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It looks pretty slick so far. The one thing I couldn't get a handle on was if they have debt or not?! One bit talks about financing solutions of 4.5mil or summat, do they have debt or not?
They have leasing costs - profit after tax & financing is loss. They also stretched the timeframe for depreciation. My take though is that it’s generating cash —- so overall looks decent —- a good bolt on acquisition for a PubCo or entertainment company
They have a very small amount of debt I belive that is directly linked to when they acquire and fit out a new site. Not material - just sensible use of low cost finance.
They generated +£9.5m cash from operating (i predicted +£9m) and they have stated they they are self funding organic growth.
I think i there is an excellenet opportunity to grow quicker which is why I think these look dirt cheap and expect Prrivate Equity to be circling...
Tend to agree with this analysis, speaks a bit of cooking the books, the capex should be lower in next update as no new openings for a while. Would have liked to see some actual detail on their pipeline , seemed a bit vague.. concerned they are still not profitable overall.
No sure you could ask for much more at this stage
I expect to see investors start returning to this stock - I like it's trajectory and would not rule out bid coming from private equity. If I was Blackrock - I would snap this up ASAP and merge it with Puttshack
I expect to see a few months of slow, steady growth to re-rate this stock.
I do like XPF and Boom Battle is a good brand in an exciting sector.
The growth is clearly in Boom as the new sites bed in and add revenues and increased margins. I particularly like the Boom EBITDA increased to 18% which was made up of 11% in H1 and 23% in H2.
So in 2024 if revenues increase to say £35m (from 28m) and EBITDA is say 25% - both conservative IMHO - then EBITDA for Boom is almost £9m (up from c£5m in 2023). £40m and 30% should be £12m EBITDA.
The more mature Escape Hunt has EBITDA at 42% so that shows where Boom should be in a couple of years.
Cashflow is good - and a sensible business model - generate £9m and use a % of this to fund new sites and purchase franchises etc.
The big negative for me and perhaps why the SP is so depressed is the confusing accounts. 3 separate EBITDA figures are quoted and the slightly disappointing c£1m profit also appears to be a loss when lease costs are factored in.
Yes they should now be into profitability after financing this year regardless of the way they cut the accounts… but more scale needed to make profit really meaningful so more reinvestment of cash needed to build the pipeline. Feels like this is the pivotal year coming
ShandyPants
I dont disagree about confusing accounts - but that is accounting for you. It gets increasingly blurred and confusing
What is undeniable though is:
- this company generated +£9m cash from its current asset portfolio
- Revenue has doubled two years on the bounce
- The venues are getting more profitable - becoming more effcient and finding innovative ways to maximise capacity which is more than offsetting wage inflations
- Escape Hunt is more mature - yet it is still showing double digit L4L growth in the most recent quarters' trading
- Corporate represents a big slug of revenues; meaning that XPF is not as reliant on Consumer spending
IMO - this SP is not sustainable. Another year of progress (12mth to March 2025) which I expect the 12mth operating cashflow to increase to +£15m, EBITDA to almost double and Operating Profit to be in the £5-£10m range - will make an mCAP of £25m looks even lighter than it does now.
Central costs of £8.1 million seems excessive for a turnover of £45 million, not sure how they will make ever money with such high fixed costs:
"Central costs of £8.1m reflect the full year effects of growth in 2022 to support the larger estate, covering operations, marketing, finance and other support functions as well as further growth in 2023 commensurate with the addition of further sites. There has also been an impact from inflation as salaries and other central costs have risen in line with market rates. "
I can see this SP closing below 0.1475p today.
This is the norm on a good RNS release
Agree with central costs - could do with a further breakdown as this is confusing. It appears £7.8m is 'unallocated' and in 2022 the equivalent was £6.8m - so not an excessive increase when revenues have almost doubled. As revenues continue to increase this should hopefully become less of an issue.
Would be interesting to know what % is marketing and also why this hasn't been allocated to the specific brands.
For comparison, Hollwoood Bowl's UK central costs are £23m.
Whlst not surprised, it baffles me that people cant see the wood for the trees. The challenging market appears to have created so much scepticism, paranoia and aversion to risk.
This company is performing excellently - some of the innovative activities i see every day posted on LinkedIn blow me away. The latest is that they are taking "Boom on the Road" and going out to corporates with a game.
Too much being made of the operating loss - it's about as meaningful as Russian democracy. Its generating significant Cash, EBITDA and and growing quickly and profitably.
I'm going on record now to say that this company will get snapped up for 80p before the end of 2025.
Signed: Hedgehogarth, 19th March, 2023
Exactly, so hollywood bowl central costs are 10 of gross revenue, XPF is 19% - If they got a grip of those the sky's the limit.
I guess I'm just jaded after 4 years of promises of profitability, it acts like a social enterprise sometimes
Q&A with XP Factory CEO Richard Harpham: “Our growth is a result of the cash that we generate”
https://www.youtube.com/watch?v=JEnCMTGXRLU
i agree the growth has been quite incredible especially if you look at what’s happened over the last 3 years. think people are negative because the share price hasn’t moved and trying to find reasons. but i’m very comfortable here and if they carry on double digit lfl growth and carry on expanding sites towards their target of 50 escape hunts and 100 boom sites this will go far beyond singers 32p target price. i also like the fact they’re not only looking at site growth but also improving operational sites. good example- putting a ****tail bar in o2 site to increase drinking pre concert events or adding in an extra escape room in sites they feel they could fit one in.
also,
£9.5m cash generated from operations (2022: £3.2m) - £6.9m invested in capital expenditure
£4.4m cash balance at 31 december 2023 (31 dec 2022: £3.2m)
that sounds good to me.
Nice lunchtime shopping spree from someone....
9-Mar-24 12:06:48 15.487 241,256 Unknown* 14.50 15.00 37.36k
Getting a serious II onboard here would be game changing, one day
Newboy - there's already a fair few - at least 50% sit wih IIs
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