TIDMESC
RNS Number : 1421H
Escape Hunt PLC
02 August 2021
2 August 2021
Escape Hunt plc (AIM: ESC)
("Escape Hunt", the "Company" or the "Group")
Trading update
Escape Hunt, a leading international operator of escape rooms in
the fast-growing experiential leisure sector, is pleased to provide
an update on trading since the re-opening of its UK sites and for
the six months to June 2021 ahead of the release of its unaudited
interim results due to be announced in September 2021.
UK owner operated estate
As set out in its AGM statement and trading update announced on
28 June 2021, the Company's UK owner-operated sites re-opened on 17
May 2021, following a pro-longed period of closure brought about by
the UK Government's lockdown measures introduced at the start of
the year.
Trading in the ten weeks to 25 July 2021 has been encouraging,
with levels of occupancy returning faster than expected after
lockdown. As a result, revenue and site level EBITDA from the UK
owner-operated estate in the ten-week period to 25 July 2021 has
been ahead of management's expectations.
Total revenue during the ten-weeks to 25 July 2021 was 58 per
cent. higher than in the same ten-week period in 2019 (in the
Board's opinion, the most relevant period for comparison as trading
in the same period in 2020 was affected by COVID-19 restrictions).
Over this 10 week period, revenue from the Company's eight
established UK owner-operated sites which were open in the same
period in 2019 was at 95 per cent. of the levels in the same period
in 2019. However, occupancy has continued to grow week on week, and
encouragingly the like-for-like performance has further improved
over the last five weeks, with sales from these original sites
exceeding sales in the same period in 2019 by 2 per cent.
As set out in its announcement on 28 June 2021, the Company is
benefitting from various initiatives implemented during 2020 to
improve site level margins and has also benefitted from the
temporary reduced VAT rate which is expected to run until 30
September 2021. As a result, estimated earnings before interest,
tax, depreciation and amortisation ("EBITDA") at site level for the
ten weeks to 25 July 2021 showed a 185 per cent. increase over the
site level EBITDA in the same ten weeks in 2019. On a like-for-like
basis, site level EBITDA from the Company's eight established sites
increased by 83 per cent. compared to 2019, and this improved
further to 114% improvement over the last five weeks.
Overseas owner operated sites
The Group's owner-operated site in Dubai has performed well,
with revenue and EBITDA in the six months to 30 June 2021 running
ahead of the Board's expectations. At current levels of trading,
the performance from Dubai will have paid back the investment in
under 12 months, notwithstanding the impact of COVID-19 on
performance since its acquisition in October 2020.
The Group's owner-operated sites in Brussels and Paris opened
during June 2021 and have also experienced a faster than
anticipated bounce back of business, with turnover marginally ahead
of the Board's expectations in the few weeks of trading so far.
International franchise
The Company's franchise estate has performed in line with the
Board's expectations in the six months to 30 June 2021, with
stronger performance in Australia offsetting the pro-longed period
of closure of the majority of sites in Europe, most notably in
France.
H1 2021 Group outturn
Throughout the period of lockdown, the Company continued to
manage its cash carefully. The cash balance at 30 June 2021 was
GBP2.4m. In addition, the Company has access to a GBP1m convertible
loan note facility, details of which are set out in its 2020 Annual
Report and Accounts. The facility remains undrawn.
Unaudited Group revenue in H1 2021 was impacted by COVID-19
restrictions, most notably the UK Government mandated lockdown
which meant all the Group's UK owner-operated sites were closed
from the beginning of the year with indoor games only re-opening on
17 May 2021. Unaudited Group revenue in the half year to 30 June
2021 is expected to be approximately GBP1.1m, (2020: GBP1.3m),
comprising GBP0.9m revenue from owner operated sites (2020:
GBP1.0m) and GBP0.2m from franchise revenue (2020: GBP0.3m).
Investors should note that the comparative period in 2020 was also
affected by COVID-19, as the UK's first national lockdown commenced
in late March 2020, but included approximately 11 weeks' trading in
the UK. In contrast, the half year to 30 June 2021 includes only 6
weeks of full trading in the UK owner operated sites. Many of the
Group's franchisees were affected by lockdowns in their own
countries in both half year periods. Owner-operated site revenue
includes GBP151k from remote and digital propositions (2020:
GBP53k).
Progress on strategic initiatives
Further progress has been made on the Group's UK rollout; the
Company has now exchanged contracts at a new site in Milton Keynes,
which will be the Group's 18(th) owner-operated venue, and work to
develop the site is in progress. Work is also continuing at the
Group's proposed 19(th) owner-operated site in the Lakeside
shopping centre in Essex, where games have been delivered and are
in the process of being installed. Further potential sites are in
the pipeline and the Board believes property conditions will
continue to be favourable in the short to medium term. As a result,
the Board remains confident of achieving the target of 20
owner-operated sites ahead of the original target date of June
2022.
Whilst growth in revenue from digital and remote propositions
has slowed as demand for the physical rooms has increased, the
Company is continuing to see demand for this range of products and
expects B2B sales, including corporate participation in physical
escape rooms, to pick up in the Autumn as many more employees are
expected to return to office-based work.
Progress in the US has been slowed by travel restrictions
impacting the pace at which escape rooms at the new super-centre in
Houston, Texas can be installed. However, with restrictions around
the world gradually easing, the Board expects this situation to be
short lived.
Commenting on the recent trading, Richard Harpham, CEO of Escape
Hunt said: "We are very pleased with the performance of the
business since the UK sites re-opened in May with occupancy levels
bouncing back more quickly than we had expected. The new sites in
Norwich, Basingstoke, Cheltenham, Watford and Kingston are
contributing meaningfully to our performance and provide confidence
in our site selection and strategy to continue the roll out of new
owner operated sites in the UK. Most pleasingly, the operational
efficiency at site level has been very good with improved EBITDA
margins leading to significant growth compared to comparable
periods in the past. We are also encouraged with the performance so
far of our acquisitions in both the Middle East and France /
Belgium where demand appears to be coming back, providing the
prospect of attractive rates of return on our investments. We
remain very firmly of the view that consumer spending on
experiential leisure will continue to grow and that the Group is
well placed to benefit from this shift in spending patterns giving
us cause for optimism for our future."
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 +44 (0) 20 7408
Tom Griffiths, David Coaten (Corporate Advisory) 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
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
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END
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