XP Factory plc (LON:XPF), one of the UK’s pre-eminent experiential leisure businesses operating the Escape HuntTM (‘EH’) and Boom Battle BarTM (‘Boom’) brands, has announced an update on trading for the 2025/26 festive period.
Trading summary:
· Record quarterly sales with UK Owned and Operated (O&O) revenue growth of +4.2% in the 13 weeks to 28 December 2025
· Year to date Group unaudited pre-IFRS 16 adjusted EBITDA of £4.8m in the 39 weeks to 28 December 2025 (+£0.1m vs prior year)
· Exceptional trading at Escape Hunt O&O
o +10.0% total UK O&O sales growth in the 13 weeks to 28 December 2025, driven by +6.4% UK LFL (“like-for-like”) sales growth and new site openings
o Site level EBITDA margins of circa 43% year to date
o New sites opened in the current year in Canterbury, Sheffield and Resorts World expansion trading in line with expectations, Colchester Escape Hunt in build
· Positive overall growth within Boom O&O but continuing LFL sales decline, with ongoing sector softness
o +2.5% UK O&O sales growth, with +9.7% attributable to the annualisation of prior year acquisitions and site openings
o -7.2% UK LFL sales decline[1] in the 13 weeks to 28 December 2025 as strong corporate bookings were unable to compensate for declines in consumer sales
o Site level EBITDA margins circa 18% year to date
o Material labour cost increases driven by rises in National Insurance contributions and National Living Wage, which have not been possible to fully mitigate given lower sales
o Sharpened focus on cost control, with £2m annualised run-rate cost savings achieved so far, partially mitigating the impact from LFL declines and labour cost inflation
o Initial signs of sector consolidation starting to accelerate, reflecting challenging market conditions within the competitive socialising industry which experienced a -9% LFL[2] sales decline during calendar 2025
o As the scale operator, Boom is well positioned to emerge as a winner when market conditions improve, consistent with XP Factory’s prior experience in Escape Rooms
· Net debt position of £5.6m as at 28 December 2025
· Given the slower than expected Boom B2C performance over the key festive period which has continued into January, the Board now expects FY26 revenue and EBITDA to be below current market estimates with the Board expecting FY26 pre-IFRS16 adjusted EBITDA of between £5.0m and £6.0m.
· Whilst the long-term growth opportunity remains highly attractive, due to challenging market conditions impacting LFL growth and cost inflation, the Board has taken the prudent view to moderate the pace of new site openings in the near term. FY27 is also therefore expected to be a year of consolidation, with remaining uncertainty driven by market conditions
Recent trading
The challenges experienced by the hospitality industry have been widely publicised with increases in national insurance and National Living Wage (NLW), cost inflation and what is now several years of heightened economic uncertainty having a negative impact. Reflecting these factors, independent data suggests the experiential leisure industry suffered negative LFL sales growth in the calendar year 2025 of around -9%. Within the Competitive Socialising segment these financial challenges are becoming increasingly evident, with several operators entering administration during the year. Meanwhile Escape Hunt has continued to see a reduction in direct competition.
As the scale operator, Boom is in a healthy position to thrive when market conditions improve, reflecting the precedent in the Escape Room industry where Escape Hunt has emerged as the clear winner through a prolonged period of consolidation. Whilst XP Factory has not been immune to these near-term external influences, the Group has outperformed the industry and made further progress towards achieving its longer-term strategic objectives.
Escape Hunt continues to exhibit incredibly resilient trading, with UK O&O revenue growth of +10.0% in the 13 weeks to 28 December 2025. The growth was driven by +6.4% UK LFL sales growth, together with contributions from new sites opened in Canterbury and Sheffield, as well as the annualization of Cambridge and Glasgow which opened in 2024. This was partly offset by the Birmingham Central site closure in March 2025, where the Landlord was forced to vacate the entire building. The new sites have continued to perform in line with management expectations. A new site is now in build in Colchester and expected to open before year end, in time for the Easter holidays.
The site pipeline remains vibrant, and the most recent trading data only serves to reinforce the view that Escape Hunt, with its market leading return on capital and deep customer resonance, can in the medium-term become a 100 site business within the UK alone. However, in light of the macro-economic uncertainty, the Board has decided to adopt a more cautious approach to near-term capital deployment and will in the near-term slow the pace of new openings to preserve a material headroom against the Company’s borrowing facilities. At 28 December 2025, the Group had net debt of £5.6m, giving significant headroom relative to covenant limits.
Boom delivered +2.5% growth in the 13 weeks to 28 December 2025, supported by the annualization of the Ipswich and Southampton acquisitions completed in 2024, the annualization of the Cambridge site opened in 2024, and the in-year opening of Reading. This was offset by continuing challenging market conditions which drove a LFL sales decline of -7.2% across the estate. Corporate sales remained resilient, with positive LFL growth in the period, but this was offset by continued softness in consumer sales. During the key four-week corporate season, LFL sales growth was -3.6% against a strong comparable base that saw +17% LFL growth in the prior year. In January 2026, the Group made the difficult decision to permanently close the Southend venue, reflecting local economic challenges and disappointing footfall.
Both brands have also experienced material labour cost inflation, reflecting the sharp increases to National Living Wage (NLW) and National Insurance implemented in April 2025 which has had a circa £1.5m annualised impact. In response to LFL pressure and rising costs, management has intensified its focus on cost control with £2m of annualised cost savings implemented to date which has partly mitigated these impacts.
Outlook
The Group remains confident in the significant long-term growth opportunity, supported by a substantial runway for new site openings. With scale and industry leading returns, the Board expects both brands to emerge as winners in their respective segments as the industry consolidates. Nevertheless, in the near term, the Group has not been immune to the challenging market conditions which have continued to impact Boom’s consumer LFL growth through the festive period and into 2026. This means that the Board now expects FY26 EBITDA below current market expectations, with the Board expecting FY26 pre-IFRS16 adjusted EBITDA of between £5.0m and £6.0m. FY27 is additionally expected to be a year of consolidation, with remaining uncertainty given market conditions and we are moderating accordingly the pace of our new site openings. The Board expects that taking this action will leave the Company well-positioned to capitalise on the longer-term growth opportunities as and when the current external turbulence subsides and provide greater flexibility in capital allocation decisions.
Commenting, Richard Harpham, Chief Executive of XP Factory plc said “Against a backdrop of well-documented industry challenges, we have continued to outperform the wider experiential leisure market and make progress against our strategic objectives. While near-term trading within Boom has been impacted by market pressures, with strong market positions and a compelling UK growth runway, we remain well positioned to emerge as a long-term winner as the sector continues to consolidate.”
