ESC.L Share News (ESC)

(Sharecast News) - Escape Hunt reported a massive increase in revenues but wider losses in a curtailed first half period as it races ahead to open new 'escape room' games.The escape rooms games operator more than quadrupled revenues to £800,000 in the six months ended 30 June but gross profits slipped 44% to £60,000 and its loss before interest, tax, depreciation and amortisation widened almost tenfold to £1.37m. Losses per share also more than doubled to 18.57p.An escape room is a physical adventure game in which players are locked in a themed room and have to find clues and solve puzzles in order to escape against a countdown clock.Escape Hunt said its first three UK owner-operated sites, opened in March, were trading in line with expectations and that it was on target to have nine UK owner operated sites open before the year-end.By the end of this year the company will be operating nine sites in the UK, with Dr Who-themed games licensed from the BBC and being rolled out from December. A network of overseas franchises are operating in 27 countries.Net cash contracted 39% to £6.4m as investment was made in opening of three site, with the losses in line with expectations and mostly related to the advance build-up of its head office and initial site trading losses.The AIM-listed firm also highlighted the fact that its first-half results for 2017 only included two months of trading under the Escape Hunt name given it had only acquired the business in May 2017.Chairman Richard Rose, said: "Whilst we have had challenges to overcome, both in obtaining planning permission for our new UK sites as well as putting together a reliable supply chain for games production, we have now made good progress in both securing sites and finding production partners."As of 0910 BST, Escape Hunt shares had ticked up 0.46% to 110p.House broker Peel Hunt said the first-half losses "give little guide to the progress of the business as only three new sites were operational for only part of the period", with the decision to rebrand and premiumise the offer "has already paid off in the form of the Dr Who licensing deal with the BBC".By the end of the year analysts expect the sites to be attracting "material corporate bookings and management to have a much clearer idea of the growth potential of the business"."If Escape Hunt were to stop opening sites at the end of this year we believe it would progress to break-even by FY20E and this is the basis for our published forecast. But this is a holding position ahead of management concluding how quickly it wants to, and is able to, roll out the business once it has more site-level trading information."