TIDMXPF
RNS Number : 9104A
XP Factory PLC
28 September 2022
28 September 2022
XP Factory plc
("XP Factory", the "Company" or the "Group")
Interim Results
XP Factory plc (AIM: XPF), a global leader in the experiential
leisure sector, is pleased to announce its unaudited interim
results for the six months ended 30 June 2022 ("H1 2022").
Half year Half year
ended 30 June ended 30 June
2022 (GBP'000) 2021 (GBP'000)
Revenue 8,120 1,178
---------------- ----------------
Gross Profit 5,096 801
---------------- ----------------
Adjusted EBITDA [1]
profit / (loss) 1,070 (796)
---------------- ----------------
Loss per share (pence) (2.20) (2.81)
---------------- ----------------
FINANCIAL HIGHLIGHTS
-- Group revenue of GBP8.1m (2021: GBP1.2m) demonstrates
a significant growth in scale and includes:
* Escape Hunt owner operated site revenue increased to
GBP4.3m (2021: GBP0.9m)
* Boom Battle Bar ("Boom") revenue of GBP3.6m comprised
GBP2.2 from owner operated sites and GBP1.4m from
franchises
-- Group Adjusted EBITDA(1) profit of GBP1.1m (H1 2021: loss
GBP0.8m)
-- Site level EBITDA profit of GBP3.1m (H1 2021: profit GBP0.4m)
-- Group Operating loss of GBP2.4m (H1 2021: loss GBP2.2m)
-- Loss per share of 2.2p (H1 2021: loss of 2.81p)
-- Cash at 30 June 2022 of GBP5.2m (30 June 2021: GBP2.4m)
OPERATING HIGHLIGHTS
-- Significant progress made in establishing the UK owner
operated network both for Escape Hunt and Boom
-- 17 UK Boom sites open at 30 June 2022 - 4 owner operated
and 13 franchised
-- 19 owner-operated Escape Hunt sites open at 30 June 2022
-- Pipeline of additional new sites well established for both
businesses
-- Escape Hunt exceeded its pre IFRS 16 target site level
EBITDA margin (39% vs 30%)
-- Boom Battle Bar owner operated sites already beginning
to demonstrate their ability to achieve mature target EBITDA
margins
POST PERIOD- HIGHLIGHTS
-- Escape Hunt and Boom currently performing well with pleasing
level of sales being achieved
-- Continuing growth in the returns being achieved across
the Boom owner operated sites
-- Acquisition of the former Boom franchise site in Cardiff
completed on 8 September 2022
-- Acquisition of the former Boom franchise site in Norwich
completed on 16 August 2022
-- Further owner operated Boom sites opened in September
2022 in Edinburgh and Plymouth and an additional Boom
franchise sites opened in Sheffield in July 2022 and Chelmsford
in September 2022 taking the total to 21 open sites, comprising
8 owner operated and 13 franchise sites
-- 2 further owner operated Escape Hunt sites opened, in
Norwich in August 2022 and Edinburgh in September 2022,
taking the total to 21 owner operated sites
-- Additional owner operated Boom sites in build in London
(Oxford Street), Leeds, and Birmingham
-- Further franchised Boom sites in build in Southampton
and Bournemouth
-- Additional owner operated Escape Hunt sites in build in
London (Oxford Street) and Bournemouth
-- All UK Escape Hunt owner operated sites operating for
more than a year awarded 'Traveller's Choice Awards' by
Tripadvisor (TM)
-- Boom consumer ratings significantly outperforming peers
and the industry
Recent performance across the estate has been encouraging with
no discernible impact from consumer weakness. The Board remains
focussed on providing the best possible customer experience to an
ever growing number of customers across the UK and beyond and will
keep a careful eye on consumer behaviour in the context of the
macro-economic environment and be ready to react if there is any
sign of an impact.
Notwithstanding the encouraging recent performance, the Group's
full year results are heavily weighted to the final quarter's
trading and will be influenced by, inter alia, the dates on which
sites currently in build are able to open, how quickly the
performance at those sites tracks through the maturity curve, and
the strength of pre-Christmas trading generally.
Richard Harpham, Chief Executive of XP Factory, commented :
"2022 represents an important year in our evolution as we continue
to build the platform for a sustainable, cash generative and
profitable experiential leisure business.
We have made significant progress towards our goals, growing the
Boom estate to 21 sites today from only seven when we acquired it
in November 2021 . We have also grown our Escape Hunt business to
21 owner operated sites today, with the brand continuing to perform
well, generating strong returns at a site level.
With each successive week, Boom's trading performance reinforces
our belief that it is a very attractive proposition, capable of
delivering strong margins and an exceedingly attractive return on
capital. We are delighted with the progress we have made and
believe that by the end of the year, the foundations will be firmly
set for the business in 2023 and beyond."
[1] Earnings before interest, tax, depreciation and
amortization, calculated before pre-opening losses, exceptional
items, and other non-cash items. A full reconciliation to operating
loss is provided below in the text of the announcement.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Enquiries
XP Factory 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
IFC Advisory - Financial PR
Graham Herring +44 (0) 20 3934
Florence Chandler 6630
About XP Factory plc
The XP Factory Group is one of the UK's pre-eminent experiential
leisure businesses which currently operates two fast growing
leisure brands. Escape Hunt 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.
Boom Battle Bar is a fast-growing network of owner-operated and
franchised sites in the UK that combine competitive socialising
activities with themed cocktails, drinks and street food in a high
energy setting. Activities include a range of games such as
augmented reality darts, Bavarian axe throwing, 'crazier golf',
shuffleboard and others. The Group's products enjoy premium
customer ratings and cater for leisure or teambuilding, in small
groups or large, and are suitable for consumers, businesses and
other organisations. The Company has a strategy to expand the
network in the UK and internationally, creating high quality games
and experiences delivered through multiple formats and which can
incorporate branded IP content. ( https://xpfactory.com/ )
CHIEF EXECUTIVE'S REPORT
INTRODUCTION
The first half of 2022 has been transformational. In November
2021 we acquired Boom Battle Bar ("Boom") and renamed the Group XP
Factory plc, creating one of the UK's pre-eminent experiential
businesses, operating two fast growing bands, Escape Hunt(TM) and
Boom Battle Bar(TM). At the time of acquisition, Boom was a very
young business, with just seven UK sites open; six of which were
franchised and one of which was owner operated and all of which had
less than twelve months' operating history.
We set ambitious targets to grow the footprint alongside our
existing Escape Hunt network. Activity in the first half of the
year has been focused on bringing the businesses together,
executing on the ambitious site roll-out plans and investing in the
operations of the new business. As at 30 June 2022, the Boom estate
stood at 17 opened sites; four owner operated and 13
franchises.
We also extended our Escape Hunt estate, adding a site in
Exeter, co-located with Boom, bringing the owner operated estate to
19. Since 30 June 2022, we have further extended the estate,
acquiring former Boom franchise sites in both Cardiff and Norwich,
opening a further co-located owner-operated Boom and Escape Hunt
site in Edinburgh, opening a new Escape Hunt site in Norwich,
opening a new Boom owner operated site in Plymouth, and opening
Boom franchise sites in Sheffield and Chelmsford. Several more
sites are in build as set out below.
This activity has set the scene for a year which will deliver a
group of significantly larger scale and capability compared to a
year ago. The objective for the year is to build the foundations of
a network of Boom Battle Bar and Escape Hunt owner operated and
franchise sites capable of delivering strong cashflows and a high
return on capital for years to come. Alongside the efforts to open
new sites, we have also focused on building capability in our
operational teams, who are now delivering the financial model we
believed Boom could be capable of, whilst continuing to nurture
Escape Hunt. We are delighted to have made such significant
progress towards these goals.
With such an aggressive rate of new site openings relative to
the Group's small size at the beginning of the year, it would be
almost impossible to predict with total accuracy the specific week
in which each new site would open. Whilst most of our owner
operated builds have been delivered broadly in line with our
expectations, there have been delays in the openings of certain
owner-operated sites and in a number of the franchise sites, but
nonetheless the Board remains confident that its target of 27 open
sites for the year end will be achieved. We are of course acutely
aware of the current pressures on consumer discretionary spend. As
a high margin business we feel as confident as we can be that we
can absorb the inflationary pressures and weather the storm by
continuing to focus on providing an outstanding customer experience
and value for money. Indeed we have been very encouraged by the
resilience in trading in the weeks post 30 June 2022.
Our full year outcome is skewed heavily towards performance in
the second half of the year, notably the final quarter, and this is
further amplified in the current year given the number of
additional site opening that are still to come. However, we believe
the results for the first half represent a solid performance which
sets the business up well for the remainder of the year and
beyond.
BOOM BATTLE BARS
Much focus during the period has been on Boom Battle Bars; the
expansion of the network in line with previously announced plans,
both owner operated and franchised sites; the integration of the
business into the Group; and development of the operational
processes and teams to deliver on Boom's potential.
Owner operated
We have made excellent progress towards our objectives. At the
start of the year, we had two owner operated sites open; one at
Lakeside shopping centre in Essex and one in the O2 Arena. The O2
site was opened shortly before Christmas, although we delayed the
formal launch due to the spread of the Omicron virus and subsequent
cancellation of all events at the O2 during January and most of
February 2022. Although open in the intervening period, the O2 Boom
held its formal opening event in April 2022. We also opened a new
site co-located with Escape Hunt in Exeter in late April and our
fourth site, located in Manchester, opened in late June 2022. At
the end of the period we had four owner operated sites open.
All four sites have shown encouraging performance in the months
of operating, in line with an expected maturity curve typical for
hospitality businesses. We expect sites to run at a loss for a
number of weeks as awareness grows and translates into revenue
growth, whilst labour and other costs will start higher than the
longer-term target and be brought down as the sites find their
operating rhythm. The owner operated estate delivered unaudited
revenue of GBP2.2m in the six months to 30 June 2022 and a site
EBITDA loss of GBP164k (GBP729k loss before IFRS16) reflecting the
maturity curve of the new sites. Performance across the estate has
shown the steady improvement we would expect, with target margins
being achieved as the sites mature. We remain confident that the
business model and returns profile for sites will be delivered,
with target EBITDA margins in excess of 20% and a target cash
return on capital of over 40%.
Our sites in central London (Oxford Street) and in Edinburgh
have caused some frustrations. In both cases, planning and other
landlord-related formalities have resulted in significant delays
compared to our original plans. We are pleased that our Edinburgh
site recently opened on 23 September 2022, and we are now 7 weeks
into the build at our site on Oxford Street, which is scheduled to
open before Christmas.
We are not immune to inflationary cost pressures, notably in
energy prices. We also anticipate wage pressure as inflation
filters through the system. The former represents a relatively low
proportion of our costs whilst we are confident the latter can be
managed through labour flexibility and, in future, by passing on an
element of our increased costs through prices. As a result, we have
no reason to believe our expectation of the potential margins from
our sites should change meaningfully.
Since 30 June 2022, we have commenced builds on four
owner-operated sites, in London (Oxford Street), Birmingham,
Plymouth and Leeds. Plymouth opened on 22 September 2022 and the
others are all expected to open during Q4 2022. We have also
completed the acquisition of the former franchise sites in Cardiff
and Norwich. Together with the owner operated sites in Edinburgh
and Plymouth that have since opened, these developments will take
our owner operated estate to 11, well ahead of our previously
announced objective of 7 by the end of 2022 and establishing a
strong baseline for 2023.
Franchise
The Boom franchise network was expanded significantly in the six
months to 30 June 2022 with the addition of a further seven
franchise sites. As at 30 June 2022 there were 13 franchise sites
open. Two further franchise sites have since opened; the first in
Sheffield opened in July, and a second in Chelmsford opened in
September. Another two sites are currently in build in Bournemouth
and Southampton. A further site in Telford has been signed and
several more sites are in advanced legals. Whilst we factor in
potential delays to franchise site openings, timing is not in our
control. On average, sites have been several months later to open
than initially indicated.
Boom franchise activities delivered unaudited revenue of GBP1.4m
and EBITDA of GBP0.9m in the six months ended 30 June 2022.
ESCAPE HUNT
Owner operated
The Escape Hunt owner operated estate generated unaudited
revenue of GBP4.3m, representing a 361% increase on the GBP0.9m
delivered in the same period in 2021, although all our UK venues
and our venues in Paris and Brussels were closed for the majority
of the comparable period in 2021. Site level EBITDA rose to GBP2.1m
from GBP0.2m. On a pre-IFRS16 basis, site level EBITDA was GBP1.7m
(H1 2021: loss GBP46k), representing a margin of 39%, significantly
ahead of our internal target of 30% EBITDA margin. The margin
outperformance was helped by the reduced VAT rate and business
rates reduction applied between January and March 2022 and which
ended on 1 April 2022. Underlying EBITDA margins, excluding the VAT
benefit, continue to track ahead of our internal target.
We have made further progress on the growth of the network and
integration with Boom. A new owner operated site, co-located with
Boom Battle Bar opened in Exeter in late April 2022. We opened a
second owner-operated site in Norwich shortly after the period end
in August 2022 and, after frustrating delays, opened a third
co-located site in Edinburgh on 23 September 2022. Two further
sites are in build in London (Oxford Street), co-located with Boom,
and in Bournemouth, where our site is adjacent to a Boom franchise
site, also in build.
The network today comprises 21 owner-operated sites and the
completion of sites in Bournemouth and Oxford Street will take the
total to 23.
Franchise
The franchise estate delivered unaudited revenue of GBP0.2m. The
Australian network performed in line with the same period in 2021
and we have seen a recovery within the European network compared to
the same period in 2021 during which many of the sites were closed.
This increase is offset by lower upfront and other fixed fees.
Some modest progress was made in the USA in late 2021. The
franchise site in Houston, which is operated by our partners,
Proprietary Capital Holdings, added two new generation games in
December 2021 and is now set up as a reference site to demonstrate
to potential franchise partners in North America. Performance in
Houston has been tracking strongly in 2022. Franchise recruitment
activity all but ceased during Covid and has been slow to
re-start. We expect to give greater attention to the US potential in 2023.
FINANCIAL REVIEW
Financial performance
Unaudited group revenue in the six months to 30 June 2022 was
GBP8.1m, an increase of 589% over the same period in 2021. The
period to 30 June 2022 includes GBP3.6m of revenue from Boom
owner-operated and franchise activities (2021: nil.. The increase
also reflects that the majority of Escape Hunt venues were closed
for much of the first half of 2021 due to Covid restrictions.
Site level EBITDA was GBP3.1m (2021: GBP0.4m), offset by central
costs of GBP2.0m (2021: GBP1.2m). As a result, Group Adjusted
EBITDA was GBP.1.1m compared to a loss of GBP0.8m in H1 of
2021.
Six months Six months
ended June ended June
2022 2021
GBP'000 GBP'000
Adjusted EBITDA 1,070 (796)
Amortisation of intangibles (455) (216)
Depreciation (1,720) (1,038)
Rent credits recognised 25 25
Loss on disposal of tangible assets (156) (18)
Profit on closure/modification of
leases 105 -
Branch closure costs and other exceptional
costs (288) (147)
Branch pre-opening costs (881) -
Provision against loan to franchisee (21) -
Foreign currency gains / (losses) 44 (6)
IFRS 9 provision for guarantee losses (57)
Share-based payment expense (34) (26)
---------------------------------------------- ----------- ------------
Operating loss (2,368) (2,222)
Of the GBP881k of branch pre-opening costs, GBP52k related to
Escape Hunt owner operated sites, GBP821k related to Boom Battle
Bar owner operated sites, and GBP7k related to Boom Battle Bar
franchise sites. Pre-opening costs (whilst not all cash) include
costs accrued before the site is opened to the public, such as rent
and other property costs, staff recruitment and training costs.
The branch closure costs and the loss on disposal of tangible
assets relate to the closure of the Escape Hunt Edinburgh site and
the final liquidation of Escape Hunt's original subsidiaries in
Malaysia and Thailand, for which the process has taken several
years to complete.
Unaudited group operating loss was GBP2.4m (2021: GBP2.2m)
Cashflow
The Group generated GBP0.8m of cash from operations (2021: cash
utilised of GBP0.1m). GBP3.4m (net of capital contributions) was
invested in plant and equipment and intangibles. This comprised
total investment of GBP3.4m offset by GBP0.8m of capital
contributions for Boom owner-operated sites and GBP0.8m investment
in Escape Hunt owner operated sites.
Cash at 30 June 2022 was GBP5.2m (30 Jun 2021: GBP2.4m) and
GBP3.7m as at 31 August 2022.
Financial position
The increase in property plant and equipment reflects the
investment in owner operated sites outlined above, offset by
depreciation. The increase in right of use assets is matched by an
increase in lease liabilities and relates to the IFRS 16 accounting
for new owner operated sites signed during the six month period.
The finance lease receivable relates to the IFRS 16 accounting for
a sub-let of the Bournemouth venue to a Boom Battle Bar franchisee
as XP Factory holds the master lease.
The largest movement in current assets related to the receipt of
the GBP1.8m (net) R&D credit paid in January 2022.
Provisions of GBP9.9m includes deferred and contingent
consideration relating to the acquisition of Boom Battle Bars in
November 2021. GBP9.4m is the valuation of contingent
consideration, inclusive of 13.7% p.a. notional interest rolled up
from the date of acquisition, the payment of which depends on the
achievement of certain turnover and site numbers from the Boom
acquisition in the year to 31 December 2022. Details of the
contingent consideration are outlined in the Company's Annual
Report for the year to 31 December 2021. The contingent
consideration is payable by the issue of up to 25m XP Factory plc
shares, valued at the date of acquisition at 35.8p. The balance
relates to a working capital and net debt adjustment for the Boom
acquisition, provided for post acquisition.
GBP340k of convertible loan notes issued in July 2020, together
with GBP54k of rolled up interest were converted to equity on 2
February 2022 at 9.0p per share, resulting in the issue of 4.4m
shares. There were no convertible loan notes in issue at 30 June
2022. GBP404k of vendor loan notes (GBP360k relating to the
acquisition of Boom in November 2021 and GBP44k relating to the
acquisition of the French master franchise in March 2021) remained
outstanding at 30 June 2022. Other loans outstanding at 30 June
2022 totalling GBP755k relate to fit-out finance for Boom sites, of
which GBP418k is offset by corresponding back-to-back receivable
amounts.
Net assets as at 30 June 2022 stood at GBP18.8m (31 December
2021: GBP21.8m)
STRATEGY
At the time of the acquisition of Boom Battle Bars in November
2021 we set out a four-point plan to increase shareholder value.
Progress has made in each of these medium-term objectives as set
out above. Our objectives are to:
1. Maximise the UK footprint by rolling out each brand,
either through direct investment into owner operated sites
or through franchise arrangements
2. Accelerate growth in international territories, predominantly
through franchise
3. Continue to develop new products and markets which facilitate
the growth of B2B sales
4. Integrate the businesses, exploit synergies where possible
and develop an infrastructure that supports scale and future
growth
Details of our progress in growing the UK footprint and the
integration of Boom have been described in some detail above. We
have intentionally de-emphasised international expansion in the
period as we focused on the intensive roll-out strategy in the UK.
We expect to place greater emphasis on international opportunities
once we have a period of profitable operating experience in the UK.
Our efforts to build a greater B2B business are being rewarded,
particularly within Boom. Corporate sales represented approximately
6% of sales in the six months to 30 June 2022. In the period since
then, we have seen a marked increase in corporate sales, and in the
period since 30 June 2022 corporate sales have grown to represent
approximately 12% of sales. We expect this to grow further in Q4
2022.
POST PERIOD TRADING AND OUTLOOK
Trading since 30 June 2022 has continued positively. In the 10
weeks to 12 September 2022 UK Escape Hunt owner-operated estate
generated unaudited turnover of approximately GBP1.7m, an increase
of 11% compared to the same ten-week period in 2021. Adjusting for
the VAT benefit received in 2021, the underlying increase was 27%,
reflecting an enlarged network and 8% like-for-like growth from
sites which were open in the same period in 2021. Escape Hunt site
level EBITDA margins continue to exceed the Board's internal
benchmark of 30%.
The Boom owner operated sites [2] delivered unaudited turnover
of approximately GBP1.4m for the ten weeks to 12 September 2022 and
each of the Group's sites has proved capable of delivering margins
in line with our expected box economics within the first few months
of operating, underpinning c onfidence in the Group's business
model. Boom franchise royalties in the 10 weeks to 12 September
2022 totalled approximately GBP0.3m.
(2) 6 weeks with 4 sites open; 3.5 weeks with 5 sites open; and
0.5 weeks with 6 sites open.
This performance provides the Board with continued confidence
for the future potential for the Group.
Recent performance across the estate has been encouraging with
no discernible impact from consumer weakness. The Board remains
focussed on providing the best possible customer experience to an
ever growing number of customers across the UK and beyond. The
Board will keep a careful eye on consumer behaviour in the context
of the macro-economic environment and be ready to react if there is
any sign of an impact.
Notwithstanding the recent performance, the Group's full year
results are heavily weighted to the final quarter's trading and
will be influenced by, inter alia, the dates on which sites
currently in build are able to open and how quickly the performance
at those sites tracks through the maturity curve, and the strength
of pre Christmas trading generally
Richard Harpham
Chief Executive Officer
27 September 2022
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.
A list of current directors is maintained on the Company's web
site: https://www.xpfactory.com/investors/key-people
By order of the Board
Richard Rose
Non-Executive Chairman
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2022
Six months Six months
ended ended
30 June 2022 30 June 2021
Note Unaudited Unaudited
GBP'000 GBP'000
Continuing operations
Revenue 8,120 1,178
Cost of sales (3,024) (377)
Gross profit 5,096 801
Other income 128 341
Administrative expenses (7,592) (3,364)
Operating loss (2,368) (2,222)
Adjusted EBITDA 1,070 (796)
Amortisation of intangibles (455) (216)
Depreciation (1,720) (1,038)
Rent credits recognised 25 25
Loss on disposal of tangible assets (156) (18)
Profit on closure/modification of
leases 105 -
Branch closure costs and other exceptional
costs (288) (147)
Branch pre-opening costs (881) -
Provision against loan to franchisee (21) -
Foreign currency gains / (losses) 44 (6)
IFRS 9 provision for guarantee losses (57) -
Share-based payment expense (34) (26)
------------ ------------
Operating loss (2,368) (2,222)
------------------------------------------- ---- ------------ ------------
Interest received 13 8
Interest expense (583) (22)
Lease finance charges 11 (367) (102)
Loss before taxation (3,305) (2,338)
Taxation 7 56 (13)
Loss after taxation (3,249) (2,351)
Other comprehensive income:
Items that may or will be reclassified
to profit or loss:
Exchange differences on translation
of foreign operations (120) (39)
Total comprehensive loss (3,369) (2,390)
Loss attributable to:
Equity holders of XP Factory plc (3,249) (2,351)
(3,249) (2,351)
------------ ------------
Total comprehensive loss attributable
to:
Equity holders of XP Factory plc (3,369) (2,390)
(3,369) (2,390)
------------ ------------
Loss per share attributable to equity
holders: (2.20) (2.81)
Basic (Pence) 6 (2.20) (2.81)
------------ ------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
As at
2012201 As at
2 2012201 2
30 June 31 December
2022 2021
Note Unaudited Audited
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 8 7,556 5,516
Right-of-use assets 9 17,098 7,602
Intangible assets 10 21,681 22,046
Rental deposits 22 44
Finance lease receivable 12 1,333 -
Loan to franchisee 31 84
47,721 35,292
Current assets
Inventories 119 24
Trade receivables 1,588 848
Other receivables and prepayments 2,218 4,142
Stocks and work in progress - 438
Cash and bank balances 5,164 8,225
9,089 13,677
TOTAL ASSETS 56,810 48,969
LIABILITIES
Current liabilities
Trade payables 2,150 1,527
Contract liabilities 1,197 1,201
Loan notes 404 404
Other loans 256 256
Lease liabilities 12 393 393
Other payables and accruals 2,489 2,889
Provisions 11 9,898 637
16,787 7,307
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30
JUNE 2022 (continued)
As at As at
30 June 31 December
2022 2021
Note Unaudited Audited
GBP'000 GBP'000
Non-current liabilities
Contract liabilities 62 491
Provisions 11 305 9,248
Loan notes - 373
Other Loans 499 620
Deferred tax liability 1,045 1,101
Lease liabilities 12 19,302 8,012
-
--------- -----------
21,213 19,845
TOTAL LIABILITIES 38,000 27,152
NET ASSETS 18,810 21,817
EQUITY
Capital and reserves attributable
to equity holders of XP Factory plc
Share capital 12 1,825
1,880
Share premium account 44,704 44,366
Merger relief reserve 4,756 4,756
Convertible loan note reserve - 68
Accumulated losses (32,566) (29,317)
Currency translation reserve (203) (83)
Capital redemption reserve 46 46
Share-based payment reserve 193 158
TOTAL EQUITY 18,810 21,817
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
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
Balance
as at
1 January
2022 1,825 44,366 4,756 (83) 46 158 68 (29,317) 21,819
Loss for
the period - - - - - - - (3,249) (3,249)
Other
comprehensive
income - - - (120) - - - - (120)
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
Total
comprehensive
loss - - - (120) - - - (3,249) (3,369)
Issue of
shares 55 338 - - - - (68) - 325
Share issue
costs - - - - - - - - -
Share-based
payment
charge - - - - - 35 - - 35
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
Transactions
with owners 55 338 - - - 35 (68) - 359
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
Balance
as at 30
June 2022 1,880 44,704 4,756 (203) 46 193 - (32,566) 18,810
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
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) - - - - 18
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
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
-------- --------- --------- ------------ ----------- ------------ ------------ ------------ --------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
Six months Six months
ended ended
30 June 2022 30 June 2021
Unaudited Unaudited
Cash flows from operating activities Note GBP'000 GBP'000
Loss before income tax (3,305) (2,338)
Adjustments:
Depreciation of property, plant and
equipment 8 1,127 799
Depreciation of right-of-use assets 9 589 239
Amortisation of intangible assets 10 455 216
Provision against non-current assets 21 69
Loss on write-off of property, plant
and equipment 156 18
Share-based payment expense 34 26
Foreign currency movements (172) (2)
Lease interest charges 12 367 102
Rent concessions received 12 (25) (25)
Profit on closure/modification of
leases (105) (31)
Profit on early redemption of Convertible
Loan notes (8) -
Interest expense / (income) 570 (8)
Operating cash flow before working
capital changes (296) (935)
Decrease in trade and other receivables 1,094 23
Increase in stock and WIP 343 (5)
Increase in trade and other payables 439 706
Increase in provisions (393) 32
Increase in deferred income (433) 87
------------ ------------
Cash generated / (used) in operations 754 (92)
Income taxes paid - (8)
Net cash generated / (used) in operating
activities 754 (100)
Cash flows from investing activities
Purchase of property, plant and equipment 8 (3,323) (1,001)
Disposal of property, plant and equipment - -
Purchase of intangibles 10 (90) (70)
Receipt of deposits 22 18
Movement in Loans advanced to franchisees 32 (146)
Acquisition of subsidiary, net of
cash acquired - (139)
Interest received 21 8
Net cash used in investing activities (3,338) (1,330)
Cash flows from financing activities
Proceeds from issue of ordinary shares 13 - 1,423
Share issue costs 13 - (67)
Finance lease payments 12 (362) (224)
Movements on loans (167) (18)
Net cash generated / (used) from
financing activities (529) 1,114
Net increase / (decrease) in cash
and bank balances (3,113) (316)
Cash and cash equivalents at beginning
of period 8,225 2,722
Exchange rate changes on cash held
in foreign currencies 51 8
Cash and cash equivalents at end
of period 5,163 2,414
------------ ------------
NOTES TO THE UNAUDITED INTERIM REPORT
FOR THE SIX MONTHSED 30 JUNE 2022
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 ceased to be an investing company on
the completion of the acquisition of the entire issued share
capital of Experiential Ventures Limited. Experiential Ventures
Limited was the holding company of the Escape Hunt Group, the
activities of which related solely to franchise.
On 2 May 2017, the Company's name was changed to Escape Hunt plc
and became the holding company of the enlarged Escape Hunt Group.
Thereafter the group established the Escape Hunt owner operated
business which operates through a UK subsidiary. All of the Escape
Hunt franchise activity was subsequently transferred to a UK
subsidiary. On 22 November 2021, the Company acquired BBB Franchise
Limited, together with its subsidiaries operating collectively as
Boom Battle Bars. At the same time, the Group took steps to change
its name to XP Factory Plc with the change taking effect on 3
December 2021.
XP Factory Plc currently operates two fast growing leisure
brands. Escape Hunt 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.
Boom Battle Bar is a fast-growing network of owner-operated and
franchise sites in the UK that combine competitive socialising
activities with themed cocktails, drinks and street food in a high
energy, fun setting. Activities include a range of games such as
augmented reality darts, Bavarian axe throwing, 'crazier golf',
shuffleboard and others.
The Company's registered office is Belmont House, Station Way,
Crawley, RH10 1JA.
The consolidated interim financial information represents the
unaudited 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 2021 annual report. The statutory
financial statements for the year ended 31 December 2021 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 27 September 2022.
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 Group's plans to continue to expand the network of
both Boom Battle Bar and Escape Hunt sites through organic growth.
The forecasts consider downside scenarios reflecting the potential
impact of an economic slowdown, delays in the roll out of sites and
inflationary pressures. Based on the assumptions contained in the
scenarios considered and taking into account mitigating actions
that could be taken in the event of adverse circumstances, 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 2021, 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.
5. Segment information
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the group of executive directors
and the chief executive officer who make strategic decisions.
Management considers that the Group has four operating segments.
Revenues are reviewed based on the nature of the services provided
under each of the Escape Hunt(TM) and Boom Battle Bar(TM) brands as
follows:
1. The Escape Hunt franchise business, where all franchised
branches are operating under effectively the same model;
2. The Escape Hunt owner-operated branch business, which as at
30 June 2022 consisted of 16 Escape Hunt sites in the UK, one in
Dubai, one in Paris and one in Brussels;
3. The Boom Battle Bar franchise business, where all franchised
branches operate under the same model within the Boom Battle
Bar(TM) brand; and
4. The Boom Battle Bar owner-operated business, which as at 30
June 2022 comprised 4 Boom Battle Bar sites in the UK.
The Group operates on a global basis. As at 30 June 2022, the
Company had active Escape Hunt franchisees in 10 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.
Escape
Hunt Owner Escape Boom Owner Boom Franchise
operated Hunt Franchise operated Unallocated Total
Six months ended 30 June GBP'000 GBP'000
2022 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 4,313 241 2,183 1,383 - 8,120
Cost of sales (1,355) - (1,192) (477) - (3,024)
----------- --------------- ------------ ---------------- ----------- -------
Gross profit 2,958 241 991 906 - 5,096
Site level operating costs (1,289) - (1,720) - - (3,009)
Other income 72 - - - - 72
IFRS 16 Adjustment 335 - 565 - - 900
Site level EBITDA 2,076 241 (164) 906 - 3,059
Centrally incurred overheads (875) - (16) (8) (1,146) (2,045)
Other income - - - 24 32 56
Adjusted EBITDA 1,201 241 (180) 922 (1,114) 1,070
Interest income - - - - 13 13
Interest expense - - - - (583) (583)
Finance lease charges (338) - (29) - - (367)
Depreciation and amortisation (1,128) (57) (175) (219) (7) (1,586)
Depreciation of right-of-use
assets (171) - (418) - - (589)
Exceptional professional
and branch closures - - - - (288) (288)
Profit on closure/modification
of leases 105 - - - - 105
Pre-opening costs (52) - (822) (7) - (881)
Provision against loan - - - - (21) (21)
Provision against guarantee
losses (57) - (57)
Loss on disposal of assets (156) - - - - (156)
Foreign currency gains - - - - 44 44
Rent credits recognised 25 - - - - 25
Share-based payment expenses - - (34) (34)
Profit/(loss) from operations
before tax (514) 184 (1,624) 639 (1,990) (3,305)
Taxation - - - - 56 56
----------- --------------- ------------ ---------------- ----------- -------
Profit / (loss) for the
period (514) 184 (1,624) 639 (1,934) (3,249)
----------- --------------- ------------ ---------------- ----------- -------
Other information :
Non-current assets 7,613 474 18,021 3,944 17,669 47,721
----------- --------------- ------------ ---------------- ----------- -------
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
--------- --------- ----------- -------
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 options are anti-dilutive.
Six months Six months
ended ended
30 June 30 June
2022 2021
Unaudited Unaudited
GBP GBP
Loss after tax (GBP000) (3,249) (2,344)
Weighted average number of
shares:
* Basic and diluted 147,780,320 83,628,885
Loss per share (pence)
* Basic and diluted 2.20 2.81
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
GBP24.7m as at 30 June 2022 (2021: GBP21.5m) 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 GBP4.7m (2021: GBP4.1m).
8. Property, plant and equipment
Leasehold Office Furniture Games Total
property equipment Computers and fixtures
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 December 2021 5,465 50 165 824 5,526 12,030
Additions arising
from internal purchase 2,299 - 48 195 781 3,323
Disposals / adjustments (238) - (7) (29) (336) (610)
As at 30 June 2022 7,526 50 206 990 5,971 14,743
------------ -------------- --------- ---------------- ------------ -----------
Accumulated depreciation
At 31 December 2021 (2,785) (49) (101) (270) (3,309) (6,514)
Depreciation charge (504) (1) (16) (72) (534) (1,127)
Disposals / adjustments 146 - 7 18 283 454
As at 30 June 2022 (3,143) (50) (110) (324) (3,560) (7,187)
Carrying amounts
At 31 December 2021 2,680 1 64 554 2,217 5,516
============ ============== ========= ================ ============ ===========
At 30 June 2022 4,383 - 96 666 2,411 7,556
============ ============== ========= ================ ============ ===========
9. Right-of-use assets
As at As at
30 June 31 Dec
2022 2021
GBP'000 GBP'000
Land and buildings - right-of-use
asset cost b/f 8,920 3,884
Closures / leases ended for renegotiation
during the period (402) (211)
Additions during the year, including
through acquisition 10,487 5,400
Newly negotiated leases - 86
Less: Accumulated depreciation b/f (1,318) (944)
Depreciation charged for the period (589) (613)
Net book value 17,098 7,602
--------- --------
The additions of in the period relate to new leases 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
2021 17,696 78 10,195 1,715 5,248 100 317 35,349
Additions
arising
from internal
development - - - 90 - - - 90
Disposals /
adjustments - - - - - - - -
As at 30 June
2022 17,696 78 10,195 1,805 5,248 100 317 35,439
----------- ------------- ------------- ----------- ------------ -------- -------- ---------
Accumulated
amortisation
At 31 December
2021 (1,393) (60) (10,195) (669) (580) (100) (306) (13,303)
Amortisation - (6) - (167) (281) - (1) (455)
At 30 June 2022 (1,393) (66) (10,195) (836) (861) (100) (307) (13,758)
=========== ============= ============= =========== ============ ======== ======== =========
Carrying amounts
At 31 December
2021 16,303 18 - 1,046 4,668 - 11 22,046
======== ========
At 30 June 2022 16,303 12 - 969 4,387 - 10 21,681
=========== ============= ============= =========== ============ ======== ======== =========
11. Provisions
As at As at 31
30 June Dec 2021
2022
GBP'000 GBP'000
Provision for contingent consideration 9,642 9,056
Provision for deferred consideration 257 637
Dilapidations provisions 215 162
Other provisions 6 5
Provision for financial guarantee
contracts 83 26
Provisions at end of period 10,203 9,885
--------- ----------
The movement on provisions in the
period can be analysed as follows:
Six months Six months
ended ended
30 June 30 June
2022 2021
GBP'000 GBP'000
Balance at beginning of period 9,885 128
Reduction in deferred consideration (380) -
Movement in dilapidations provision 54 32
IFRS 9 Provision for lease guarantees 57
Finance cost recognised on contingent 586 -
consideration
Movement in other provisions 1
Provisions at end of period 10,203 160
----------- -----------
12. Lease liabilities
Six months Six months
ended ended
30 June 30 June
2022 2021
GBP'000 GBP'000
In respect of right-of-use assets
Balance at beginning of period 8,405 3,742
Closures / leases ended for renegotiation
during the period (508) (411)
Additions during the period 11,819 282
Newly re-negotiated leases - (16)
Interest Incurred 367 102
Repayments during the period (363) (122)
Rent concessions received (25) (24)
Reallocated from accruals and trade
payables - 135
Lease liabilities at end of period 19,695 3,688
----------- -----------
As at As at
30 June 30 Dec
2022 2021
GBP'000 GBP'000
Maturity
< 1month 33 42
1 - 3 months 66 84
3 - 12 months 295 290
Non-current 19,302 7,989
Total lease liabilities 19,695 8,405
Lease liabilities includes a master lease in Bournemouth. Part
of the site is occupied by an Escape Hunt owner operated site and
the remainder is sub-let to a Boom franchisee. A liability of
GBP1,666k for the master lease has been recognised and is included
in the balances shown above. The sub-lease gives rise to a finance
lease receivable of GBP1,333k, whilst the property occupied by
Escape Hunt gives rise to a right of use asset of GBP333k.
13. Share capital
Six months Year
ended ended
30 June 31 December
2022 2021
Unaudited Audited
GBP'000 GBP'000
As at beginning of period / year
* 146,005,098 (2021: 80,369,044)
Ordinary shares of 1.25 pence each 1,825 1,005
Issued during the period / year
* 4,378,082 Ordinary shares 55 820
As at end of period / year
* 150,383,180 (2021: 146,005,098)
Ordinary shares of 1.25 pence each 1,880 1,825
----------- ------------------------------------
During the six months ended 30 June 2022 the Company converted
GBP340,000 convertible loan notes, together with GBP54,027 of
rolled up interest at price of 9 pence per share, leading to the
issue of 4,378,082 Ordinary shares of 1.25 pence each.
Share option and incentive plans
XP Factory plc Enterprise Management Incentive Plan
On 15 July 2020, the Company established the XP Factory 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.
It is the Board's intention to make awards under the 2020 EMI
Plan to attract and retain senior employees. The 2020 EMI Plan is
available to employees whose committed time is at least 25 hours
per week or 75% of his or her "working time" and who is not
precluded from such participation by paragraph 28 of Schedule 5 (no
material
interest). The 2020 EMI Plan will expire on the 10th anniversary of its formation.
The Company has made three awards to date as set out in the
table below. The options are exercisable at their relevant exercise
prices 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 the Company's share price at testing equals the first
vesting price, one third of the vested options will be exercisable.
If the Company's share price at testing equals the second vesting
price, 90 per cent of the vested options will be exercisable. If
the Company's share price at testing equals or exceeds the third
vesting price, 100% of the vested options will be exercisable. The
proportion of vested options exercisable for share prices between
the first and second vesting prices will scale proportionately from
one third to 90 per cent. Similarly, the proportion of options
exercisable for share prices between the second and third vesting
prices will scale proportionately from 90 per cent to 100 per
cent.
The options will all vest in the case of a takeover. If the
takeover price is at or below the exercise price, no options will
be exercisable. If the takeover price is greater than or equal to
the second vesting price, 100 per cent of the options will be
exercisable. The proportion of options exercisable between the
first and second vesting prices will scale proportionately from nil
to 100 per cent.
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.
Awards #1 #2 #3
---------------------------------------- --------------- ---------- ----------
Date of award 15-Jul-20 18-Nov-21 23-Nov-21
Date of expiry 15-Jul-25 18-Nov-26 23-Nov-26
Exercise price 7.5p 35.0p 35.0p
Qualifying awards - number of shares
under option 13,333,332 700,001 533,334
Non-qualifying awards - number of
shares under option 2,400,000 0 0
First vesting price 11.25p 43.75p 43.75p
Second vesting price 18.75p 61.25p 61.25p
Third vesting price 25.00p 70.00p 70.00p
Proportion of awards vesting at first
vesting price 33.33% 33.33% 33.33%
Proportion of awards vesting at second
vesting price 90.00% 90.00% 90.00%
Proportion of awards vesting at third
vesting price 100% 100% 100%
As at 30 June 2022, 16,966,667 options were outstanding under
the 2020 EMI Plan (31 Dec 2021: 16,996,667) exercisable at the
prices shown above. 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 2022.
The sum of GBP34,268 has been recognised as a share-based
payment and charged to the profit and loss during the period (6
months ended 30 Jun 2021: GBP25,611). The fair value of the options
granted during the period has been calculated using the Black &
Scholes formula with the following key assumptions:
Table 2
Awards #1 #2 #3
------------------------------ ---------- ---------- ----------
Exercise price 7.5p 35.0p 35.0p
Volatility 34.60% 31% 31%
Share price at date of award 7.375p 33.50p 32.00p
Option exercise date 15-Jul-24 18-Nov-25 23-Nov-25
Risk free rate -0.05% 1.55% 1.55%
The performance conditions were taking into account as
follows:
The value of the options have then been adjusted to take account
of the performance hurdles by assuming a lognormal distribution of
share price returns, based on an expected return on the date of
issue. This results in the mean expected return calculated using a
lognormal distribution equaling the implied market return on the
date of issue validating that the expected return relative to the
volatility is proportionately correct. This was then used to
calculate an implied probability of the performance hurdles being
achieved within the four year window and the Black & Scholes
derived option value was adjusted accordingly.
Time based vesting: It has been assumed that there is between a
90% and 95% probability of all share option holders for each award
remaining in each consecutive year thereafter.
The weighted average remaining contractual life of the options
outstanding at 30 June 2022 is 42.1 months (31 Dec 2021: 48.0
months).
An option-holder has no voting or dividend rights in the Company
before the exercise of a share option.
Escape Hunt Employee Share Incentive Scheme
In November 2020, the Company established the Escape Hunt Share
Incentive Plan ("SIP").
The SIP has been adopted to promote and support the principles
of wider share ownership amongst all the Company's employees. The
Plan is available to all eligible employees, including Escape
Hunt's executive directors, and invites individuals to elect to
purchase ordinary shares of 1.25p each in the Company via the SIP
trustee using monthly salary deductions. Shares are be purchased
monthly by the SIP trustee on behalf of the participating employees
at the prevailing market price. Individual elections can be as
little as GBP10 per month, but may not, in aggregate, exceed
GBP1,800 per employee in any one tax year. The Ordinary Shares
acquired in this manner are referred to as "Partnership Shares"
and, for each Partnership Share purchased, participants are awarded
one further Ordinary Share, known as a "Matching Share", at nil
cost.
Matching Shares must normally be held in the SIP for a minimum
holding period of 3 years and, other than in certain exceptional
circumstances, will be forfeited if, during that period, the
participant in question ceases employment or withdraws their
corresponding Partnership Shares from the Plan.
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. As at 30 June 2020,
101,694 matching shares had been awarded and were held by the
trustees for release to employees pending satisfaction of their
retention conditions. As such no share based payment charge has
been recognised for the period (2021: nil)
14. Key management personnel compensation
Six months Six months
ended ended
30 June 30 June
2022 2021
Unaudited Unaudited
GBP'000 GBP'000
Salaries and benefits (including directors) 427 293
Share-based payments 20 26
Social security costs 56 47
Other post-employment benefits 22 4
Less amounts capitalised (7) (18)
Total 518 352
------------- -------------
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 2021: nil).
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
2022 2021
Unaudited Unaudited
GBP'000 GBP'000
Coronavirus Job Retention Scheme grants 0 474
Local authority Small Business Grants 68 341
Total 68 815
------------- -------------
16. Subsequent Events
There are no material subsequent events requiring
disclosure.
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IR LRMPTMTTTBMT
(END) Dow Jones Newswires
September 28, 2022 02:02 ET (06:02 GMT)
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