REG - XP Factory PLC - Preliminary Unaudited Final Results
01/09/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250901:nRSA3430Xa&default-theme=true
RNS Number : 3430X XP Factory PLC 01 September 2025
XP Factory Plc
1 September 2025
XP Factory plc (AIM: XPF)
("XP Factory", the "Company" or the "Group")
Preliminary unaudited results for the year ended 31 March 2025
XP Factory is pleased to announce its preliminary unaudited final results for
the year ended 31 March 2025.
FINANCIAL HIGHLIGHTS
· Group revenue for the 12-month period increased 19% to £57.8m compared to the
prior year(1) (12 months to Mar 2024: £48.6m (unaudited); 15 months to
March 2024: £57.3m) representing significant further growth in scale:
- Escape Hunt® owner operated site revenue increased by 7% to £14.2m
(12 months to Mar 2024 £13.3m (unaudited): 15 months to Mar 2024: £16.7m)
- Boom Battle Bar® ("Boom") owner operated revenue increased by 29%
to £42.2m (12 months to Mar 2024: £32.7m (unaudited); 15 months to Mar 2024:
£37.5m)
· Pre IFRS 16 Group Adjusted EBITDA increased to £6.6m (12 months to Mar 2024:
£5.1m(2) (unaudited); 15 months to Mar 2024: £6.3m)
· Site level pre IFRS 16 EBITDA was £15.2m (12 months to Mar 2024: £13.1m(2)
(unaudited); 15 months to Mar 2024: £16.3m )
· Group Adjusted EBITDA rose to £10.5m (15 months to Mar 2024: £9.9m)
· Adjusted Operating profit(3) of £3.5m (15 months to Mar 2024: £2.7m)
· Adjusted earnings per share of 0.23p (15 months to 31 Mar 2024: 0.09p);
statutory loss per share of 0.71p (15 months to Mar 2024: loss 0.27p)
· £1.1m cash balance and £4.8m net debt at 31 March 2025 (31 Mar 2024: £3.9m
cash and £0.1m net cash)
OPERATING HIGHLIGHTS
· Continued positive like-for-like sales growth delivered across both
owner-operated brands:
o Boom: up 2.3 % in the 52 weeks to 30 March 2025
o Escape Hunt: up 3.2% in the 52 weeks to 30 March 2025
· New owner operated Boom site opened in Cambridge in December 2024
· Five Boom franchise sites in Wandsworth, Aldgate East, Bournemouth,
Southampton and Ipswich acquired during the year
· Boom owner operated Pre IFRS16 site level EBITDA margin increased to 18% (15
months to Mar 2024: 17%)
· Boom Pre IFRS 16 site level EBITDA return on capital of 54% (15 months to Mar
2024: 52%)
· New owner operated Escape Hunt sites opened in Worcester, Glasgow and at
shared site in Cambridge in September, October and December 2024 respectively
· Escape Hunt owner operated Pre IFRS 16 site level EBITDA margin of 44% (15
months to Mar 2024: 42%)
· Escape Hunt Pre IFRS 16 site level EBITDA return on capital of 51% (15 months
to Mar 2024: 48%)
· Escape Hunt games catalogue advanced with 3 brand new games launched in the
year
· New £10m revolving credit facility with Barclays signed
· Revised, accelerated strategy for growth announced supported by the Barclays
bank facility
· Pipeline of further site openings developed across both brands
· Both brands continue to receive industry leading customer reviews
POST PERIOD END HIGHLIGHTS
· New Boom site in Reading and new Escape Hunt site in Canterbury opened in May
2025
· Further Escape Hunt site expanding existing Birmingham Resorts world site
opened in August 2025
· Escape Hunt site in Sheffield in build, and a further five sites in advanced
negotiations
· Group owner operated ('O&O') revenue was up 12% in the 19 weeks to 10
August 2025 compared with the prior year
· Escape Hunt UK LFL sales +0.4% year-to-date ('YTD'), with LFLs of
+8.6% in the six weeks to 10 August 2025 having fully offset the negative
-3.6% in Q1
· Boom UK LFL sales -5.6% YTD, excluding the impact of Euro 2024 LFLs
returned to +0.2% in the six weeks to 10 August 2025 vs -6.4% in Q1
· New Boom site in Reading trading materially ahead of plan, and positive early
indications for new EH sites which are trading in line with plan
· Positive momentum on corporate bookings, which bodes well for the
all-important calendar Q4 trading period
· The Board remains cautiously optimistic about meeting the market's
expectations for the full year
Richard Harpham, Chief Executive of XP Factory, commented:
"The year to March 2025 represents another successful period of development
for XP Factory, with underlying operating metrics showing continued positive
improvement. Whilst the business is having to cope with increased costs from
government policy and a challenging first quarter has posed operational
challenges,we have made significant progress towards our strategic goals and
remain resolute in pursuit of success."
1. Unaudited period to 31 March 2024
2. Annualisation of the FY25 15 month period to 31 March 2024 due to a
change in accounting period
3. Adjusted Operating profit calculated as statutory operating profit
before exceptional costs and pre-opening costs and before fair value gains /
losses
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)
Singer Capital Markets, NOMAD and Broker +44 (0) 20 7496 3000
https://www.singercm.com/ (https://www.singercm.com/)
Peter Steel
James Todd
IFC Advisory - Financial PR +44 (0) 20 3934 6630
https://www.investor-focus.co.uk/ (https://www.investor-focus.co.uk/)
Graham Herring
Florence Staton
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 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/) )
STRATEGIC REPORT
Chairman's Statement
Once again, I am pleased to report on a successful year in which the Group has
made further material strategic, operational and cultural progress whilst
achieving its financial performance objectives. Group turnover of £57.8m
reflects growth of c.19% on the comparable prior year 12 month period,
delivering a pre-IFRS16 Adjusted EBITDA of £6.6m. The turnover growth was
delivered through both positive like-for-like growth in both brands together
with new site openings and acquisitions of former Boom franchise sites.
Overall site-level and group-level Adjusted EBITDA margins improved and,
whilst Escape Hunt again exceeded our margin target, both Boom and Group
margins are tracking towards our medium term targets. Adjusted EPS was 0.23p
per share (statutory EPS loss 0.71p per share).
Escape Hunt has continued to deliver, with underlying turnover up 7% compared
with the 12 months to 31 March 2024 to £14.2m, delivering pre IFRS 16 site
level EBITDA margin of 44%, ahead of our internal targets, and an
industry-leading return on capital of 51%. Boom underlying turnover grew 29%
compared with the 12 months to 31 March 2024 to £42.2m, delivering pre IFRS
16 site level EBITDA margin of 18% up from 17% in the prior reporting period,
and approaching our internal target of 20%-plus. Boom also delivered a
healthy return on capital of 54%.
All these metrics are symptomatic of an enterprise which has matured from a
fledgling business into a credible, scale operator in the last few years.
Alongside the financial success, further progress has been made in other
areas. We have focused investment into technology and data analytics which
is transforming the way we make decisions, both at an operational and
strategic level. Since the year end, we have upgraded our accounting and ERP
systems and the improved insight into day-to-day operations is expected to
have a meaningful, positive impact going forward. Within Escape Hunt, we
have launched three new games in the year, extending our catalogue of
intellectual property which underpins the unique value of the brand. Within
Boom, progress is being made on developing proprietary technology to enable us
to better curate customer experiences and improve site level operations. We
are at the beginning of looking to the use of Artificial Intelligence to
augment and improve our customer experience and operational efficiency.
Whilst building on the inherent value of the business, these and similar
investments are helping the teams deliver memorable customer experiences
evidenced in our industry-leading customer ratings.
In October 2024, we signed a £10m revolving credit agreement with Barclays
which gave us the confidence to announce an accelerated growth strategy
presented to shareholders and other stakeholders in early March 2025. Our
plan is to build the business with a run-rate of £100m sales and £15m
Adjusted EBITDA by March 2028 and to fund the growth by accessing modest
levels of debt. The pipeline of opportunities for Escape Hunt is
well-developed, whilst focus in Boom is to deliver fewer, larger sites in
high-footfall areas. We believe the market in the UK would support at least
100 Escape Hunt sites and 50 Booms longer term. Today the group has 22
owner-operated Escape Hunt sites and 30 Boom sites in the UK, of which five
are franchised. Internationally, the group has three owner-operated and 20
franchised Escape Hunt sites, and one owner-operated Boom site.
We are conscious of both our public duty towards and the benefits of
developing a culture which embraces broader environmental, social and
governance issues alongside commercial success. Last year we presented our
first Streamlined Energy and Carbon Reporting ("SECR") report which set a base
line for the business. We report again this year, and as we gather more data
are confident of being able to show improvements, notably in our energy
intensity measures. During the financial year, the business introduced a
number of employee focused incentives and support structures through our
THRIVE initiative, and we have made further progress on these initiatives
during the year. We have a group bonus scheme for all centrally located
staff, which aims to link individual reward to business success. We also
have equity participation programmes available to all staff and appropriate
site level incentivisation for site level employees.
Our board was unchanged during the period under review. We have a highly
experienced board of directors who have made a significant contribution to the
success of the business thus far, and to whom I would like to extend my
thanks.
Finally, I wanted to thank all our people in the Group without whose efforts
and dedication the business would not be the success it is today.
Outlook
The opportunity presented by the growth of experiential leisure continues to
be attractive. Across both market segments, Escape Hunt and Boom are emerging
as winners in the UK market, with growing market share, industry-leading
customer ratings and best-in-class operating metrics. As market leaders in
their respective segments, the businesses benefit from scale which has proven
to be of increased importance in the current environment. The cost increases
brought about by tax increases are now beginning to show and it is evident
that a number of the weaker competitors are struggling. The number of new
entrants also seems to be falling and we are starting to see evidence of
consolidation. We believe XP Factory continues to be well placed to capitalise
on the changes and to continue to expand.
Following the updated strategic plan communicated at the Capital Markets Day
in March, both businesses have continued with site rollouts and the
development of a robust pipeline. Performance of recent openings remains
encouraging, with sites trading in line or ahead of board expectations. This
reinforces confidence in the strategy, with a significant untapped UK growth
runway remaining for both brands.
As flagged in prior trading statements, unseasonal weather impacted Q1
trading, with the warmest and sunniest UK spring on record particularly
impacting demand for indoor activities. Encouragingly, both businesses have
rebounded through Q2 to date, with underlying LFLs for Escape Hunt of 8.6% and
Boom 0.2% in the subsequent 6 weeks to 10 August 2025. The improved trading
momentum, combined with internal initiatives supports the board's cautious
optimism about meeting full year market expectations.
Richard Rose
Chairman
31 August 2025
Chief Executive's Report
FY25 was a year of continued progress for XP Factory, with further revenue and
EBITDA growth and cash generation. The company opened 4 sites in year and
announced updated strategic targets to accelerate future openings and new FY28
targets centred on robust unit economics and an attractive UK runway. The
business remains in a uniquely strong position as the market leader within its
subsegments to capitalise on the growth in experiential leisure.
Group performance
Revenue was £57.8m, up 19% compared to the prior 12 month period, underpinned
by LFL growth, new site openings, franchise acquisitions, and the
annualisation effect of growth in the prior year. Pre-IFRS 16 EBITDA expanded
to £6.6m, representing a margin of 11.4% on sales, a modest improvement on
the 11.0% delivered in the 15 months to March 2024. Adjusted pre IFRS profit
after tax was £1.9m, and £0.4m post IFRS.
The group's customer proposition has continued to evolve guided by customer
trends and data driven insights. The customer experience remains our central
pillar, and is reflected in industry-leading review scores with an average
score of 98% across the estate (FY24: 98%). Gradual enhancements are being
made to improve the estate, including selectively added capacity in sites with
pent-up demand where space permitted.
During the year, XP Factory detailed its FY28 strategic targets at a Capital
Markets Day, targeting £90m of revenue and £13m of pre-IFRS EBITDA in FY28,
with underlying year end run rates of £100m and £15m respectively. The
strategy is anchored in confidence in the group's industry leading unit
economics and reflects the extensive runway identified in the UK market.
Expansion is supported by a £10m Revolving Credit Facility from Barclays
signed in year, providing flexibility to manage intra year working capital and
site launch timings.
Escape Hunt
Escape Hunt has continued to deliver strong and consistent performance, with
site-level revenue and EBITDA margins exceeding initial expectations. Revenue
grew 7% in the 52 weeks to 30 March, with LFL sales up 3.2%. EBITDA margin
also further expanded to 44% (FY24 42%). During the year, 3 new sites were
launched; in Worcester, Glasgow and a co-located site in Cambridge; with
Canterbury and an extension at Birmingham Resorts World opening shortly after
year end. All new sites have opened strongly with initial performance
consistent with targets and returns criteria.
Sales at the initial seven UK sites opened in 2018 remained stable at a high
level, and 34% above pre-covid levels. Notably, this has been achieved largely
with the original games which have remained in place seven years post launch,
representing a much longer than expected lifespan. Subsequent sites also have
continued to outperform expectations, benefitting from our cumulative
learnings since inception on game design, site selection and operational
excellence. In combination with enhanced landlord incentives these have driven
improved returns on capital for successive cohorts.
Escape Hunt's strong performance has been consistent across towns and cities
of varying affluence, catchment profiles, and competitive intensity. In
addition, its destinational appeal and a flexible and modular site layout
enables it to trade effectively in a wide range of micro-locations, including
less prominent and irregularly shaped units that would typically be unsuitable
for traditional retail which draws attractive offers from landlords. This
consistency of performance across diverse environments underpins confidence in
a longer UK runway.
As a result, the group is targeting an average of 8-10 new Escape Hunt
openings per year to FY28, although these are likely to be back-end weighted
in the three year period, resulting in 50-60 Escape Hunt sites in FY28. The
Group would expect this to generate c£30m of revenue at c40% EBITDA margins.
In the mid-term, XP Factory now sees a potential for at least 100 UK Escape
Hunt sites where previously the expectation was closer to 50.
The pipeline remains active, with several sites under legal negotiation or
evaluation. In addition to the Canterbury opening after period end, the
Resorts World site has been extended from 5 to 8 rooms, and a new site in
Sheffield is in build. A further 5 sites are in active legal discussions,
with a vibrant pipeline of additional opportunities beyond this.
Escape Hunt continues to innovate its product portfolio, launching three new
Escape Room themes during the year, bringing the portfolio of Escape Room
themes to 15, and the total catalogue of Escape Hunt games to 30. These latest
additions distil 7 years of guest feedback and games design innovation into
uniquely immersive experiences. Encouragingly these games deliver the highest
customer review scores and repeat visit rates across the estate. The
introduction of themed Escape Hunt cocktails, tailored to specific rooms, has
elevated the drink offering and contributed to an increase in wet spend.
Boom Battle Bar
FY25 represented another year of progress for Boom, consolidating learnings
across the estate following a rapid new site roll out through 2022. Revenue
grew to £42.2m, representing 29% growth in the 52 week period to 30 March
2025. Growth was driven by LFL growth of 2.3%, franchise acquisitions, the
opening of the new Cambridge site, and annualisation effects. Pre IFRS 16
Adjusted EBITDA margin also expanded from 17% to 18% as the estate matured.
The co-located Cambridge opening and the Reading opening after period end
showcase learnings from the 30 prior launches. Both sites are in
high-footfall, premium locations, supporting local awareness and spontaneous
visits which are particularly important for Boom. Site layouts were optimised
based on detailed analysis of historical sites and their marginal returns by
asset type - designed to maximise expected contribution per square foot. The
launch also brought together Boom's most vibrant team members from sites
across the country to embed the unique Boom brand identity into the team.
These enhancements in new site openings, from location selection to fitout
design to operational execution, reflect the benefits of Boom's scale as
market leader within the competitive socialising sector. The impact of this is
evident in performance, with Cambridge and Reading delivering the strongest
opening weekends of any Boom site since inception.
Going forward, Boom will continue to focus on selective openings in premium
locations, with a target to open 2-4 new sites per year to FY28, similarly
back-ended. This drives the company's target to reach 35-40 Boom sites in
FY28, contributing c£60m of revenue at a 20% margin, consistent with historic
trends.
Five Boom franchise sites were acquired during FY25; Aldgate, Bournemouth,
Ipswich, Southampton and Wandsworth. Post acquisition performance has been in
line with management's expectations, with franchise sites typically showing an
uplift upon implementation of owner-operated best practice after acquisition.
We will continue to consider future franchise acquisitions if incremental
returns exceed internal hurdle rates.
As the group has scaled, XP Factory has been able to secure materially
improved supplier terms as contracts reach renewal. Many of the original
agreements were established when the group had significantly less scale and
brand recognition. As these agreements mature, they are being renewed or
renegotiated on more favourable terms, driving material cost savings
reflecting the group's stronger negotiating position.
People and culture
XP Factory has continued to invest in an exceptional team capable of building
a sustainable and scalable business, whilst fostering a culture which nurtures
and develops talent, embraces best practices, and operates with integrity,
honesty and enthusiasm. We are proud to offer opportunities for internal
progression to our most talented team members, with many having progressed
from site roles to central functions including in operations, guest services,
finance and legal.
Investments in data and technology continue to enhance decision-making, guest
experience, and efficiency across the business. Examples include
- Analytics: Real-time insights now inform on decisions across the
business, supporting site enhancements, pricing strategy and have helped to
guide the group's mid-term strategy
- Customer journey: Both brands have been consolidated onto one
booking system, with streamlined booking flows and additional add-ons to boost
average basket size
- Internal support: Business reporting has been improved with the
transition to a new finance system, allowing enhanced and faster reporting. In
parallel, the group has developed an internal app to streamline site
operations, and an internally developed chatbot to assist guest services and
improve customer response times
We continue to explore how technology can support the business and augment the
customer experience with various initiatives in active development.
Strategic objectives
During the year we outlined the details of our near-term strategic objectives,
components of which have been described above. In summary, our strategy is
built around three pillars:
Site Expansion
Accelerate the expansion of Escape Hunt in the UK targeting an average of 8 -
10 new sites per year over a three year period. Within Boom, we aim to
continue to expand, targeting an average of 2 - 4 new sites per year over a
three year period, prioritising premium locations. Focus will initially
remain on the UK market, whilst international expansion is seen as a
significant incremental medium term opportunity.
Unit economics
The business is investing in data and systems to implement key learnings which
underpin the success of the brands. Tactically, investment is aimed at
expanding capacity to unlock pent up demand whilst technology investment is
being made to drive cost efficiency and product enhancements.
Central costs
In time, operational leverage is expected to benefit the group resulting in a
reduction on the ratio of central costs to group revenue. In the mid term the
target is to achieve a central cost ratio of 10% - 12.5% of group revenue.
Current Position and longer-term opportunity
The group is seeing the benefits from enhanced scale and is expanding the
competitive advantages. By design, the business model is capital efficient
with a fast pay back on investment, as well as being modular and scalable.
This allows the company to deliver a consistent and quality customer
experience, enabling strong growth and superior returns on capital. Key
company strengths include:
- Standardised modular formats and automated games
- Expanding data lake, enabling the implementation of best practice
across the estate and accelerating the speed to maturity of new sites
- Increasing brand equity with consistently strong customer reviews
and growing awareness
- Cost advantages with modular off-site build construction
- Attractiveness to landlords driving improved rent conditions and
incentives on new builds
- Enhanced supplier terms at scale
Outlook and post period end
The opportunity presented by the growth of experiential leisure remains as
attractive today as it was when XP Factory (then Escape Hunt) started its
journey. Escape Hunt has settled into an attractive and consistent rhythm,
producing high site level margins and attractive returns on capital. Boom's
performance has continued its gradual improvement, with site level EBITDA
margins approaching the targeted 20% and returns on capital exceeding 50%.
In the near term, as noted in prior trading statements and by other industry
participants, after a strong start to the calendar year, XP Factory saw a
slowdown through fiscal Q1. This was heavily impacted by unfavourable weather
comparisons with the warmest and sunniest spring on record which reduced
demand for indoor activities. In addition, a deterioration in business
confidence related to rising minimum wage and national insurance costs,
amongst other factors, impacted B2B bookings. As a result, Q1 trading was
challenging and resulted in negative LFLs of -3.5% for Escape Hunt and -6.4%
for Boom.
Encouragingly, as these external factors have started to normalise, trends
have subsequently improved with underlying LFL growth of 8.6% and 0.2% for
Boom in the subsequent 6 weeks to 10 August, the latter excluding the final
week of the 2024 Euros. Meanwhile, improved B2B momentum has driven bookings
growth back in to positive territory at 2%, providing optimism ahead of the
all-important festive period.
Whilst the material increases to labour costs associated with increases in
minimum wage and national insurance have impacted labour ratios, the company
has mitigated against these factors with a sharpened focus on cost management.
As market leader within its respective segments, the company is well
positioned to manage these challenges.
The enhanced scale achieved through expansion has further strengthened this
position, which has enabled the negotiation of materially improved terms
across several supplier contracts. By contrast, we are beginning to see signs
of consolidation among sub-scale operators for whom these pressures are
proving more difficult to manage.
Based on the improved trajectory in recent months, and internal initiatives,
we remain cautiously optimistic about meeting market expectations for the
full-year. In the mid-term, we remain excited by the significant untapped
growth runway ahead for both brands and will continue to deliver on the
targeted expansion outlined in our strategy.
Financial Review
Revenue
Group revenue for the year to 31 March 2025 grew 19% to £57.8m compared to
£48.6m (unaudited) in the year to 31 March 2024*, a modest increase over the
£57.3m delivered in the 15 months to 31 March 2024. The growth was
delivered from the full year effects of the new Boom and Escape Hunt sites
opened and acquired during FY24, further site openings in the current period
and underlying like-for-like growth.
Year Fifteen months
ended ended
31 March 31 March
2025 2024
£'000 £'000
New site upfront location exclusivity fees, support and administrative fees 216 354
Franchise revenues 1,224 2,339
Owned branch game revenues 28,995 31,085
Owned branch food and drinks revenues 25,419 22,188
Volume based rebates on food and drink purchases 1,176 1,012
Other 788 361
Total 57,818 57,339
* 12 months to 31 March 2024 are Unaudited
Within the Escape Hunt owner operated estate, revenue grew 7% in the 52 weeks
to 30 March 2025, resulting in total owner-operated sales of £14.2m from
Escape Hunt up from £13.3m (unaudited) in the comparable prior year period.
Of the c.£1.0m increase delivered in the period, £0.4m was delivered from
like for like sales growth, representing annual like-for-like growth of 3.2%,
£0.7m came from new sites opened in the year and £0.2m from the full year
effects of sites opened in the prior year. These increases were offset by a
reduction of £0.2m of sales from the closure of our original Norwich site.
The Boom owner operated estate revenue rose 29% in the 52 weeks to 30 March,
an increase of c.£9.4m on the equivalent 52 week period, resulting in
owner-operated sales of £42.2m in the financial year. The increase was
delivered through a combination of like-for-like growth of £0.7m representing
2.3% annual like-for-like growth across the estate, £4.2m from the
acquisition of former franchise sites, £0.9m from new sites opened in the
period and £3.7m from the full year effects of sites opened or acquired in
the prior period. Within the estate, 3 underperforming sites were put under
strategic review. Since year one of these has closed, a decision has been made
to close the second and the third site is under review. Note that the first
two sites are currently on turnover-related rent deals only, and the third
site has a 'zero' rent deal.
At the start of the reporting period, the estate comprised 20 owner operated
sites. One new site was opened and a further five franchise sites were
brought under owner operation, bringing the total to 26 owner-operated
sites.
The Escape Hunt franchise network delivered turnover of £0.6m, unchanged from
the comparable 12 months in the prior year. The Boom franchise business
delivered turnover of £0.8m, a reduction of 50% compared to the same period
in the prior year. The reduction was as a result of the acquisition of
franchise sites in the year and the full year impact of the acquisition of
franchise sites in the prior year.
Gross profit
Cost of sales includes the variable labour cost at sites and other direct cost
of sales, but not fixed salaries of site staff, whose costs are included as
site level administration costs.
Gross profit rose 17% to £36.9m from £31.7m (unaudited) in the comparable 12
month period in the prior year. Gross margin at Group level is impacted by
the mix of sales between Boom and Escape Hunt and between franchise and owner
operated performance. Gross margin within the Escape Hunt owner operated
network remained consistent at 71%, the same level achieved in the 15 months
to March 2024. Boom gross margins improved modestly from 59% to 60%.
Site level EBITDA and Adjusted EBITDA
Site level Adjusted EBITDA is a key performance measure for the business and
is calculated before IFRS 16 adjustments. The Escape Hunt owner operated
estate delivered £6.2m pre IFRS 16 site level EBITDA, representing a 44%
EBITDA margin, slightly up on the 42% margin achieved in the 15 months to 31
March 2024.
Boom owner operated estate delivered a pre IFRS 16 site level EBITDA of
£7.6m, representing a margin of 18%, an improvement on the 17% margin
achieved in the 15 month period to 31 March 2024 and a further step towards
the Board's internal targets of 20% plus. The divisional margin has been
diluted by some lower performing sites where action plans are in place to
improve performance or close the site.
Adjusted EBITDA is a key performance indicator for the Company. The Group
recorded an increase in the reporting period, with pre IFRS16 Adjusted EBITDA
profit rising to £6.6m, representing an Adjusted EBITDA margin of 11.4%
compared the 11.0% margin achieved in the 15 months to 31 March 2024. After
IFRS16, Adjusted EBITDA was £10.5m, representing a post IFRS16 Adjusted
EBITDA margin of 18.2%, an improvement from the 17.3% achieved in the 15
months to 31 March 2024.
Escape Hunt Escape Hunt Boom Boom Unallocated Year to 31 March 2025
Owned Franchise Owned Franchise £'000
Sales 14,213 606 42,165 834 - 57,818
Pre IFRS 16 Adjusted site level EBITDA 6,206 611 7,580 839 - 15,236
Site level EBITDA margin 44% 101% 18% 101% 26%
Centrally incurred costs (1,538) (5) (1,103) - (6,024) (8,670)
Pre-IFRS Adjusted EBITDA 4,668 606 6,477 839 (6,024) 6,566
IFRS adjustments (net of pre-opening) 645 - 3,289 - - 3,934
Adjusted EBITDA 5,313 606 9,766 839 (6,024) 10,500
Escape Hunt Escape Hunt Boom Boom Unallocated 15 months to Mar 2024
Owned Franchise Owned Franchise £'000
Sales 16,726 828 37,513 2,272 - 57,339
Pre IFRS 16 Adjusted site level EBITDA 7,035 799 6,245 2,256 - 16,335
Site level EBITDA margin 42% 96% 17% 99% - 28%
Other income - - 3 - - 3
Centrally incurred costs (1,814) (201) (921) (112) (6,961) (10,007)
Pre-IFRS Adjusted EBITDA 5,221 598 5,326 2,144 (6,961) 6,328
IFRS adjustments (net of pre-opening) 618 - 2,976 - - 3,594
Adjusted EBITDA 5,839 598 8,302 2,144 (6,961) 9,922
Centrally incurred costs (before pre-opening costs) totalled 8.7m,
representing 15.0% of group turnover, compared to £10.0m representing 17.3%
of turnover in the 15 months to 31 March 2024. Of this, £6.0m was unallocated
central costs (10.4% of group turnover) compared to £7.0m (12.0% of group
turnover) in the previously reported 15 month period. The Group's longer
term goal is to contain total central costs to between 10% and 12.5% of group
sales with the expectation of achieving this largely through revenue growth.
Operating profit
A reconciliation between statutory operating profit and Adjusted EBITDA is
shown below.
Year to 31 March 2025 15 months ended 31 March 2024
£'000 £'000
Pre IFRS 16 and Adjusted EBITDA 6,566 6,328
IFRS 16 adjustments (excl pre-opening) 3,934 3,594
Adjusted EBITDA 10,500 9,922
Depreciation and amortisation (6,607) (6,913)
Loss on disposal of assets (115) (202)
Branch closure costs and dilapidations provision (268) (50)
Foreign currency gains / (losses) (8) (24)
IFRS 9 provision for guarantee losses 12 24
Share-based payment expense (49) (73)
Adjusted Operating profit 3,465 2,684
Branch pre-opening costs (799) (915)
Contract termination and other exceptional (costs) / gains (857) 160
Gain on disposal of subsidiary - 480
Fair value adjustment - (312)
Operating profit 1,809 2,097
Adjusted Operating profit rose to £3.5m from £2.7m in the 15 months to 31
March. Statutory operating profit was £1.8m compared to £2.1m in the 15
months to March 2024. The 15 month period to 31 March 2024 included a £312k
fair valuation loss related to the revaluation of contingent consideration, as
well as a £480k gain on closure of subsidiary, which arose on the final
liquidation of the legacy subsidiaries in Seychelles, Malaysia and Thailand
connected with the original acquisition of Experiential Ventures in 2017, and
a further £240k notional gain on the finalisation of the acquisition of the
Boom site in Cardiff.
The operating profit is after £0.8m pre-opening costs (15 Months to 31 March
2024: £0.9m) relating to openings of both Boom and Escape Hunt sites during
the year. £0.4m related to Boom sites and £0.4m to Escape Hunt sites.
Pre-opening costs comprised the following:
Pre-opening costs Escape Hunt Boom Total
£,000 £'000 £'000
Admin and marketing 106 84 190
Property costs 49 4 53
Cost of sales - consumables 4 26 30
Training / site staff costs 19 19 38
Central staff marketing and training 233 269 502
Pre IFRS 16 411 402 813
Rent accruals (1) (13) (14)
Post IFRS 16 410 389 799
The largest components of Exceptional costs / gains in the current year relate
to restructuring costs related to the central cost reduction exercise in the
latter part of the 2024 calendar year together with the contract exit costs
relating to onerous media contracts at Boom sites. The 15 month comparative
includes significant credits relating to post acquisition completion
adjustments on franchise sites acquired in the 15 month period.
Exceptional and non-recurring items Year to 31 March 2025 15 months ended 31 March 2024
£'000 £'000
Restructuring costs (246) -
Exceptional legal and other fees (59) (103)
Debt early redemption fees (62) -
Onerous contracts write off (490) -
Post acquisition revaluations - 277
Total (857) 174
Adjusted Earnings per share more than doubled to 0.23p per share compared to
0.1p for the 15 months to March 2024. On a statutory basis, the loss was 0.71p
per share compared to a loss of 0.27p for the 15 months to March 2024.
Cashflow and capital expenditure
The Group generated £7.6m of cash from operations (15 months to 31 March
2024: £11.1m) on a post IFRS16 basis, and £3.3m on a pre-IFRS16 basis.
Although the Group inherently has a negative working capital cycle, there was
a net outflow of £1.0m from working capital driven partly by higher supplier
rebates invoiced at the end of the financial year, received after year end,
together with a net reduction in trade payables, which include invoices
relating to capital expenditure. £7.4m was invested in tangible fixed
assets. This comprised total investment of £4.1m within Boom owner-operated
sites and £3.3m in Escape Hunt owner operated sites. The spend was offset by
landlord capital contribution receipts of £1.0m.
Within Boom, a total of £2.1m related to investment in new sites, principally
the new site opened during the year Cambridge as well as a modest amount of
capex in acquired franchise sites and some spend on the new site in Reading,
which opened after the financial year end. £0.9m was directed to existing
sites to make improvements and expand capacity, and £1.0m reflects
maintenance capex.
A total of £3.3m was invested into Escape Hunt of which £2.2m was invested
in new sites, including Worcester, Glasgow, Cambridge and Canterbury, which
opened post year end, as well as £0.3m towards games stock for sites not yet
signed. £0.4m was invested in extending existing sites through the addition
of new rooms and the conversion of previous virtual reality rooms. The
remaining £0.7m was spent on maintenance capex.
Investment in intangibles totalled £248k, of which £20k was in Boom (largely
branding and IP related), £110k in Escape Hunt (related to games), and £117k
centrally (IP and portal development).
Whilst the acquisitions of Boom franchises in Southampton and Bournemouth were
both partly funded by vendor loans, some cash was paid on acquisition. More
details on specific acquisitions can be seen in note 15 to the preliminary
financial statements. In total, £0.6m was paid out in connection with the
acquisition of former franchise sites, whilst £0.3m is repayable to the Group
by the vendors over 2 - 3 years.
New vendor loans in respect of the acquisitions made during the year totalled
£0.5m. A total of £1.1m new and existing vendor loans were repaid in the
year, leaving £0.6m vendor loans outstanding at 31 March 2025 (31 March 2024:
£1.2m).
The biggest movement in relation to debt was the successful signing of the
£10m revolving credit facility with Barclays in October 2024. At year end,
£4.5m had been drawn, together with £0.2m of new funding related to the
Group's annual insurance, whilst £1.4m of bank and other debt, including
prior year insurance funding, was repaid. In addition, £0.9m of fitout
finance (including finance leases) was repaid and £0.2m new debt raised.
£'000 Op Bal Acquisitions New debt cash in Repayments cash out Reclassified Closing Balance
Vendor Loans 1,156 501 - (1,045) (5) 607
Fit out finance 1,479 40 154 (857) (39) 777
Bank and other 1,224 0 4,748 (1,369) 0 4,603
Total 3,859 541 4,902 (3,271) (44) 5,987
Cash at 31 March 2025 was £1.1m (31 Mar 2024: £3.9m), and net debt,
excluding IFRS 16 lease liabilities was £4.9m (2024: net cash £0.1m).
Balance sheet
Net assets as at 31 March 2025 were £23.7m (31 March 2024: £25.0m).
The net book value of property plant and equipment rose to £25.2m from
£19.4m reflecting the capital investment programme and franchise acquisitions
offset by depreciation in the year.
Right of use assets rose from £20.3m to £26.9m, reflecting the IFRS 16
treatment of new leases signed in the year as well as acquisitions of
franchise sites, offset by depreciation. Landlord incentives of £1.2m
(£1.0m of which was received in cash), were offset against the value of right
of use assets in accordance with IFRS treatment during the financial year
period. The increase is reciprocated by an increase in lease liabilities to
£37.2m from £29.8m.
Whilst ordinarily the value of right of use assets would offset the value of
lease liabilities exactly, there are three factors which cause a significant
mismatch between the two balance sheet items, both at inception and
subsequently over the period of the lease.
· Firstly, as mentioned above, landlord incentives are offset against
right of use asset under IFRS16 treatment. As the majority of Boom sites
have received substantial cash contributions from landlords, this has led to a
significant difference between the value of the lease liability and the value
of the right of use asset at the inception of the lease.
· Secondly, where sites benefit from rent free or reduced rental
periods at the start of the lease, the value of the lease liability will
increase until the full rental is payable. However, the right of use asset is
depreciated from the date of inception, further exacerbating the difference in
values.
· Finally, the right of use assets are depreciated on a straight line
basis, whereas the treatment of the lease liabilities leads to higher interest
charges in the early years of the lease. As a result, the liability will
reduce more slowly at the start of the lease than towards the end.
Key Performance Indicators
The Directors and management have identified the following key performance
indicators ('KPIs') that the Company tracks for each of its operating brands.
These will be refined and augmented as the Group's business matures:
· Numbers of owner-operated sites: 26 Escape Hunt sites and 26 Boom
Battle Bar sites as at 31 March 2025 (2024: 23 Escape Hunt and 20 Boom Battle
Bar)
· Numbers of franchised sites: 20 Escape Hunt sites and 5 Boom Battle Bar
sites as at 31 March 2025 (2024: 22 Escape Hunt and 10 Boom Battle Bar)
· Site level revenue: £56.4m in the year to 31 March 2025 (£54.3m in
the 15 months to 31 March 2024)
· Pre-IFRS 16 adjusted site level EBITDA: £15.2m in the year to 31 March
2025 (£16.3m in the 15 months to 31 March 2024)
· Franchise revenue: £1.4m in the year to 31 March 2025 (£3.1m in the
15 months to 31 March 2024)
· Central costs before adjusting items: £8.7m in the year to 31 March
2025 (£10.0m in the 15 months to 31 March 2024)
· Adjusted EBITDA, before IFRS 16 for the Group: £6.6m in the year to 31
March 2025 (£6.3m in the 15 months to 31 March 2024)
The Company monitors performance of the owner-operated sites on a weekly
basis. The Board also receives monthly updates on the progress on site
selection, site openings and weekly as well as monthly information on
individual site revenue and site operating costs. Monthly management accounts
are also reviewed by the Board which focuses on revenue, site profitability
and adjusted EBITDA as the key figures.
Both the number of franchised branches as well as their financial performance
are monitored by the management team and assistance is provided to all
branches that request it in terms of marketing advice as well as the provision
of additional games.
The key weekly KPIs by which the UK and owner-operated business is operated
are the site revenue (including UK franchise sites), gross margins (in the
case of Boom sites) marketing spend and staff costs and consequent ratio of
staff costs to revenue. Total revenue is tracked against budget, adjusted for
seasonality, number of rooms open and the stage in the site's maturity cycle.
Staff costs are measured against target percentages of revenue. The
effectiveness of marketing is assessed by observing revenue conversion rates
and the impact on web traffic, bookings and revenue from specific marketing
campaigns.
The Company's systems track performance on both a weekly and a monthly basis.
These statistics provide an early and reliable indicator of current
performance. The profitability of the business is managed primarily via a
review of revenue, adjusted EBITDA and margins. Working capital is reviewed
by measures of absolute amounts.
Graham Bird
Chief Financial Officer
31 August 2025
DIRECTORS' REPORT FOR THE YEAR ENDED 31 MARCH 2025
The Directors present their report together with the unaudited preliminary
financial statements of the Group for the year ended 31 March 2025.
Principal activities
The principal activities of the Group are that of operating consumer facing
leisure brands offering immersive experiences.
The Group currently operates two brands, each of which is developing a network
of locations, either owned and operated directly or franchised. 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, and through digitally delivered games which can be played
remotely. There are no overseas branches operated by UK companies within the
group.
Boom Battle Bar is a fast-growing network of owner-operated and franchise
sites in the UK and UAE that combine competitive socialising activities with
themed cocktails, drinks and street food in a setting aimed to be high energy
and fun.
Cautionary statement
The review of the business and its future development in the strategic report
has been prepared solely to provide additional information to shareholders to
assess the Company's strategies and the potential for these strategies to
succeed. It should not be relied on by any other party for any other purpose.
The review contains forward-looking statements which are made by the Directors
in good faith based on information available to them up to the time of the
approval of the reports and should be treated with caution due to the inherent
uncertainties associated with such statements.
Results and dividends
The results of the Company will be set out in detail in the audited Financial
Statements.
Given the nature of the business and its growth strategy, the Board does not
recommend a dividend this year, nor does it expect to in the near future. The
Directors believe the Company should focus on growing the network and
improving performance to generate profits to fund the Company's growth
strategy over the medium term.
Business review and future developments
Details of the business activities and developments made during the period can
be found in the Strategic Report and in Note 1 to the Preliminary financial
statements respectively.
Business relationships with suppliers, customers and others
Details of how the business has considered relationships with suppliers,
customers and others, and the effect this regard has had, including on the
principal decisions made in the year, can be found in the Strategic Report.
Streamlined Energy and Carbon Reporting
The Group presents its global greenhouse gas (GHG) emissions and energy use
data under Streamlined Energy and Carbon Reporting (SECR) for the year ended
31 March 2025.
Emissions (tCO(2)e) Year ended 15-month period ended
31 March 31 March
2025 2024
Scope 1: Combustion of gas 46.2 60.6
Scope 2: Purchased electricity 772.1 709.5
Total Scope 1 and 2 818.3 770.1
Scope 3: Other indirect 129.2 166.2
Total Scope 1, 2 and 3 947.6 936.3
Energy Consumption (kWh)
Scope 1: Combustion of gas 250,652 331,197
Scope 2: Purchased electricity 3,625,806 3,341,140
Total Scope 1 and 2 3,876,458 3,672,337
Scope 3: Other indirect 267,305 343,856
Total Scope 1, 2 and 3 4,143,764 4,016,193
Intensity Ratio (kgCO(2)e per m(2)) 28.9 34.3
Intensity Ratio (kgCO(2)e per £1k turnover) 16.4 16.3
Methodology
· Base data was provided to the external consultant and converted using
DEFRA 2024 Conversion Factors in line with Environmental Reporting Guidelines
(2019) as most of the financial year falls into the calendar year 2024, and
International Carbon Factors for Global Energy
· Global energy has been included for sites situated in the UAE, France
and Belgium with regional carbon factors applied.
· Spend based data was provided for business-travel, and this was
converted to total distance (km) based on cost per km, extracted from
Department for Transport, Office of Rail and Road, Transport for London, or
other appropriate regulatory body.
· Energy for all UK sites is procured from a renewable tariff,
therefore market-based emissions are reported. The international sites in
Belgium, France and Dubai are not procured from a renewable tariff. Location
based reporting has also been used for all sites.
· 26 Franchise locations outside of the control of XP Factory PLC have
been excluded from the environmental reporting boundary, as they fall outside
the group's financial control
· Due to a lack of available data, energy use and emissions at the
Woking site were estimated using a benchmark derived from other Escape Hunt
locations. The site's energy consumption was calculated at 67 kWh/m(2),
resulting in an estimated total of 18,736 kWh for its 280 m(2) area.
This is the second year of reporting under the SECR framework, and the group
has continued to engage with an external consultant to maintain a
comprehensive and accurate baseline of energy usage across all operational
sites which can now be compared year on year. The Group actively monitors
energy intensity ratios as a key performance indicator alongside other waste
and recycling measures to assess progress. Further information on the Group's
non-financial, sustainability and corporate governance matters is set out in
the strategic report.
Research and development activities
The Group has historically invested in research and development activities
relating to software and intellectual property that supports the Group's
experiential leisure activities. It remains part of the Group's strategy to
further invest in selected areas which will enhance the Group's operating and
data analytic capabilities. Further details of the Group's strategic
objectives are set out in the strategy report.
Employment policies
The Group has employment policies which give full and fair consideration for
the employment of disabled persons, having regard to their particular
aptitudes and abilities. Where possible, the Group will make appropriate,
sympathetic changes and provide training to continue the employment of any
employees who become disabled whilst in the employment of the Group and will
otherwise provide training and support the career development and promotion of
any such employees.
Employee engagement
The Group attaches importance to good communications and relations with
employees. Information that is or may be relevant to employees in the
performance of their duties is circulated to them on a regular basis, or
immediately if it requires their immediate attention. There is regular
consultation with employees through meetings or other lines of communication,
so that their views are known and can be taken into account in making
decisions on matters that will or may affect them. Employee participation in
their venue's performance is encouraged and there is regular communication
with all employees on the performance of their particular venue or central
function and on the financial and economic factors affecting the overall
performance of the Group.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Directors'
report confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's auditor is unaware; and each director has
taken all the steps that he/ she ought to have taken as a director to make
himself/ herself aware of any relevant audit information and to establish that
the Company's auditor is aware of that information.
Financial instruments and risk management
Disclosures regarding financial instruments are provided within Note 30 to the
Preliminary financial statements.
Capital structure and issue of shares
Details of the Company's share capital, together with details of the movements
during the period are set out in Note 23 to the Preliminary financial
statements. The Company has one class of ordinary share which carries no right
to fixed income.
During the year, the Company undertook a court sanctioned capital
restructuring to enable it to transfer the balance in the Share Premium
Account to distributable reserves. The restructuring was formally approved
on 25 March 2025 and became effective on 28 March 2025.
Post balance sheet events
Since the period end, there has been significant volatility in international
markets with the implementation of import tariffs and trade conflict brought
about by the Trump government in the USA, escalation and subsequent ceasefire
of the war in the Middle East, ongoing conflict in Ukraine, and announcements
by almost all NATO countries of planned increases in military spending.
Whilst interest rates have fallen, the pace of reduction is slower than was
expected at the start of the year, as inflation has remained higher than
hoped. Within the UK, there have been mixed signals with fears of further tax
rises offsetting other factors which could otherwise be positive for
consumers. How these factors and the general economic environment will
impact the business is unknown and they do not provide any further information
impacting the financial performance or position of the Group as at 31 March
2025.
Board of Directors
The Directors of the Company who have served during the year and at the date
of this report are:
Director Role Date of appointment Date of resignation Board Committee
Richard Rose Independent Non-Executive Chairman 25/5/2016 N A R
Richard Harpham Chief Executive Officer 3/5/2017
Graham Bird Chief Financial Officer 6/1/2020
Martin Shuker Independent Non-Executive Director 29/6/2022 N A R
Philip Shepherd Independent Non-Executive Director 29/6/2022 N A R
Richard Harpham was first appointed on 25 May 2015 and resigned on 15 June
2016. He was subsequently re-appointed on 3 May 2017.
Board Committee abbreviations are as follows: N = Nomination Committee; A =
Audit Committee; R = Remuneration Committee
The Board comprises two Executive and three Non-Executive directors.
Richard Rose, Independent Non-Executive Chairman
Richard has a wealth of experience chairing high profile boards. Previously he
has been CEO of two multi-site quoted businesses where he significantly
increased shareholder value. Since then he has held a number of Chairman roles
including Booker Group plc (retiring in 2015 after three terms) and AO World
plc where he retired in 2016. He has been Non-Executive Chairman of Watchstone
Group plc since May 2015 is also Chairman of IB Group Ltd since October 2018.
Richard is a member of the Remuneration Committee, the Audit Committee and the
Nomination Committee of the Company.
Richard Harpham, Chief Executive Officer
Richard joined the Company on its admission to AIM in May 2017 having worked
since November 2016 with the Escape Hunt (now XP Factory) management team.
Richard's prior role was with Harris + Hoole, having been Chief Financial
Officer and then Managing Director, responsible for its turnaround. Before
this, Richard spent over four years at Pret A Manger as Global Head of
Strategy. Richard has also held a number of strategic and financial positions
at companies including Constellation Brands, Shire Pharmaceuticals and Fujitsu
Siemens Computers.
Graham Bird, Chief Financial Officer
Graham, who joined the Company in January 2020, has significant experience in
financial and City matters and in growing small businesses. He is a chartered
accountant, having qualified with Deloitte in London, and has worked in
advisory, investment, commercial and financial roles. Prior to joining XP
Factory, Graham was one of the founding employees at Gresham House plc
("Gresham House") where, in addition to supporting the growth of Gresham
House, he was responsible for establishing and managing the successful
strategic equity business unit which focuses on both quoted and unquoted
equity investments. Prior to joining Gresham House, Graham spent six years in
senior executive roles at PayPoint Plc ("PayPoint"), including director of
strategic planning and corporate development and executive chairman and
president of PayByPhone. Before joining PayPoint, he was head of strategic
investment at SVG Investment Managers, having previously been at JPMorgan
Cazenove, where he served as a director in the corporate finance department.
Martin Shuker, Independent Non-Executive Director
Martin has had a long and distinguished career with Yum Brands, the US Fortune
500 Global hospitality business. He spent 24 years in a variety of leadership
roles, most recently as Managing Director KFC Western Europe where he had full
strategic, growth and operational responsibility over 1,700 restaurants and
165 franchisees which generated £2.3 billion in sales and £120 million of
profit.
As MD of KFC UK, he more than doubled sales in the UK to £1.3 billion and met
or exceeded targets in 11 of 13 years.
Martin has demonstrated his ability in consistently achieving growth and
bottom-line performance of established owner-operated and franchise businesses
over a long period of time and has relevant experience in entering new
territories through franchise routes. He successfully opened new markets in a
number of European countries and has demonstrated his ability to both manage
an established franchise network as well as establishing new networks in new
territories.
Prior to YUM, Martin had a variety of marketing roles with United Biscuits.
Martin is chairman of the Company's Remuneration Committee.
Philip Shepherd, Independent Non-Executive Director
Philip is a former partner of PricewaterhouseCoopers ("PwC"), where he
originally trained in audit and tax, qualifying as an ACA in 1987.
Following a career in corporate finance and transaction advisory services,
Philip returned to PwC in 2004 working both in the UK and overseas, leading
Strategy and Deals practices, with a particular focus on the hospitality and
leisure sectors. Since leaving PwC in 2018, he has held a number of board and
advisor roles, again with a focus on hospitality and leisure. He regularly
travels abroad where he advises, and speaks, on the experiential leisure
market and start up opportunities. Philip combines his experience in
accounting and audit with deal evaluation and execution and has a deep
understanding of the hospitality and leisure markets both in the UK and
globally.
Philip is chairman of the Company's Audit Committee.
Directors' interests in shares
Directors' interests in the shares of the Company at the date of this report
are disclosed below. Directors' interests in contracts of significance to
which the Company was a party during the financial period are disclosed in
note 28 to the Preliminary financial statements.
Director Ordinary shares held % held
Richard Rose 53,666 0.03
Richard Harpham 964,878 0.55
Graham Bird 2,033,511 1.16
Philip Shepherd 62,163 0.04
Martin Shuker Nil 0.00
XP Factory Plc owns all the ordinary shares in its subsidiary, Escape Hunt
Group Ltd ("EHGL"). EHGL issued a total of 1,000 Growth shares in 2017 to
three then directors and employees. These have subsequently all been bought
back. As at 31 March 2025, XP Factory owns 100% of the Growth shares. The
Growth shares carry no voting rights and are not entitled to any dividends
that may be paid by EHGL.
Directors' interests in options
The following options have been granted to certain Directors under the Escape
Hunt Plc 2020 EMI Share Option Scheme. The options vested over three years
and were subject to achieving certain performance conditions related to share
price appreciation over a four year period. These conditions were all
fulfilled.
Director Options held Exercise price Options vested Date of Grant Expiry date
Richard Harpham 5,333,333 7.5 pence 5,333,333 16 July 2020 16 July 2027
Graham Bird 3,733,333 7.5 pence 3,733,333 16 July 2020 16 July 2027
No directors exercised any options during the year.
Substantial interests
As at 31 March 2025 the Company has been advised of the following significant
interests (greater than 3%) in its ordinary share capital:
Shareholder Ordinary shares held % held
Canaccord Genuity Wealth Management 32,734,656 18.69%
BGF GP 23,674,420 13.52%
Allianz Global Investors (London) 12,250,000 6.99%
Abrdn plc (Interactive investor) 11,141,487 6.36%
Hargreaves Lansdown, stockbrokers (EO) 9,548,150 5.45%
Stephen Lucas 7,233,024 4.13%
Raymond James Investment Services 6,466,088 3.69%
Oberon investments 5,633,731 3.22%
Teviot partners 5,390,000 3.08%
Except as referred to above, the Directors are not aware of any person who was
interested in 3% or more of the issued share capital of the Company or could
directly or indirectly, jointly or severally, exercise control.
Directors' insurance
The Company has maintained directors' and officers' liability insurance
throughout the period for the benefit of the Company, the Directors and its
Officers.
Going Concern
The time horizon required for the Going Concern Statement is a minimum of 12
months from the date of signing the financial statements. Consistent with
prior periods, the Directors have adopted an assessment period of 18 months
and run forecasts for a three-year period from the period end date of 31 March
2025.
In determining whether there are material uncertainties, the Directors
consider the Group's business activities and principal risks. The Directors'
reviewed the Group's cash flows, liquidity positions and borrowing facilities
for the going concern period.
There has been no material uncertainty identified which would cast significant
doubt upon the Group's ability to continue using as a going concern. As such,
the Directors considered it appropriate to adopt the going concern basis of
accounting in the preparation of the Group's financial statements.
Annual General Meeting
The Annual General Meeting (AGM) will be held on 29 September 2025.
Signed by order of the board
Graham Bird
Chief Financial Officer
31 August 2025
PRELIMINARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 31 March 2025
All figures in £'000s Year ended 15 month period ended
31 March 31 March
Continuing operations Note 2025 2024
Revenue 4 57,818 57,339
Cost of sales 6 (20,834) (20,291)
Gross profit 36,984 37,048
Other income 92 3
Fair value adjustment on contingent consideration 22 - (313)
Administrative expenses 6 (35,267) (34,641)
Operating profit 6 1,809 2,097
Adjusted EBITDA 10,500 9,922
Amortisation of intangibles 13 (265) (786)
Depreciation of property plant and equipment 11 (3,841) (3,653)
Depreciation of right-of-use assets 12 (2,501) (2,474)
Loss on disposal of tangible assets 11 (110) (104)
Loss on disposal of intangible assets 13 (5) (98)
Dilapidations provision 22 (236) -
Branch closure costs - (50)
Branch pre-opening costs (799) (915)
Provision against loan to franchisee 16 (32) (14)
Provision for guarantee losses 22 12 24
Exceptional costs and gains 6 (857) 174
Gain on closure of subsidiary 14 - 480
Foreign currency losses (8) (24)
Fair value movements on provisions 22 - (313)
Share-based payment expense 25 (49) (72)
Operating profit 1,809 2,097
Net Interest charged 8 (370) (242)
Lease finance charges 12 (2,685) (2,394)
Loss before taxation (1,246) (539)
Taxation 9 (5) 119
Loss after taxation (1,251) (420)
Other comprehensive income:
Items that may or will be reclassified to profit or loss:
Exchange differences on translation of foreign operations (27) (670)
Total comprehensive loss (1,278) (1,090)
Loss attributable to:
Equity holders of XP Factory Plc (1,278) (420)
Non-controlling interests - -
(1,278) (420)
Total comprehensive loss attributable to:
Equity holders of XP Factory Plc (1,278) (1,090)
Non-controlling interests - -
(1,278) (1,090)
Loss per share attributable to equity holders:
Basic and diluted (Pence) 10 (0.71) (0.27)
Adjusted earnings per share(1) 0.23 0.19
Adjusted earnings per share is calculated as earnings / (loss) attributable to
equity holders of XP Factory plc, before Branch pre-opening costs, Exceptional
gains and losses, Gain on disposal of subsidiaries and fair value movements.
PRELIMINARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
As at As at
31 March 31 March
Note 2025 2024
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 11 25,178 19,360
Right-of-use assets 12 26,858 20,326
Intangible assets 13 23,673 23,639
Finance Lease receivable 12 - 1,389
Rent deposits 113 71
75,822 64,785
Current assets
Inventories and work in progress 18 495 348
Trade receivables 17 843 1,635
Other receivables and prepayments 17 3,357 2,444
Cash and cash equivalents 19 1,095 3,935
5,790 8,362
TOTAL ASSETS 81,612 73,147
LIABILITIES
Current liabilities
Trade payables 20 3,663 3,758
Contract liabilities 21 2,153 1,905
Other loans 24 1,140 1,941
Lease liabilities 12 2,419 2,032
Other payables and accruals 20 6,714 7,546
Provisions 22 294 -
16,383 17,182
PRELIMINARY Consolidated Statement of Financial Position
As at 31 March 2025 (continued)
As at As at
31 March 31 March
2025 2024
Note £'000 £'000
Non-current liabilities
Contract liabilities 21 597 323
Provisions 22 1,175 609
Other loans 24 4,847 1,917
Deferred tax liability 9 5 326
Lease liabilities 12 34,822 27,786
41,446 30,961
TOTAL LIABILITIES 57,829 48,143
NET ASSETS 23,783 25,004
EQUITY
Capital and reserves attributable to equity holders of XP Factory Plc
Share capital 23 2,190 2,182
Share premium account 27 - 48,832
Merger relief reserve 27 - -
Accumulated losses 27 21,604 (25,977)
Currency translation reserve 27 (418) (391)
Capital redemption reserve 27 46 46
Share-based payment reserve 27 361 312
23,783 25,004
Non-controlling interests - -
TOTAL EQUITY 23,783 25,004
The notes on pages 29 to 85 are an integral part of these preliminary
financial statements.
The preliminary financial statements were approved by the Board of Directors
and authorised for issue on 31 August 2025 and are signed on its behalf by:
Graham Bird
Director
Registered company number 10184316
PRELIMINARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year ended 31 March 2025
Attributable to owners of the parent
Year ended Share capital Share premium account Merger relief reserve Currency translation reserve Capital redemption reserve Share-based payment reserve Accumulated losses Total
31 Mar 2025
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 2,182 48,832 - (391) 46 312 (25,977) 25,004
1 Apr 2024
Loss for the year - - - - - - (1,251) (1,251)
Other comprehensive income - - - (27) - - - (27)
Total comprehensive loss - - - (27) - - (1,251) (1,278)
Issue of shares 8 - - - - - - 8
Capital reduction - (48,832) - - - - 48,832 -
Share-based Payment Charges - - - - - 49 - 49
Transactions with owners 8 (48,832) - - - 49 48,832 57
Balance as at 31 Mar 2025 2,190 - - (418) 46 361 21,604 23,783
Year ended 31 Mar 2024:
Balance as at 1,883 44,705 4,756 279 46 240 (30,312) 21,597
1 Jan 2023
Loss for the year - - - - - - (421) (421)
Other comprehensive income - - - (670) - - - (670)
Total comprehensive loss - - - (670) - - (421) (1,091)
Issue of shares 299 4,127 - - - - - 4,426
Reclassification of merger reserve (4,756) 4,756 -
Share-based Payment Charges - - - - - 72 - 72
Transactions with owners 299 4,127 - - - 72 - 4,498
Balance as at 31 Mar 2024 2,182 48,832 - (391) 46 312 (25,977) 25,004
The notes on pages 29 to 85 are an integral part of these preliminary
financial statements.
PRELIMINARY CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year ended 31 March 2025
Year ended 15 month period ended
31 March 31 March
2025 2024
£'000 £'000
Cash flows from operating activities
Loss before income tax (1,246) (540)
Adjustments:
Depreciation of property, plant and equipment 11 3,841 3,653
Depreciation of right-of-use assets 12 2,501 2,474
Amortisation of intangible assets 13 265 786
Fair value movements 22 - 313
Loss on disposal of plant and equipment 11 110 104
Loss on disposal of intangibles 13 5 98
Net foreign exchange differences (4) (148)
Profit of disposal of subsidiary 14 - (480)
Share-based payment expense 25 49 72
Lease interest charge 12 2,685 2,394
Interest charge 8 370 242
Operating cash flow before working capital changes 8,576 8,968
Decrease / (Increase) in trade and other receivables 35 (234)
(Increase) / Decrease in inventories (86) 39
Increase / (Decrease) in provisions 373 (562)
(Decrease) / Increase in trade and other payables (1,357) 3,168
Increase / (Decrease) in deferred income 105 (318)
Cash generated in operations 7,646 11,061
Income taxes paid 9 (17) 21
Net cash generated in operating activities 7,629 11,082
Cash flows from investing activities
Purchase of property, plant and equipment 11 (7,436) (7,223)
Purchase of intangibles 13 (248) (209)
Landlord incentives received 12 985 1,300
Payment of deposits (42) (11)
Loan made to master franchisee - -
Acquisition of subsidiaries, net of cash acquired 15 (604) (50)
Interest received 48 60
Net cash used in investing activities (7,297) (6,133)
Cash flows from financing activities
Proceeds from new loans 24 4,902 1,169
Repayment of loans 24 (3,271) (1,809)
Interest paid (443) (418)
Repayment of leases 12 (4,355) (3,135)
Net cash used in financing activities (3,167) (4,193)
Net (decrease) / increase in cash and cash equivalents (2,835) 756
Cash and cash equivalents at beginning of period 3,935 3,189
Effects of exchange rate changes on the balance of cash held in foreign (5) (10)
currencies
Cash and cash equivalents at end of period 1,095 3,935
Reconciliation of movements in net debt
£'000 Cash Borrowing Net debt excluding lease liabilities Leases Net debt including lease liabilities
Balance at 31 December 2022 3,189 (1,479) 1,710 (24,040) (22,330)
Cash movements 756 641 1,397 3,135 4,532
Assumed through acquisition - (2,097) (2,097) (5,095) (7,192)
Equipment leases and fit-out funding - (923) (923) - (923)
New property leases - - - (1,150) (1,150)
Modification to leases - - - (275) (275)
Interest on Property leases - - - (2,394) (2,394)
Foreign exchange movements (10) - (10) - (10)
Balance at 31 March 2024 3,935 (3,858) 77 (29,819) (29,742)
Cash movements (2,835) (1,631) (4,466) 4,355 (111)
Assumed through acquisition - (540) (540) (5,928) (6,468)
Equipment leases and fit-out funding - 42 42 - 42
New property leases - - - (3,164) (3,164)
Interest on Property leases - - - (2,685) (2,685)
Foreign exchange movements (5) - (5) - (5)
Balance at31 March 2025 1,095 (5,987) (4,892) (37,241) (42,133)
NOTES TO THE PRELIMINARY CONSOLIDATED FINANCIAL STATEMENTS
1. General Information
The Company was incorporated in England on 17 May 2016 under the name of
Dorcaster Limited with registered number 10184316 as a private company with
limited liability under the Companies Act 2006, limited by shares. The Company
was re-registered as a public company on 13 June 2016 and changed its name to
Dorcaster Plc on 13 June 2016. On 8 July 2016, the Company's shares were
admitted to AIM. The company is domiciled in the United Kingdom.
Until its acquisition of Experiential Ventures Limited on 2 May 2017, the
Company was an investing company (as defined in the AIM Rules for Companies)
and did not trade.
On 2 May 2017, the Company ceased to be an investing company on the completion
of the acquisition of the entire issued share capital of Experiential Ventures
Limited. Experiential Ventures Limited was the holding company of the Escape
Hunt Group, the activities of which related solely to franchise.
On 2 May 2017, the Company's name was changed to Escape Hunt Plc and became
the holding company of the enlarged Escape Hunt Group. Thereafter the group
established the Escape Hunt owner operated business which operates through a
UK subsidiary. All of the Escape Hunt franchise activity was subsequently
transferred to a UK subsidiary. On 22 November 2021, the Company acquired BBB
Franchise Limited, together with its subsidiaries operating collectively as
Boom Battle Bars. At the same time, the group took steps to change its name
to XP Factory Plc with the change taking effect on 3 December 2021.
XP Factory Plc 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 Company's registered office is Boom Battle Bar Oxford Street Ground Floor
And Basement Level, 70-88 Oxford Street, London, England, W1D 1BS.
The consolidated financial information represents the unaudited consolidated
results of the Company and its subsidiaries, (together referred to as "the
Group").
During the prior period, the Group moved its accounting reference date from 31
December to 31 March. As such, the results for the comparative period
represent the fifteen month period from 1 January 2023 to 31 March 2024,
whereas the results for the current period represent the twelve month period
from 1 April 2024 to 31 March 2024. The results are therefore not directly
comparable.
Basis of preparation
The unaudited preliminary consolidated financial statements have been prepared
in accordance with UK-adopted International Accounting Standards ("IFRSs").
The unaudited preliminary financial statements are presented in Pounds
Sterling, which is the presentational currency for the preliminary financial
statements. All values are rounded to the nearest thousand pounds except where
otherwise indicated. They have been prepared under the historical cost
convention, except for financial instruments that have been measured at fair
value through profit and loss.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies.
Changes in accounting policy
There are no new standards impacting the Group adopted in the annual financial
statements for the year ended 31 March 2025. The Directors do not expect any
material impact on the Group's reporting from new accounting standards,
interpretations and amendments not yet effective but currently under
contemplation by the International Accounting Standards Board.
2. Material accounting policies
The principal accounting policies applied in the preparation of the unaudited
preliminary consolidated financial information set out below have, unless
otherwise stated, been applied consistently throughout.
Basis of consolidation
The unaudited preliminary consolidated financial information incorporates the
preliminary financial statements of the Company and its subsidiaries.
Subsidiaries are entities over which the Group has control. The Group controls
an investee if the Group has power over the investee, exposure to variable
returns from the investee, and the ability to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
Subsidiaries are consolidated from the date on which control is obtained by
the Group up to the effective date on which control is lost, as appropriate.
Under the acquisition method, the results of the subsidiaries acquired or
disposed of are included from the date of acquisition or up to the date of
disposal. At the date of acquisition, the fair values of the subsidiaries' net
assets are determined and these values are reflected in the preliminary
consolidated financial statements. The cost of acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. Any excess of the purchase consideration
of the business combination over the fair value of the identifiable assets and
liabilities acquired is recognized as goodwill. Goodwill, if any, is not
amortised but reviewed for impairment at least annually. If the consideration
is less than the fair value of assets and liabilities acquired, the difference
is recognized directly in the statement of comprehensive income.
Acquisition-related costs are expensed as incurred.
Intra-group transactions, balances and recognized gains on transactions are
eliminated. Unrealised losses are also eliminated unless cost cannot be
recovered. Where necessary, adjustments are made to the Financial Statements
of subsidiaries to ensure consistency of accounting policies with those of the
Group.
The financial statements of the subsidiaries are prepared for the same
reporting period as that of the Company, using consistent accounting policies.
Where necessary, accounting policies of subsidiaries are changed to ensure
consistency with the policies adopted by other members of the Group.
Changes in the Group's interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions. The carrying amounts of
the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiary. Any
difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary it derecognises the assets and
liabilities of the subsidiary and any non-controlling interest. The profit or
loss on disposal is calculated as the difference between (i) the aggregate of
the fair value of the consideration received and the fair value of any
retained interest and (ii) the previous carrying amount of the assets
(including goodwill), and liabilities of the subsidiary and any
non-controlling interests. Amounts previously recognised in other
comprehensive income in relation to the subsidiary are accounted for (i.e.
reclassified to profit or loss or transferred directly to retained earnings)
in the same manner as would be required if the relevant assets or liabilities
were disposed of.
Going Concern
The preliminary financial statements have been prepared on a going concern
basis which contemplates the continuity of normal business activities and the
realisation of assets and the settlement of liabilities in the ordinary course
of business.
The Directors have assessed the Group's ability to continue in operational
existence for the foreseeable future which is at least, but not limited to,
twelve months from the end of the reporting period in accordance with the
Financial Reporting Council's Guidance on the going concern basis of
accounting and reporting on solvency and liquidity risks issued in April 2016.
The Board has prepared detailed cashflow forecasts covering a three-year
period from the reporting date.
The Group plans to continue the roll out of new sites under both the Escape
Hunt and Boom Battle Bar brands in the UK which are expected to contribute to
performance in future.
The central case is based on opening a limited number of new Escape Hunt and
Boom owner operated sites in the UK in line with the Board's stated strategy.
Sites are expected to take a period of time to reach maturity based on
previous experience. The central case does not assume any openings other than
sites for which leases have already been secured.
The Group has also considered a 'downside' scenario. In this scenario the
Group has assessed the potential impact of a reduction in sales across the
group and cost increases. In the 'downside' scenario, the Directors believe
it can take mitigating actions to preserve cash. Principally the roll-out of
further sites would be delayed and cost saving measures would be introduced at
head office central services. Reductions could be targeted in both people and
areas such as IT, professional services and marketing. Other areas of
planned capital expenditure would also be curtailed. These include planned
expenditure system improvements and capital expenditure at sites. Taking
into account the mitigating factors, the Group believes it would have
sufficient resources for the foreseeable future.
Based on the above, the Directors consider there are reasonable grounds to
believe that the Group will be able to pay its debts as and when they become
due and payable, as well as to fund the Group's future operating expenses. The
going concern basis preparation is therefore considered to be appropriate in
preparing these preliminary financial statements.
Merger relief
The issue of shares by the Company is accounted for at the fair value of the
consideration received. Any excess over the nominal value of the shares issued
is credited to the share premium account other than in a business combination
where the consideration for shares in another company includes the issue of
shares, and on completion of the transaction, the Company has secured at least
a 90% equity holding in the other company. In such circumstances the credit is
applied to the merger relief reserve.
Foreign currency transactions and translation
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency are recorded at the
rate of exchange prevailing on the date of the transaction.
The functional currency of the Company's subsidiaries which operate overseas
are as follows:
Escape Hunt Entertainment LLC
Arab Emirates Dinar
Boom Battle Facilities Management Services LLC Arab Emirates
Dinar
BGP Escape
France
Euro
BGP Entertainment
Belgium
Euro
Escape Hunt USA Franchises
Limited US Dollar
These subsidiaries, when recording their own foreign transactions follow the
principles below. At the end of each financial year, monetary items
denominated in foreign currencies are retranslated at the rates prevailing as
of the end of the financial year. Non-monetary items carried at fair value
that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary items, and on
retranslation of monetary items are included in profit or loss for the period.
For the purpose of presenting preliminary consolidated financial statements,
the assets and liabilities of the Group's foreign operations (including
comparatives) are expressed in the presentational currency which is Pounds
Sterling using exchange rates prevailing at the end of the financial year.
Income and expense items (including comparatives) are translated at the
average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising are
recognised initially in other comprehensive income and accumulated in the
Group's foreign exchange
reserve.
On disposal of a foreign operation, the accumulated foreign exchange reserve
relating to that operation is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Where parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items of property, plant and
equipment.
Depreciation is charged to the income statement on a straight-line basis over
the estimated useful lives of each part of an item of property, plant and
equipment. Land is not depreciated. The estimated useful lives are as follows:
Office
equipment
5 years
Furniture and
fixtures
5 years
Leasehold improvements
Expected duration of the lease
Computers
3 years
Games
5 years
Depreciation methods, useful lives and residual values are reviewed at each
reporting date.
Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that costs incurred
on development projects are capitalised as long-term assets to the extent that
such expenditure is expected to generate future economic benefits. Development
expenditure is capitalised if, and only if an entity can demonstrate all of
the following:-
(i) its ability to measure reliably the expenditure
attributable to the asset under development;
(ii) the product or process is technically and commercially
feasible;
(iii) its future economic benefits are probable;
(iv) its ability to use or sell the developed asset; and
(v) the availability of adequate technical, financial
and other resources to complete the asset under development.
Capitalised development expenditure is measured at cost less accumulated
amortisation and impairment losses, if any. Certain internal salary costs
are included where the above criteria are met. These internal costs are
capitalised when they are incurred in respect of new game designs which are
produced and installed in the UK owner-operated sites, where the ensuing
revenue is tracked on a weekly basis at each site by each game. Development
expenditure initially recognised as an expense is not recognised as assets in
subsequent periods.
Intangible assets
Expenditure on internally generated goodwill and brands is recognised in the
income statement as an expense as incurred.
With the exception of goodwill, intangible assets that are acquired or
developed by the Group are stated at cost less accumulated amortisation and
accumulated impairment losses.
Game design and development costs are expensed as incurred unless such
expenditure meets the criteria to be capitalised as a non-current asset.
Amortisation is charged to the income statement within administrative expenses
on a straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite.
The estimated useful lives are as follows:
Trademarks 3 years
Intellectual property:
- Trade names and domain 3 years
names
- Rights to system and business processes 3 years
- Internally generated intellectual 5 years
property
Franchise agreements Term of franchise
App development 2 years
Portal 3 years
Impairment of assets
Financial assets
A financial asset not carried at fair value through profit or loss is assessed
at each reporting date to determine whether there is objective evidence that
it is impaired. A financial asset is impaired if objective evidence indicates
that a loss event has occurred after the initial recognition of the asset, and
that the loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost
is calculated as the difference between its carrying amount and the present
value of the estimated future cash flows taking into account credit risk. The
present value of the future cash flows represents the expected value of the
future cash flows discounted at the appropriate rate. Interest on the
impaired asset continues to be recognised through the unwinding of the
discount. When a subsequent event causes the amount of impairment loss to
decrease, the decrease in impairment loss is reversed through profit or loss.
Non-financial assets
The carrying amounts of the Group's non-financial assets are reviewed at each
reporting date to determine whether there is any indication of impairment. If
any such indication exists, then the asset's recoverable amount is estimated.
For goodwill, and intangible assets that have indefinite useful lives or that
are not yet available for use, the recoverable amount is estimated each year
at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. For the purpose of
impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other
assets or groups of assets (the "cash-generating unit"). The goodwill acquired
in a business combination, for the purpose of impairment testing, is allocated
to cash-generating units, or ("CGU"). Subject to an operating segment ceiling
test, for the purposes of goodwill impairment testing, CGUs to which goodwill
has been allocated are aggregated so that the level at which impairment is
tested reflects the lowest level at which goodwill is monitored for internal
reporting purposes. Goodwill acquired in a business combination is allocated
to groups of CGUs that are expected to benefit from the synergies of the
combination.
An impairment loss is recognised if the carrying amount of an asset or its CGU
exceeds its estimated recoverable amount. Impairment losses are recognised in
profit or loss. Impairment losses recognised in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to the units,
and then to reduce the carrying amounts of the other assets in the unit (group
of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
Employee benefits
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Revenue recognition
The Group is operating and developing a network of franchised and
owner-operated branches and offsite "escape the room" type games under the
Escape Hunt brand and a network of owner-operated and franchised competitive
socialising cocktail bar venues under the Boom Battle Bar brand. The Group
receives revenues from its directly owned branches but also from franchisees,
master-franchisees and sub-franchisees.
The Group, as franchisor, develops original escape games and other fun
competitive socialising games and supporting materials and provides
management, creative, technical and marketing services based on its knowledge
of and expertise in the relevant disciplines to enable delivery of
proprietary consumer experiences.
The Group considers that its contracts with franchisees, master-franchisees
and sub-franchisees provide a customer with a right to access the Group's
intellectual property throughout the franchise term which is typically for a
minimum term of ten years. Accordingly, the Group satisfies each of its
performance obligations by transferring control of goods and services to the
customer over the period of the franchise agreement. Franchise revenues are
therefore recognised over time.
The Group derives "upfront exclusivity fees" as well as training fees and
documentation fees from the sale and set up of franchises and subsequent
"Service Revenues" in the form of revenue shares, administration fees, and
other related income.
New branch upfront location exclusivity fees
The initial non-refundable upfront exclusivity fees relate to the transfer of
promised goods or services which are satisfied throughout the life of the
franchise agreement. Payment of the initial upfront exclusivity fee is due
immediately on the signing of a franchise agreement.
The Group, as franchisor, supplies a manual and grants to a franchisee during
the term of a franchise agreement, the exclusive rights to carry on its
business and to utilise the know-how, intellectual property rights and games
within a territory. The franchise term typically provides for an initial term
of 10 years, with automatic rights for renewal of successive 10-year periods.
The Group offers to:
• Assist the franchisee to establish, manage and operate
the business within the territory;
• Provide advice on the choice of branch location;
• Identify equipment, furniture, props and other items
required to conduct the business;
• Assist in designing the layout and fit-out of any
chosen branch location;
• Provide full game and other activity design to be
installed in each branch;
• Provide guidance on setting up website, booking and
other online services;
• Provide the franchisee with the franchise manual;
• Train the franchisee and its staff;
• Give the franchisee continuing assistance and advice
for the efficient running of the franchise business;
• Regularly update the franchisee on any changes to the
services and know-how;
• Design and provide territory-specific, and
branch-specific, logos for use in advertising, merchandise and uniforms; and
• Communicate at all times with the franchisee in a
timely manner.
The initial fee is recognised as revenue on a straight-line basis over the
period of the franchise agreement where this is 10 years (or less in case of
sub-franchise agreements, where the term of the sub-franchise agreement
typically equals the remaining term of the master franchise agreement). Where
the franchise term is not specified or is greater than 10 years, revenue is
recognised over 10 years to reflect a lack of certainty over the actual
duration of the franchise arrangement. See Note 3 for more details.
Fees related to future periods are carried forward as deferred income within
current and non-current liabilities, as appropriate. The amounts of deferred
revenue at each reporting date are disclosed in Note 21 to the preliminary
financial statements.
IFRS 15 also requires the Group to consider if there is a financing element to
such long-term contracts. However, it is considered that there is no such
financial element provided by the Group to franchisees as payment is received
at the time of signing the franchise agreement and at the commencement of the
delivery of the various services under such agreement.
Under a Master Franchise Agreement, the Group is entitled to a one-off upfront
exclusivity fee representing an advance payment for a number of branches with
all branches paid at a fixed rate, payable on signing of the Agreement. The
contract is not deemed to be fulfilled and in force until this payment is
received in full by the franchisor. This fee is recognised over the lower of
the franchise term and 10 years, in the same manner as in a single franchise
arrangement.
Where the Group, through a Master Franchisee, enters into contracts with
sub-franchisees, the initial fee is recognised in the same manner as contracts
with direct franchisees (i.e. spread over 10 years), where not already covered
in the fees attributed to the Master Franchisee. In the event of termination
of a franchise agreement, any remaining deferred income related to this
contract is immediately recognised in full.
Documentation fees are recognised when the franchise agreement and associated
leases and other legal documents are exchanged and have reached practical
completion. Training fees are recognised when the franchise site is opened.
Franchise revenues
As part of each franchise agreement, the Group receives franchise service
revenues at a fixed percentage of a franchisee's monthly revenues which are
recognised as the income is earned.
Service revenues comprise:
· An agreed share of the franchisee's monthly revenues, payable
weekly or monthly;
· Fixed monthly fees payable quarterly in advance;
· Extra costs in respect of site visits and website set-up fees;
and
· Fees charged for additional services, such as management of
marketing and social media on behalf of a franchisee, for which franchisees
opt in.
Revenue shares, support and administration and other related revenues are
recognised as and when those sales occur. Amounts billed in advance are
deferred to future periods as deferred revenue.
Owner-operated branch and offsite games
Revenues from the owner-operated branch and offsite activities include game
participation fees and the sale of food and beverages and merchandise. Such
revenues are recognised as and when those sales occur. Where customers book in
advance, the recognition of revenue is deferred until the customer
participates in the experience.
Retros from suppliers
Retrospective rebates from food and drink suppliers are recognised to match
the relevant purchase volumes.
Deferred revenue
The amounts of deferred revenue at each reporting date are disclosed in Note
21.
Contract costs
Where the game design costs relate to games for individual franchisees, the
costs are not capitalised but expensed as in line with the delivery of
services to franchisees, unless these costs are significant and other
capitalisation criteria are met.
Government Grants
Grants relating to revenue are recognised on the performance model through the
consolidated statement of comprehensive income by netting off against the
costs to which the grants were intended to compensate. Where the grant is not
directly associated with costs incurred during the period, the grant is
recognised as 'other income'. Grants relating to assets are recognised in
income on a systematic basis over the expected useful life of the asset.
Leases
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
• Leases of low value assets; and
• Leases with a duration of 12 months or less.
Identifying Leases
The Group accounts for a contract, or a portion of a contract, as a lease when
it conveys the right to use an asset for a period of time in exchange for
consideration. Leases are those contracts that satisfy the following criteria:
a) There is an identified asset;
b) The Group obtains substantially all the economic benefits from use of the
asset; and
c) The Group has the right to direct use of the asset.
In determining whether the Group obtains substantially all the economic
benefits from use of the asset, the Group considers only the economic benefits
that arise from use of the asset, not those incidental to legal ownership or
other potential benefits.
In determining whether the Group has the right to direct use of the asset, the
Group considers whether it directs how and for what purpose the asset is used
throughout the period of use. If there are no significant decisions to be made
because they are pre-determined due to the nature of the asset, the Group
considers whether it was involved in the design of the asset in a way that
predetermines how and for what purpose the asset will be used throughout the
period of use. If the contract or portion of a contract does not satisfy these
criteria, the Group applies other applicable IFRSs rather than IFRS 16.
Lease liabilities are measured at the present value of the contractual lease
payments due to the lessor over the lease term. The discount rate is the rate
implicit in the lease, if readily determinable. If not, the Company's
incremental borrowing rate is used, which the Company has assessed to be 4.5%
above the Bank of England base rate.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
• amounts expected to be payable under any residual value guarantee;
• the exercise price of any purchase option granted in favour of the
Group if it is reasonably certain to assess that option;
• any penalties payable for terminating the lease, if the term of
the lease has been estimated on the basis of termination option being
exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
• lease payments made at or before commencement of the lease;
• initial direct costs incurred; and
• the amount of any provisions recognised where the Group is
contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations - see Note 22).
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining
economic life of the asset if, rarely, this is judged to be shorter than the
lease term.
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted at
the discount rate appropriate at the time of revision. The carrying value of
lease liabilities is similarly revised when the variable element of future
lease payments dependent on a rate or index is revised. In both cases an
equivalent adjustment is made to the carrying value of the right-of-use asset,
with the revised carrying amount being amortised over the remaining (revised)
lease term.
Nature of leasing activities (in the capacity as lessee)
During the financial year, the Group leased owner-operated Escape Hunt and
Boom Battle Bar venues. The Group also leases certain items of plant and
equipment, but these are not significant to the activities of the Group.
Nature of leasing activities (in the capacity as lessor)
During the previous financial year, the Group sub-let part of the space in
Bournemouth which the group leases under a master lease agreement. The sub-let
was to a Boom Battle Bar franchisee and was treated as a finance lease
receivable. During the current financial year, the Group bought back the venue
from the franchisee and consequently the finance lease receivable is offset by
the reciprocal payable within the group.
Financing income and expenses
Financing expenses comprise interest payable, finance charges on shares
classified as liabilities and leases recognised in profit or loss using the
effective interest method, unwinding of the discount on provisions, and net
foreign exchange losses that are recognised in the income statement (see
foreign currency accounting policy). Borrowing costs that are directly
attributable to the acquisition, construction or production of an asset that
takes a substantial time to be prepared for use, are capitalised as part of
the cost of that asset. Financing income comprise interest receivable on funds
invested, dividend income, and net foreign exchange gains.
Interest income and interest payable is recognised in profit or loss as it
accrues, using the effective interest method. Dividend income is recognised in
the income statement on the date the entity's right to receive payments is
established. Foreign currency gains and losses are reported on a net basis.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
reporting date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the temporary
difference can be utilised.
Share-based payment arrangements
Equity-settled share-based payments to employees are measured at the fair
value of the equity instruments at the grant date. Equity-settled share based
payments to non-employees are measured at the fair value of services received,
or if this cannot be measured, at the fair value of the equity instruments
granted at the date that the Group obtains the goods or counterparty renders
the service. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 25 to the
preliminary consolidated financial statements.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of equity instruments that will eventually vest, with
a corresponding increase in equity. Where the conditions are non-vesting, the
expense and equity reserve arising from share-based payment transactions is
recognised in full immediately on grant.
At the end of each reporting period, the Group revises its estimate of the
number of equity instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to other reserves.
Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows,
cash and cash equivalents include cash on hand, deposits held at call with
financial institutions, other short-term highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of
changes in value, and bank overdrafts.
Trade and other receivables
Trade receivables are recognised initially at the transaction price and
subsequently measured at amortised cost using the effective interest method,
less provision for impairment. If the arrangement constitutes a financing
transaction, the receivable instrument is measured at the present value of the
future payments discounted at a market rate of interest.
Impairment provisions for current and non-current trade receivables are
recognised based on the simplified approach within IFRS 9 using a provision
matrix in the determination of the lifetime expected credit losses. In the
process, the probability of the non-payment of the trade receivables is
assessed. This probability is multiplied by the amount of the expected loss
arising from default to determine the lifetime expected credit loss for the
trade receivables.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the weighted average principle and includes expenditure incurred in
acquiring the inventories and other costs in bringing them to their existing
location and condition.
Provisions
A provision is recognised when the Group has a present obligation, legal or
constructive, as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation, and a reliable estimate can be made. Provisions are reviewed at
each reporting date and adjusted to reflect the current best estimate. If it
is no longer probable that an outflow of economic resources will be required
to settle the obligation, the provision is reversed. Where the effect of the
time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, where appropriate, the risks specific to the
liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as an interest expense.
The Group has recognized provisions for liabilities of uncertain timing or
amount including those for leasehold dilapidations and losses arising of
financial guarantee contracts.
Dilapidation provisions
Provisions for dilapidations are recognised on a lease-by-lease basis over the
period of time landlord assets are being used and are based on the Directors'
best estimate of the likely committed cash outflow.
Losses arising on financial guarantee contracts
Provision for losses on financial guarantee contracts uses the simplified
approach within IFRS 9 using a provision matrix in the determination of the
lifetime expected losses. In the process, the probability of the guarantee
being called is assessed. This probability is multiplied by the amount of the
expected loss arising from default to determine the lifetime expected credit
loss for the financial guarantee contract.
Contingent liabilities
Contingent liabilities are possible obligations whose existence depends on the
outcome of uncertain future events or present obligations where the outflow of
resources is uncertain or cannot be measured reliably. Contingent liabilities
are not recognised in the preliminary financial statements but are disclosed
unless the possibility of an outflow of resources is remote.
Financial Liabilities and equity
Financial liabilities and equity are classified according to the substance of
the financial instrument's contractual obligations rather than the financial
instrument's legal form. Financial liabilities, excluding convertible debt
and derivatives are initially measured at fair value which ordinarily is the
transaction price (including transaction costs) and subsequently held at
amortised cost.
Financial liabilities
Financial liabilities, including trade and other payables, bank and other
loans and loans from fellow group companies that are classified as debt are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present
value of the future payments discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the
effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
contractual obligations are discharged, cancelled or they expire.
Equity instruments
Equity instruments including share capital issued by the Company are recorded
at the proceeds received, net of direct issue costs. Dividends payable on
equity instruments are recognised as liabilities once they are no longer at
the discretion of the Company.
3. Critical accounting estimates and judgements
In the application of the Group's accounting policies, which are described in
Note 2 above, the Directors are required to make judgements and estimates
about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances. Actual results may differ
from these estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the
period.
The key estimates and underlying assumptions concerning the future and other
key sources of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial period
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods. In particular:
Key judgements
Initial upfront exclusivity
fees
Note 2 describes the Group's policies for recognition of revenues from initial
upfront exclusivity fees. In making their judgement, the Directors consider
that the upfront non-refundable exclusivity fee provides the customer with a
right to access the Group's intellectual property throughout the franchise
term which is typically for a minimum term of ten years. The Group's service
obligations include a requirement to advise, assist and update the customer
throughout the term of the agreement.
However, certain franchise contracts are for the unspecified term which
theoretically can run in perpetuity. Furthermore, for term franchise contracts
certain factors could reduce the franchise term (such as early termination)
whilst franchises may be extended beyond their initial term. No franchises
have yet been in place for a full term and in the absence of sufficient track
record the Directors made a judgement that until a clear pattern of
terminations and extensions of franchises becomes clear, it is reasonable to
assume that franchises will on average run for 10 years, hence the initial
upfront exclusivity fees are recognised over this estimated period.
Recognition of deferred tax assets
The Group's tax charge on ordinary activities is the sum of the total current
and deferred tax charges.
A deferred tax asset is recognised when it has become probable that future
taxable profit will allow the deferred tax asset to be recovered. Recognition,
therefore, involves judgement regarding the prudent forecasting of future
taxable profits of the business and in applying an appropriate risk adjustment
factor.
Based on detailed forward-looking analysis and the judgement of management, it
has been concluded that a deferred tax asset should not yet be recognised for
the carry forward of unused tax losses and unused tax credits totalling
approximately £24.2m, as the timing and nature of future taxable profits
remains uncertain given the relatively young stage of development and the of
the group and the rate of planned expansion which under current rules gives
rise to certain accelerated capital allowances reducing taxable income.
Whilst the Directors do expect the business in its current form to become
profitable, the Directors do not yet regard the timing and future scale of
taxable profits against which the unused tax losses and unused tax credits can
be utilised in the near term to be sufficiently probable to justify
recognition of deferred tax assets. In forming this conclusion, management
have considered the same cash flow forecasts used for impairment testing
purposes. Impairment testing adjusts for risk through the discounting of
future cash flows and focus on cash generation rather than taxable profits.
Additionally, the owner-operated segment is still in a relatively early stage
of development, and the Directors envisage that there will be an extended
period (and thus increasing uncertainty as time progresses) before it expects
to recoup net operating losses. The analysis indicates that the unused losses
may not be used in the foreseeable future as the Group does not yet have a
history of taxable profits nor sufficiently convincing evidence that such
taxable profits will arise within the near term.
Recognition of R&D credits and other government grants
Research and development credits and other government grants are recognised as
an asset when it has become probable that the grant will be received.
Companies within the Group have previously made successful applications for
grants relating to research and development and in respect of support related
to the COVID-19 pandemic.
In relation to research and development grants, no claims are outstanding, but
the company expects to make claims in respect of activity undertaken in
future, but not in respect of activity undertaken in the 15 months to 31 March
2024 or the current year. As such, no claims in relation to 2022, 2023 or
2024 have been recognised as an asset.
Valuation of assets acquired in business combinations
Where the group has acquired the trading assets and businesses of former
franchise businesses, estimates of the fair value of the assets acquired have
been made. These estimates are based on the accumulated experience of
opening new sites and take into account the trading performance and purchase
price of the former franchise businesses. The valuations therefore include
an element of judgement regarding the expected future performance of the
business acquired.
Recognition of onerous contracts
During the period, the group has recognised onerous contract provisions
relating to certain contracts off a fixed term where the economic value of the
contract is not supported by the costs. In cases where the service is not
utilised and the costs associated with the onerous contracts are known, they
are fully provided for to the end of the term. Where the exit cost is subject
to negotiation, the expected present value of the exit costs are provided for,
involving judgement.
Key estimates
Impairment of intangible assets
IFRS requires management to undertake an annual test for impairment of
indefinite lived assets and, for finite lived assets, to test for impairment
if events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.
Impairment testing is an area involving management judgement in determining
estimates, requiring assessment as to whether the carrying value of assets can
be supported by the net present value of future cash flows derived from such
assets using cash flow projections which have been discounted at an
appropriate rate. In calculating the net present value of the future cash
flows, certain assumptions are required to be made in respect of highly
uncertain matters including management's expectations of:
• growth in EBITDA, calculated as adjusted operating profit before
depreciation and amortisation;
• the forecast occupancy rate (and growth thereof) for each escape
room based on historic experience from similar rooms;
• the forecast level of turnover (and growth thereof) for each
Boom Battle Bar site, based on historic experience of the site in question and
similar sites;
• the level of capital expenditure to open new sites and to
maintain existing sites, as well as the costs of disposals;
• long-term growth rates; and
• the selection of discount rates to reflect the risks involved.
The Group prepares and approves a detailed annual budget and strategic plan
for its operations, which are updated regularly to take account of actual
activity and are used in the fair value calculations. The forecasts perform a
detailed analysis for three years, apply an anticipated growth rate for years
4 and 5 of between 3% and 10% per annum and apply a 2.5% growth rate
thereafter. Further details are provided in the sensitivity analysis below.
Changing the assumptions selected by management, in particular the discount
rate and growth rate assumptions used in the cash flow projections, could
significantly affect the Group's impairment evaluation and hence results.
The current strategic plan for the group indicates an excess of the net
present value of future cashflows compared to the carrying value of intangible
assets.
The sensitivity of impairment tests to changes in underlying assumptions is
summarised below:
Site level EBITDA
If the site level EBITDA is 10% lower in each business unit within the Group
than as set out in the strategic plan, this would lead to reduction in the net
present value of intellectual property of £20.9m (2024: £12.1m) but would
not result in the need for an impairment charge.
Discount rate
The discount rate used for the fair value calculation has been assumed at
12.3%. A 100 basis point increase in the discount rate reduces the net present
value of intellectual property across the group by £8.7m (2024: £4.0m) but
would not result in the need for an impairment charge.
The discount rate used, being the estimated weighted average cost of capital
has been reduced to 12.3% from 13.7% in the prior reporting period. The
reduction was brought about by a fall in base interest rates during the
period, a reduction in the Company's beta, and the introduction of bank debt
into the capital structure. It is the Directors' view that the risk
premium associated with XP Factory will have reduced significantly over the
current and prior period given the following:
· The group has achieved a scale at which it is capable of operating
profitably where previously it lacked such scale
· The group is significantly more diversified with the addition of the
Boom business to the group
· The network of owner operated sites is significantly more diversified
with a much larger estate and the group is consequently less exposed to any
single site
· The group has developed a proven operating history with Escape Hunt
in particular, operating at attractive growth rates and margins
· The group exited the financial year ended 31 March 2025 with sites
generating positive cashflow and EBITDA.
· The bank facility signed during the year provides external validation
of the improved financial prospects for the group.
Furthermore, external estimates of the group's cost of capital, which are
based on historic numbers which do not take account of these factors, indicate
a level not materially different to the director's assessment. The cost of
capital indicated for similar competitors further supports the directors'
view.
Long-term growth rates
The growth rate used for the fair value calculation after year 5 has been
assumed at 2.5% per annum. If this rate was decreased by 100 basis points the
net present value of intellectual property across the group would fall by
£6.7m (2024: £2.7m) but would not result in the need for an impairment
charge.
Capital expenditure
If capital expenditure over the forecast period were to be 10% higher than in
the strategic plan, the net present value of intellectual property across the
group would fall by £3.9m (2024: £1.1m) but would not result in the need for
an impairment charge.
Estimation of useful life and amortisation rates for intellectual property
assets
The useful life used to amortise intangible assets relates to the expected
future performance of the assets acquired and management's estimate of the
period over which economic benefit will be derived from the asset.
The estimated useful life principally reflects management's view of the
average economic life of each asset and is assessed by reference to historical
data and future expectations. Any reduction in the estimated useful life would
lead to an increase in the amortisation charge. The average economic life of
the intellectual property has been estimated at 5 years. If the estimation of
economic lives was reduced by one year, the amortisation charge for IP would
have increased by £160k (period ended 31 March 2024: £114k).
Estimation of useful life and depreciation rates for property, plant and
equipment of the owner- operated business
The useful life used to depreciate assets of the owner-operated business
relates to the expected future performance of the assets acquired and
management's estimate of the period over which economic benefit will be
derived from the asset.
Property, plant and equipment represent a significant proportion of the asset
base of the Group being 31% (2024: 26%) of the Group's total assets.
Therefore, the estimates and assumptions made to determine their carrying
value and related depreciation are critical to the Group's financial position
and performance.
The charge in respect of periodic depreciation is derived after determining an
estimate of an asset's expected useful life and the expected residual value at
the end of its life. Increasing an asset's expected life or its residual value
would result in a reduced depreciation charge in the consolidated income
statement. The useful lives and residual values of the Group's assets are
determined by management at the time the asset is acquired and reviewed
annually for appropriateness. The lives are based on historical experience
with similar assets as well as anticipation of future events which may
impact their life such as changes in technology. Historically changes in
useful lives and residual values have not resulted in material changes to the
Group's depreciation charge.
The useful economic lives of property, plant and equipment has been estimated
at between 2 and 10 years. If the estimation of economic lives was reduced by
one year, the depreciation charge for property, plant and equipment would have
increased by £905k (period ended 31 March 2024: £895k).
Estimation of the value of right of use assets and lease liabilities arising
from long term leases under IFRS16
The value of right of use assets and the associated lease liability arising
from long term leases is estimated by calculating the net present value of
future lease payments. In doing so, the Directors have used the discount
rate implicit in the lease, if readily determinable. If not, the Company's
incremental borrowing rate is used which the Company has assessed to be 4.5%
(FY2024: 6%) above the Bank of England base rate.
Estimation of dilapidations provision
The provision for dilapidations is estimated by anticipating the cost of
stripping out a site at the end of the contracted lease to restore the
property to the condition required under the terms of the lease. The
liability is accrued over the period of the lease. The judgement of the cost
of the strip out is based on a management estimate and represents a key
estimate.
Estimation of share base payment charges
The calculation of the annual charge in relation to share based payments
requires management to estimate the fair value of the share-based payment on
the date of the award. The estimates are complex and consider a number of
factors including the vesting conditions, the period of time over which the
awards are recognised, the exercise price of options which are the subject of
the award, the expected future volatility of the company's share price,
interest rates, the expected return on the shares, and the likely future date
of exercise. The charge recognized in the year ended 31 March 2025 was £31k
(15 months to 31 March 2024: £47k).
The Group also operates a broader share based Incentive scheme available to
all employees, allowing employees to purchase shares tax efficiently each
month. For each share purchased (a "Partnership Share"), the employee is
granted a further matching share ("Matching Share"). The Management has
estimated the cost of the Matching Shares recognized in the year ended 31
March 2025 was £18k (15 months to 31 March 2024: £26k) Further details are
provided in note 25.
Estimation of liabilities arising from Financial Guarantee Contracts -
Franchise lease guarantees
The Company is a co-tenant or has provided a guarantee on a number of property
leases for which a franchisee is the primary lessee. IFRS 9 requires the
recognition of expected credit losses in respect of financial guarantees,
including those provided by the Group. Where there has been a significant
increase in credit risk, the standard requires the recognition of the expected
lifetime losses on such financial guarantees. The assessment of whether there
has been a significant increase in credit risk is based on whether there has
been an increase in the probability of default occurring since previous
recognition. An entity may use various approaches to assess whether credit
risk has increased. The assessment of the probability of default is inherently
subjective and requires management judgement.
In all cases where the Group is co-tenant or has provided guarantees for
underlying leases, the Group has taken security in the form of personal
guarantees from the lessee and, in addition, has step-in rights which enable
the relevant company in the group to take over the assets and operations of
the franchisee and to operate the site as an owner-operated site. Management
believes that the personal guarantees and step in rights significantly reduce
the probability of incurring losses and provide a mechanism to mitigate any
adverse impact on the group in the event of any guarantees being called upon.
Details of the number of lease guarantees provided, the average length of the
guarantee and the average annual rental are given in note 22.
Each guarantee is assessed separately. Management's view of the probability
of the lessee defaulting on its lease obligations is assigned to the specific
guarantee. Lessees are categorized on a rating of 1 - 5, which allocates a
probability of default to each banding, with category 1 representing very
limited risk, and 5 representing extreme risk. Management then assesses the
likelihood of the personal guarantee from the lessee, together with the
step-in rights being insufficient to fully cover the payments required to be
made under the guarantee provided to the landlord. This is based on historic
experience of the former owner of Boom Battle Bars which has, on a number of
occasions, taken on existing franchisees within other parts of its business
which have either been re-sold or have since become owner-operated sites.
Based on this experience and taking account of the current economic
environment, Management has judged that 1 in 6 sites where the guarantee is
called would result in a loss. Finally, management applies an assessment as
to the proportion of the future lease liability that might be suffered in the
event that the guarantee is not fully covered by the personal guarantees
and/or the step in rights. The proportion used in the calculation was 50%.
This cumulative probability is applied to the net present value of the future
lease liability. The net present value is calculated by reference to the
expected future cash payments required under the lease using a discount rate
of 9.25%.
In the year to 31 March 2025, the average probability of default used across
the portfolio was assessed as between 10% and 50% (2024: between 10% and 20%).
This was made on the basis of the current operating performance of the
respective franchisees. The overall expected loss provision at 31 March 2025
was £57,442 (2024: £69,079) with the reduction being attributed
predominantly to the fall in the number of franchisee sites subject to
guarantees.
Sensitivities.
The key assumptions impacting the assessment of the expected loss provision
are the discount rate used to calculate the net present value of the leases
under guarantee; the probability of default assigned to each guaranteed lease;
the proportion of defaulted leases that would give rise to a credit loss; and
the proportion of the total liability that would not be covered by security
and step-in rights. The sensitivity to each of these assumptions in the
period to 31 March 2025 and the 15 months to 31 March 2024 is shown in the
table below:
Assumption Base case Sensitivity applied Increase in Expected loss provision (£'000)
2025 2024
Discount rate 9.25% 1% decrease 2.6 3.7
(2024 11.3%)
Probability of default Individually assessed 10% increase in probability of default 5.7 6.9
Proportion of defaulted leases giving rise to a loss 16.67% Increase by 3.33% 11.5 2.2
(1 in 6) (1 in 5)
Proportion of liability not covered by guarantee / step-in right 50% 10% increase in loss 5.7 6.9
Estimation of valuation of acquired intangibles
As part of the acquisition of Boom Battle Bars, the Directors recognised
£4,386k as relating to franchise contracts in place at the date of
acquisition. The valuation took into account the forecast revenue from the
relevant franchise contracts over the remaining life of the contracts, net of
tax and allocated costs to service the contracts, discounted at the then
estimated cost of capital, 13.7 per cent. During the year to 31 March 2025,
three of the franchise sites to which the acquired intangible applied were
acquired. The value of the acquired intangibles attributable to these three
sites as at 31 March 2025 has been reclassified to goodwill associated with
the acquisition Boom Battle Bars. The remaining value of acquired
intangibles will be amortised over the remaining franchise term. As at 31
March 2025, the value of acquired intangibles was £20k (2024: £1.31m).
The Directors have re-assessed the value of the acquired intangibles based on
the latest forecasts for specific franchisee sites and an allocation of
central costs using a cost of capital of 12.3 per cent to determine whether an
impairment was necessary. The analysis concluded that no impairment is
necessary. A 1% increase in the cost of capital applied would reduce the
value of acquired intangibles in the year by £4k (2024: £313k), but would
not lead to an impairment of the carrying value.
4. Revenue
Year Ended 15 Month Period
Ended
31 March 31 March
2025 2024
£'000 £'000
Upfront location exclusivity fees, support and administration fees 216 354
Franchise revenue share 1,224 2,339
Revenues from owned branches 28,995 31,085
Food and drinks revenue from owned branches 25,419 22,188
Retros/rebates received on food and drinks purchases 1,176 1,012
Other 788 360
57,818 57,339
Revenues from contracts with customers:
Year Ended 15 Month Period
Ended
31 March 31 March
2025 2024
£'000 £'000
Revenue from contracts with franchise customers 1,440 3,028
Revenue from customers at owner operated branches 56,378 54,310
Total revenue from contracts with customers 57,818 57,339
In respect of contracts from franchise customers, the satisfaction of
performance obligations is treated as over a period of up to 10 years. The
typical timing of payment from customers is a mixture of upfront fees, payable
at the start of the contract, fixed fees payable quarterly or monthly during
the term of the contract and variable consideration typically received shortly
after the month in which the revenue has been accrued.
Future upfront exclusivity fee income that has been deferred on the balance
sheet is certain as the amount has already been received. Support and
administrative fees and other fees are considered to be reasonably certain and
unaffected by future economic factors, except to the extent that adverse
economic factors would result in premature franchise closure. Revenue based
service fees are dependent on and affected by future economic factors,
including the performance of franchisees.
A total of £56.4m (2024: £54.3m) of revenues relate to the owner-operated
segment. All other revenues in the table refer to the franchise segment as
detailed in Note 5 (Segment Information).
Upfront exclusivity fees are billed and received in advance of the performance
of obligations. This generally creates deferred revenue liabilities which
are greater than the amount of revenue recognised from each customer in a
financial year.
Revenue share income is necessarily billed monthly in arrears (and accrued on
a monthly basis).
5. Segment information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the group of
executive directors and the chief executive officer who make strategic
decisions.
Management considers that the Group has four operating segments. Revenues are
reviewed based on the nature of the services provided under each of the Escape
Hunt and Boom Battle Bar brands as follows:
1. The Escape Hunt franchise business, where all franchised branches are
operating under effectively the same model;
2. The Escape Hunt owner-operated branch business, which as at 31 March
2025 consisted of 25 Escape Hunt sites (2024: 22), comprising 22 in the UK,
one in Dubai, one in Paris and one in Brussels; and
3. The Boom Battle Bar franchise business, where all franchised branches
operate under the same model within the Boom Battle Bar brand.;
4. The Boom Battle Bar owner-operated business, which as at 31 March 2025
consisted of 26 Boom Battle Bar sites (2024: 20), comprising 25 in the UK and
one in Dubai.
There is currently no trade between the operating segments. The Group operates
on a global basis. As at 31 March 2025, the Group had active Escape Hunt
franchisees in 7 countries (2024: 7). The Group does not presently analyse or
measure the performance of the franchising business into geographic regions or
by type of revenue, since this does not provide meaningful analysis to
managing the business. The geographic split of revenue was as follows:
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
United Kingdom 54,955 54,015
Europe 1,031 1,398
Rest of world 1,832 1,926
57,818 57,339
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
The cost of sales in the owner-operated business comprise variable site staff
costs and other costs directly related to revenue generation.
Escape Hunt Escape Hunt Boom Boom
Owner Franchise operated Owner Franchise operated Unallocated Total
operated operated
Year Ended 31 March 2025 £'000 £'000 £'000 £'000 £'000
14,213 606 42,165 834 - 57,818
Revenue
Cost of sales (4,085) - (16,749) - - (20,834)
Gross profit/(loss) 10,128 606 25,416 834 - 36,984
Site level operating costs (3,537) - (14,947) - - (18,484)
Other income - - - - 92 92
Site level EBITDA 6,591 606 10,469 834 92 18,592
Centrally incurred overheads (1,769) (5) (1,357) - (6,188) (9,319)
Depreciation and amortization (1,664) (21) (4,825) (64) (33) (6,607)
Exceptional items (129) - (599) - (129) (857)
Operating profit 3,029 580 3,688 770 (6,258) 1,809
Adjusted EBITDA 5,314 606 9,768 839 (6,027) 10,500
Depreciation and amortisation (1,148) (21) (2,840) (64) (33) (4,106)
Depreciation - right-of-use assets (517) - (1,984) - - (2,501)
Foreign currency losses - (5) (3) - - (8)
Share-based payment expenses - - - - (49) (49)
Provision against loan to franchisee - - - - (32) (32)
Provision for guarantee losses - - - - 12 12
Gain / (loss) of disposal of assets (22) - (88) (5) - (115)
Exceptional Professional & Branch Closure Costs (129) - (599) - (129) (857)
Dilapidations (59) - (177) - - (236)
Branch pre-opening costs (410) - (389) - - (799)
Operating profit 3,029 580 3,688 770 (6,258) 1,809
Interest expense/receipt - - - - (370) (370)
Lease charges (366) - (2,319) - - (2,685)
Profit / (Loss) before tax 2,663 580 1,369 770 (6,628) (1,246)
Taxation (2) - (14) 11 - (5)
Profit/(loss) after tax 2,661 580 1,355 781 (6,628) (1,251)
Other information:
Non-current assets 10,822 20 42,175 44 22,761 75,822
Escape Hunt Escape Hunt Boom Boom
Owner Franchise operated Owner Franchise operated Unallocated Total
operated operated
Period Ended 31 March 2024 £'000 £'000 £'000 £'000 £'000
16,726 828 37,513 2,272 - 57,339
Revenue
Cost of sales (4,896) - (15,395) - - (20,291)
Gross profit/(loss) 11,830 828 22,118 2,272 - 37,048
Site level operating costs (4,477) - (13,456) - - (17,933)
Other income - - 3 - - 3
Site level EBITDA 7,353 828 8,665 2,272 - 19,118
Centrally incurred overheads (1,915) (202) (1,180) (113) (7,352) (10,762)
Depreciation and amortization (1,875) (169) (4,389) (408) (72) (6,913)
Exceptional items (57) - 44 236 431 654
Operating profit 3,506 457 3,140 1,987 (6,993) 2,097
Adjusted EBITDA 5,840 597 8,302 2,142 (6,959) 9,922
Depreciation and amortisation (1,296) (169) (2,494) (408) (72) (4,439)
Depreciation - right-of-use assets (579) - (1,895) - - (2,474)
Foreign currency losses - 29 (53) - - (24)
Share-based payment expenses - - - - (72) (72)
Provision against loan to franchisee - - - 17 (31) (14)
Provision for guarantee losses - - - - 24 24
Gain / (loss) of disposal of assets (125) - (85) - 19 (202)
Exceptional Professional & Branch Closure Costs (107) - 44 236 (49) 174
Gain on disposal of subsidiary - - - - 480 480
Branch pre-opening costs (217) - (698) - - (915)
Fair value adjustments - - - - (313) (313)
Operating profit 3,506 457 3,140 1,987 (6,993) 2,097
Interest expense/receipt - - - - (242) (242)
Lease charges (390) - (2,004) - - (2,394)
Profit / (Loss) before tax 3,116 457 1,136 1,987 (7,235) (539)
Taxation (3) - 24 98 - 119
Profit/(loss) after tax 3,113 457 1,160 2,085 (7,235) (420)
Other information:
Non-current assets 7,686 39 32,913 2,663 21,484 64,785
Significant customers:
No customer provided more than 10% of total revenue in either the Year ended
31 March 2025 or the period ended 31 March 2024.
6. Operating loss before taxation
Loss from operations has been arrived at after charging / (crediting):
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Auditor's remuneration:
- Audit of the Parent and Group financial statements 150 225
- Review of interim financial statements - -
Movement on provision against trade receivables (78) 69
Foreign exchange losses 8 24
Staff costs including directors, net of amounts capitalized 9,844 10,656
Depreciation of property, plant and equipment (Note 11) 3,841 3,653
Depreciation of right-of-use assets (Note 12) 2,501 2,474
Amortisation of intangible assets (Note 13) 265 786
Share-based payment costs 49 72
Detailed information on statement of profit or loss items:
Cost of sales Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Wages and salaries 11,490 11,245
Food and beverages 7,133 6,728
Other costs of sale 2,211 2,318
20,834 20,291
Administrative expenses Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Depreciation of property, plant and equipment 3,841 3,653
Depreciation of right-of-use assets 2,501 2,474
Amortisation 265 786
Loss on disposal of non-current assets 115 202
Staff costs including directors, net of amounts capitalised 9,844 10,656
Share-based payments 49 72
Gain on disposal of subsidiary - (480)
Foreign currency (gains) / losses 8 24
Other administrative expenses 18,644 17,254
35,267 34,641
Exceptional costs and gains Year to 31 March 2025 15 months ended 31 March 2024
£'000 £'000
Restructuring costs (246) -
Exceptional legal and other fees (59) (103)
Debt early redemption fees (62) -
Onerous contracts write off (490) -
Post acquisition revaluations - 277
Total (857) 174
7. Staff costs
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Wages salaries and benefits (including directors) 19,817 20,260
Share-based payments 49 73
Social security costs 1,293 1,332
Other post-employment benefits 462 488
Less amounts capitalised (237) (252)
21,384 21,901
Included in cost of sales 11,490 11,245
Included in Admin expenses 9,894 10,656
21,384 21,901
Key management personnel:
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Wages, salaries and benefits (including directors) 1,067 1,263
Share-based payments 9 26
Social security costs 139 164
Pensions 55 54
Other post-employment benefits 17 15
Less amounts capitalised (41) (93)
1,246 1,429
Key management personnel are the directors, the company secretary and one
member of staff. Their remuneration was as follows:
Year ended 31 March 2025 Bonus
Salary and fees Share-based payments Pension contributions Other benefits
Total
£'000 £'000 £'000 £'000 £'000 £'000
Graham Bird 213 64 1 10 5 293
Richard Rose 60 - - - 1 61
Richard Harpham 247 74 1 12 3 337
Philip Shepherd 30 - - - - 30
Martin Shuker 30 - - - - 30
Total Board of directors 580 138 2 22 9 751
Joanne Briscoe 133 20 6 16 3 178
Other key management 160 36 1 17 5 219
873 194 9 55 17 1,148
Amounts capitalised (41) - - - - (41)
Profit and loss expense 832 194 9 55 17 1,107
Bonus
15 Months ended 31 March 2024 Salary and fees Share-based payments Pension contributions Other benefits
Total
£'000 £'000 £'000 £'000 £'000 £'000
Graham Bird 254 70 7 12 5 348
Richard Rose 75 - - - - 75
Richard Harpham 295 82 9 14 3 403
Philip Shepherd 38 - - - - 38
Martin Shuker 38 - - - - 38
Total Board of directors 700 152 16 26 8 902
Joanne Briscoe 159 23 4 19 3 208
Other key management 191 40 6 9 5 250
1,048 215 26 54 15 1,360
Amounts capitalised (93) - - - - (93)
Profit and loss expense 956 215 26 54 15 1,267
Only two directors are accruing retirement benefits, being Richard Harpham and
Graham Bird. Both make personal contributions and receive company
contributions into defined contribution (money purchase) pensions schemes.
There are no defined benefit schemes in the group and the Group has no pension
commitments other than monthly contributions for employees.
The average monthly number of employees was as follows:
Year Ended 15 Month Period Ended
31 March 31 March
2025 2024
No. No.
Management 6 6
Administrative 64 54
Operations 953 990
1,023 1,050
8. Interest
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Interest income 73 176
Interest expense (443) (418)
Net interest (expense) / income (370) (242)
9. Taxation
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Current tax expense
Current tax on profits for the year 1 -
Prior period tax adjustment 15 -
Total Current tax 16 -
Deferred tax expense
Origination and reversal of Temporary differences (321) 665
Remeasurement of deferred tax for changes in tax rates - (1,191)
Effects of Business combinations 310 408
Total deferred tax (11) (118)
Total tax expense 5 (118)
A reconciliation of income tax expense applicable to the loss before taxation
at the statutory tax rate to the income tax expense at the effective tax rate
of the Group is as follows:
Year 15 Month Period
Ended Ended
31 March 31 March
2025 2024
£'000 £'000
Loss before taxation (1,246) (540)
Tax calculated at the standard rate of tax of 25% (2024: 23.82%) (311) (128)
Tax effects of:
Expenses not deductible for tax purposes 24 168
Non-taxable income (4) (75)
Enhanced relief for qualifying additions - (9)
Movement in unrecognised tax losses (1,406) 398
Tax on foreign operations 152 105
Non qualifying amortisation 31 56
Movement in fixed asset timing differences not recognised in deferred tax (42) -
Depreciation on ineligible assets 483 373
Increase in dilapidation provision 12 56
Remeasurement of deferred tax for changes in tax rates - (1,191)
Fixed asset differences relating to transfer of trade and assets 614 -
Timing differences on right of use assets 304 271
Foreign exchange differences in relation to closure of foreign subsidiary - (119)
Amounts written off from connected company not taxable 1 (22)
Transfer of losses to connected company 156
Other (9) (1)
5 (118)
Changes in tax rates and factors affecting the future tax charge
There are no factors affecting the future tax charge.
Deferred tax
Deferred tax assets have been recognised in respect of all tax losses and
other temporary differences giving rise to deferred tax assets where the
directors believe it is probable that these assets will be recovered.
The Group has tax losses of approximately £24,119k as at 31 March 2025
(£22,340k as at 31 March 2024) which, subject to agreement with taxation
authorities, are available to carry forward against future profits. The tax
value of such losses amounted to approximately £6,030k (£5,585k as at 31
March 2024). A deferred tax asset has been recognised in respect of £13,361k
(2024 - £6,976k) of these losses to offset the deferred tax liability in
respect of fixed asset temporary differences. A deferred tax asset has
therefore not been recognised in respect of the remaining tax losses of
£10,758k (2024 - £15,364k) due to there being insufficient certainty that
profits will be recognised in future years.
Amounts of deferred tax recognised in profit or loss:
Provisions and Fixed asset Unused tax Intangibles Total
other timing temporary losses acquired
differences differences through
business
combinations
£'000 £'000 £'000 £'000 £'000
Balance as at 1 April 2024 (176) 1,744 (1,568) 326 326
(Charge) / credit for the year (38) 1,800 (1,752) (11) (11)
Effects of business combinations excluded from profit and loss charge - - - (310) (310)
Balance as at 31 March 2025 (214) 3,544 (3,330) 5 5
Provisions and Fixed asset Unused tax Intangibles Total
other timing temporary losses acquired
differences differences through
business
combinations
£'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2023 (94) 774 (680) 832 832
(Charge) / credit for the year (82) (241) 323 (118) (118)
Effects of business combinations excluded from profit and loss charge - - - (408) (408)
Remeasurement of deferred tax for changes in tax rates - 1,191 (1,191) - -
Other adjustments - 20 (20) 20 20
Balance as at 31 March 2025 (176) 1,744 (1,568) 326 326
Estimates and assumptions, including uncertainty over income tax treatments
The Group is subject to income tax in several jurisdictions and significant
judgement is required in determining the provision for income taxes. During
the ordinary course of business, there are transactions and calculations for
which the ultimate tax determination is uncertain. As a result, the Group
recognises tax liabilities based on estimates of whether additional taxes and
interest will be due.
These tax liabilities are recognised when, despite the Directors' belief that
its tax return positions are supportable, the Directors believe it is more
likely than not that a taxation authority would not accept its filing
position. In these cases, the Group records its tax balances based on either
the most likely amount or the expected value, which weights multiple potential
scenarios. The Directors believe that its accruals for tax liabilities are
adequate for all open audit years based on its assessment of many factors
including past experience and interpretations of tax law.
No material uncertain tax positions exist as at 31 March 2025. This assessment
relies on estimates and assumptions and may involve a series of complex
judgments about future events. To the extent that the final tax outcome of
these matters is different than the amounts recorded, such differences will
impact income tax expense in the period in which such determination is made.
In the Year Ended 31 December 2021 upon acquisition of both the French master
franchise in March 2021 and the Boom group of companies in November 2021,
there were intangibles acquired as part of the purchase. These acquired
intangibles were deemed to create a deferred tax liability and calculated at
25.75% for France and 25% for Boom. In total, these amounted to £1,112k.
These deferred tax liabilities were recognised in the period ended 31 December
2021 and are being amortised over the same periods as the acquired intangible.
As at 31 March 2025 these have been amortised to £5k (2024: £326k).
10. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity
holders by the weighted average number of ordinary shares in issue during the
period. Diluted net loss per share is calculated by dividing net loss by the
weighted average number of shares in issue and potential dilutive shares
outstanding during the period.
Because XP Factory is in a net loss position, diluted loss per share excludes
the effects of ordinary share equivalents consisting of stock options and
warrants, which are anti-dilutive. The total number of shares subject to share
options and conversion rights outstanding excluded from consideration in the
calculation of diluted loss per share for the Year ended 31 March 2025 was
19,726,571 shares (15 months ended 31 March 2024: 17,366,666 shares).
Year 15 Month Period
Ended Ended
30 31
March March
2025 2024
Loss after tax attributable to owners of the Company (£'000)
(1,251) (420)
Weighted average number of shares:
- Basic and diluted 175,037,600 165,271,148
Loss per share
- Basic and diluted (Pence) (0.71) (0.27)
11. Property, plant and equipment
Leasehold improvements Office equipment Computers Furniture and fixtures Games Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost:
As at 1 January 2023 13,188 51 325 1,609 6,761 21,934
Additions 3,872 140 326 1,294 2,514 8,146
Additions arising from acquisition 2,140 35 33 395 156 2,759
Transfers - 498 - (493) (5) -
Translation differences (27) (29) (2) (17) (8) (83)
Disposals (334) - (2) (8) (183) (527)
As at 31 March 2024 18,839 695 680 2,780 9,235 32,229
Additions 3,952 1 120 1,304 2,059 7,436
Additions arising from acquisition 1,456 - 44 364 486 2,350
Transfers - (498) - 493 5 -
Translation differences (7) 8 1 (9) (9) (16)
Disposals (138) - (7) (116) (772) (1,033)
As at 31 March 2025 24,102 206 838 4,816 11,004 40,966
Accumulated depreciation:
As at 1 January 2023 (4,165) (50) (147) (527) (4,292) (9,181)
Additions arising from acquisition (380) (13) (6) (75) (15) (489)
Depreciation charge (1,929) (40) (153) (529) (1,002) (3,653)
Translation differences 53 1 - 7 (11) 50
Disposals 289 - 1 26 88 404
As at 31 March 2024 (6,132) (102) (305) (1,098) (5,232) (12,869)
Depreciation charge (1,782) (50) (207) (713) (1,089) (3,841)
Translation differences 1 - (1) - (1) (1)
Disposals 95 13 7 108 700 923
As at 31 March 2025 (7,818) (139) (506) (1,703) (5,622) (15,788)
Net book value
As at 31 March 2025 16,284 67 332 3,113 5,382 25,178
As at 31 March 2024 12,707 593 375 1,682 4,003 19,360
The amount of expenditure recognised in the carrying value of leasehold
improvements in the course of construction at 31 March 2025 is £292,669
(2024: £nil).
12. Right-of-use assets and lease liabilities
Year ended 15 Month Period ended
Right-of-use assets 31 March 31 March
2025 2024
£'000 £'000
Land and buildings - right-of-use asset cost b/f 25,442 20,484
Closures / modification of leases during the period - 275
Additions during the period, including through acquisition 10,215 6,245
Lease incentives (1,182) (1,563)
Less: Accumulated depreciation b/f (5,116) (2,641)
Depreciation charged for the period (2,501) (2,474)
Net book value 26,858 20,326
The Group leases land and buildings for its offices and escape room and battle
bar venues under agreements of between five to fifteen years with, in some
cases, options to extend. The leases have various escalation clauses. On
renewal, the terms of the leases are renegotiated.
During the year ended 31 December 2022 the Group entered into a lease on a
premises in Bournemouth where a portion of the property is sub-let to a Boom
franchisee. The total value of the master lease is recognised within lease
liabilities whilst the underlease has been recognised as a finance lease
receivable.
During the year ended 31 March 2025, the group bought back the Bournemouth
franchisee and de-recognised this finance lease receivable accordingly.
Year ended 31 March 15 Month Period ended
Finance lease receivable 2025 31 March
2024
£'000 £'000
Balance at beginning of period 1,389 1,273
Disposals during the year (1,414) -
Interest charged 25 116
Payments received - -
Balance at end of period - 1,389
Where leases have been renegotiated during the year, these have been treated
as modifications of leases and included as separate items in the note above.
Year ended 15 Month Period ended
Lease liabilities 31 March 31 March
2025 2024
£'000 £'000
In respect of right-of-use assets
Balance at beginning of period 29,818 24,039
Closures / modification of leases during the period - 275
Additions during the year 9,094 6,245
Interest incurred 2,685 2,394
Repayments during the period (4,356) (3,135)
Lease liabilities at end of period 37,241 29,818
As at As at
31 March 31 March
2025 2024
£'000 £'000
Maturity
< 1 month 223 232
1 - 3 months 446 463
3 - 12 months 1,749 1,337
Non-current 34,823 27,786
Total lease liabilities 37,241 29,818
In the Escape Hunt group of companies, leases are generally 10 years with a 5
year break clause. Where the break clause is tenant only the leases are
accounted for over the full period of the lease as it is assumed the break
clause will not be enacted, whereas where the break clause is both ways,
leases are accounted for over the period to the initial break clause years.
In the Boom group of companies, leases are generally over 15 years with a 10
year tenant only break clause, which are therefore accounted over 15 years.
Only leases with a break that can be invoked by the landlord are accounted for
over 10 years.
The group has no short term leases of properties.
None of the leases imposed restrictions or covenants.
The group also leases laptops for a small number of staff on leases of 3
years. The charge to the profit and loss for the year ended 31 March 2025 for
these computers was £7k (2024: £10k). These leases are all cancellable on
short notice.
There are a number of properties for which turnover rent is payable. The
amount charged to the profit and loss for these turnover rent payments in the
year ended 31 March 2025 was £1,422k (2024: £1,191k).
As at 31 March 2025 there were no leases that had not commenced to which the
group was committed.
13. Intangible assets
Goodwill Trademarks Intellectual property Internally generated IP Franchise agreements App Quest Portal Total
£'000 £'000 £'000 £'000 £'000 £'00' £'000 £'000
Cost
At 1 January 2023 19,640 86 10,195 1,864 4,623 100 377 36,885
Additions arising from internal development - 14 - 101 - - 93 208
Additions arising from acquisition 1,896 - - - - - - 1,896
Re-analysis 1,339 - - - (1,635) - - (296)
Disposals - - - - - - (149) (149)
Translation differences - (4) - 14 - - 9 19
As at 31 March 2024 22,875 96 10,195 1,979 2,988 100 330 38,563
Additions arising from internal development 5 18 - 98 - - 127 248
Additions arising from acquisition 367 - - - - - - 367
Re-analysis 938 - - - (2,268) - (5) (1,335)
Translation differences - - - (3) - - 1 (2)
As at 31 March 2025 24,185 114 10,195 2,074 720 100 453 37,841
Accumulated amortisation / impairment
At 1 January 2023 (1,393) (72) (10,195) (971) (1,143) (100) (315) (14,189)
Amortisation for the year - (9) - (192) (532) - (53) (786)
Disposals - - - - - - 51 51
As at 31 March 2024 (1,393) (81) (10,195) (1,163) (1,675) (100) (317) (14,924)
Amortisation for the year (55) (8) - (137) (46) - (19) (265)
Re-analysis - - - - 1,021 - - 1,021
As at 31 March 2025 (1,448) (89) (10,195) (1,300) (700) (100) (336) (14,168)
Carrying amounts
At 31 March 2025 22,737 25 - 774 20 - 117 23,673
At 31 March 2024 21,482 15 - 816 1,313 - 14 23,639
Goodwill and acquisition related intangible assets recognised have arisen from
the acquisition of Experiential Ventures Limited in May 2017, Escape Hunt
Entertainment LLC in September 2020, BGP Escape France, BGP Entertainment
Belgium in March 2021 and the Boom group of companies in November 2021, Boom
East in August 2022, Boom Battle Bar Cardiff in September 2022, BBB Chelmsford
and BBB Ealing in June 2023, BBB Liverpool and BBB Five in November 2023, the
acquisitions of the assets and business of Boom franchise sites in Aldgate in
May 2024, Bournemouth in June 2024, and Southampton in November 2024 .
Goodwill has also been recognised on the consolidation of BBB Nine Limited
(Boom Battle Bar Swindon) which is managed by the group under an operating
agreement. Refer to Notes 14 and 15 for further details.
Goodwill acquired in a business combination is allocated, at acquisition, to
the cash generating units ('CGUs') that are expected to benefit from that
business combination. Management considers that the goodwill is attributable
to the owner-operated business because that is where the benefits are expected
to arise from expansion opportunities and synergies of the business.
No value was attributed to the brand and customer relationships as the Board's
strategic review of the business and a repositioning of our branding exercise
enabled the Group to clearly define its quality, service and values, and make
it more attractive to new customers and partners. Furthermore, the value of
any existing brand and customer relationships which was separately
identifiable from other intangible assets was insignificant.
The Group tests goodwill annually for impairment or more frequently if there
are indications that these assets might be impaired. The recoverable amounts
of the CGU are determined from fair value less costs to sale. The value of the
goodwill comes from the future potential of the assets rather than using the
assets as they are (i.e. there is assumed expansionary capex which supports
growth in revenues and the value of the business and therefore goodwill).
The key assumptions for the fair value less costs to sale approach are those
regarding capital expenditure which supports a consequent growth in revenues
and associated earnings and a discount rate. The Group monitors its pre-tax
Weighted Average Cost of Capital and those of its competitors using market
data. In considering the discount rate applying to the CGU, the Directors have
considered the relative sizes, risks and the inter-dependencies of its CGUs.
The impairment reviews use a discount rate adjusted for pre-tax cash flows.
The Group prepares cash flow forecasts derived from the most recent financial
plan approved by the Board and extrapolates revenues, net margins and cash
flows for the following three years based on forecast growth rates of the CGU.
Cash flows beyond this period are also considered in assessing the need for
any impairment provisions. A discount rate of 12.3% and capex of £25.0
million over the three years has been assumed. Growth in years 4- 6 is assumed
at 5% per annum. The rate used for the fair value calculation thereafter is
2.5%. The directors consider these assumptions are consistent with that
which a market participant would use in determining fair value.
Intellectual property
The Intellectual Property relates to the valuation of the Library of Game Wire
Frame Templates of games, the process of games development and the inherent
know how and understanding of making successful games.
The fair value of these assets on acquisition of £10,195k was determined by
discounting estimated future net cash flows generated by the asset where no
active market for the assets exists.
The Group tests intellectual property for impairment only if there are
indications that these assets might be impaired. An impairment loss is
calculated as the difference between its carrying amount and the present value
of the estimated future cash flows.
Franchise agreements
The intangible asset of the Franchise Business was the net present value of
the net income from the franchisee agreements acquired.
The approach selected by management to value the franchise agreements was the
Multi-Period Excess Earnings Method ("MEEM") which is within the income
approach. The multi-period excess earnings method estimated value is based on
expected future economic earnings attributable to the agreements.
The key assumptions used within the intangible asset valuation were as
follows:
- Economic life - The valuation did not assume income for a period
longer than the asset's economic life (the period over which it will generate
income). The contractual nature of the Franchise Agreements (with terms
typically between 6 and 10 years) means it is possible to forecast with a
reasonable degree of certainty the remaining term of each agreement and
therefore the period in which it will generate revenue. Only contracts which
were signed at the acquisition date were included.
- Renewal - No provision for the renewal of existing Franchise
Contracts has been included with the valuation. This reflects the fact that
potential contract renewals will only take place several years in the future,
and the stated strategy of management has been to focus on the development of
owner-managed sites rather than renewing the franchises when they are due for
renewal - as they may be bought out.
- Contributory Asset Charges (CAC) - The projections assumed after
returns are paid/charged to complementary assets which are used in conjunction
with the valued asset to generate the earnings associated with it. The only
CAC identified by management is the charge relating to IP - a charge has been
included to take into account the Intellectual Property used within the
franchise operation. This is considered key in generating earnings at the
franchised sites. Management has applied the same royalty rate of 10% used to
value this asset.
- Discount Rate - The Capital Asset Pricing Model ("CAPM") was used to
calculate a discount rate of 12.3%.
- Taxation - At the time of acquisition, the franchise profits were
earned within a group subsidiary which was incorporated in the Labuan province
of Malaysia. The tax rate applicable in Labuan was applied to the earnings
generated from franchise operations for franchise contracts acquired at that
time. The acquisitions in France and the UK during 2021 have used anticipated
tax rates of 25.75% and 25% respectively.
During the period ended 31 March 2025, the assets of Boom Aldgate East, Boom
Wandsworth, Boom Bournemouth, Boom Southampton and Boom Ipswich were
purchased. As such amounts that were previously being held as Franchise
agreement intangibles have been transferred to goodwill to reflect the new
group ownership and management of these companies.
The carrying amount of the franchise agreements has been considered on the
basis of the value in use derived from the expected future cash flows.
14. Subsidiaries
Details of the Company's subsidiaries as at 31 March 2025 are as follows:
Name of subsidiary Country of incorporation Principal activity as at 31 March 2025 Effective equity interest held by the Group (%) Ref
Escape Hunt Group Limited England and Wales Operator of escape rooms 100
#1
Escape Hunt IP Limited England and Wales IP licensing 100 #1
Escape Hunt Franchises Limited England and Wales Franchise holding 100 #1
Escape Hunt Innovations Limited England and Wales Game design 100 #1
Escape Hunt Limited England and Wales Dormant 100 #1
Escape Hunt USA Franchises Ltd England and Wales Franchise holding 100 #1
Escape Hunt Entertainment LLC United Arab Emirates Operator of Escape Rooms in Dubai and master franchise to the Middle East 100 #1
BGP Escape France France Operator of Escape Rooms in Paris and master franchise to France, Belgium and 100 #1
Luxembourg
BGP Entertainment Belgium Belgium Operator of Escape Rooms in Brussels 100 #1
BBB Franchise Limited England and Wales Franchise holding 100 #1
BBB Ventures Limited England and Wales Dormant 100 #2
BBB UK Trading Limited England and Wales Central administration and employment entity for the Boom owner-operated 100 #2
division
Boom BB One Limited England and Wales Operator of battle bar Lakeside 100 #2
BBB Six Limited England and Wales Operator of battle bar Edinburgh 100 #2
BBB UK Property Limited (formerly BBB Seven Limited) England and Wales Operator of battle bars in 14 locations 100 #2
BBB Eleven Limited England and Wales Operator of battle bar Plymouth 100 #2
BBB Twelve Limited England and Wales Operator of battle bar Manchester 100 #2
BBB Thirteen Limited England and Wales Operator of battle bar Oxford Street 100 #2
BBB Fourteen Limited England and Wales Operator of battle bar Exeter 100 #2
BBB IP Limited (formerly BBB Seventeen Limited) England and Wales Holder of Boom IP 100 #2
Boom East Limited England and Wales Operator of battle bar Norwich 100 #2
Boom Battle Bar Cardiff Limited England and Wales Operator of battle bar Cardiff 100 #2
BBB Chelmsford Limited England and Wales Operator of battle bar Chelmsford 100 #2
BBB Ealing Limited England and Wales Former operator of battle bar - Ealing 100 #2
BBB Five Limited England and Wales Former operator of battle bar - Glasgow 100 #2
BBB Liverpool Limited England and Wales Former operator of battle bar - Liverpool 100 #2
Boom Battle Facilities Management Services LLC United Arab Emirates Operator of battle bar Dubai 100 #1
Each of the companies incorporated in England and Wales have their registered
office at 70-88 Oxford Street, London, England, W1D 1BS.
Each of the subsidiaries for which reference #1 is shown is directly held by
the Company. Those referenced #2 are held indirectly through one of the
directly held subsidiaries.
The registered address of each overseas subsidiary is as follows:
Escape Hunt Entertainment LLC
Retail Space 26, Galleria Mall, Al Wasl Road, Bur Dubai, Dubai
Boom Battle Facilities Management Services LLC
Office no. 1506-7, The One Tower, Al Thanya First, Dubai, UAE
BGP Escape France
112 bis rue cardinet 75017, France
BGP Entertainment Belgium
13-15 rue de Livourne, 1060 Brussels
Previously held entities
Escape Hunt Operations Ltd
Lot A020, Level 1, Podium Level, Financial Park Labuan, Jalan Merdeka,8700
Labuan, Malaysia.
E V Development Co. Ltd
No. 689 Bhiraj Tower at EmQuartier, Sukhumvit (Soi 35) Road, Klongton-Nua
Sub-district, Bangkok, Thailand.
Experiential Ventures Limited
103 Sham Peng Tong Plaza, Victoria, Mahe, Seychelles.
Boom BB Two Limited
70-88 Oxford Street, London, England, W1D 1BS
BBB Three Limited
70-88 Oxford Street, London, England, W1D 1BS
BBB Fifteen Limited
70-88 Oxford Street, London, England, W1D 1BS
BBB Sixteen Limited
70-88 Oxford Street, London, England, W1D 1BS
15. Business Combination
Acquisition of business and assets of Boom Battle Bar Aldgate East
On 9 May 2024, the XP Factory Group acquired the business and assets of BBB1
Ltd. BBB1 Ltd Ltd runs an owner operated Boom Battle Bar site situated in
Aldgate East.
The details of the business combination are as follows:
£'000
Fair value of consideration transferred
Amounts settled in cash 154
Loan receivable (80)
Settlement of vendor debts 129
Total consideration 203
No further acquisition related costs were incurred.
Book Value Fair Value Adjustment £'000 Fair Value £'000
£'000
Assets and liabilities recognised as a result of the acquisition
Other receivables and deposits 83 - 83
Inventory 11 - 11
Property, plant and equipment 532 - 532
Right of use assets 1,849 - 1,849
Lease liabilities (1,849) - (1,849)
Loans (7) - (7)
Other payables (63) - (63)
Net identifiable assets acquired 556 - 556
Goodwill arising on acquisition - 168 168
Provision for lease guarantee recognised (521) - (521)
Total 35 168 203
No cash, trade receivables or trade payables were acquired.
The fair value of the total consideration exceeded the net identifiable assets
acquired giving rise to a goodwill balance of £168k arising from the
acquisition. As a condition of the acquisition, the group undertook to
guarantee the lease for BBB Nine Limited, which is operated under an operating
agreement and consolidated within the results, but is not owned. The present
value of the future lease obligations which run to June 2031 was considered
onerous and factored into the consideration. Boom Battle Bar Aldgate East
contributed £1.7m turnover and a proft of £0.2m in the period post
acquisition.
Acquisition of business and assets of Boom Battle Bar Wandsworth
On 9 May 2024, the XP Factory Group acquired the business and assets of BBB2
Ltd. BBB2 Ltd runs an owner operated Boom Battle Bar site situated in
Wandsworth.
The details of the business combination are as follows:
£'000
Fair value of consideration transferred
Amounts settled in cash -
Group receivables forgiven 57
Vendor loan receivable (153)
Total consideration (96)
Further acquisition related costs of £1k are included in administrative
expenses under the owner operated segment.
Book Value Fair Value Adjustment £'000 Fair Value £'000
£'000
Assets and liabilities recognised as a result of the acquisition
Inventory 13 - 13
Property, plant and equipment 413 (316) 97
Right of use assets 825 - 825
Lease liabilities (825) - (825)
Loans (6) - (6)
Other payables (200) - (200)
Net identifiable assets acquired 220 (316) (96)
Goodwill arising on consolidation - - -
Total 220 (316) (96)
No cash, trade or other receivables or trade payables were acquired.
The fair value of the total consideration is equal to the net identifiable
assets acquired and there is no goodwill arising from the acquisition. Boom
Battle Bar Wandsworth contributed turnover of £0.7m and a loss of £0.3m in
the period post acquisition.
Acquisition of business and assets of Boom Battle Bar Bournemouth
On 28 June 2024, the XP Factory Group acquired the business and assets of BBB
Bournemouth Ltd. BBB Bournemouth Ltd runs an owner operated Boom Battle Bar
site situated in Bournemouth.
The details of the business combination are as follows:
£'000
Fair value of consideration transferred
Amounts settled in cash 100
Vendor loan 302
Total consideration 402
Further acquisition related costs of £12k are included in administrative
expenses under the owner operated segment.
Book Value Fair Value Adjustment £'000 Fair Value £'000
£'000
Assets and liabilities recognised as a result of the acquisition
Other receivables and deposits 3 - 3
Inventory 10 - 10
Property, plant and equipment 716 - 716
Loans (15) - (15)
Other payables (328) - (328)
Net identifiable assets acquired 386 - 386
Goodwill arising on acquisition - 16 16
Total 386 16 402
No cash, trade receivables or trade payables were acquired.
The fair value of the total consideration exceeded the net identifiable assets
acquired giving rise to a goodwill balance of £16k arising from the
acquisition. Boom Battle Bar Bournemouth contributed turnover of £1.0m and a
profit of £0m in the period post acquisition.
Acquisition of business and assets of Boom Battle Bar Southampton
On 1 November 2024, the XP Factory Group acquired the business and assets of
BBB Southampton Ltd. BBB Southampton Ltd runs an owner operated Boom Battle
Bar site situated in Southampton.
The details of the business combination are as follows:
£'000
Fair value of consideration transferred
Amounts settled in cash 350
Vendor loan 199
Total consideration 549
Further acquisition related costs of £11k are included in administrative
expenses under the owner operated segment.
Book Value Fair Value Adjustment £'000 Fair Value £'000
£'000
Assets and liabilities recognised as a result of the acquisition
Other receivables and deposits 37 - 37
Inventory 12 - 12
Property, plant and equipment 500 (62) 438
Right of use assets 955 - 955
Lease liabilities (955) - (955)
Loans (6) - (6)
Other payables (92) - (92)
Net identifiable assets acquired 451 (62) 389
Goodwill arising on acquisition - 160 160
Total 451 98 549
No cash, trade receivables or trade payables were acquired.
The fair value of the total consideration exceeded the net identifiable assets
acquired giving rise to a goodwill balance of £160k arising from the
acquisition. Boom Battle Bar Southampton contributed £0.7m turnover and
£0.1m profit in the period post acquisition.
Acquisition of business and assets of Boom Battle Bar Ipswich
On 21 November 2024, the XP Factory Group acquired the business and assets of
Raskan Enterprises Ltd. Raskan Enterprises Ltd runs an owner operated Boom
Battle Bar site situated in Ipswich.
The details of the business combination are as follows:
£'000
Fair value of consideration transferred
Amounts settled in cash -
Group receivables forgiven 51
Total consideration 51
No further acquisition related costs were incurred.
Book Value Fair Value Adjustment £'000 Fair Value £'000
£'000
Assets and liabilities recognised as a result of the acquisition
Other receivables and deposits 94 - 94
Inventory 15 - 15
Property, plant and equipment 579 (397) 182
Right of use assets 688 - 688
Lease liabilities (885) - (885)
Loans (5) - (5)
Other payables (38) - (38)
Net identifiable assets acquired 448 (397) 51
Goodwill arising on consolidation - - -
Total 448 (397) 51
No cash, trade receivables or trade payables were acquired.
The fair value of the total consideration is equal to the net identifiable
assets acquired and there is no goodwill arising from the acquisition. Boom
Battle Bar Ipswich contributed £0.3m turnover and £0.0m profit in the period
post acquisition.
16. Loan to franchisee
A loan of £300,000 is due from a master franchisee which bears interest at 5%
per annum plus 2% of the franchisee's revenues and was repayable in
instalments between January 2020 and June 2023.
The majority of income receivable under the terms of the loan relates to
interest at a fixed rate. The impact of COVID-19 on the borrower in 2020 was
significant with performance not improving to the level expected since then.
As a result it is considered unlikely that the loan will be repaid. As at 31
March 2025 this loan, together with accrued interest, has been provided for in
full.
17. Trade and other receivables
As at As at
31 March 31 March
2025 2024
£'000 £'000
Trade receivables (customer contract balances) 843 1,636
Prepayments 1,871 1,840
Accrued income (customer contract balances) 881 481
Deposits and other receivables 605 122
4,200 4,079
The Group's exposure to credit risk and impairment losses related to trade
receivables is disclosed in Note 30.
Significant movements in customer contract assets during the Year ended 31
March 2025 are summarised below:
Year ended 31 March 2025: Trade Accrued income
Receivables
£'000 £'000
Contract assets:
Balance at 1 January 2023 1,934 782
Transfers from contract assets recognised at the beginning of the period to 782 (782)
receivables
Net (decreases)/increases as a result of changes in the measure of progress (669) 633
Provisions for doubtful amounts (410) (31)
Balance at 31 March 2024 1,636 603
Transfers from contract assets recognised at the beginning of the period to 603 (603)
receivables
Net (decreases)/increases as a result of changes in the measure of progress (1,063) 913
Provisions for doubtful amounts (332) (32)
Balance at 31 March 2025 843 881
The amount of revenue recognised from performance obligations satisfied in
previous periods is nil.
The group receives payments from customers based on terms established in its
contracts. In the case of franchise revenues in Escape Hunt, amounts are
billed within five working days of a month end and settlement is due by the
14(th) of the month. In the case of franchise revenues in Boom Battle Bar,
amounts are billed every Tuesday and settlement is due by Friday each week.
Accrued income relates to the conditional right to consideration for completed
performance under the contract, primarily in respect of franchise revenues.
Accounts receivable are recognised when the right to consideration becomes
unconditional.
18. Inventories
As at As at
31 March 31 March
2025 2024
£'000 £'000
Branch consumables (at cost) 495 348
Total inventories 495 348
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the weighted average principle and includes expenditure incurred in
acquiring the inventories and other costs in bringing them to their existing
location and condition. As items are sold, the costs of those items are drawn
down from the value of inventory and recorded as an expense under costs of
sale in the profit and loss for the period.
The movement in stocks was as follows:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Balance brought forward 348 323
Amounts recognised as expense during the period (7,135) (6,736)
Acquired through acquisition 61 64
Purchases / cost incurred 7,221 6,697
Total inventories 495 348
19. Cash and cash equivalents
As at As at
31 March 31 March
2025 2024
£'000 £'000
Bank balances 1,095 3,935
Cash and cash equivalents in the statement of cash flow 1,095 3,935
The currency profiles of the Group's cash and bank balances are as follows:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Pounds Sterling 670 3,350
Australian Dollars 3 100
United States Dollars 10 165
Euros 291 223
United Arab Emirates Dirhams 121 97
1,095 3,935
20. Trade and other payables (current)
As at As at
31 March 31 March
2025 2024
£'000 £'000
Trade payables 3,663 3,757
Accruals 4,925 5,544
Deferred income 2,153 1,809
Taxation 5 320
Loans due in < 1yr 1,140 1,941
Other taxes and social security 1,784 1,595
Other payables - 87
13,670 15,054
21. Deferred income
As at As at
31 March 31 March
2025 2024
£'000 £'000
Contract liabilities (deferred income):
Balance at beginning of year 2,228 1,484
Revenue recognised in the year that was included in the deferred income (1,907)
balance at the beginning of the year and from balances acquired during the
year (1,484)
Drawdown of landlord contributions (68) (15)
Increases due to cash received, excluding amounts recognised as revenue during 1,640 1,620
the period
Increases on acquisition of new businesses 422 611
Decreases on termination of franchises - (18)
Translation differences - 6
Reclassification 436 24
Transaction price allocated to the remaining performance obligations 2,751 2,228
All of the above amounts relate to contracts with customers and include
amounts which will be recognised within one year and after more than one year.
The amounts on the early termination of upfront franchise fees were recognised
as revenue as all performance obligations have been satisfied.
As at As at
31 March 31 March
2025 2024
£'000 £'000
Upfront exclusivity, legal and training fees 73 173
Landlord contributions 618 250
Escape room advance bookings 483 504
Boom Battle Bar advance bookings 1,161 943
Gift vouchers 416 358
2,751 2,228
Within one year After more than one year Total
£'000 £'000 £'000
Upfront exclusivity, legal and training fees 25 48 73
Landlord contributions 68 549 617
Escape room advance bookings 483 - 483
Boom Battle Bar advance bookings 1,161 - 1,161
Gift vouchers 416 - 416
As at 31 March 2025 2,153 597 2,750
Within one year After more than one year Total
£'000 £'000 £'000
Upfront exclusivity, legal and training fees 30 142 172
Landlord contributions 69 181 250
Escape room advance bookings 504 - 504
Boom Battle Bar advance bookings 943 - 943
Gift vouchers 359 - 359
As at 31 March 2024 1,905 323 2,228
Deferred revenues in respect of upfront exclusivity fees are expected to be
recognised as revenues over the remaining lifetime of each franchise
agreement. Deferred legal fees are recognised on the earlier of the date of
completion of the franchise lease and the date of occupation and training fees
are recognised on the date the franchise site is opened. The average remaining
period of the Escape Hunt franchise agreements is approximately two years. The
average remaining life on all Boom franchise leases is approximately seven
years. All other deferred revenue is expected be recognised as revenue
within one year.
22. Provisions
The following provisions have been recognised in the period:
Year ended 15 Month Period ended
31 March 31 March
2025 2024
£'000 £'000
Dilapidations provisions 775 539
Provision for financial guarantee contracts 58 70
Other provisions 636 -
1,469 609
Provisions represent future liabilities and are recognised on an item by item
basis based on the Group's best estimate of the likely committed cash outflow.
Movements on provisions can be illustrated as follows:
Deferred consideration Dilapi-dations Financial guarantee contracts Other Total
£'000 £'000 £'000 £'000 £'000
Cost:
As at 31 March 2024 - 539 70 - 609
Provisions recognised 100 251 - 707 1,058
Releases recognised (100) (15) (12) (71) (198)
As at 31 March 2025 - 775 58 635 1,469
The ageing of provisions can be split as follows:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Within one year 294 -
After more than one year 1,175 609
1,469 609
Financial guarantee contracts relate to leases where the Group has signed as
co-tenant or has provided a guarantee for a site operated by a franchisee.
31 March 31 March
2025 2024
£'000 £'000
Provision for financial guarantee contracts at start of period 70 94
Additional provision in period - -
Releases in period (12) (24)
Provision at 31 March 2025 58 70
Number sites for which guarantees provided 4 6
Average term of lease remaining (years) 9.4 12.9
Average annual rent (£'000) 132 165
At the end of the reporting period, the directors of the Company have assessed
the past due status of the debts under guarantee, the financial position of
the debtors as well as the economic outlook of the industries in which the
debtors operate. There has been no change in the estimation techniques or
significant assumptions made during the reporting periods in assessing the
loss allowance for these financial assets.
23. Share capital
As at As at
31 March 31 March
2025 2024
£'000 £'000
Issued and fully paid:
At beginning of the year: 174,557,600 (2024: 150,633,180) Ordinary shares of
1.25 pence each
2,182 1,883
Issued during the year: 600,000 Ordinary shares 8 299
As at end of period / year 2,190 2,182
- 175,157,600 (2024: 174,557,600)
Ordinary shares of 1.25 pence each
XP Factory Plc does not have an authorised share capital and is not required
to have one.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
During the Year ended 31 March 2025, the following changes in the issued share
capital of the Company occurred:
- 600,000 shares were issued at nominal value of 1.25 pence per share
to the trustees of the Employee Share Incentive Plan to be utilised to satisfy
matching and free share awards made in accordance with the plan rules.
24. Borrowings
As at As at
31 March 31 March
2025 2024
£'000 £'000
Amounts due within one year
Vendor loans 433 922
Fit out finance, including equipment finance leases 492 795
Bank and other borrowings 215 224
1,140 1,941
Amounts due in more than one year:
Vendor loans 173 234
Fit out finance 286 683
Bank and other borrowings 4,388 1,000
As at end of period / year 4,847 1,917
During the year, the Group bought back five franchise sites in Aldgate East,
Wandsworth, Bournemouth, Southampton and Ipswich. The Bournemouth and
Southampton acquisitions used vendor finance in form of deferred payments to
the franchisee to help fund the respective acquisitions. Details are set
out in note 15. As at 31 March 2025, £372k of this vendor finance remained
outstanding.
On 7 October 2024, the Company signed a two-year, £10m revolving credit
agreement with Barclays Bank plc. The facility is drawable and repayable at
the Company's discretion and is repayable at the end of the term. Drawn
funds accrue interest at 4.5% above the Bank of England Base Rate, and the
Company pays an availability fee of 1.8% on undrawn funds. At 31 March 2025
£4.5m of the facility had been drawn.
During the year ended 31 March 2025, the group made use of certain fit out
finance facilities from a range of different suppliers. The total fit-out
finance outstanding at the end of the period was £778k.
25. Share option and incentive plans
XP Factory Plc (formerly Escape Hunt Plc) Enterprise Management Incentive Plan
On 15 July 2020, the Company established the Escape Hunt plc Enterprise
Management Incentive Plan ("2020 EMI Plan"). The 2020 EMI Plan is an HMRC
approved plan which allows for the issue of "qualifying options" for the
purposes of Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003
("Schedule 5"), subject to the limits specified from time to time in paragraph
7 of Schedule 5, and also for the issue of non qualifying options.
It is the Board's intention to make awards under the 2020 EMI Plan to attract
and retain senior employees. The 2020 EMI Plan is available to employees
whose committed time is at least 25 hours per week or 75% of his or her
"working time" and who is not precluded from such participation by paragraph
28 of Schedule 5 (no material interest). The 2020 EMI Plan will expire on
the 10th anniversary of its formation.
The Company has made five awards to date as set out in the table below. The
options are exerciseable at their relevant exercise prices and vest in three
equal tranches on each of the first, second and third anniversary of the
grants, subject to the employee not having left employment other than as a
Good Leaver. The number of options that vest are subject to a performance
condition based on the Company's share price. This will be tested on each
vesting date and again between the third and fourth anniversaries of awards.
If the Company's share price at testing equals the first vesting price, one
third of the vested options will be exercisable. If the Company's share price
at testing equals the second vesting price, 90 per cent of the vested options
will be exercisable. If the Company's share price at testing equals or exceeds
the third vesting price, 100% of the vested options will be exercisable. The
proportion of vested options exercisable for share prices between the first
and second vesting prices will scale proportionately from one third to 90 per
cent. Similarly, the proportion of options exercisable for share prices
between the second and third vesting prices will scale proportionately from 90
per cent to 100 per cent.
The options will all vest in the case of a takeover. If the takeover price
is at or below the exercise price, no options will be exercisable. If the
takeover price is greater than or equal to the second vesting price, 100 per
cent of the options will be exercisable. The proportion of options
exercisable between the first and second vesting prices will scale
proportionately from nil to 100 per cent.
If not exercised, the options will typically expire on the seventh anniversary
of award. Options exercised will be settled by the issue of ordinary shares
in the Company.
Awards #1 #2 #3 #4 #5
Date of award 15-Jul-20 18-Nov-21 23-Nov-21 15-Dec-23 01-Oct-24
Date of expiry 15-Jul-27 18-Nov-26 23-Nov-26 29-Nov-30 31-Jul-31
Exercise price 7.5p 35.0p 35.0p 15.0p 14.0p
Qualifying awards - number of shares under option 13,333,332 700,001 533,334 0 0
Non-qualifying awards - number of shares under option 2,400,000 0 0 666,666 2,359,905
Awards lapsed 0 0 266,667 0 0
First vesting price 11.25p 43.75p 43.75p 18.75p 18.76p
Second vesting price 18.75p 61.25p 61.25p 25.05p 24.50p
Third vesting price 25.00p 70.00p 70.00p 26.25p 34.16p
Proportion of awards vesting at first vesting price 33.33% 33.33% 33.33% 33.33% 33.33%
Proportion of awards vesting at second vesting price 90.00% 90.00% 90.00% 90.00% 90.00%
Proportion of awards vesting at third vesting price 100% 100% 100% 100% 100%
As at 31 March 2025, 19,726,571 options were outstanding under the 2020 EMI
Plan (2024: 17,366,666).
As at As at
31 March 31 March
2025 2024
'000 '000
Options outstanding at the beginning of the period 17,367 16,700
Awards made during the year 2,360 667
Options exercised - -
Options lapsed or forfeited - -
Options outstanding at the end of the period 19,727 17,367
Options vested and exercisable at the end of the period 15,733 15,733
The sum of £30,994 has been recognised as a share-based payment and charged
to the profit and loss during the year (2024: £72,852). The fair value of
the options granted during the period has been calculated using the Black
& Scholes formula with the following key assumptions:
Awards #1 #2 #3 #4 #5
Exercise price 7.5p 35.0p 35.0p 15.0p 14.0p
Volatility 34.60% 31% 31% 35.0% 35.0%
Share price at date of award 7.375p 33.50p 32.00p 15.00p 12.50p
Option exercise date 15-Jul-24 18-Nov-25 23-Nov-25 31-Jul-29 31-Jul-30
Dividend yield 0% 0% 0% 0% 0%
Risk free rate -0.05% 1.55% 1.55% 3.50% 4.13%
The performance conditions were taken into account as follows:
The value of the options have then been adjusted to take account of the
performance hurdles by assuming a lognormal distribution of share price
returns, based on an expected return on the date of issue. This results in
the mean expected return calculated using a lognormal distribution equalling
the implied market return on the date of issue validating that the expected
return relative to the volatility is proportionately correct. This was then
used to calculate an implied probability of the performance hurdles being
achieved within the four year window and the Black & Scholes derived
option value was adjusted accordingly.
Time based vesting: It has been assumed that there is between a 90% and 95%
probability of all share option holders for each award remaining in each
consecutive year thereafter.
During the year, the expiry date of the options in #1 tranche was extended
from 15 July 2025 to 15 July 2027. The weighted average remaining
contractual life of the options outstanding at 31 March 2025 is 34.0 months
(31 March 2024: 18.9 months). No incremental value has been attributed to
the change.
An option-holder has no voting or dividend rights in the Company before the
exercise of a share option.
Escape Hunt Employee Share Incentive Scheme
In January 2021, the Company established the Escape Hunt Share Incentive Plan
("SIP").
The SIP has been adopted to promote and support the principles of wider share
ownership amongst all the Company's employees. The Plan is available to all
eligible employees, including Escape Hunt's executive directors, and invites
individuals to elect to purchase ordinary shares of 1.25p each in the Company
via the SIP trustee using monthly salary deductions. Shares are be purchased
monthly by the SIP trustee on behalf of the participating employees at the
prevailing market price. Individual elections can be as little as £10 per
month, but may not, in aggregate, exceed £1,800 per employee in any one tax
year. The Ordinary Shares acquired in this manner are referred to as
"Partnership Shares" and, for each Partnership Share purchased, participants
are awarded one further Ordinary Share, known as a "Matching Share", at nil
cost.
Matching Shares must normally be held in the SIP for a minimum holding period
of 3 years and, other than in certain exceptional circumstances, will be
forfeited if, during that period, the participant in question ceases
employment or withdraws their corresponding Partnership Shares from the Plan.
As at 31 March 2025, 677,475 matching shares (31 March 2024, 415,045) had been
awarded and were held by the trustees for release to employees pending
satisfaction of their retention conditions. A charge of £17,830 (15 months
to 31 March 2024: £26,167) has been recognised in the accounts in respect of
the Matching Shares awards. The fair value of the charge is based on the
market price of the shares on the day of the matching award.
26. Capital management
The Board defines capital as share capital and all components of equity.
The Board's policy is to maintain a strong capital base to maintain investor,
creditor and market confidence and to sustain future development of the
business. In particular, the Company has in the past raised equity as a means
of executing its acquisition strategy and as a sound basis for operating the
acquired Escape Hunt and Boom Battle Bar businesses in line with the Group's
strategy. The Board of Directors will also monitor the level of dividends to
ordinary shareholders.
The Company is not subject to externally imposed capital requirements.
27. Reserves
The share premium account arose on the Company's issue of shares and is not
distributable by way of dividends. During the year, the Company undertook a
capital re-organisation sanctioned by the Courts, to convert share premium
into distributable reserves. This resulted in a transfer of £48.8m from the
Share Premium account to distributable reserves.
The share-based payment reserve represents the cumulative charge for share
options over the vesting period with such charges calculated at the fair value
at the date of the grant.
The merger relief reserve arose from the issue of shares to by the Company in
exchange for shares in Experiential Ventures Limited and is not distributable
by way of dividends. Upon the liquidation of Experiential Ventures Limited,
the merger reserve has been transferred to retained income.
In the case of the Company's acquisition of Experiential Ventures Limited,
where certain shares were acquired for cash and others on a share for share
basis, then merger relief has been applied to those shares issued on a share
for share basis.
The currency translation reserve represents cumulative foreign exchange
differences arising from the translation of the Financial Statements of
foreign subsidiaries and is not distributable by way of dividends.
The capital redemption reserve has arisen following the purchase by the
Company of its own shares pursuant to share buy-back agreements and comprises
the amount by which the distributable profits were reduced on these
transactions in accordance with the Companies Act 2006.
28. Related party transactions
Related parties are entities with common direct or indirect shareholders
and/or directors. Parties are considered to be related if one party has the
ability to control the other party in making financial and operating
decisions.
During the period under review there were no material related party
transactions.
29. Directors and key management remuneration
Details of the Directors' remuneration are set out in Note 7 above.
30. Financial risk management
General objectives, policies and processes
The overall objective of the Directors is to set policies that seek to reduce
risk as far as possible without unduly affecting the Company's competitiveness
and flexibility. Further details regarding these policies are set out below.
The Directors review the Company's monthly reports through which they assess
the effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets.
Categories of financial assets and liabilities
The Company's activities are exposed to credit, market and liquidity risk. The
Company's overall financial risk management policy focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on its financial performance.
The principal financial instruments used by the Company, from which financial
instrument risk arises, are as follows:
· cash and cash equivalents;
· trade and other receivables; and
· trade and other payables;
The financial assets and financial liabilities maturing within the next 12
months approximated their fair values due to the relatively short-term
maturity of the financial instruments.
The Company had no financial assets or liabilities carried at fair values. The
Directors consider that the carrying amount of financial assets and
liabilities approximates to their fair value.
A summary of the financial instruments held by category is provided below:
Financial assets at amortised cost:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Trade receivables 843 1,636
Other receivables and deposits 1,601 2,152
Cash and cash equivalents 1,095 3,935
3,539 7,723
Financial liabilities at amortised cost:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Trade payables 3,663 3,758
Accruals and other payables 6,713 7,548
Other loans 5,987 3,858
16,363 15,164
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from
customers. The Group will provide against the carrying value receivables when
the board considers that there is no reasonable expectation of full
recovery. The provision reflects the extent to which a loss is expected.
The financial asset will be fully written off and removed from the books when
there is no longer any prospect of enforcement action.
The Group manages its exposure to credit risk by the application of credit
approvals, credit limits and monitoring procedures on an ongoing basis. For
other financial assets (including cash and bank balances), the Group minimises
credit risk by dealing exclusively with high credit rating counterparties.
As at 31 March 2025 £810k (2024: £3,650k) of the cash and bank balances,
as detailed in Note 19 to the preliminary financial statements are held in
financial institutions which are regulated and located in the UK, which
management believes are of high credit quality. Management does not expect any
losses arising from non-performance by these counterparties.
The concentration of credit risk is limited due to the fact that the customer
base is large and unrelated.
Management have assessed the increase in credit risk over the last 12 months
and have adjusted the carrying values of receivables where appropriate. In
aggregate, Management does not consider there to have been a significant
change in credit risk since initial recognition of receivables balances.
Management reviews credit risk on an ongoing basis taking into account the
circumstances at the time.
Impairment of financial assets
As described in Note 2 above, the Group applies the "expected loss" model
which focuses on the risk that a loan or receivable will default rather than
whether a loss has been incurred.
The carrying amount of financial assets in the statement of financial position
represents the Group's maximum exposure to credit risk, before taking into
account any collateral held. The Group does not hold any collateral in respect
of its financial assets.
Concentration of credit risk relating to trade receivables is limited due to
the Group's many varied customers. The Group's historical experience in the
collection of accounts receivable falls within the recorded allowances. Due to
these factors, management believes that no additional credit risk beyond the
amounts provided for collection losses is inherent in the Group's trade
receivables. The ageing of trade receivables at the reporting date was as
follows:
As at As at
31 March 31 March
2025 2024
Gross amounts (before impairment): £'000 £'000
Not past due 535 1,330
Past due 0-30 days 165 52
Past due 31-60 days 19 123
Past due more than 60 days 458 541
1,176 2,046
Impairment losses:
The movement in the allowance for impairment losses in respect of trade
receivables during the year was as follows:
As at As at
31 March 31 March
2025 2024
£'000 £'000
At beginning of year (410) (341)
Impairment losses recognised (285) (396)
Bad debts written off 434 15
Other adjustments (70) 312
At end of year (332) (410)
The allowance account for trade receivables is used to record impairment
losses unless the Group is satisfied that no recovery of the amount owing is
possible; at that point the amounts considered irrecoverable are written off
against the trade receivables directly.
The Group assesses collectability based on historical default rates expected
credit losses to determine the impairment loss to be recognised. Management
has reviewed the trade receivables ageing and believes that, except for
certain past due receivables which are specifically assessed and impaired, no
impairment loss is necessary on the remaining trade receivables due to the
good track records and reputation of its customers.
During the year ended 2020 the Group recognised an impairment in full against
both the capital and accrued interest portions of the loan receivable from a
master franchise. Further impairments have been recognised against all
interest due in the current financial period. Therefore as at 31 March 2025
the net balance outstanding on this loan per these preliminary financial
statements is nil (2024: £nil).
Liquidity risk
The ageing of financial liabilities at the reporting date was as follows:
As at As at
31 March 31 March
2025 2024
£'000 £'000
Not past due 15,231 13,818
Past due 0-30 days 304 731
Past due 31-60 days 43 205
Past due more than 60 days 784 410
16,363 15,164
Liquidity risk arises from the Company's management of working capital. It is
the risk that the Company will encounter difficulty in meeting its financial
obligations as they fall due.
The Company's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. The principal
liabilities of the Group arise in respect of trade and other payables which
are all payable within 12 months. At 31 March 2025, total trade payables
within one year were £3,663k (2024: £3,758k), which is more than the
Group's cash held at the year-end of £1,095k (2024: £3,936k). However, the
Board receives and reviews cash flow projections on a regular basis as well as
information on cash balances and projections show that cash generation from
the sites in the group, plus the availability of borrowing facilities will
allow the group to meet these liabilities as they fall due.
Market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
The Group has insignificant financial assets or liabilities that are exposed
to interest rate risks.
Foreign currency risk
The Group has exposure to foreign currency movements on trade and other
receivables, cash and cash equivalents and trade and other payables
denominated in currencies other than the respective functional currencies of
the Group entities. It also exposed to foreign currency risk on sales and
purchases that are denominated in foreign currencies. The currencies giving
rise to this risk are primarily the United States ("US") dollar and the Euro
("EUR"). Currently, the Group does not hedge its foreign currency exposure.
However, management monitors the exposure closely and will consider using
forward exchange or option contracts to hedge significant foreign currency
exposure should the need arise.
The Group's exposure to foreign currency risk expressed in Pounds was as
follows:
UK Pound Sterling United States Dollar Euro Australian Dollar Other Total
As at 31 March 2025 £'000 £'000 £'000 £'000 £'000 £'000
Financial assets:
Trade receivables 736 2 26 0 79 843
Other receivables and deposits 1,497 5 99 0 0 1,601
Cash and bank balances 669 10 291 3 122 1,095
2,902 17 416 3 201 3,539
Financial liabilities:
Trade payables 3,495 0 34 0 134 3,663
Other payables and accruals 6,246 0 309 0 158 6,713
Other loans 5,755 0 0 0 232 5,987
15,496 0 343 0 524 16,363
Foreign currency exposure (net) - 17 73 3 (323) (230)
UK Pound Sterling United States Dollar Euro Australian Dollar Other Total
As at 31 March 2024 £'000 £'000 £'000 £'000 £'000 £'000
Financial assets:
Trade receivables 1,510 - 76 - 51 1,636
Other receivables and deposits 2,076 - 76 - - 2,152
Cash and bank balances 3,455 60 223 100 97 3,935
7,040 60 374 100 148 7,723
Financial liabilities:
Trade payables 3,496 - 170 - 92 3,758
Other payables and accruals 7,224 - 276 - 47 7,548
Other loans 3,507 - - - 351 3,858
14,227 - 446 - 490 15,164
Foreign currency exposure (net) - 60 (71) 100 (342) (253)
Sensitivity analysis
A 10% strengthening of the Pound against the following currencies at 31 March
2025 would increase/(decrease) profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular interest rates,
remain constant.
Increase/ Increase/
(Decrease) (Decrease)
£'000 £'000
2024/25 2023/24
Effects on profit after taxation/equity
United States Dollar:
- strengthened by 10% (2) (6)
- weakened by 10% 2 6
Euro:
- strengthened by 10% (1) (7)
- weakened by 10% 7
Australian Dollar:
- strengthened by 10% - (10)
- weakened by 10% - 10
31. Commitments
As at 31 March 2025, the Group had capital expenditure commitments in respect
of leasehold improvements totalling £292,669 (2024: £nil).
32. Contingencies
The Directors are not aware of any other contingencies which might impact on
the Company's operations or financial position.
33. Events after the reporting period
Since the year end, the group has closed its Escape Hunt site in Birmingham
Central and its Boom site in Swindon. New Escape Hunt sites have opened in
Canterbury and Birmingham Resorts World, whilst a new Boom site has opened in
Reading. The group continued to invest in growth and has drawn a further
£4.5m of its Revolving credit facility with Barclays to fund these new sites
and other capital expenditure. These events do not give rise to adjustments
for the preliminary financial statements for the year ended 31 March 2025.
34. Ultimate controlling party
As at 31 March 2025, no one entity owns greater than 50% of the issued share
capital. Therefore,
the Company does not have an ultimate controlling party.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAXPFDLNSEFARecent news on XP Factory
See all newsREG - XP Factory PLC Canaccord GenuityGrp - Holding(s) in Company
AnnouncementREG - XP Factory PLC - Posting of Annual Report and Notice of AGM
AnnouncementREG - XP Factory PLC - Preliminary Unaudited Final Results
AnnouncementRCS - XP Factory PLC - Investor Presentation via Investor Meet Company
AnnouncementREG - XP Factory PLC - Director/PDMR Shareholding
Announcement