REG - XP Factory PLC - Trading Update

XP FactoryAnnouncement

18/01/2024 07:00

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RNS Number : 0623A  XP Factory PLC  18 January 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS CONSIDERED TO BE IN THE
PUBLIC DOMAIN.

 

18 January 2024

XP Factory Plc

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

Trading Update

"Very strong December trading underpins confidence for financial year to 31
March 2024"

XP Factory, one of the UK's pre-eminent experiential leisure businesses
operating the Escape Hunt and Boom Battle Bar brands, is pleased to provide an
update on trading for the 52 week period to 31 December 2023.

Highlights:

Substantial growth sees XPF double revenues for the second year in a row

 ·             Group turnover of circa £44.5m was 95% ahead of prior year (2022: £22.8m)
 ·             Exceptional like for like sales growth delivered across both brands in the 52
               weeks to 31 December 2023:
 ·                                                      Boom: up 29%
 ·                                                      Escape Hunt: up 17%
 ·             Record corporate sales at Christmas drove strong like-for-like sales in
               December 2023 :
 ·                                                      Boom: up 50%
 ·                                                      Escape Hunt: up 20%
 ·             Performance provides confidence of meeting market expectations for the
               financial year to 31 March 2024

Operating metrics being delivered

 ·             Boom's continuing maturity profile, combined with strong operating leverage in
               H2 2023, delivered site level EBITDA margins in line with management's
               expectations (mature target of 20% - 25%)
 ·             Escape Hunt site level EBITDA margins continue to exceed 40%
 ·             Both businesses continue to enjoy the highest customer ratings in the industry

Strategic progress continuing

 ·             Boom former-franchise sites in Liverpool, Glasgow and Watford all acquired in
               Q4 2023
 ·             New Boom owner-operated sites opened in Dubai, Canterbury and Southend in H2
               2023
 ·             New Escape Hunt owner-operated site opened in Woking in H2 2023

Trading

The Group experienced a particularly strong end to the calendar year, buoyed
by robust corporate sales in December across both brands.  Group turnover for
the twelve months to 31 December 2023 almost doubled to exceed £44.5m (2022:
£22.8m). This notable increase reflects robust like-for-like growth, the full
year inclusion and maturing of sites opened in the latter part of 2022, and
expansion of the owner operated estates of both Boom and Escape Hunt.  The
performance is a culmination of the significant operational and strategic
progress made throughout the year which has focused on implementing learnings
from the rapid roll-out of sites in 2022 in Boom, and further optimisation of
performance in Escape Hunt. The Group benefitted from operational leverage in
the final months of the year, supporting improved EBITDA margins in H2, in
line with management's expectations.

Escape Hunt

Escape Hunt had an exceptional twelve months.  Like for like sales growth
within the Group's owner-operated estate was 17%(1) for the twelve months to
31 December 2023, (19%(1) in the UK) which rose to 20% in the final five weeks
of the calendar year. Total sales within the owner operated estate are
expected to exceed £13 million, an increase of well over 30% on 2022. With
the benefits of operating leverage, site level EBITDA margins are once again
expected to exceed 40%, well above the internal benchmarks set for the
business.

A new site in Woking was opened in July 2023, bringing the owner operated
estate to 24 sites.

The Escape Hunt international franchise business is expected to show a modest
decline in revenue given the estate has reduced in size.

Boom Battle Bar

Sales from the Boom owner operated estate exceeded £27.5m, a near threefold
increase on 2022 (2022: £9.5m), with like for like sales up 29% in the 52
weeks to 31 December 2023. The maturing nature of the young sites, combined
with significant operational focus, saw performance improve month on month,
culminating in an extraordinary Christmas period which delivered 50% like for
like sales in the final five weeks of the year. As sales continue to grow,
operating leverage continues to improve, and accordingly site level EBITDA
margins are expected to be significantly ahead of H1 2023 and in line with the
board's expectations for the twelve months to December 2023.

Three new owner operated sites were opened in the six-month period to 31
December 2023; Dubai in July, Canterbury in September and Southend in
October.   In addition, franchise sites in Liverpool and Glasgow were bought
back in November 2023 and Watford in December 2023.   As at 31 December
2023, the owner operated estate comprised 19 sites.

Franchise revenue for the twelve month period is expected to be broadly flat
year on year (2022:£2.8m), reflecting underlying growth offset by the smaller
estate as sites have been bought back.

Group

Overall performance is expected to be in line with market expectations for the
twelve months to 31 December 2023, and provides confidence of achieving market
expectations for the 15 month financial year to 31 March 2024.

The Company will publish an interim report for the 12 months to 31 December
2023 in March 2024, and audited financial statements for the 15 months to 31
March 2024 during the summer.

Commenting, Richard Harpham, Chief Executive of XP Factory plc said "We are
delighted with the performance of the Group over Christmas and for the twelve
months to December 2023.  Group turnover in the second half of the year
surpassed that of the entirety of 2022, showcasing the substantial growth and
transformative step change in scale achieved. Our offerings continue to
resonate well with a broad spectrum of customers, whose support and loyalty,
combined with the trading momentum we are carrying, positions the business
favourably and underpins our confidence in meeting market expectations for our
15 month financial period to 31 March 2024."

(1) After normalising for the VAT benefit in Q1 2022

 

Enquiries:

 XP Factory Plc                                                          +44 (0) 20 7846 3322

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

 Richard Harpham (Chief Executive Officer)

 Graham Bird (Chief Financial Officer)

 Kam Bansil (Investor Relations)

 Singer Capital Markets, NOMAD and Broker                                +44 (0) 20 7496 3000

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

 Peter Steel

 Alaina Wong

 James Fischer

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

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

 Graham Herring

 Florence Chandler

Notes to Editors:

About XP Factory plc

 

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

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

 Facebook:   EscapeHuntUK       BoomBattleBar
 Twitter:    @EscapeHuntUK      @boombattlebar
 Instagram:  @escapehuntuk      @boombattlebar

 

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