XP Factory H2 EBITDA seen ahead of market expectations

Escape Hunt and Boom Battle Bar operator XP Factory said on Wednesday that it expects to deliver positive group underlying earnings in its second trading half, excluding R&D credits, with group underlying earnings expected to be ahead of market expectations.

XP Factory said it had brought in £5.1m in revenues from owner-operated Escape Hunt sites in the second half, up 133% when compared to 2019's pre-Covid comparative, while Escape Hunt site-level EBITDA was expected to exceed £2.0m in the period, a 340% improvement on 2019, driven by its enlarged estate, underlying like-for-like growth and improved margins.

The AIM-listed firm stated that since the acquisition of Boom Battle Bar, completed on 23 November 2021, significant progress had been made in the development of the network with The O2 opening as an owner-operated site in December, and Wandsworth and Coventry opening as franchises.

Elsewhere, XP Factory noted that in December 2021 it had submitted a further application for research and development grants related to expenditure incurred during 2019 and 2020. In early January, the firm received confirmation that the applications had been successful and has since received £1.5m in cash, net of fees by way of R&D credits, further boosting its cash reserves.

Chief executive Richard Harpham said: "We are delighted with the performance our Escape Hunt business in the second half of 2021, with activity bouncing back strongly after the lockdown in H1. Our acquisition of Boom Battle Bar which completed in late November 2021 is settling in well and we have made excellent progress on the site pipeline.

"With Covid restrictions now being substantially lifted in the coming days, we have much reason to be optimistic about the future."

As of 0945 GMT, XP Factory shares were up 9.11% at 30.55p.