Escape Hunt narrows loss despite Covid-19 closures

(Sharecast News) - Escape Hunt reported a group adjusted EBITDA loss of £1.4m in its final results on Tuesday, narrowing from a loss of £1.7m in the prior year, despite Covid-19 restrictions shuttering its locations for much of the period.

The AIM-traded operator of 'escape room' leisure experiences reported like-for-like sales growth of 25% on a 12-week rolling basis in the two months prior to lockdown.

Group revenue totalled £2.7m, which was 46% lower than the 2019 financial year as a result of Covid-19, although revenue from its pandemic-induced digital and other play-at-home products was £0.23m, compared to nil in 2019.

Positive site-level adjusted EBITDA was £0.4m from owner-operated sites in the 12 months ended 31 December, down from £1.0m year-on-year, with the earnings that were recorded said to have been driven by a strong performance pre-lockdown, and "encouraging trading" when the locations were allowed to open under Covid-19 restrictions later in the year.

Franchise EBITDA totalled £0.3m, down from £0.4m in 2019.

Escape Hunt recorded a group operating loss of £6.4m for the year, widening from a loss of £5.9m in 2019, with the board highlighting the raising of £4.0m net of expenses in an equity placing and open offer, share subscription, and convertible loan note in July.

Cash at year-end totalled £2.7m, up from £2.2m a year earlier, rising to £3.3m as at 31 March.

"We are delighted that our UK sites have finally been able to re-open and are excited to be building on the substantial strategic progress we have been able to make in the last year, notwithstanding the extremely tough conditions brought about by Covid-19," said chief executive officer Richard Harpham.

"Escape Hunt is in a much stronger position today than it was 12 months ago, and subject to reasonable assumptions on demand returning, we are confident that we now have a platform established capable of supporting a profitable business."

Harpham said the company had "significantly" grown its owner-operated estate, launched its digital and remote-play propositions, made progress with franchisees, and re-capitalised the business over the year.

"We are hopeful that consumer and corporate demand will return strongly in the coming months and look forward with cautious optimism."

At 1555 BST, shares in Escape Hunt were down 3.75% at 39.46p.