TIDMESC

RNS Number : 1344N

Escape Hunt PLC

28 September 2021

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

28 September 2021

Escape Hunt plc

("Escape Hunt", the "Company" or the "Group")

Half Yearly Results for the Six Months ended 30 June 2021

Escape Hunt plc (AIM: ESC), a global leader in the growing escape rooms sector, is pleased to announce its unaudited interim results for the six months ended 30 June 2021.

 
                        Half year ended   Half year ended 
                          30 June 2021      30 June 2020 
                           (GBP'000)         (GBP'000) 
 Revenue                     1,178             1,306 
                       ----------------  ---------------- 
 Gross Profit                 801               900 
                       ----------------  ---------------- 
 Adjusted EBITDA [1] 
  loss, pre-IFRS 16          (796)             (816) 
                       ----------------  ---------------- 
 Loss per share             (2.81)           (11.48p) 
                       ----------------  ---------------- 
 

HIGHLIGHTS

 
  --    Strong post lockdown bounce back from UK sites which 
         re-opened on 17 May 2021 
              o    H1 revenue GBP1,178k with UK sites open for only 
                    six weeks in the period (H1 2020: GBP1,306k from 
                    c.11 weeks UK trading) 
              o    Site level EBITDA for the half year GBP441k (H1 
                    2020: 499k) 
              o    Improved EBITDA conversion ratios benefitting 
                    from technology investment and labour changes 
  --    Downloadable and play at home games continue to be additive, 
         contributing GBP151k in the period (H1 2020: GBP53k) 
  --    Adjusted EBITDA loss in the half year reduced to GBP796k 
         (HI 2020: GBP816k) 
  --    Basic loss per share ('EPS') of 2.81p (H1 2020 loss 
         per share: 11.48p) 
  --    Dubai acquisition performing ahead of expectations with 
         payback expected in less than 12 months 
  --    Completion of GBP1.4m placing of new shares at 17.5p 
         per share to fund acquisition of master franchise in 
         France and Belgium and provide working capital 
  --    New UK owner operated sites opened in Watford and Kingston 
         on 17 May 2021 bringing total UK owner operated sites 
         to 14; further sites secured and in build at the Lakeside 
         shopping centre in Essex and in Milton Keynes. This 
         brings us to 16 owner operated sites in the UK and 19 
         in total 
 
 

POST PERIOD- HIGHLIGHTS

 
  --   Strong bounce back in sales continuing 
  --   Mature LFL sites delivering 117% of pre-COVID (2019) sales 
        with total sales (including new sites) delivering 192% 
        of 2019 level in the 16 weeks between re-opening and 5 
        September 2021 
  --   July and August both profitable at Group EBITDA level 
        (even stripping out UK Government COVID support) which 
        validates our previous assertion that with the existing 
        estate, the Company could become cash generative over 
        a full year 
  --   All owner operated sites trading with positive contribution 
  --   On track to be operating from 20 owner operated sites 
        well ahead of target of July 2022 
  --   Build finally commenced at US franchise 'super centre' 
        in Houston after considerable COVID-related delays 
  --   Awarded TripAdvisor(TM) Traveller's Choice awards at all 
        eligible UK sites for second year in a row 
  --   Strong cash management ensured cash balance of GBP2.4m 
        at 30 June 2021 (31 Dec 2020: GBP2.7m) and GBP2.4m at 
        31 August 2021 
  --   Receipt of further GBP0.95m (net of advisory fees) R&D 
        credits from HMRC in September 2021 which will be recognised 
        in H2 2021 (H2 2020: GBP0.2m) further boosting cash resources 
 

Richard Harpham, Chief Executive of Escape Hunt, commented : " It has been extremely pleasing to see such a strong bounce back of consumer demand in the UK over the summer. Encouragingly, we are now beginning to see an increase in corporate activity which we expect to show further growth as office-based work begins to return over the Autumn. Our acquisitions in both the Middle East and France / Belgium are performing well and we believe they will generate a very attractive return on investment underpinning our international franchise efforts whilst our new sites have all traded profitably virtually from day one. It is clear that escape rooms have now entered the mainstream consumer psyche underpinning confidence in our strategy and the significant strategic progress made in the last 18 months. Notwithstanding the incredibly tough conditions for the leisure industry during this period, the Company has emerged stronger and with a platform with significantly greater critical mass. We look forward with optimism."

 
 Enquiries 
 Escape Hunt plc 
  Richard Harpham (Chief Executive Officer) 
  Graham Bird (Chief Financial Officer) 
  Kam Bansil (Investor Relations)                     +44 (0) 20 7846 3322 
 Shore Capital - NOMAD and Joint Broker 
  Tom Griffiths, David Coaten (Corporate Advisory) 
  Fiona Conroy (Corporate Broking)                    +44 (0) 20 7408 4050 
 Zeus Capital - Joint Broker 
  John Goold 
  Daniel Harris                                       +44 (0) 20 3829 5000 
 IFC Advisory - Financial PR 
  Graham Herring 
  Florence Chandler                                   +44 (0) 20 3934 6630 
 

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.

CHIEF EXECUTIVE'S REPORT

INTRODUCTION

It has been very encouraging to see the return of consumer demand as COVID restrictions have lifted in both the UK and many of the other regions in which Escape Hunt operates. While recognising that the pandemic is not yet over, we are hopeful that, with the success of the vaccination programme, life can resume without the need for further economically damaging restrictions.

The strong performance of our franchisee Escape Rooms in Australia in the early part of the year when Australia initially came out of lock down gave us optimism that demand would return in the UK and Europe once sites were allowed to re-open. We were correct in our expectation that demand would take a few weeks to return to full strength and we have been delighted to see that it continued to build through July and August to very encouraging levels. It is increasingly evident that Escape Rooms have entered the consumer psyche and it is now becoming a natural consideration of 'things to do' alongside more traditional leisure activities. We see this as part of a growth trend in experiential leisure.

Perhaps one of the most satisfying aspects of the recent performance has been the energy with which our staff have returned to work and the resultant five-star consumer ratings all our sites in the UK enjoy, including our newly opened sites. In August 2021, all the UK sites which had been open for more than a year, and therefore eligible for consideration, received the prestigious TripAdvisor(TM) Travellers' Choice awards, placing them in the top 10% of businesses listed on TripAdvisor(TM).

We have made further strategic progress in the period, which we discuss in more detail below. Significantly, we added to our owner operated estate through the acquisition of our French and Belgian master franchise which gave us an owner operated site in both Paris and Brussels. We also opened two new owner operated sites in the UK in Watford and Kingston respectively and we are in the process of building two further sites - one at the Lakeside shopping centre in Essex and one in Milton Keynes. Given the excellent returns we are achieving on new sites, we are actively evaluating a number of further sites helped by favourable property conditions.

The performance of our owner operated estate since re-opening has further demonstrated the attractions of our business model. The estate as a whole has outperformed against our target 'box economics', whilst still showing growth. The site level EBITDA margins we are achieving, notwithstanding the short-term help from a lower VAT rate and business rates holiday, have been particularly encouraging.

Within our franchise estate, different countries have been affected in varying ways. However, overall, the estate has performed well and, whilst we have lost a small number of sites which have been forced to close as a result of financial hardship under COVID, it is pleasing to see those that have survived performing again with a number registering record weekly revenue performances.

There is a significant opportunity both in the UK and more widely in the retail property market and we believe that Escape Hunt is well positioned to take advantage of the more attractive terms on offer. In turn, we expect this to make future sites even more financially attractive than before. With our 'box economics' now unequivocally proven and the evidence that consumers enjoy the Escape Hunt offering, the Board looks forward to the next phase of our progress with optimism.

OWNER OPERATED SITES

The owner operated estate comprised 17 sites at the end of June 2021; 14 sites in the UK and 1 in each of Paris, Brussels and Dubai. Total owner operated revenue in the period fell by 8% to GBP936k (H1 2020: GBP1,017k), although both periods were severely impacted by lockdown restrictions and the periods are therefore not easily comparable. Site level EBITDA fell 12% to GBP441k (H1 2020: GBP499k).

UK

The UK estate re-opened to the public on 17 May 2021, following a protracted COVID lockdown enforced by the UK Government. As a result, the reporting period includes only six weeks' trading where physical indoor games were available. Trading since re-opening has been very encouraging. Although there has undoubtedly been a 'post COVID bounce', the duration of which is unknown, there has to date been a low level of corporate bookings which we expect to resume gradually as people return to office working and we would hope that this will replace any end to the 'COVID bounce'.

Revenue and EBITDA from the UK owner operated estate has been significantly ahead of the Board's expectations in the 16 weeks since re-opening, between 17 May 2021 and 5 September 2021. Revenue for the 8 sites which were open in the same period in 2019 was up 17% than in the same period in 2019. At an EBITDA level, the performance was even more positive with both July and August profitable at group EBITDA level. In the 16 weeks of trading to 5 September 2021, our estimated site level EBITDA from the eight sites that were open in the same period in 2019 was 172% higher than in the same period in 2019.

Across all UK sites, including our new sites, revenue in the 16-week period grew 92% compared to 2019, and site level EBITDA grew 326%.

Encouragingly, five of the six newest UK sites have been performing in line with high performing, more mature sites. The sixth site is growing nicely, albeit operating at reduced capacity whilst awaiting its full complement of games

Dubai

Dubai was open throughout the six months to 30 June 2021, although trading was impacted to some extent by COVID restrictions. Nevertheless, the Dubai site delivered a performance over the period which was marginally ahead of the Board's expectations. Following a strong performance in July 2021 and another profitable month in August 2021, the profits generated from Dubai since its acquisition in October 2020 have more than covered the acquisition cost, inclusive of fees, leading to a payback of significantly less than one year.

The team in Dubai has recently won a tender to participate in the 'Riyadh Season', which is an Expo funded by the government of Saudi Arabia to promote tourism and leisure. The Expo runs for a number of months from 1 October 2021 and Escape Hunt will be present with both physical and VR games. The costs are all covered by the Expo's promoters and the event provides an excellent opportunity to test our new modular designed games whilst promoting the brand to both consumers and potential franchisees. The event should generate a meaningful contribution for our Middle East business in the current financial year.

France and Belgium

The acquisition of the master franchise for France and Belgium completed on 8 March 2021. Excluding earnout, the consideration represented approximately 1x the business' historic EBITDA and was funded using a portion of the proceeds from a placing of 8 million shares at 17.5p per share which was announced on 28 January 2021. As a condition of the deal, the Group's six leading franchisees in France all signed new franchise agreements, extending for a further six years on renewed terms. We now have direct relationships with our French franchisee network and our Paris based team are working effectively with them.

Lockdown in both Belgium and France was extended until early June 2021, so these half year results include very little trading from the two countries. However, both France and Belgium have seen a resumption of business and, taking into account the delayed re-opening, have been performing in line with our expectations. We remain confident of generating a very good return on capital from the acquisition and in building on the progress made in the region by the previous owners.

FRANCHISE OPERATIONS

International franchise

It has been a difficult period for many of our international franchise operators. Whilst Australia enjoyed a period of relative freedom from COVID in Q1 and Q2 2021, a number of Australian sites have had to close again due to renewed lockdowns. As set out above, France and other northern European countries all endured long lockdown periods which extended throughout most of the reporting period. When sites have been open, it has been evident that there is considerable consumer demand, so we are confident that the estate will return to previous performance levels. We have been going through a process to refresh our franchise relationships increasingly interacting directly rather than through a master franchisee and this seems to be paying off. We have made significant progress in developing our games catalogue, which is delivering higher quality games and associated collateral to our franchise network. During the period, our franchisee in Buenos Aires was forced to close due to financial pressures and our site in Singapore is currently closed, although it remains to be seen whether this is permanent. Excluding these latter two, the franchise estate comprised 28 venues in 11 countries at the end of the period.

US franchise

Progress in the US has been impacted by COVID notably through the effects on travel. We have previously noted that our area representative in the USA, PCH, is establishing a 'super centre' in Houston which will serve as the hub from which they can showcase an Escape Hunt site to prospective franchisees. New modular design games have been built and were delivered to Houston several weeks ago, but installation has been delayed due to travel restrictions. However, with restrictions gradually lifting, we expect the installation to complete in the coming weeks.

The team and PCH hosted an initial set of 'Discovery days' in the period and are building a pipeline of potential franchise partners.

OPERATIONAL PROGRESS

The relationship with our new games manufacturer has been working well and our 'modular' games design is now standard for all new sites. The manufacturer is also providing options for some of our franchise network. We continue to work on ways to streamline the installation process and reduce dependency on specialist know how required for the installation.

Our operations team has done an amazing job managing the 'pingdemic' during a very busy time as a result of which all our sites were able to operate at capacity throughout. The enthusiasm with which staff have returned to work is a testament to the team and the culture we have built in the organisation.

FINANCIAL REVIEW

Group revenue in the first half was GBP1,178k (H1 2020: GBP1,306k) comprising GBP936k (H1 2020: GBP1,017k) from owner-operated sites and GBP242k (H1 2020: GBP287k) from the franchise network reflecting a period when across the estate, many franchise sites were closed. Downloadable print and play games together with remote play and digital games contributed GBP151k to revenue (H1 2020: GBP53k). Whilst gross profit margin was lower than the comparable period in the prior year, this was largely as a result of direct labour training costs incurred prior to re-opening and the cumulative, although relatively small, costs not covered by furlough payments during lockdown.

Site level EBITDA from the Group's owner-operated sites was GBP199k (H1 2020: GBP254k) reflecting modest cost reductions helped by furlough, and the benefit received from Government support schemes during lockdown. The P&L benefit from the Government rates holiday and rates-related grants totalled GBP432k in the period of which GBP341k was received in cash grants and the balance being the benefit of the rates holiday.

Central costs, including costs allocated to owner-operated sites and the franchise network in aggregate fell 9% to GBP1,237k (H1 2019: GBP1,359k). Much of this can be attributed to the success of all our head office staff working from home, which led to a decision to exercise a break clause in our head office property lease which terminated in Q1 2021. This is expected to lead to annualised savings of over GBP100k per annum. We have been successfully making use of more flexible working arrangements whilst providing a location in central London for colleagues to meet and work together when necessary. The overall cost reflects a 30% reduction compared to central costs in the same period in 2019 illustrating the impact of a number of enduring cost cuts. As the Group resumes its planned growth trajectory, central costs are expected to rise, although at a significantly lower rate than turnover and gross profit as we expect a substantial operational gearing benefit.

Group Adjusted EBITDA [2] loss reduced to GBP796k (H1 2020: GBP816k).

 
                                 Six months   Six months 
                                 ended June   ended June 
                                       2021         2020 
                                    GBP'000      GBP'000 
Adjusted EBITDA                       (796)        (816) 
Amortisation of intangibles          (216))      (1,078) 
Depreciation                        (1,038)      (1,111) 
Rent credits recognised                  25            - 
Loss on disposal of tangible 
 assets                                (18)            - 
Branch closure costs and 
 other exceptional costs              (147)            - 
Foreign currency gains / 
 (losses)                               (6)            - 
Share-based payment expense            (26)          (5) 
-----------------------------  ------------  ----------- 
Operating loss                     (2,222))      (3,010) 
-----------------------------  ------------  ----------- 
 

Group operating loss reduced by 27% to GBP2,222k (H1 2020: GBP3,010k) and the total comprehensive loss for the period was GBP2,390k (H1 2020: GBP3,073k). Branch closure and other exceptional costs include costs associated with the acquisition of the French and Belgian master franchise, and provision against the remaining balance on a loan made to a franchisee several years ago.

We have continued to manage cash carefully, with net cash used in operating activities of GBP100k (H1 2020: GBP94k). The movement was helped by GBP836k of positive working capital movements. Approximately GBP706k of this was as a result of an increase in trade and other payables. The increase is attributable to approximately GBP390k of capital expenditure on Lakeside and Milton Keynes which was paid in July 2021; approximately GBP250k reflects the estimated earnout payable in relation to the French and Belgian acquisition; and the balance is from an increase in the sale of gift vouchers since sites have re-opened. Approximately GBP512k of property related creditors remained on the balance sheet at 30 June 2021 and is expected to unwind in the second half of the year.

The Group had GBP2,414k cash on hand at the end of the period (31 Dec 2020: GBP2,722k). Cash was boosted by the GBP1.4m fund raising which completed on 28 January 2021. Cash on hand at the end of August 2021 was GBP2.4m.

In September 2021, the Group received GBP1.2m cash (GBP950k net of associated fees) in respect of research and development grants from HMRC. The grant will be recognised in H2 and is in addition to the GBP256k (GBP207k net of fees) recognised in 2020. The cash receipt has further boosted the Group's cash reserves.

STRATEGY

As previously set out, the Board has set out a five-point plan to deliver shareholder value:

   1.     Roll-out of owner-operated network through direct investment 
   2.     Deliver US Franchise network in partnership with PCH 

3. Sustain and support growth in existing franchise network; sign further master franchise agreements

   4.     Broaden the product offer and market reach 
   5.     Investment in infrastructure to improve efficiency and scalability 

The target set in July 2020 was 20 owner-operated sites in the medium term, being within two years of the July 2020 fundraise, with a longer-term ambition of 50 sites. Following the acquisitions of sites in Dubai, Paris and Brussels, and the successful opening of new sites in Norwich, Basingstoke, Cheltenham, Watford and Kingston, the Group's owner operated estate at 30 June 2021 comprised 17 sites. Fit out is well advanced in Lakeside and is in progress at Milton Keynes. Both sites are expected to open in Q4 2021. A strong pipeline of further sites is also in negotiations and the Board is confident of achieving the medium-term target of 20 owner operated sites well ahead of the target date of July 2022.

Conditions in the property market remain attractive. A number of well known high street brands in both retail and hospitality have gone out of business since COVID impacted the economy leaving many vacancies. As a result, COVID has increased pressure at a time when landlords were already struggling to occupy empty units. Institutional landlords are increasingly looking to alternative use options, including leisure and as a result, Escape Hunt is seen as an attractive option. Many sites are seeing significant reductions in rent. This, together with the Group's recent trading performance since the re-opening of sites in the UK on 17 May 2021 has proved the strength of the site level proposition and, as a result, Escape Hunt is able to contemplate sites which previously would have been unaffordable.

The US is key to our ambitions for our franchise business and we are working closely with our area representative, PCH, to support it in its efforts to begin to roll out our Escape Hunt franchises in North America. PCH is establishing a 'super centre' Escape Hunt site in Houston which will serve as the core reference site for prospective franchisees. As mentioned above, progress was slowed by COVID, not only due to the lockdowns, but more recently by travel restrictions which have slowed progress in installing our modular games. The restrictions are gradually easing and, with games already on site, progress should now accelerate.

Focus on the existing franchise network is currently on supporting its recovery from COVID closures. Whilst we are not yet specifically targeting new regions, it is positive that we have started to see a resumption of enquiries from prospective and credible franchisees.

Our plans to broaden the product offering and market reach made good progress in the latter part of 2020, with early successes in our remote play games, 'Escape Hunt for Business', 'Escape Hunt for Education' and 'Escape Hunt for Brands' propositions. Our focus has now shifted to growing sales from these propositions and we have invested in a business development team to drive our Escape Hunt for Business proposition forward. The team has delivered over GBP180k of corporate sales, comprising over 400 'deals' in the year to end of August 2021. Whilst remote play revenue dropped off over the summer, we have seen a resumption of interest in corporate solutions in recent weeks as employees are returning to offices. We expect activity to pick up ahead of the Christmas booking season.

Regarding our infrastructure, the development of a more advanced games management platform is now complete and has been rolled out at all of our most recently opened sites and is the default solution for all new sites and in existing sites where it is practicable to do so. The benefits are already evident in the significant improvement in our labour efficiency ratios since re-opening. Work has also progressed on other projects, including data management and our e-commerce platform. This latter project is a significant piece of work which will continue over the next 12 to 18 months.

BOARD CHANGE

Having joined our Board a year ago, John Story stepped down from the Board on 2 August 2021. John remains a supportive and significant shareholder and we thank him for his contribution. The Board intends to appoint another non-executive director in due course.

POST PERIOD TRADING AND OUTLOOK

Trading since the period end has been significantly stronger than we had expected as COVID restrictions have been relaxed.

The newly acquired businesses in Dubai, France and Belgium are likewise performing satisfactorily. Since the period end, cumulative earnings from Dubai have fully paid back the initial investment and deal costs. The business in France and Belgium had a slower start than planned, as lockdown in the region was extended. However, since re-opening, the region is showing a promising return of business.

The Group's franchise estate suffered a set-back in August 2021 with a number of Australian cities going back into lockdown. However, all sites in the Group's French estate are open and business appears to be bouncing back as expected.

The Group reached a significant milestone, delivering a positive group level EBITDA in both July and August, helped by the 'stay at home' summer in the UK, lower VAT rates and the business rates holiday. The performance has validated our previous assertion that, with its current estate, is the Group could become cash generative given reasonable trading assumptions .

With the foundations laid for a profitable and cash generative business, we look to the future with confidence.

Richard Harpham

Chief Executive Officer

28 September 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL STATEMENTS

The directors confirm that the condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', and that the Interim Report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

 
  --   an indication of important events that have occurred during 
        the first six months and their impact on the condensed 
        consolidated interim financial information, and a description 
        of the principal risks and uncertainties for the remaining 
        six months of the financial year; and 
  --   material related-party transactions in the first six months 
        and any material changes in the related-party transactions 
        described in the last Annual Report. 
 

The directors of Escape Hunt plc are listed on page 26 of this report. A list of current directors is maintained on the Company's web site: http://investors.escapehunt.com/

By order of the Board

Richard Rose

Non-Executive Chairman

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHSED 30 JUNE 2021

 
                                                     Six months    Six months 
                                                          ended         ended 
                                                   30 June 2021  30 June 2020 
                                             Note     Unaudited     Unaudited 
                                                        GBP'000       GBP'000 
Continuing operations 
Revenue                                       5           1,178         1,306 
Cost of sales                                             (377)         (406) 
 
 
Gross profit                                                801           900 
Other income                                                341           130 
Administrative expenses                                 (3,364)       (4,040) 
 
 
Operating loss                                          (2,222)       (3,010) 
 
Adjusted EBITDA                                           (796)         (816) 
Amortisation of intangibles                               (216)       (1,078) 
Depreciation                                            (1,038)       (1,111) 
Rent credits recognised                                      25             - 
Loss on disposal of tangible assets                        (18)             - 
Branch closure costs and other exceptional 
 costs                                                    (147)             - 
Foreign currency gains / (losses)                           (6)             - 
Share-based payment expense                                (26)           (5) 
                                                   ------------  ------------ 
Operating loss                                          (2,222)       (3,010) 
-------------------------------------------  ----  ------------  ------------ 
 
Interest received                                             8             9 
Interest expense                                           (22) 
Lease finance charges                         11          (102)          (88) 
 
 
Loss before taxation                                    (2,338)       (3,089) 
Taxation                                      7            (13)           (2) 
 
 
Loss after taxation                                     (2,351)       (3,091) 
 
 
Other comprehensive income: 
Items that may or will be reclassified 
 to profit or loss: 
Exchange differences on translation 
 of foreign operations                                     (39)            18 
 
 
Total comprehensive loss                                (2,390)       (3,073) 
 
Loss attributable to: 
 
Equity holders of Escape Hunt plc                       (2,351)       (3,091) 
                                                        (2,351)       (3,091) 
                                                   ------------  ------------ 
 
Total comprehensive loss attributable 
 to: 
 
Equity holders of Escape Hunt plc                       (2,390)       (3,073) 
                                                        (2,390)       (3,073) 
                                                   ------------  ------------ 
 
Loss per share attributable to equity 
 holders: 
Basic (Pence)                                 6          (2.81)       (11.48) 
                                                   ------------  ------------ 
 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2021

 
 
                                              As at 
                                            2012201        As at 
                                                  2    2012201 2 
                                            30 June  31 December 
                                               2020         2020 
                                    Note  Unaudited      Audited 
                                            GBP'000      GBP'000 
 
ASSETS 
Non-current assets 
Property, plant and equipment        8        4,165        3,885 
Right-of-use assets                  9        2,852        2,940 
Intangible assets                    10       1,240          913 
Rental deposits                                  44           26 
Loan to franchisee                               79            2 
 
 
                                              8,380        7,766 
 
 
Current assets 
Inventories                                      21           16 
Trade receivables                               182          182 
Other receivables and prepayments               765          691 
Cash and bank balances                        2,414        2,722 
 
 
                                              3,382        3,611 
 
 
TOTAL ASSETS                                 11,762       11,377 
 
 
LIABILITIES 
Current liabilities 
Trade payables                                  940          606 
Deferred income                                 582          441 
Other payables and accruals                   1,708          815 
Lease liabilities                    11       1,080          489 
 
 
                                              4,310        2,351 
 
 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 (continued)

 
                                                        As at         As at 
                                                      30 June   31 December 
                                                         2020          2020 
                                       Note         Unaudited       Audited 
                                                      GBP'000       GBP'000 
 
Non-current liabilities 
Deferred income                                            98           152 
Provisions                                                160           128 
Convertible loan notes                                    310           289 
Other Loans                                               119             - 
Lease liabilities                       11              2,608         3,253 
- 
                                                   ----------   ----------- 
 
                                                        3,295         3,822 
 
 
 
TOTAL LIABILITIES                                       7,605         6,173 
 
 
 
NET ASSETS                                              4,157         5,204 
 
 
 
EQUITY 
Capital and reserves attributable to 
 equity holders of Escape Hunt Plc 
Share capital                           12                            1,005 
                                                        1,108 
Share premium account                                  29,011        27,758 
Merger relief reserve                                   4,756         4,756 
Convertible loan note reserve                              68            68 
Accumulated losses                                   (30,834)      (28,444) 
Currency translation reserve                            (120)          (81) 
Capital redemption reserve                                 46            46 
Share-based payment reserve                               122            96 
 
 
 
TOTAL EQUITY                                            4,157         5,204 
 
 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent

 
 
                                                                                         Convertible 
                              Share    Merger      Currency      Capital   Share-based          loan 
                    Share   premium    relief   translation   redemption       payment          note   Accumulated 
                  capital   account   reserve       reserve      reserve       reserve       reserve        losses     Total 
 
 Six months 
  ended 
  30 June 
  2021            GBP'000   GBP'000   GBP'000       GBP'000      GBP'000       GBP'000       GBP'000       GBP'000   GBP'000 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Balance as 
  at 
  1 January 
  2021              1,005    27,758     4,756          (81)           46            96            68      (28,444)     5,204 
 Loss for 
  the period            -         -         -             -            -             -             -       (2,390)   (2,390) 
 Other 
  comprehensive 
  income                -         -         -          (39)            -             -             -             -      (39) 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Total 
  comprehensive 
  loss                  -         -         -          (39)            -             -             -       (2,390)   (2,429) 
 Issue of 
  shares              103     1,320         -             -            -             -             -             -     1,423 
 Share issue 
  costs                 -      (67)         -             -            -             -             -             -      (67) 
 Share-based 
  payment 
  charge                -         -         -             -            -            26             -             -        26 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 
 Transactions 
  with owners         103     1,253         -             -            -            26             -             -     1,382 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 
 Balance as 
  at 30 June 
  2021              1,108    29,011     4,756         (120)           46           122            68      (30,834)     4,157 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 
 
 Six months 
  ended 
  30 June 
  2020            GBP'000   GBP'000   GBP'000       GBP'000      GBP'000       GBP'000       GBP'000       GBP'000   GBP'000 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Balance as 
  at 
  1 January 
  2020                336    24,717     4,756          (19)           46            67             -      (21,803)     8,100 
 Loss for 
  the period            -         -         -             -            -             -             -       (3,091)   (3,091) 
 Other 
  comprehensive 
  income                -         -         -            18            -             -             -             -        18 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Total 
  comprehensive 
  loss                  -         -         -            18            -             -             -       (3,091)   (3,073) 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Share-based 
  payment 
  charge                -         -         -             -            -             5             -             -         5 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Transactions 
  with owners           -         -         -             -            -             5             -             -         5 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 Balance as 
  at 30 June 
  2020                336    24,717     4,756           (1)           46            72             -      (24,894)     5,032 
                 --------  --------  --------  ------------  -----------  ------------  ------------  ------------  -------- 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHSED 30 JUNE 2021

 
                                                    Six months  Six months ended 
                                                         ended 
                                                  30 June 2021      30 June 2020 
                                                     Unaudited         Unaudited 
Cash flows from operating activities        Note       GBP'000           GBP'000 
Loss before income tax                                 (2,338)           (3,089) 
Adjustments: 
  Depreciation of property, plant and 
   equipment                                 8             799               921 
  Depreciation of right-of-use assets        9             239               190 
  Amortisation of intangible assets          10            216             1,078 
  Provision against non-current assets                      69                 - 
  Loss on write-off of property, plant 
   and equipment                                            18                 - 
  Share-based payment expense                               26                 5 
  Foreign currency movements                                 6                 - 
  Lease interest charges                     11            102                 - 
  Rent concessions received                  11           (25)                 - 
  Profit on closure/modification of 
   leases                                                 (31)                 - 
  Interest income                                          (8)               (9) 
 
Operating cash flow before working 
 capital changes                                         (927)             (904) 
Decrease in trade and other receivables                     23               350 
Increase in inventories                                    (5)                 - 
Foreign currency translation differences                   (8)                26 
Increase in trade and other payables                       706               337 
Increase in provisions                                      32                26 
Increase in deferred income                                 87                69 
                                                  ------------  ---------------- 
Cash used in operations                                   (92)              (96) 
Income taxes paid                                          (8)                 2 
 
Net cash used in operating activities                    (100)              (94) 
 
Cash flows from investing activities 
Purchase of property, plant and equipment    8         (1,001)             (634) 
Disposal of property, plant and equipment                    -                40 
Purchase of intangibles                      10           (70)             (170) 
Disposals of intangibles                                     -                 7 
Receipt of deposits                                         18                 - 
Loans advanced to franchisees                            (146)              (47) 
Acquisition of subsidiary, net of 
 cash acquired                               13          (139)                 - 
Interest received                                            8                 9 
 
Net cash used in investing activities                  (1,330)             (795) 
 
Cash flows from financing activities 
Proceeds from issue of ordinary shares       12          1,423                 - 
Share issue costs                            12           (67)                 - 
Loan repayments                                           (18)                 - 
Lease interest charge payment                11          (102)                 - 
Repayment of finance leases                  11          (122)             (161) 
 
Net cash from financing activities                       1,114             (161) 
 
Net increase / (decrease) in cash 
 and bank balances                                       (316)           (1,050) 
Cash and cash equivalents at beginning 
 of period                                               2,722             2,171 
Exchange rate changes on cash held 
 in foreign currencies                                       8               (7) 
 
 
Cash and cash equivalents at end of 
 period                                                  2,414             1,114 
                                                  ------------  ---------------- 
 

NOTES TO THE UNAUDITED INTERIM REPORT

FOR THE SIX MONTHSED 30 JUNE 2021

   1.         General information 

The Company was incorporated in England on 17 May 2016 under the name of Dorcaster Limited with registered number 10184316 as a private company with limited liability under the Companies Act 2006. The Company was re-registered as a public company on 13 June 2016 and changed its name to Dorcaster Plc on 13 June 2016. On 8 July 2016, the Company's shares were admitted to AIM.

Until its acquisition of Experiential Ventures Limited on 2 May 2017, the Company was an investing company (as defined in the AIM Rules for Companies) and did not trade.

On 2 May 2017, the Company completed the acquisition of the entire issued share capital of Experiential Ventures Limited. Experiential Ventures Limited was the holding company of the Escape Hunt Group which is a global provider of live 'escape the room' experiences.

On 2 May 2017, the Company's name was changed to Escape Hunt plc.

The Company's registered office is Belmont House, Station Way, Crawley, RH10 1JA.

The consolidated financial information represents the consolidated results of the Company and its subsidiaries, (together referred to as "the Group"). The Consolidated Interim Financial Statements are presented in Pounds Sterling, which is the currency of the primary economic environment in which the Company operates.

   2.         Basis of preparation 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2020 annual report. The statutory financial statements for the year ended 31 December 2020 were prepared in accordance with International Financial Reporting Standards in accordance with the requirements of the Companies Act 2006. The auditors reported on those financial statements; their Audit Report was unqualified.

The interim financial information is unaudited and does not constitute statutory accounts as defined in the Companies Act 2006.

The interim financial information was approved and authorised for issue by the Board of Directors on 28 September 2021.

   3.          Going concern 

The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The directors have assessed the Group's ability to continue in operational existence for the foreseeable future in accordance with the Financial Reporting Council's Guidance on the going concern basis of accounting and reporting on solvency and liquidity risks issued in April 2016.

The Board has prepared detailed cashflow forecasts covering a thirty-month period from the reporting date. The forecasts take into account the residual impact of COVID-19 on the business, notably that various payments were deferred during the lockdown period, including employment tax and national insurance payments and, in the case of certain sites, rent payments. Some of these deferred payments have subsequently been waived by landlords, but most will need to be caught up utilising cash resources.

The UK sites were able to re-open on 17 May 2021 and have been trading since then without any material restrictions. Taking into account the resumption of trading since re-opening sites to the end of August the Group has considered a number of potential scenarios for the ongoing trading, including the possibility of a further, short lockdown. The Group also plans to continue the roll out new sites in the UK which are expected to contribute to performance in future.

Based on the assumptions contained in the scenarios considered and taking into account mitigating actions that could be taken in the event of a further lockdown or COVID related slowdown, the directors consider there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable, as well as to fund the Group's future operating expenses. The going concern basis preparation is therefore considered to be appropriate in preparing these financial statements.

   4.         Significant accounting policies 

The Company has applied the same accounting policies, presentation, methods of computation, significant judgements and the key sources of estimation of uncertainties in its interim consolidated financial statements as in its audited financial statements for the year ended 31 December 2020, which have been prepared in accordance with International Financial Reporting Standards in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

Government Grants

During the period, the Company received benefits from Government grants. Revenue based Government grants are recognised through the consolidated statement of comprehensive income by netting off against the costs to which they relate. Where the grant is not directly associated with costs incurred during the period, it is recognised as 'other income'.

   5.         Segment information 

Management considers that the Group has two operating segments. Revenues are reviewed based on the nature of the services provided as follows:

1. The franchise business, where all franchised branches are operating under effectively the same model; and

2. The owner-operated branch business, which consisted of 14 sites in the UK and 1 in Dubai plus 1 acquired in Paris and another in Brussels during the six months to 30 June 2021.

The Group operates on a global basis. At the balance sheet date, the Company had active franchisees in 17 countries. The Company does not presently analyse or measure the performance of the franchising business into geographic regions or by type of revenue, since this does not provide meaningful analysis to managing the business. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The cost of sales in the owner-operated business comprise site staff costs and other costs directly related to revenue generation. In the franchisee business, the cost of sales comprises principally the creation and shipping of games to franchisees.

 
                                      Owner  Franchise 
                                   operated   operated  Unallocated    Total 
Six months ended 30 June 2021       GBP'000    GBP'000      GBP'000  GBP'000 
Revenue                                 936        242            -    1,178 
Cost of sales                         (377)          -            -    (377) 
                                  ---------  ---------  -----------  ------- 
Gross profit                            559        242            -      801 
 
 
Other income                            341          -            -      341 
Site level operating costs            (701)          -            -    (701) 
Site level EBITDA                       199        242            -      441 
 
Centrally incurred overheads          (146)       (99)        (992)  (1,237) 
Adjusted EBITDA                          53        143        (992)    (796) 
 
Interest income                           -          -            8        8 
Interest expense                          -          -         (22)     (22) 
Finance lease charges                  (81)          -         (21)    (102) 
Depreciation and amortisation       (1,049)        (9)        (196)  (1,254) 
Exceptional professional and 
 branch closures                       (11)          -         (67)     (78) 
Provision against loan                    -          -         (69)     (69) 
Loss on disposal of assets             (11)          -          (7)     (18) 
Foreign currency losses                   -        (6)            -      (6) 
Rent credits recognised                  16          -            9       25 
Share-based payment expenses              -          -         (26)     (26) 
Profit/(loss) from operations 
 before tax                         (1,083)        128      (1,383)  (2,338) 
Taxation                                  -          -         (13)     (13) 
                                  ---------  ---------  -----------  ------- 
Profit / (loss) for the period      (1,083)        128      (1,396)  (2,351) 
                                  ---------  ---------  -----------  ------- 
 
 
  Other information : 
Non-current assets                    7,024         30        1,326    8,380 
                                  ---------  ---------  -----------  ------- 
 
 
                                      Owner  Franchise 
                                   operated   operated  Unallocated    Total 
Six months ended 30 June 2020       GBP'000    GBP'000      GBP'000  GBP'000 
Revenue                               1,017        287            2    1,306 
Cost of sales                         (362)       (38)          (6)    (406) 
                                  ---------  ---------  -----------  ------- 
Gross profit                            655        249          (4)      900 
 
Other income                            130          -            -      130 
Site level operating costs            (745)          -            -    (745) 
IFRS 16 Adjustment                      214          -            -      214 
                                  ---------  ---------  -----------  ------- 
Site level EBITDA                       254        249          (4)      499 
 
Centrally incurred overheads           (81)      (110)      (1,168)  (1,359) 
IFRS 16 Adjustment                        -          -           44       44 
                                  ---------  ---------  -----------  ------- 
EBITDA                                  173        139      (1,128)    (816) 
Interest income                           -          -            8        8 
Finance lease charges                  (82)          -          (6)     (88) 
Depreciation and amortisation       (1,087)        (9)      (1,092)  (2,188) 
Share-based payment expenses              -          -          (5)      (5) 
Profit/(loss) from operations 
 before tax                           (996)        130      (2,223)  (3,089) 
Taxation                                  -        (2)            -      (2) 
                                  ---------  ---------  -----------  ------- 
Profit / (loss) for the period        (996)        128      (2,223)  (3,091) 
                                  ---------  ---------  -----------  ------- 
 
 
  Other information : 
Non-current assets                    6,140        354        2,117    8,612 
                                  ---------  ---------  -----------  ------- 
 
   6.         Loss per share 

Basic loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of ordinary shares in issue during the period. Diluted loss per share is not presented as the potential issue of ordinary shares from the exercise of warrants are anti-dilutive.

 
                                  Six months   Six months 
                                       ended        ended 
                                     30 June      30 June 
                                        2021         2020 
                                   Unaudited    Unaudited 
                                         GBP          GBP 
 Loss after tax (GBP000)             (2,344)      (3,091) 
 Weighted average number of 
  shares: 
 
        *    Basic and diluted    83,628,885   26,925,925 
 Loss per share 
 
        *    Basic and diluted        0.0280       0.1148 
 
   7.         Taxation 

The tax charge is based on the expected effective tax rate for the year. The Group estimates it has tax losses of approximately GBP21.5m as at 30 June 2021 which, subject to agreement with taxation authorities, would be available to carry forward against future profits. The estimated tax value of such losses amounts to approximately GBP4.1m.

   8.         Property, plant and equipment 
 
 
                                                                                              Escape room 
                            Leasehold                                          Furniture            games        Total 
                             property      Office equipment  Computers      and fixtures 
                              GBP'000               GBP'000    GBP'000           GBP'000          GBP'000      GBP'000 
  Cost 
  At 31 December 2020           3,905                    15        122               262            3,962        8,266 
  Additions arising 
   from 
   internal purchase              240                     -          5                24              732        1,001 
  Acquisitions                    395                    37          -                18                -          450 
  Disposals / 
   adjustments                   (22)                   (1)        (6)              (18)             (29)         (76) 
  As at 30 June 2021            4,518                    51        121               286            4,665        9,641 
                         ------------  --------------------  ---------  ----------------  ---------------  ----------- 
 
  Accumulated 
  depreciation 
 
  At 31 December 2020         (1,651)                  (13)       (86)             (110)          (2,521)      (4,381) 
  Additions arising 
   from 
   acquisition                  (303)                  (35)          -              (18)                -        (356) 
  Depreciation charge           (363)                     -       (12)              (43)            (382)        (799) 
  Disposals / 
   adjustments                     15                     2          6                10               28           62 
   As at 30 June 2021         (2,302)                  (46)       (92)             (161)          (2,875)      (5,476) 
 
  Carrying amounts 
  At 31 December 2020           2,254                     2         36               152            1,441        3,885 
                         ============  ====================  =========  ================  ===============  =========== 
 
    At 30 June 2021             2,216                     5         29               125            1,790        4,165 
                         ============  ====================  =========  ================  ===============  =========== 
 
   9.         Right-of-use assets 
 
                                                 As at     As at 
                                               30 June    31 Dec 
                                                  2021      2020 
                                               GBP'000   GBP'000 
 Land and buildings - right-of-use 
  asset                                          3,884     3,127 
 Closures / leases ended for renegotiation 
  during the period                              (128)     (336) 
 Additions                                         282     1,034 
 Newly negotiated leases                           (2)       152 
 Less: Accumulated depreciation 
 At the beginning of the period                  (945)     (657) 
 Depreciation charged for the period             (239)     (380) 
 Net book value                                  2,852     2,940 
                                             ---------  -------- 
 
 

The additions of GBP282,000 in the period relate to a new lease signed. The Group leases land and buildings for its offices and escape room venues under agreements of between five to fifteen years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.

   10.       Intangible assets 
 
                                                               Internally 
                                   Trademarks   Intellectual    generated     Franchise       App 
                      Goodwill    and patents       property           IP    agreements     Quest    Portal      Total 
                       GBP'000        GBP'000        GBP'000      GBP'000       GBP'000   GBP'000   GBP'000    GBP'000 
 Cost 
 At 31 December 
  2020                   1,412             78         10,195          855           802       100       269     13,711 
 Additions 
  arising 
  from internal 
  development                -              -              -           70             -         -         -         70 
 Additions 
  arising 
  from 
  acquisition              457              -              -            -             -         -        47        504 
 Disposals / 
 adjustments                 -              -              -            -             -         -         -          - 
 As at 30 June 
  2021                   1,869             78         10,195          925           802       100       316     14,285 
                   -----------  -------------  -------------  -----------  ------------  --------  --------  --------- 
 
 Accumulated 
 amortisation 
 At 31 December 
  2020                 (1,393)           (47)       (10,195)        (405)         (420)     (100)     (238)   (12,798) 
 Additions 
  arising 
  from 
  acquisition                -              -              -            -             -         -      (31)       (31) 
 Amortisation                -            (7)              -        (129)          (57)         -      (23)      (216) 
 At 30 June 2021       (1,393)           (54)       (10,195)        (534)         (477)     (100)     (292)   (13,045) 
                   ===========  =============  =============  ===========  ============  ========  ========  ========= 
 
 Carrying amounts 
 
 At 31 December 
  2020                      19             31              -          450           382         -        31        913 
                                                                                         ========  ======== 
 
 At 30 June 2021           476             24              -          391           325         -        24      1,240 
                   ===========  =============  =============  ===========  ============  ========  ========  ========= 
 
   11.       Lease liabilities 
 
                                                 Six months      Six months 
                                                      ended           ended 
                                               30 June 2021    30 June 2020 
                                                    GBP'000         GBP'000 
 In respect of right-of-use assets 
 Balance at beginning of period                       3,742           2,602 
 Closures / leases ended for renegotiation 
  during the period                                   (411) 
 Additions during the period                            282             363 
 Newly negotiated leases                               (16) 
 Interest Incurred                                      102              88 
 Repayments during the period                         (122)           (249) 
 Rent concessions received                             (24) 
 Reallocated from accruals and trade 
  payables                                              135 
 Lease liabilities at end of period                   3,688           2,804 
                                             --------------  -------------- 
 
                                                      As at           As at 
                                                    30 June         30 June 
                                                       2021            2020 
                                                    GBP'000         GBP'000 
 Maturity 
 Current                                                855             342 
 Non-current                                          2,833           2,462 
 Total lease liabilities                              3,688           2,804 
 
   12.       Share capital 
 
                                                    Six months                                  Year 
                                                         ended                                 ended 
                                                       30 June                           31 December 
                                                          2021                                  2020 
                                                     Unaudited                               Audited 
                                                       GBP'000                               GBP'000 
            As at beginning of period / year 
              *    80,369,044 (2020: 26,925,925) 
 
 
             Ordinary shares of 1.25 pence each          1,005                                   336 
        Issued during the period / year 
          *    8,126,047 Ordinary shares                   103                                   669 
            As at end of period / year 
              *    88,495,091 (2020: 80,369,044) 
 
 
             Ordinary shares of 1.25 pence each          1,108                                 1,005 
                                                   -----------  ------------------------------------ 
 

During the six months ended 30 June 2021 the Company issued 8,126,047 new shares at 17.5p per share in a fund raise comprising a placing, a share subscription and the issue of shares in payment of professional fees, raising GBP1.4m (before fees of GBP67k). The expenses have been deducted from the premium of GBP1.32m arising from the fund raise. The new shares were admitted to trading on AIM on 28 January 2021.

Share option and incentive plans

Escape Hunt Employee Share Incentive Scheme

On 25 November 2020, the Company established an employee share incentive plan ("SIP") which is available to all employees in the Group once they have completed three months of employment. The scheme allows employees to acquire ordinary shares in the Company each month from pre-tax income, such shares being 'Partnership Shares'. The purchases are funded through a deduction from payroll. For each Partnership Share so acquired, the participant is granted a 'Matching Share' which is released to the individual on the third anniversary of the purchase provided that they are still employed by the Group at the time and they have retained the Partnership share in respect of which the Matching Share was granted. The SIP is administered by an independent trustee who holds all Partnership and Matching shares for the benefit of the participants.

On 4 February 2021, the Company issued 125,000 shares to the trustee of the scheme to be allocated to individuals as Matching Shares during the operation of the scheme.

Escape Hunt plc Enterprise Management Incentive Plan

On 15 July 2020, the Company established the Escape Hunt plc Enterprise Management Incentive Plan ("2020 EMI Plan"). The 2020 EMI Plan is an HMRC approved plan which allows for the issue of "qualifying options" for the purposes of Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 ("Schedule 5"), subject to the limits specified from time to time in paragraph 7 of Schedule 5, and also for the issue of non-qualifying options.

On 15 July 2020, in aggregate 13,333,332 qualifying options and 2,400,000 non-qualifying options were awarded to four executives, including two executive directors of the Company. The options are exercisable at 7.5 pence per share and vest in three equal tranches on each of the first, second and third anniversary of the grants, subject to the employee not having left employment other than as a Good Leaver. The number of options that vest are subject to a performance condition based on the Company's share price. This will be tested on each vesting date and again between the third and fourth anniversaries of awards. If not exercised, the options will expire on the fifth anniversary of award. Options exercised will be settled by the issue of ordinary shares in the Company.

As at 30 June 2021, 15,733,332 options were outstanding under the 2020 EMI Plan (2020: nil) all exercisable at 7.5 pence per share. No options were exercised during the period, and no options expired or had lapsed and none had vested or were exercisable as at 30 June 2021.

The sum of GBP25,611 has been recognised as a share-based payment and charged to the profit and loss during the period (2020: GBPnil).

The weighted average remaining contractual life of the options outstanding at 31 December 2020 is 48.5 months.

An option-holder has no voting or dividend rights in the Company before the exercise of a share option.

   13.       Business Combination 

On 28(th) February 2021, Escape Hunt Plc acquired 100% of the equity interest in BGP Entertainment Belgium and BGP Escape France, thereby obtaining control. BGP Entertainment Belgium runs an owner operated escape room in Brussels and BGP Escape France holds the master franchise for the territory of France, Belgium and Luxembourg and also runs an owner operated venue in Paris.

The preliminary details of the business combination are as follows:

 
                                                                       GBP'000 
       Fair value of consideration transferred 
       Amounts settled in cash                                             278 
       Net loan payable                                                   (19) 
       Deferred consideration                                              249 
       Total purchase consideration                                        508 
                                                                        ------ 
 
 

Deferred consideration includes a preliminary estimate on the earnout payable on the owned and operated sites.

 
                                                                         GBP'000 
       Assets and liabilities acquired as a result of the acquisition 
       Cash                                                                  139 
       Trade receivables (net of provisions)                                  78 
       Other receivables and deposits                                         19 
       Property, plant and equipment                                          94 
       Right of use assets                                                   282 
       Intangible assets                                                      16 
       Trade payables                                                      (161) 
       Lease liabilities                                                   (282) 
       Other payables                                                      (134) 
                                                                        -------- 
       Net identifiable assets acquired                                       51 
       Goodwill arising on consolidation                                     457 
       Total purchase consideration                                          508 
                                                                        -------- 
 
   14.       Key management personnel compensation 
 
 
                                                        Six months     Six months 
                                                             ended          ended 
                                                           30 June        30 June 
                                                              2021           2020 
                                                         Unaudited      Unaudited 
                                                           GBP'000        GBP'000 
       Salaries and benefits (including directors)             293            219 
       Share-based payments                                     26              5 
       Social security costs                                    47             39 
       Other post-employment benefits                            4             10 
       Less amounts capitalised                               (18)           (34) 
       Total                                                   352            239 
                                                     -------------  ------------- 
 

Related party transactions

During the period under review, the Directors are not aware of any significant transactions with related parties (six months ended 30 June 2020: invoices for services of GBP4,125 and other benefits GBP92 were paid on an arm's length basis).

   15.       Government Grants and Government Assistance 

The following Government grants were received and have been recognised during the period:

 
 
                                                    Six months     Six months 
                                                         ended          ended 
                                                       30 June        30 June 
                                                          2021           2020 
                                                     Unaudited      Unaudited 
                                                       GBP'000        GBP'000 
       Coronavirus Job Retention Scheme grants             474            407 
       Local authority Small Business Grants               341            130 
       Total                                               815            537 
                                                 -------------  ------------- 
 

In addition, the Company benefitted from Business Rates Relief introduced for the retail, hospitality and leisure industries. The benefit in the period was GBP91k (2020: GBP35k)

   16.       Seasonality of the Group's business 

There are no seasonal factors which materially affect the operations of any company in the Group.

   17.       Subsequent Events 

There are no material subsequent events requiring disclosure.

COMPANY INFORMATION

Directors

Richard Rose, Independent Non-Executive Chairman

Richard Harpham, Chief Executive Officer

Graham Bird, Chief Financial Officer

Karen Bach, Non-Executive Director

John Story, Non-Executive Director (resigned)

Company Secretary

Graham Bird

Company number

10184316

Registered address

Belmont House

Station Way

Crawley

RH10 1JA

Independent auditors

Crowe U.K. LLP

55 Ludgate Hill

London

EC4M 7JW

Nominated adviser and joint broker

Shore Capital

Cassini House

57 St James's Street

London SW1A 1LD

Joint broker

Zeus Capital Limited

82 King Street

Manchester M2 4WQ

Registrars

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

   [1]   See Consolidated Statement of Comprehensive Income for reconciliation to operating loss 
   [2]   See Consolidated Statement of Comprehensive Income for reconciliation to operating loss 

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September 28, 2021 02:00 ET (06:00 GMT)

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