REG - XP Factory PLC - Trading Update

XP FactoryAnnouncement

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RNS Number : 1981R  XP Factory PLC  02 February 2026

2 February 2026

XP Factory Plc

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

Trading Update

XP Factory, one of the UK's pre-eminent experiential leisure businesses
operating the Escape Hunt(TM) ('EH') and Boom Battle Bar(TM) ('Boom') brands,
announces an update on trading for the 2025/26 festive period.

Trading summary:

·     Record quarterly sales with UK Owned and Operated ("O&O")
revenue growth of +4.2% in the 13 weeks to 28 December 2025

·      Year to date Group unaudited pre-IFRS 16 adjusted EBITDA of
£4.8m in the 39 weeks to 28 December 2025 (+£0.1m vs prior year)

·      Exceptional trading at Escape Hunt O&O

o  +10.0% total UK O&O sales growth in the 13 weeks to 28 December 2025,
driven by +6.4% UK LFL ("like-for-like") sales growth and new site openings

o  Site level EBITDA margins of circa 43% year to date

o  New sites opened in the current year in Canterbury, Sheffield and Resorts
World expansion trading in line with expectations, Colchester Escape Hunt in
build

·      Positive overall growth within Boom O&O but continuing LFL
sales decline, with ongoing sector softness

o  +2.5% UK O&O sales growth, with +9.7% attributable to the
annualisation of prior year acquisitions and site openings

o  -7.2% UK LFL sales decline 1  (#_ftn1) in the 13 weeks to 28 December 2025
as strong corporate bookings were unable to compensate for declines in
consumer sales

o  Site level EBITDA margins circa 18% year to date

o  Material labour cost increases driven by rises in National Insurance
contributions and National Living Wage, which have not been possible to fully
mitigate given lower sales

o  Sharpened focus on cost control, with £2m annualised run-rate cost
savings achieved so far, partially mitigating the impact from LFL declines and
labour cost inflation

o  Initial signs of sector consolidation starting to accelerate, reflecting
challenging market conditions within the competitive socialising industry
which experienced a -9% LFL 2  (#_ftn2) sales decline during calendar 2025

o  As the scale operator, Boom is well positioned to emerge as a winner when
market conditions improve, consistent with XP Factory's prior experience in
Escape Rooms

·      Net debt position of £5.6m as at 28 December 2025

·      Given the slower than expected Boom B2C performance over the key
festive period which has continued into January, the Board now expects FY26
revenue and EBITDA to be below current market estimates with the Board
expecting FY26 pre-IFRS16 adjusted EBITDA of between £5.0m and £6.0m.

·      Whilst the long-term growth opportunity remains highly
attractive, due to challenging market conditions impacting LFL growth and cost
inflation, the Board has taken the prudent view to moderate the pace of new
site openings in the near term. FY27 is also therefore expected to be a year
of consolidation, with remaining uncertainty driven by market conditions

Recent trading

The challenges experienced by the hospitality industry have been widely
publicised with increases in national insurance and National Living Wage
(NLW), cost inflation and what is now several years of heightened economic
uncertainty having a negative impact. Reflecting these factors, independent
data suggests the experiential leisure industry suffered negative LFL sales
growth in the calendar year 2025 of around -9%. Within the Competitive
Socialising segment these financial challenges are becoming increasingly
evident, with several operators entering administration during the year.
Meanwhile Escape Hunt has continued to see a reduction in direct competition.

As the scale operator, Boom is in a healthy position to thrive when market
conditions improve, reflecting the precedent in the Escape Room industry where
Escape Hunt has emerged as the clear winner through a prolonged period of
consolidation. Whilst XP Factory has not been immune to these near-term
external influences, the Group has outperformed the industry and made further
progress towards achieving its longer-term strategic objectives.

Escape Hunt continues to exhibit incredibly resilient trading, with UK O&O
revenue growth of +10.0% in the 13 weeks to 28 December 2025. The growth was
driven by +6.4% UK LFL sales growth, together with contributions from new
sites opened in Canterbury and Sheffield, as well as the annualization of
Cambridge and Glasgow which opened in 2024. This was partly offset by the
Birmingham Central site closure in March 2025, where the Landlord was forced
to vacate the entire building. The new sites have continued to perform in line
with management expectations. A new site is now in build in Colchester and
expected to open before year end, in time for the Easter holidays.

The site pipeline remains vibrant, and the most recent trading data only
serves to reinforce the view that Escape Hunt, with its market leading return
on capital and deep customer resonance, can in the medium-term become a 100
site business within the UK alone. However, in light of the macro-economic
uncertainty, the Board has decided to adopt a more cautious approach to
near-term capital deployment and will in the near-term slow the pace of new
openings to preserve a material headroom against the Company's borrowing
facilities. At 28 December 2025, the Group had net debt of £5.6m, giving
significant headroom relative to covenant limits.

Boom delivered +2.5% growth in the 13 weeks to 28 December 2025, supported by
the annualization of the Ipswich and Southampton acquisitions completed in
2024, the annualization of the Cambridge site opened in 2024, and the in-year
opening of Reading. This was offset by continuing challenging market
conditions which drove a LFL sales decline of -7.2% across the estate.
Corporate sales remained resilient, with positive LFL growth in the period,
but this was offset by continued softness in consumer sales. During the key
four-week corporate season, LFL sales growth was -3.6% against a strong
comparable base that saw +17% LFL growth in the prior year. In January 2026,
the Group made the difficult decision to permanently close the Southend venue,
reflecting local economic challenges and disappointing footfall.

Both brands have also experienced material labour cost inflation, reflecting
the sharp increases to National Living Wage (NLW) and National Insurance
implemented in April 2025 which has had a circa £1.5m annualised impact. In
response to LFL pressure and rising costs, management has intensified its
focus on cost control with £2m of annualised cost savings implemented to date
which has partly mitigated these impacts.

Outlook

The Group remains confident in the significant long-term growth opportunity,
supported by a substantial runway for new site openings. With scale and
industry leading returns, the Board expects both brands to emerge as winners
in their respective segments as the industry consolidates. Nevertheless, in
the near term, the Group has not been immune to the challenging market
conditions which have continued to impact Boom's consumer LFL growth through
the festive period and into 2026. This means that the Board now expects FY26
EBITDA below current market expectations, with the Board expecting FY26
pre-IFRS16 adjusted EBITDA of between £5.0m and £6.0m. FY27 is additionally
expected to be a year of consolidation, with remaining uncertainty given
market conditions and we are moderating accordingly the pace of our new site
openings. The Board expects that taking this action will leave the Company
well-positioned to capitalise on the longer-term growth opportunities as and
when the current external turbulence subsides and provide greater flexibility
in capital allocation decisions.

Commenting, Richard Harpham, Chief Executive of XP Factory plc said "Against a
backdrop of well-documented industry challenges, we have continued to
outperform the wider experiential leisure market and make progress against our
strategic objectives. While near-term trading within Boom has been impacted by
market pressures, with strong market positions and a compelling UK growth
runway, we remain well positioned to emerge as a long-term winner as the
sector continues to consolidate."

Enquiries:

 XP Factory Plc                                                          +44 (0) 20 7846 3322

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

 Richard Harpham (Chief Executive Officer)

 Dominic Richards (Strategy and Corporate Finance Director)

 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

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the
publication of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public domain.

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

 

 1  (#_ftnref1) Excluding Southend-on-Sea as a discontinued site

 2  (#_ftnref2) Source: CGA RSM Hospitality tracker

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