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This is the norm on a good RNS release
I can see this SP closing below 0.1475p today.
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. "
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.
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
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.
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.
No sure you could ask for much more at this stage
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.
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...
Brilliant update and broadly in line with expectations - the nice surprise being that Escape Hunt continues to grow stronger than i expected
£44m Revenue - TICK (In line with what i expected)
£28m GM - TICK (In line with what i expected)
Site Level EBITDA £15.3m - CLOSE(I said £17.9m)
Adj EBITDA £8m CLOSE (I said £9m)
Operating profit £1.7m (before fair value movements) VERY CLOSE (I said £2.5m)
L4L growth in 2024 - 11% Escape Hunt, 9% Boom Bar WRONG ( I undercalled this - 5% EH, 10% BB)
And nice Post period Outlook
POST PERIOD END TRADING AND OUTLOOK
" Both Escape Hunt® and Boom Battle Bar® have continued to deliver strong like for like sales growth in the first 10 weeks of 2024 (11% and 9% respectively), and the new sites and recently acquired former franchise sites are performing in line our anticipated maturity profiles. As we have come to expect, half term in February proved particularly successful for Escape Hunt, and at Boom, the operational focus over the last 12 months continues to yield the margin and customer improvements that were targeted. We remain confident about the outlook for the business and the board is confident that the results to 31 March 2024 will be in line with market expectations. "
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
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?
Fantastic update!
Newboy - a TU was released in Jan (rev almost doubled to £44m) and we were told more details would be provided in March. We are halfway through March so expect news in the next 2 weeks. Don't forget the YE has been extended to 15 months for this financial period so YE is 31/3 not 31/12
Excerpt below...
"Overall performance is expected to be in line with market expectations for the twelve months to 31 December 2023, and provides confidence of achieving market expectations for the 15 month financial year to 31 March 2024.
The Company will publish an interim report for the 12 months to 31 December 2023 in March 2024, and audited financial statements for the 15 months to 31 March 2024 during the summer."
It's a matter of timeframes, it is true to say that the share price has doubled since 2020, which if you got in at 7.5p ish back then and accepted this would be a steady growth stock it wouldn't be to bad a return. It might double again in the next 4 years with steady growth and stable margins, the trajectory here is up though over the long term as things currently stand.
Ok, I hear you HH, but then if the SP doesn't reflect the performance, we have to ask why it's aritificially supresssed?
I've been waiting for many years and it's still not going up! How long do you want?
Derek99 - the share price is not the abiter of performance. The business is growing proftablyand acheived everything shareholders would have wanted to see in FY23.
Lets see what happens shall we ;-)
I agree totally Newboy58. Zero comms and you have to ask why seeing the experience in the board. Has to be intentional!
But HedgeHogarth is adamant they are doing it all so well. SP says otherwise.
Be nice if they could at least release the interims and a trading update so we know a bit more detail on Jan to December 2024
I've been bitten so many times now with rampy ceo's, really hoping Richard isn't another in a long line of disappointments
Still here BillyBB
Still holding
Still very confident
Still think this will get snapped up sooner or later
HedgeH. Where are you? This share is dying. What’s gone wrong?
The problem with this company is a total lack of investor communications. Apart from results time there is virtually no info coming out whatsoever, nothing to move the share price.
With the number of sites they now have there must be lots going on behind the scenes.
The PR dept needs to start communicating and promoting the business to the market.
As we all know, on AIM no news means a falling share price.
Agree - results have been consistently good, however, this has not translated into SP increases.
Results for the 12 months (financial year is being moved to end of March, so 15 months this period) will be in March, so hopefully in the next 2 weeks.
As per the Jan TU RNS
"The Company will publish an interim report for the 12 months to 31 December 2023 in March 2024, and audited financial statements for the 15 months to 31 March 2024 during the summer."
This share has only had excellent results and excellent RNS's. unfortunately, this is the AIM market and we are all being duped!