9th Oct 2024 13:46
(Alliance News) - XP Factory PLC on Wednesday announced the completion of its new GBP10 million revolving credit facility with Barclays Bank PLC, amid a growth in free cash flow.
The Crawley, England-based entertainment company operates the Boom Battle Bar and Escape Hunt brands.
The facility increased the group's flexibility to grow both the Boom and Escape Hunt estates by providing additional working capital headroom, as well as allowing the company to refinance an existing GBP1 million debt facility at "significantly lower" borrowing costs. It was secured on the strength of its underlying cash generation.
XP Factory delivered GBP6.5 million in free cash flow after a GBP1.1 million maintenance capex in the fifteen months to March 31. Its pre-IFRS 16 earnings before interest, taxation, depreciation and amortisation in the same fifteen-month period was GBP6.3 million, more than doubling from GBP2.6 million in calendar 2022. The company recently moved its financial period to a March 31 year-end from December 31.
Chief Executive Officer Richard Harpham said: "Securing this new revolving credit facility represents an important milestone for the group. Not only is it a strong endorsement of the progress made in the last few years, but it will significantly enhance our ability and confidence to add further venues to our two fast-growing brands. Our existing cash generation supports around 5-6 new site openings per annum. Although there will not be any impact in the current financial year, with the facility in place we have the ability to increase the pace of roll-out in 2025 and beyond whilst maintaining conservative debt ratios."
Investments into new sites have historically generated returns on capital per annum of 52% for the Boom estate and 48% for Escape Hunt, the company added.
Shares in XP Factory were up 2.0% at 12.75 pence each in London on Wednesday afternoon.
By Emily Parsons, Alliance News reporter
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