XP Factory revenues jump 130% in H1 as it continues aggressive rollout
() , the experiential leisure company behind Escape Hunt and Boom Battle Bar, announced unaudited interim results for the 6 months ended June 30 2023 (H1 2023).
XP Factory reported significant growth across the board, with revenues up 130% to £18.7m, adjusted EBITDA up 120% to £2.4m, and gross margins maintained at a high 62.1%. Escape Hunt site revenue increased 41% to £6.1m while Boom Battle Bar revenues jumped 416% to £11.3m on the back of recent franchise acquisitions. Cash as at June 30 2023 was £3.7m, up from £3.2m last year.
On a like-for-like basis, both owner operated brands saw double-digit sales growth. Sales at Boom sites were up 19.6% and Escape Hunt saw a 20.4% increase during the period. Boom site-level EBITDA margins were 19% in sites trading over 12 months, and Escape Hunt EBITDA margins hit 40%, exceeding internal targets.
View from Vox
Strong results from XP Factory, largely tracking what was announced in its August interim trading update. Revenues jumped 130% compared to the same period in 2022, primarily as a result of the aggressive rollout of Boom Battle Bar. EBITDA margins continued to trend toward mature targets.
Boom revenue grew 416%, reflecting like-for-like (LFL) growth of 19.6% as the number of owner-operated franchises increased from 2 in January 2022 to 13 on 30 June 2023. Not to be outdone, Escape Hunt owner-operated revenue also grew 41% on a LFL basis, reflecting new turnover from sites opened in H2 2022 in Edinburgh, Bournemouth, and London Oxford Street, together with 20% LFL growth from existing franchises. Group adjusted EBITDA before IFRS16 grew strongly from £275k to £1.049m and to £2.356m from £1.07m in H1 2022 after IFRS 16 adjustments.
Post-period end, the group's performance rebounded strongly in July and August following the typically quieter May and June period. LFL growth within the Boom franchises was 25% and within Escape Hunt it was 23% in the 9 weeks to 3 September 2023. XP Factory saw Boom margins grow post-period while Escape Hunt maintained H1 margins. The company expressed confidence in meeting full-year market expectations.
XP Factory continued its aggressive expansion post-period with a new Boom site opening in Dubai in July, and Boom sites in Canterbury and Southend on track to open in September and October respectively. A new Escape Hunt site opened in Woking in July with strong performance so far. As of the time of the interim release, XP Factory had 24 Escape Hunt and 15 Boom owned and operated sites.
In general, experiential leisure has shown strong demand despite current economic headwinds, and XP Factory's aggressive expansion strategy is paying off. The sector has proven to be highly resilient despite current pressures on the consumer, with competitive socialising in particular growing steadily at 13% per year. Therefore, we would expect further expansion from in the short-term at a pace consistent with cash generation.
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