XP Factory (XPF) , the experiential leisure company operating the Escape Hunt and Boom Battle Bar brands, issued a trading update for the 52 weeks to December 2023.
The group doubled turnover to £44.5m from £22.8m in 2022, with exceptional like-for-like (LFL) sales growth across both brands during the period. Boom sales increased by 29% and Escape Hunt sales were up 17% from the previous year. During the Christmas period, XPF saw record corporate sales, with Boom LFL sales up 50% and Escape Hunt LFL sales up 20% in December.
Boom site-level EBITDA margins are expected to be significantly ahead of H1 2023 and in line with management expectations, with a mature target of 20-25%. Escape Hunt's site-level EBITDA margins continued to exceed 40%. Both franchises continued to expand, with Boom acquiring franchises in Liverpool, Glasgow and Watford in Q4 2023, and Escape Hunt opening a new owner-operating site in Woking in H2 2023.
XP Factory's strong performance in 2023 further increases confidence of meeting market expectations for the financial year to March 31, 2024.
View from Vox
Solid 2023 results from XP Factory with a particularly strong holiday season, driven by robust corporate sales in December across both brands. Turnover more than doubled to £44.5m, reflecting robust sales growth and the inclusion and maturing of sites opened in 2022. In the second half alone, turnover surpassed that of the entire 2022. The group benefited from strong operational leverage in H2, supporting improved EBITDA margins in line with management expectations.
Overall performance is expected to be in line with market expectations for the 12 months to December 31, 2023, and provides confidence of meeting market expectations for the 15-month financial year to March 31, 2024. Both brands have strong momentum with expanding estates and rising sales. XP Factory's official interim report for the 12 months to December 31, 2023 will be published in March.
In general, experiential leisure has shown strong demand despite economic headwinds, and XP Factory's aggressive expansion strategy has paid 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.
Markets welcomed the strong results, pushing XPF shares 5.2% higher in early trade.
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