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I am long, but, I feel they could have mentioned whether they were profitable in the trading update, if that is allowed. I believe with the investment in key sites, such as Oxford Street , o2, Glasgow, Liverpool, these will eventually drive the company forward, but if in the interims they still post a loss per share, no matter how small , this will tank to new lows, perhaps the market wasn't happy with TU being light on details. I think it will be good overall, but maybe not for a couple of years as it is still a small company really
I think it wasn't helpful that Richard said they absorbed most of the cost increases.
So stock, utilities and staffing go up but they hold prices....
Also the franchise model is looking shaky, is that 5 they have had to buy back now?
I could not have more of a different opinion Simon
It's almost irrelevent whether they make a profit of £2m or a loss of £1m. Net rpfoit is a very complex metric that in recent years has been signifcantly impacted by new accounting principles
This is a company that is growing rapidly; whilst it is growing it is constantly learning and making changes to increase gross margin whcih will drive profitability.
What will drive this business is Cashflow, Revenue Growth and EBITDA Growth.
Its pretty much debt free (a few small vendor loans but nothing significant)
Its generating cash
Its growing rapidly
Its not reliant on Consumar Spending; it has a great B2B revenue stream and they are looking to grow it with a number of new appointments
I'm happy they have the opportunity to buy back some of the Franchise venues - they have proved how well they operate them directly. This will be help fuel growth
It's healthy and uderstandable to look for cracks, esp when the SP is not performing the way you want it to.
However, I could not be more confident that this company will continue to grow, it will get increasingly profitable as it finds way to extract more revenue from existing venues. SIte EBITDA margins are in line with expectations - and they will include the majority of staff costs impacted by living wage increases.
I just wonder if this company is maybe doing too well? I've said a number of times on here that at this mCAp it would make a wonderful acquisition for Private Equity. That may explain the SP movement - you usually see share price suppressed ahead of a take-over
For me the biggest issue here re investing is the faddish nature of the business. I went to am Escape Room once ‘to do it’. For the ‘experience’.
The business ideas are very much based on fads are not, imo, long lasting or sustainable.
I suspect the market agrees. I think the only business model that would be sustainable here would be based on constant reinvention, constant evolution, new ideas. Because people will tire of this as just another craze.
If you read the broker note I’m not sure how you could be despondent. It had a buy rating of well over double where the sp is now.
Dibs - i know what you mean about the fad nature of the business, and i think this particularly applies to Escape Hunt. However, this part of the business continues to grow steadily on a like for like basis, which is reassuring .
The big growth area is of course Boom, where the number of sites has increased rapidly.
From the interims i noticed this - "Boom owner operated site level EBITDA margins 19% in sites trading over 12 months and 11% overall (H1 2022: loss 33%)".
So as each site beds in the revenues rise and the EBITDA margin increases rapidly. Many sites were opened late 2022 (including Oxford St) so they should now be adding value.
This is backed up in last week's trading update for Boom
"As sales continue to grow, operating leverage continues to improve, and accordingly site level EBITDA margins are expected to be significantly ahead of H1 2023 and in line with the board's expectations for the twelve months to December 2023."
I'm not worried about the popularity of Escape Hunt dropping. You have to look at the year on year growth for the established Escape rooms.
If I'm not mistaken it's +17% and they still have the same games they installed 6 years ago. I don't think they are going anywhere. I did a VR one, it was brilliant and so many opportunities to develop those.
Nice to finish blue, first time in a very long time
If you read the broker note I’m not sure how you could be despondent. It had a buy rating of well over double where the sp is now.
Don’t forget, Max. This is the AIM…..
No I absolutely get that billy. But if people are being negative because of their interpretation of the broker note then I can’t see where they’re coming from personally. The growth has been quite incredible imo. And they will no doubt eventually become a very profitable business. Everything they set out as a goal 2 years or so ago they have delivered on. Now that is rare on aim.
I know I sound like a BS er but I bought some more XPF yesterday at 14.35p, happy days!
Well done NewBoy
I've bought lots at sub 15p too :-)
Fair play, Max. And respect for not taking my blog as personal. I do hope more than anyone that this comes good! Saying that, look at the SP today. Totally false market makers, manufacturing, corrupt, manipulation etc, etc….
Come on XPF, we are waiting