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XP Factory maintains growth momentum in Q1, in line with full-year market forecast

11:25, 8th May 2024
Victor Parker
Vox Newswire

XP Factory (XPFFollow | XPF, the experiential leisure company operating the Escape Hunt and Boom Battle Bar brands, issued a trading update for the 15-month period to March 31, 2024. As previously announced, XPF's year-end has been moved to March 31, resulting in the current fiscal year of 15 months.

XP Factory reported turnover of £57.8m for the 15-month period, compared to £22.8m for the 12 months to December 2022. Both brands saw strong LFL sales growth in the 13 weeks to March 31, 2024, with revenues up 11.6% and 11.7% respectively for Boom and and Escape Hunt. Overall performance is in line with market expectations for the FY to March 31, 2024.

The positive quarterly results follow a strong 12 months to December 31, 2023, when revenues doubled to £44.7m as Escape Hunt operated revenue rose 38% and Boom Battle bar sales jumped 201% on the back of new franchise acquisitions. Moreover, adjusted EBITDA doubled to £8.0m and FY22's (£4.9m) operating loss turned to a £1.7m profit.

Richard Harpham, CEO, commenting on today's results: "The Group's continued strong performance in the final three months of the financial year culminates a period of exceptional growth and development within the business. Trading in April has continued the positive momentum. Our investments into new sites are generating industry leading returns setting the business well to generate growth in shareholder value and providing the blueprint to continue our expansion."


View from Vox

A strong end to XP Factory's 15-month financial year as the company moves its year-end to March 31, with double-digit LFL growth in the 3 months to March 31 2024, in line with management expectations. Group turnover for the 15-month period came in at £57.6m, up 80% on the comparable 15-month period. Robust LFL growth was driven by new acquisitions and maturing of sites opened in the latter part of 2022, and expansion of owner-operated estates of both Boom and Escape Hunt.

Recent quarterly performance follows material growth throughout calendar 2023 as the group aggressively expanded its footprint, effectively doubling in scale for the 2nd year running. At the same time, XPF generated £9.5m in cash from operations (of which £6.9m was invested in capex) while maintaining healthy gross margins of 64.2%. The expansion trend is bound to continue, with a pipeline of further site openings being advanced this year. Cash on December 31, 2023 was £4.4m, with both brands having significant runways ahead of them.

Overall, experiential leisure has shown strong demand despite economic headwinds, and XP Factory's aggressive expansion strategy is paying off. The sector has proven to be highly resilient despite continuing pressures on the consumer, with competitive socialising in particular growing steadily at 13% per year, partially driven by corporate sales. Therefore, we would expect further expansion from XPF in the short-term at a pace consistent with cash generation.

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