TIDMESC
RNS Number : 4126Q
Escape Hunt PLC
26 February 2021
26 February 2021
Escape Hunt plc (AIM: ESC)
("Escape Hunt", the "Group" or the "Company")
Exchange of Contracts for French acquisition
and
Trading Update
Exchange of contracts for French Master Franchise Partner
Escape Hunt, a global leader in the growing escape rooms sector,
is pleased to announce that, further to its announcement made on 22
January 2021 ("Announcement"), it has exchanged contracts to
acquire its French master franchise partner, BGP Escape ("French
Acquisition"). The acquisition is expected to complete on or before
15 March 2021 with the terms of the deal the same in all material
respects as set out in the Announcement. A further announcement
will be made in due course.
Trading update
Highlights:
-- Modest improvement in FY20 Group Adjusted EBITDA loss(1) vs
FY19, despite COVID-19 restrictions on trade
-- Significant progress made in all aspects of the Company's strategy
o Owner-operated estate expanded by 89% from 9 to 17 (4 new
builds, 1 in progress, 3 acquisitions)
o Digital and play-at-home product range launched
o Further progress in the US
-- Encouraging levels of consumer demand between lockdowns gives
cause for cautious optimism on full reopening of UK owner-operated
sites
-- Cash balance at 31 January 2021 of GBP3.95m
Trading in 2020, both in the Company's UK and international
business, was severely impacted by government mandated restrictions
on the leisure industry in response to the COVID-19 pandemic.
However, as previously announced, the Company was able to take
action to mitigate the impact of the site closures, including the
launch of digital and play-at-home propositions, careful management
of costs, and by accessing certain government support schemes. In
addition, the Company has completed two successful fundraises since
COVID-19 restrictions were initially imposed; the first in July
2020 raised GBP4.3m (before expenses) ("July Placing") and a second
in January 2021, raised GBP1.4m (before expenses) ("January
Placing"), in part to fund the French Acquisition.
The July Placing, in particular, enabled the Company's
management to make significant progress in all aspects of the five
point value creation plan set out at the time, with shareholders
being appraised of the progress through the Company's announcements
during the second half of 2020 and in early 2021. In particular,
the Company's UK owner-operated estate has been substantially
expanded and, as set out above, the Company has successfully
launched a series of digital and play-at-home products. As a
result, the directors believe that the Company is in a strong
position to benefit from a resumption of activity once lockdown
restrictions are lifted.
Revenue for the year to 31 December 2020 fell to approximately
GBP2.6m from GBP4.9m in 2019. At a segmental level, revenue from
the UK owner-operated sites was approximately GBP2.0m (2019:
GBP3.8m), including revenue from digital and play-at-home solutions
of approximately GBP0.23m (2019: nil); whilst franchise revenue was
approximately GBP0.6m (2019: GBP1.1m).
Notwithstanding the significant reduction in turnover in the
year ended 31 December 2020, Adjusted Group EBITDA loss[1] is
expected to show a modest improvement compared to the prior year at
approximately GBP2.0m (2019: GBP2.1m).
The Group ended the year with GBP2.7m of cash (2019: GBP2.2m)
and the January Placing raised a further GBP1.4m (before expenses).
The Group held GBP3.95m of cash at the end of January 2021.
Further details will be provided in the Company's audited final
results for the year.
Outlook
Whilst the continuation of lockdown restrictions means that it
is difficult to plan for the months ahead, the pace at which the
vaccination programme is being rolled out in the UK and the recent
Government announcement outlining a route towards re-opening the
economy gives reason for a more positive outlook than the Company
was faced with only a few weeks ago. Evidence on re-opening after
the 2020 spring/summer lockdown was very encouraging and, as a
result, the Board is confident that both consumer and corporate
demand will return strongly when the restrictions currently in
place are lifted. At the same time, property market conditions in
the UK are increasingly favourable for those seeking to take on new
space and the Board is therefore actively looking at ways in which
the Company can capitalise on the opportunity and build on the
platform to cater for the growing demand for experiential leisure
activities and engagement.
In February 2020, the Company had only 9 Escape Hunt branded
owner-operated sites, all in the UK. Following completion of the
French Acquisition and the build-out at Kingston, the network will
have expanded to 17, with Milton Keynes potentially becoming the
Company's 18(th) owner-operated site. Once new site performance has
matured and conditions and demand have normalised post COVID-19,
the Directors believe that an owner-managed network of this size
should be capable of supporting positive group EBITDA and positive
cash generation, subject to reasonable assumptions in other areas
of the Group.
On the international front, the Board is excited about the
potential of bringing the French master franchise in-house
alongside the Middle East business which was acquired in September
2020, and the progress being made in the US with partners
Proprietors Capital Holdings, is encouraging. Whilst it is possible
that a small number of the Company's existing international
franchise network may not survive the challenges of the pandemic,
the opportunity for the other parts of the network to rejuvenate
after COVID-19 is tangible.
Finally, the significant progress made by the Company in
establishing digital and other play-at-home products has provided a
new, scalable revenue stream and growth opportunity, which the
directors expect to become an increasingly important part of the
business in the future. As a result, notwithstanding the prospect
that the coming weeks and possibly months are likely to remain
difficult for the whole leisure industry, the Board has reason to
look forward with cautious optimism.
The information contained within this announcement is deemed by
the Group to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014.
Enquiries
Escape Hunt plc
Richard Harpham (Chief Executive Officer)
Graham Bird (Chief Financial Officer) +44 (0) 20 7846
Kam Bansil (Investor Relations) 3322
Shore Capital - NOMAD and Joint Broker
Tom Griffiths, David Coaten (Corporate Advisory) +44 (0) 20 7408
Fiona Conroy (Corporate Broking) 4050
Zeus Capital - Joint Broker
John Goold +44 (0) 20 3829
Daniel Harris 5000
IFC Advisory - Financial PR
Graham Herring +44 (0) 20 3934
Florence Chandler 6630
Notes to Editors
About Escape Hunt plc
The Escape Hunt Group is a global leader in providing
escape-the-room experiences delivered through a network of
owner-operated sites in the UK, an international network of
franchised outlets in five continents, and through digitally
delivered games which can be played remotely. Its products enjoy
consistent premium customer ratings and cater for leisure or
teambuilding, in small groups or large, and are suitable for
consumers, businesses and other organisations. Having been
re-admitted to AIM in May 2017, the Company has a strategy of
creating high quality premium games and experiences delivered
through multiple formats and which can incorporate branded IP
content. (https://escapehunt.com/)
Facebook: EscapeHuntUK
Twitter: @EscapeHuntUK
Instagram: @escapehuntuk
[1] Before IFRS 16 adjustments and before Covid-related
provisions against franchisee receivables and loans to
franchisees
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