The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I know I sound like a BS er but I bought some more XPF yesterday at 14.35p, happy days!
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.
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…..
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
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."
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.
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.
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
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 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 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've been patient on my main stock "HEMO" for 3 years since it sunk to the depths of 1.2p. Its now looking very bullish at 3p with news imminent of a very significant milestone for the company
So, I 'm prepared to be patient here. It's not a difficult business to understand - the clues are all there that this will grow to something big
The share price movment is defying logic IMHO
Patience is the key here
Thanks guys, guess I'm just getting a bit despondent with it all.
Spot on Shandypants _ I could not have articulated it better myself
I'm predicting a profit of c+£2m for the FY
Next year, there is no reason why profit cannot increase to doube digits.
Newboy - XPF made an operating profit last year of c£1.6m. H1 2023 did show a loss but that included the cost of a few new sites, which then take a while to be fully functional.
H2 was better for both revenues and margins so hopefully there will be a small profit overall.
However, as a growth company money is being spent to the growth so that always comes off the bottom line.
EBITDA is pretty much an industry standard and is a good guide for a growing company. Many deals are also done on an EBITDA multiple - for example only yesterday EAAS sold one of it's divisions for c7 x its EBITDA - so £30m upfront although last year the whole company made a profit of just over £1m . If for example XPF was to sell Escape Hunt to invest in BOOM it would be done on EBITDA. Based on a multiple of 7 that's c £35m BTW.
As a rule of thumb i often use a 5xEBITDA to get a company value. Based on £10m for 2023 gives us c£50m, double the current SP.
Also look at cashflow - XPF is very cash generative from operations. Always a good sign
Race against time for me - I'm hoping to free up some capital to invest here. Please DYOR, but it's an absolue no brainer in my opinion.
I have a 50p target on this share in the next 18mths.
I can only assume that two things going on here - a distressed (or impatient) seller OR some attempted manipulation that precipitates a bid or large accumlulation.
I have scoured the accounts and RNS of the last 2 years and cannot find any gremlins here
This company is doing phenomenally well and will keep growing - I expect the share price to be between £1 and £2 over a 5 year timeframe. No reason why it cannot be closing the gap on Hollywood Bowl or similar
No idea why you think they are not yet profitable - I expect them to show a profit
I will continue to take a big interest in EBITDA. It’s a much more straight forward metric to understand and a good guage if in year performance.
EBITDA is pointless though if the business is not turning a profit, they said they would by now, they haven't and Mr Market is punishing them for it.
All the pumpers have sold out now and a few long term investors left with a massive hole in their portfolio.
Shielded their customers from fixed cost increases, well done, what about shareholders.
It's only the brokers note that shows any honesty re profit.
Its only a matter of time -
That’s another classic saying on here.
How long is a piece of string?
Only if investors have sold their shares.
The progress and value of this business HAS increased over the last 18months significantly. It's achieving the potential, its walking the walk.
The SP will reflect that in time I have no doubt. IN the meantim I have no idea who/what/why is suppressing the share price.
Its only a matter of time - until the EBITDA annual run rate is in line of greater than the mCap.
Hold for Gold
It has created a fantastic people culture - full of ambition, pride and hungry
Unfortunately. It has robbed a lot of investors!!!!!!!!
The trading performance and general growt hof the business has been faultless
The business is booming (pardon te pun)
Things I like:
- Revenue doubled 2 years on the trot
- Cash generative
- Not reliant on consumer confidence - it has been very successful in the Corporate Events space and is continuing to invest in this space. Corporate engagement spend is more stable and resilient. (IT recently hosred an big international contingent from Google including their Vice President
(https://www.linkedin.com/posts/elisha-khan_internationalevents-eventplanning-google-activity-7153411621959135232-Pk8u?utm_source=share&utm_medium=member_desktop)
- It has grown at a great time - acquiring some great locations at great prices given the macro environment in recent years
- Performance powered by both brands
I have no idea why the share price has not reflected the performance of the business - but It will have to eventually and I'm happy to hold as long as it takes (And add at these levels without hesitation)
- It has created a fantastic people culture - full of ambition, pride and hungry
So then. No significant move in SP then…. Other than down. Could be the bottom drawer for this.
Https://podcasts.apple.com/gb/podcast/the-vox-markets-podcast/id1569138869?i=1000642081692
Not sure this link works. But it’s an interview with Richard harpham CEO and Vox markets. Very happy holding here. Think we’ll see many multiples of this share price in time.