Trading Update

ON PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

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

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