-focus.co.uk/ (https://www.investor-focus.co.uk/)

 Graham Herring

 Florence Chandler

Notes to Editors:

About XP Factory plc

 

The XP Factory Group is one of the UK's pre-eminent experiential leisure
businesses which currently operates two fast growing leisure brands.  Escape
Hunt is a global leader in providing escape-the-room experiences delivered
through a network of owner-operated sites in the UK, an international network
of franchised outlets in five continents, and through digitally delivered
games which can be played remotely.

Boom Battle Bar is a fast-growing network of owner-operated and franchise
sites in the UK that combine competitive socialising activities with themed
cocktails, drinks and street food in a high energy, fun setting.  Activities
include a range of games such as augmented reality darts, Bavarian axe
throwing, 'crazier golf', shuffleboard and others.  The Group's products
enjoy premium customer ratings and cater for leisure or teambuilding, in small
groups or large, and are suitable for consumers, businesses and other
organisations. The Company has a strategy to expand the network in the UK and
internationally, creating high quality games and experiences delivered through
multiple formats and which can incorporate branded IP content.
(https://xpfactory.com/ (https://xpfactory.com/) )

 

Facebook:
EscapeHuntUK
BoomBattleBar

Twitter:
@EscapeHuntUK
@boombattlebar

Instagram:             @escapehuntuk
 
                @boombattlebar

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