Final Results

7 September 2026

XP Factory plc

("XP Factory", the "Company" or the "Group")

Final audited results for the period ended 29 March 2026

XP Factory is pleased to announce its audited final results to the period ended 29 March 2026

Financial Summary

• Underlying group revenue for the period increased 3% to £59.6m1 compared to the prior year (FY25: £57.8m) representing further growth in scale

• Pre-IFRS-16 Group Adjusted EBITDA was £5.5m (FY25: £6.6m)

• Site-level pre-IFRS-16 EBITDA was £14.5m (FY25: £15.0m)

• Group Adjusted EBITDA was £10.2m (FY25: £10.3m)

• Adjusted Operating profit2 of £0.8m (FY25: £3.4m)

• Net debt of £5.9m at 29 March 2026 (31 March 2025: £4.9m net debt)

• £20m revolving credit facility with HSBC signed

Divisional Summary

• Escape Hunt® owner-operated ("O&O"):

• Revenue growth: +11% to £15.8m (FY25: £14.2m)

• UK like for like ("LFL") sales growth of +4.6% in the 52 weeks to 29 March 2026

• Escape Hunt Pre-IFRS-16 site-level EBITDA margin of 42% (FY25: 44%)

• New sites opened in Canterbury and Sheffield, in May and October 2025 respectively, as well as an expansion into an additional unit at Birmingham Resorts World

• O&O sites at year end: 27 (FY25: 25), of which 24 in the UK (FY25: 22)

• Boom Battle Bar® ("Boom") O&O:

• Underlying revenue growth: +2% to £42.8m (FY25: £42.2m), driven by the annualisation of prior year franchisee acquisitions, and net site openings

• UK LFL decline of -8.0% in the 52 weeks to 29 March 2026, modestly ahead of the competitive socialising industry which experienced a LFL decline of -9%3

• Pre-IFRS-16 site-level EBITDA margin of 17% (FY25: 18%), with disciplined cost controls partially offsetting the impacts of negative LFL sales, and material labour and supplier cost inflation

• New owner-operated Boom site opened in Reading in June 2025, Southend site closed in January 2026

• O&O sites at year end: 25 (FY25: 25), of which 24 in the UK (FY25: 24)

Post-Period End Summary

• Unusually warm and dry weather throughout summer impacted demand for indoor activities, subsequent improvement with normalisation in weather in recent weeks

• Positive initial indications for key festive trading period, supported by internal initiatives with LFL December B2B bookings up +15% against the comparable period last year

• £1m HQ cost reductions implemented with full benefit expected in FY27

• New Escape Hunt site openings:

• New sites in Colchester, Wandsworth, and Birmingham Canon Street opened in April, June, and July 2026 respectively.

• Cardiff site in build, and is expected to open in October; Cardiff will be UK site number 28

• Strong pipeline of further site openings developed, long-term potential to grow O&O estate to 100 sites in UK&I

• The Christmas trading period remains important to the full year outcome. Based on initial Christmas indications, the Board continues to expect performance for the year to be in line with market expectations.

​1. Excluding the impact of the presentational accounting change in retrospective supplier rebates (so-called "retros") which are now recognised as a deduction from cost of sales, reflecting the substance of the underlying arrangements. Previously, these amounts were presented within revenue

​2. Adjusted Operating profit calculated as statutory operating profit before exceptional and pre-opening costs

​3. Source: CGA RSM Hospitality tracker, average weekly LFL for Experiential Venues for the 52 weeks to 29 March 2026

Enquiries:

Notes to Editors:

About XP Factory plc

The XP Factory Group is one of the UK's pre-eminent experiential leisure businesses which currently operates two fast growing leisure brands. Escape Hunt is a global leader in providing escape-the-room experiences delivered through a network of owner-operated sites in the UK, an international network of franchised outlets in five continents, and through digitally delivered games which can be played remotely. 

Boom Battle Bar is a network of owner-operated and franchise sites in the UK that combine competitive socialising activities with themed cocktails, drinks and street food in a high energy, fun setting. Activities include a range of games such as augmented reality darts, Bavarian axe throwing, 'crazier golf', shuffleboard and others. The Group's products enjoy premium customer ratings and cater for leisure or teambuilding, in small groups or large, and are suitable for consumers, businesses and other organisations. The Company has a strategy to expand the network in the UK and internationally, creating high quality games and experiences delivered through multiple formats and which can incorporate branded IP content. (https://xpfactory.com/)

STRATEGIC REPORT

Chairman's Statement

Having assumed the role of Chairman on 2 February 2026, succeeding Richard Rose after his nine years on the Board, I am pleased to present my first report to shareholders. Firstly I would like to thank Richard Rose who, during his tenure, led the Group from under £1 million of revenue to almost £60 million. Richard was generous with his time throughout the handover, for that, I am grateful.

Although I have only recently joined the Board, it is already clear that the Group has significant opportunities ahead, as well as challenges to navigate. One of my principal responsibilities as Chairman is to ensure we maintain a disciplined focus on capital allocation - a priority that can easily lose clarity over time. It has been particularly pleasing to see that the Board and the wider Group have embraced this focus so readily. More importantly, there are opportunities within the business that are genuinely deserving of capital, and that makes the decisions ahead all the more exciting.

Turning to the results we announce today, underlying revenue grew 3% to £59.6 million, while pre-IFRS 16 adjusted EBITDA declined to £5.5 million (FY25: £6.6 million), reflecting approximately £1.5 million of additional labour costs and a significantly weaker competitive socialising market. Net debt, excluding leases, closed at £5.9 million (FY25: £4.9 million) after investment in four Escape Hunt site openings and expansions during the year and shortly thereafter. It is fair to say that 2026 was a year of resilience rather than progress.

However, in a year when several competitors failed, Boom limited its margin decline to less than two percentage points, finishing at 17%. Escape Hunt UK delivered 4.6% like-for-like sales growth and site-level margins of 42%. The Group's ability to protect margins in a year like 2026 should not be underestimated. More than £2 million of annualised site-level savings were identified during the year and, since I became Chairman, a further £1 million cost-saving programme has been initiated at head office.

Escape Hunt's unit economics remain remarkably consistent across a wide range of locations, underpinning our confidence in the longer-term opportunity to build a 100-site estate. Boom's like-for-like performance requires sustained attention. While the market backdrop helps explain Boom's recent performance, explanation alone is not a solution. Encouragingly, the leaner central cost base now gives us the ability to deliver operational leverage that the model has always promised.

Outlook

XP Factory enters FY27 leaner, more disciplined, and with a clearer sense of purpose. Both brands are capital-efficient and stand to benefit as consolidation continues across the market. But we are not assuming a rapid recovery in consumer demand. However, we have an incredibly talented and dedicated team at XP Factory. We now have a cost base that is aligned with current trading conditions and a clear conviction about where capital should be allocated. As a result, the Board believes we are well positioned, while remaining mindful of the challenges ahead.

Finally, I would like to thank our shareholders for the warm welcome they have given me since joining the Board. I have been equally grateful for the support, encouragement and commitment shown by my fellow directors and everyone across the XP Factory family.

James van den Bergh

3 September 2026

Chief Executive's Report

​

FY26 was a year in which XP Factory demonstrated resilience and operational discipline despite a challenging market backdrop. Escape Hunt continued to deliver an exceptional performance, with robust like-for-like (LFL) revenue growth and industry leading site-level profitability and return on capital. Boom was impacted by continued weakness across the competitive socialising market, resulting in negative LFL growth, marginally ahead of wider industry trends. Nevertheless, disciplined cost management and operational efficiencies helped offset much of the impact on operating profitability, demonstrating the resilience of our operating model.

Group performance

Delivering exceptional guest experiences remains central to our strategy, and both brands continue to enjoy exceptional customer engagement. This is evidenced by industry leading review scores which averaged 98% across the estate (FY25: 98%). These consistently high scores are a testament to the exceptional commitment of our teams across the business, from game and content development through to the operational excellence delivered in our venues every day.

Underlying revenue grew 3%4, reflecting further LFL growth in Escape Hunt, site expansion and the annualization of prior year Boom Franchise acquisitions, offset by LFL declines at Boom. Despite a challenging trading environment, the Group delivered resilient profitability with pre-IFRS 16 adjusted EBITDA of £5.5m (FY25: £6.6m). Performance was impacted by a number of external headwinds, including c. £1.5m additional LFL labour costs arising from increases in National Insurance contributions and National Living Wage, together with broader supplier cost inflation and softer LFL trading at Boom. These pressures were substantially mitigated through disciplined cost management with over £2m of site level cost savings and £1m of head office savings implemented to date, with full effects to be achieved during FY27.

Net debt excluding lease liabilities at year end was £5.9m (FY25: £4.9m), with strong underlying free cash flow balanced against investment in the existing estate and expansion, with 4 new sites opened in the year and a further 3 new sites opened shortly after year end.

4. Excluding the impact of the presentational accounting change in retrospective supplier rebates (so-called "retros") which are now recognised as a deduction from cost of sales, reflecting the substance of the underlying arrangements. Previously, these amounts were presented within revenue

Escape Hunt

Escape Hunt delivered another year of strong and consistent performance. Owned and operated (O&O) revenue grew by 11%, supported by UK LFL growth of 4.6% and new site openings. Site-level profitability continues to significantly exceed original expectations with pre-IFRS 16 adj. EBITDA margins of 42% (FY25: 44%), despite material labour cost inflation.

During the year, new Escape Hunt sites opened in Canterbury and Sheffield, as well as an expansion into an additional unit at Birmingham Resorts World. In addition, three new sites have opened after year end; in Colchester, Wandsworth and Birmingham Cannon Street. The Birmingham site replaces the first UK Escape Hunt site in Birmingham Central which forced to close at short notice due to landlord issues, resulting in a closure of the shopping centre. The Wandsworth site represents a reallocation of space from the existing Boom site, reflecting our view that the location's affluent, family-oriented catchment is expected to resonate more strongly with the Escape Hunt proposition. Initial performance of these new sites has been in line with Board expectations. This provides further assurance in the repeatability of the model across a wide range of locations and confidence in the long-term potential to open 100 sites in the UK & Ireland.

Escape Hunt's performance remains notable for its consistency. All mature UK sites are materially profitable across locations with differing affluence levels, competitive intensity and footfall characteristics. Its modular formation, destination appeal and ability to operate successfully from a range of unit shapes and micro-locations remain important competitive advantages. These characteristics allow Escape Hunt to access attractive property opportunities and landlord incentives, which supports the capital efficient model, and compelling payback periods.

Whilst Escape Hunt enjoys consistently strong profitability and unit economics, this has not been the case across much of the wider Escape Room market. As a result, the reduction in direct competition within the market has also continued with increased pressure on cost and revenue, reflecting the broader trend of industry consolidation in recent years. During this period Escape Hunt has further strengthened its position as the clear scale leader.

Product innovation remains an important contributor to the brand's resilience and Escape Hunt continues to refine its game portfolio, with two new escape room formats launched during the year, further enhancing the breadth and quality of the portfolio. Newer games continue to demonstrate higher customer review scores and repeat visit rates, reflecting the success of the Group's ongoing investment in game design and guest experience. Behind the scenes, technology continues to enhance both guest experience and operational efficiency. Significant improvements to clue prompting have been tested and are now being rolled out, whilst the latest generation of Escape Hunt's show control system has further enhanced the immersive game experiences through more sophisticated integration of lighting, audio, video and environmental effects, whilst making operations simpler for venue teams. In addition, the drinks sales continued to grow, supported by an expanded themed cocktail menu.

Boom Battle Bar

Boom delivered positive overall revenue growth in FY26, with underlying O&O revenue increasing by 2%5. Growth was supported by the annualisation of prior year franchise acquisitions, the annualisation of the FY25 Cambridge opening, and the in-year opening of Reading. This was offset by the continued LFL trading pressure, consistent with conditions across the wider competitive socialising market, with Boom O&O LFL sales declining by 8% during the year.

The competitive socialising market experienced sustained weakness during the period, with LFL revenue declining by 9%6. Combined with material labour cost increases and supplier inflation, these headwinds placed significant financial pressure on various operators across the sector. These pressures are accelerating consolidation across the sector, with several operators entering administration during the year. As one of the scale leaders in the sector, Boom remains well positioned to benefit when market conditions normalise, consistent with the Group's prior experience in the escape room market.

Whilst Boom was not immune to these challenges, a strong focus on cost control and operational efficiency helped to significantly mitigate the impact on margins. Most of these savings were achieved through the renegotiation of supplier contracts from a position of greater scale, reflecting the substantial growth in the business since many original agreements were entered into. As a result, the reduction in site-level margin was contained to within 2 percentage points, with FY26 site-level pre-IFRS 16 adj. EBITDA margin of 17% (FY25: 18%).

As with the Cambridge opening in FY25, the opening of Reading in FY26 incorporated our cumulative learnings from previous Boom openings; spanning site selection, venue layout, asset mix and operational execution. The encouraging performance of these newer sites reinforces the Board's view that any future expansion should remain highly selective with a clear focus on premium locations capable of delivering attractive long-term returns.

Various internal initiatives to support LFL growth have been implemented, including the launch of a proprietary B2B booking platform. This is supporting positive initial indications for the key festive trading period, with LFL December B2B bookings +15% compared to the same period last year.

​5. Excluding the impact of the presentational accounting change in retrospective supplier rebates (so-called "retros") which are now recognised as a deduction from cost of sales, reflecting the substance of the underlying arrangements. Previously, these amounts were presented within revenue

​6. Source: CGA RSM Hospitality tracker, average weekly LFL for Experiential Venues for the 52 weeks to 29 March 2026

People and Culture

The Group's people remain central to performance and future growth. During the year, we continued to invest in learning and development and hospitality standards across both brands, ensuring teams are equipped to deliver exceptional guest experiences whilst creating meaningful opportunities for career progression and internal promotion.

Alongside investment in people, the Group has continued to enhance the technology and operational tools available to teams, supporting greater efficiency across the business. AI-enabled guest communications, enhanced operational reporting and data-driven guest insights are streamlining routine tasks. These initiatives help to improve decision making and allow our teams to increasingly focus more of their time on what matters most; delivering best-in-class hospitality.

Strategic objectives

The Group's financial strategy remains built around three core priorities; disciplined site expansion, attractive unit economics, and operational leverage.

Site expansion

The Group continues to see a substantial runway for growth in the UK & Ireland, whilst recognising the need for disciplined capital allocation in the current trading environment. Escape Hunt remains the clearest near-term expansion opportunity, supported by highly attractive returns, consistent site performance and a proven ability to trade in a broad range of locations. Accordingly, the Board continues to believe the business has the long-term potential to expand to 100 Escape Hunt sites in the UK & Ireland. However, in light of current market conditions, the pace of expansion will remain measured, preserving financial flexibility while ensuring the Group is well positioned to accelerate as market conditions improve.

Unit economics

The Group's long-term confidence is underpinned by attractive unit economics. Both brands operate capital-efficient models by design, enabling strong returns on capital. Data and operational insights continue to inform the evolution of both brands, including the optimisation of site layouts, game and activity mix and the identification of incremental revenue generating opportunities. As a market leader across both segments, the Group benefits from scale, strengthening our purchasing power with suppliers, enhancing attractiveness to landlords, and enabling a "test-and-learn" philosophy across the estate.

Central costs

Operational leverage remains an important medium-term objective, and our head office function has been designed to be capable of supporting a larger estate. During FY26, the Group initiated £1m of annualised cost savings, with the majority of benefit expected in FY27. These actions reflect a disciplined approach to overheads, intended to ensure that the central cost base remains appropriate for the current trading environment whilst retaining capabilities required to support future growth. As the business continues to scale, the Board expects the ratio of central costs to Group revenue to reduce further through both operational leverage and the benefits of the cost savings implemented during FY26.

Current position and long-term opportunity

XP Factory enters FY27 as a leaner, more resilient and operationally stronger business. During FY26, the Group strengthened cost discipline, enhanced operational efficiency and continued to invest selectively in the customer proposition, leaving both brands well positioned to benefit as market conditions improve.

The Board believes the Group is differentiated by a number of structural competitive advantages, including:

1. Standardised modular formats and automated games, enabling cost-efficient off-site construction.

2. Expanding data lake, enabling the implementation of best practice across the estate and accelerating the speed to maturity of new sites

3. Increasing brand equity with consistently strong customer reviews and growing awareness

4. Attractiveness to landlords driving improved rent conditions and incentives on new builds

5. Enhanced supplier terms at scale

Taken together, these advantages provide the Board with confidence that both Escape Hunt and Boom are well positioned to strengthen market positions over the long term. Whilst the near-term trading environment remains uncertain, the Board continues to believe both brands are well placed to capitalise on the long-term potential as market conditions normalise.

Outlook and post period end

The Group remains confident in the attractive long-term growth opportunity within the experiential leisure industry. Escape Hunt in particular continues to demonstrate the strength of its proposition, with strong and consistent returns across the estate. Whilst trading conditions within the competitive socialising market have remained difficult, we are confident that Boom, as a scale operator, will prove to be a long-term winner as the industry consolidates.

Whilst unusually warm and dry weather throughout summer impacted demand for indoor activities through summer, this has since improved with the normalisation in weather in recent weeks. Additionally, we have seen positive initial signs for the key festive trading period, supported by various internal initiatives with December B2B bookings up +15% compared to the same period last year.

To further support profitability, we continue to drive incremental cost efficiency both centrally and at a site level, with over £2m of annualised site-level savings and £1m of annualised central cost savings initiated so far, with further opportunities being explored.

Financial Review

Revenue

On a basis consistent with the prior year, Group revenue for the period to 29 March 2026 grew 3% to £59.6m compared to £57.8m in the year to 31 March 2025. During the period, the Group changed the presentation of retrospective supplier rebates (so-called "retros") so that they are recognised as a deduction from cost of sales, reflecting the substance of the underlying arrangements. Previously, these amounts were presented within revenue. As a result, reported revenue for the current period was £58.6m. The impact of applying this presentation to the comparative period was not material and the comparative information has therefore not been restated. Had the comparative period been presented on the current basis, revenue for the current period would have been 2% higher than the comparative period, equivalent to £1.7m.

The growth was delivered from the full year effects of the new Boom and Escape Hunt sites opened and acquired during FY25, further site openings in the current period and underlying like-for-like growth within the Escape Hunt owner operated estate. 

Within the Escape Hunt owner-operated estate, revenue grew 11% in the period to 29 March 2026, resulting in total owner-operated sales of £15.8m from Escape Hunt up from £14.2m in the prior year. Of the £1.6m increase delivered in the period, £0.5m was delivered from like-for-like sales growth, driven by UK like-for-like growth of 4.6%, £1.1m came from new sites opened in the year, and £0.5m from the full year effects of sites opened in the prior year. These increases were offset by a reduction of £0.5m of sales from the Birmingham Central site which was forced to close in March 2025.

At the start of the reporting period, the estate comprised 25 owner-operated sites. During the period, sites were opened in Canterbury and Sheffield with no closures, bringing the total to 27 owner-operated sites at period end.

On a basis consistent with the prior year and before the change in presentation of retros, the Boom owner-operated estate revenue rose 2% in the period to 29 March 2026, an increase of £0.7m on the prior year, resulting in owner-operated sales of £42.8m in the financial year. Reported revenue under the revised policy was £41.9m; had the comparative period been presented on the same basis, this would have represented an increase of £0.6m, or 2%. Of this increase, £2.1m was delivered from the Reading site opened in the period, and £1.6m from the full year effects of sites opened in the prior period. These increases were offset by a like-for-like decline of £3.1m representing an 8% annual like-for-like decrease across the estate. Within the estate, one underperforming site in Southend was closed during the period, with Dubai subsequently closed post period end.

At the start of the reporting period, the estate comprised 25 owner-operated sites. One new site was opened and one closed, bringing the total to 25 owner-operated sites at period end.

The Escape Hunt franchise network delivered turnover of £0.5m, a slight reduction from the prior year's £0.6m. The Boom franchise business also delivered turnover of £0.5m, a reduction of 35% compared to the same period in the prior year. The reduction resulted from the full year impact of the acquisition of franchise sites in the prior year. The remaining franchise network continues to make a consistent contribution to the Group, albeit at a modest level compared with the wider operations.

Gross profit

Cost of sales includes the variable labour cost at sites and other direct cost of sales, but not fixed salaries of site staff, whose costs are included as site level administration costs.

Gross profit declined by 1% to £36.6m from £37.0m in the prior year. Gross margin at Group level is impacted by the mix of sales between Boom and Escape Hunt and between franchise and owner operated performance. Gross margin within the Escape Hunt owner operated network increased by 1%, whereas Boom gross margins fell from 60% to 58%. This was driven mainly by higher variable labour costs, particularly National Insurance contributions, which increased significantly following the changes to employer contribution rates announced in the 2025 Budget.

Site level EBITDA and Adjusted EBITDA

Site level Adjusted EBITDA is a key performance measure for the business and is calculated before IFRS 16 adjustments. The Escape Hunt owner operated estate delivered £6.6m pre IFRS 16 site level EBITDA, a 7% increase year on year. Site EBITDA margin was 42%, a slight decrease on the 44% margin achieved in the year to 31 March 2025. 

Boom owner-operated estate delivered a pre-IFRS-16 site-level EBITDA of £6.9m, representing a margin of 17%, a slight decline on the 18% margin achieved in the year to 31 March 2025. With the closure of underperforming sites, it is estimated that the Board's internal target of 20% plus margin remains achievable.

Adjusted EBITDA is a key performance indicator for the Company. The Group recorded a decrease in the reporting period, with pre-IFRS-16 Adjusted EBITDA profit falling to £5.5m, representing an Adjusted EBITDA margin of 9.4% compared to the 11.4% margin achieved in the year to 31 March 2025. After IFRS 16, Adjusted EBITDA was £10.2m, representing a post-IFRS-16 Adjusted EBITDA margin of 17.4%, down from the 18.2% achieved in the year to 31 March 2025. 

Centrally incurred costs (before pre-opening costs) totalled £8.9m, representing 15.2% of Group turnover, compared to £8.4m representing 14.6% of turnover in the year to 31 March 2025. Of this, £6.0m was unallocated central costs (10.3% of Group turnover) comparable to £6.0m (10.4% of Group turnover) in the prior year. In the latter half of the year, the group implemented several central cost-saving measures to ensure that the longer-term goal of containing total central costs to between 10% and 12.5% of Group sales is met.

Operating profit

A reconciliation between statutory operating profit and Adjusted EBITDA is shown below.

Adjusted Operating profit fell to £0.8m from £3.4m in the year to 31 March 2025. Statutory operating loss was £0.5m compared to profit of £1.7m in the prior year. During the year, the Group recognised £1.1m of losses on disposal of assets from the closure of its Southend site

The operating profit is after £0.8m pre-opening costs (2025: £0.8m) relating to openings of both Boom and Escape Hunt sites during the year. £0.2m related to Boom sites and £0.6m to Escape Hunt sites. 

The largest components of exceptional costs in the current year relate to costs incurred as part of a strategic review of the business and various one-off professional fees such as commission on business rates savings. The prior year included £490k of site-level onerous contracts and £246k of restructuring costs.

Adjusted loss per share fell to -1.8p per share compared to an adjusted profit per share of 0.13p for the year to 31 March 2025. On a statutory basis, the loss was -2.58p per share compared to a loss of 0.82p for the year to 31 March 2025.

Cashflow and capital expenditure

The Group generated £10.6m of cash from operations (year to 31 March 2025: £7.6m) on a post-IFRS-16 basis, and £5.4m on a pre-IFRS16 basis. Although the Group inherently has a negative working capital cycle, there was a net inflow of £1.9m from working capital driven primarily by the timing of the period end, when £1.5m of wages remained payable (31 March 2025: Nil). £5.9m was invested in tangible fixed assets. This comprised a total investment of £4.1m within Escape Hunt owner-operated sites and £1.8m in Boom owner-operated sites. The spend was offset by landlord capital contribution receipts of £0.5m.

A total of £4.1m was invested into Escape Hunt of which £2.0m was invested in new sites, including Canterbury, Sheffield, Wandsworth, and Colchester, the latter two of which opened post year end, as well as £1.6m towards games stock for sites not yet signed. £0.2m was invested in extending existing sites through the addition of new rooms and the conversion of previous virtual reality rooms. The remaining £0.3m was spent on maintenance capex.

Within Boom, a total of £0.7m related to investment in the new Reading site. £0.4m was directed to existing sites to make improvements and expand capacity, and £0.7m reflects maintenance capex.

Investment in intangibles totalled £283k, of which £180k was in Escape Hunt (game development), and £103k centrally (IP and portal development).

A total of £0.4m new and existing vendor loans were repaid in the year, leaving £0.2m vendor loans outstanding at 29 March 2026 (31 March 2025: £0.6m). In December 2025, the Group refinanced its £10m Barclays facility by entering into a new £20m agreement with HSBC. At year end, £8m had been drawn, together with £0.1m of new funding related to the Group's annual insurance, whilst £9.7m of bank and other debt was repaid, including £6m of the Barclays facility and prior year insurance funding. In addition, £0.6m of fit-out finance (including finance leases) was repaid and £0.2m new debt raised.

Cash at 29 March 2026 was £2.8m (31 Mar 2025: £1.1m), and net debt, excluding IFRS 16 lease liabilities was £5.9m (2025: £4.9m).

Balance sheet

Net assets as at 29 March 2026 were £20.0m (31 March 2025 restated: £24.5m).

The net book value of property plant and equipment decreased slightly to £24.9m from £25.2m reflecting the capital investment programme offset by depreciation in the year.

Right-of-use assets decreased from £27.7m (restated) to £25.2m, driven mainly by depreciation and the addition of only two new leases (Escape Hunts in Sheffield and the extension of Birmingham Resorts World). Landlord incentives of £0.5m (all of which was received in cash), were offset against the value of right-of-use assets in accordance with IFRS treatment during the period. The decrease is accompanied by a decrease in lease liabilities to £36.0m from £37.2m. Under IFRS 16, the carrying values of right-of-use assets and lease liabilities do not remain aligned over the life of a lease. This is primarily because landlord contributions reduce the value of the right-of-use asset, rent-free periods affect the timing of lease liability repayments, and right-of-use assets are depreciated on a straight-line basis while lease liabilities unwind using the effective interest method. These differences result in the two balances changing at different rates over the lease term.

Key Performance Indicators

The Directors and management have identified the following key performance indicators ('KPIs') that the Company tracks for each of its operating brands:

· Numbers of owner-operated sites: 27 Escape Hunt sites and 25 Boom Battle Bar sites as at 29 March 2026 (2025: 25 Escape Hunt and 25 Boom Battle Bar)

· Numbers of franchised sites: 18 Escape Hunt sites and 5 Boom Battle Bar sites as at 29 March 2026 (2025: 20 Escape Hunt and 5 Boom Battle Bar)

· Site level revenue: £57.6m in the period to 29 March 2026 (£56.4m in the year to 31 March 2025)

· Pre-IFRS 16 adjusted site level EBITDA: £14.5m in the period to 29 March 2026 (£15.0m in the year to 31 March 2025)

· Franchise revenue: £1.0m in the period to 29 March 2026 (£1.4m in the year to 31 March 2025)

· Central costs before adjusting items: £8.9m in the period to 29 March 2026 (£8.4m in the year to 31 March 2025)

· Adjusted EBITDA, before IFRS 16 for the Group: £5.5m in the period to 29 March 2026 (£6.6m in the year to 31 March 2025)

The Company monitors performance of the owner-operated sites on a weekly basis. The Board also receives monthly updates on the progress on site selection, site openings and weekly as well as monthly information on individual site revenue and site operating costs. Monthly management accounts are also reviewed by the Board which focuses on revenue, site profitability and adjusted EBITDA as the key figures.

Both the number of franchised branches as well as their financial performance are monitored by the management team and assistance is provided to all branches that request it in terms of marketing advice as well as the provision of additional games.

The key weekly KPIs by which the UK and owner-operated business is operated are the site revenue (including UK franchise sites), gross margins (in the case of Boom sites) marketing spend and staff costs and consequent ratio of staff costs to revenue. Total revenue is tracked against budget, adjusted for seasonality, number of rooms open and the stage in the site's maturity cycle. Staff costs are measured against target percentages of revenue. The effectiveness of marketing is assessed by observing revenue conversion rates and the impact on web traffic, bookings and revenue from specific marketing campaigns.

The Company's systems track performance on both a weekly and a monthly basis. These statistics provide an early and reliable indicator of current performance. The profitability of the business is managed primarily via a review of revenue, adjusted EBITDA and margins. Working capital is reviewed by measures of absolute amounts.

Owain Loft

Finance Director

3 September 2026

Corporate Responsibility

The Board believes that creating long-term shareholder value depends on operating the business responsibly. This includes maintaining high standards of governance, investing in our people, protecting the health and safety of our customers and employees, minimising our environmental impact and conducting business ethically.

The Group seeks to embed these principles throughout its operations, recognising that responsible business practices support sustainable long-term growth and strengthen relationships with all stakeholders.

Governance

The Board is responsible for overseeing the Group's approach to sustainability and responsible business. Governance arrangements are designed to ensure that environmental, social and ethical considerations are incorporated into decision-making alongside commercial objectives.

The Board is supported by established governance committees and a strong independent non-executive presence. Performance-related remuneration arrangements are designed to promote responsible decision-making, effective risk management and long-term value creation.

Further information on the Group's corporate governance framework is provided in the Corporate Governance Report on page 29.

Environment

The Group is committed to reducing the environmental impact of its operations through the efficient use of energy and resources, waste reduction and continuous improvement across its venues.

Environmental considerations form part of the Group's wider business planning and operational decision-making. During the year the Group continued initiatives aimed at improving energy efficiency, increasing recycling and reducing waste across the estate whilst evaluating opportunities to improve the sustainability of its operations.

The Board recognises that climate change presents both risks and opportunities for the business. Details of the Group's governance, strategy, risk management and performance in relation to climate-related matters are set out in the Non-financial and Sustainability Information Statement on page 20, with energy and emissions disclosures provided in the Directors' Report on page 22 in accordance with the Streamlined Energy and Carbon Reporting Regulations.

Our People

The continued success of the Group depends on attracting, developing and retaining talented employees across both our venue operations and support functions.

We invest in training and professional development through structured learning programmes, internal knowledge sharing and external training where appropriate. Performance management processes align individual objectives with the Group's strategic priorities, while regular communication ensures employees remain informed about the performance and direction of the business.

The Group operates a range of incentive arrangements designed to recognise performance and encourage long-term engagement, including discretionary share participation schemes available to eligible employees.

Diversity and inclusion

The Group is committed to providing an inclusive workplace where everyone is treated fairly and with respect. Recruitment, development and promotion decisions are based on merit, with due regard given to creating equal opportunities regardless of age, gender, nationality, ethnic origin, disability, sexual orientation or marital status.

The Board believes that a diverse workforce and inclusive culture strengthen decision-making, support innovation and enhance the Group's ability to attract and retain talented people.

Health, Safety and Wellbeing

Providing a safe environment for customers, employees, contractors and visitors remains a fundamental priority.

The Group maintains comprehensive health and safety policies and procedures, supported by regular training, monitoring and review. Compliance with legal and regulatory requirements is supplemented by internal standards designed to promote continuous improvement across the estate.

The Group also recognises the importance of employee wellbeing and seeks to provide a working environment that supports both physical and mental health whilst enabling colleagues to balance their work and personal commitments.

Ethical Business Conduct

The Group is committed to conducting business with integrity and maintaining the highest standards of ethical behaviour.

Policies covering anti-bribery and corruption, whistleblowing and modern slavery support this commitment and are regularly reviewed to ensure they remain appropriate and reflect evolving regulatory requirements. The Group expects the same high standards from suppliers and business partners and seeks to promote ethical practices throughout its supply chain.

Community

The Group recognises the positive role its venues can play within the communities in which they operate. Through local engagement, charitable support and community initiatives, the Group seeks to make a positive contribution beyond its commercial activities.

Principal Risks and Uncertainties

The Directors consider that the principal risks and uncertainties facing the Group and a summary of the key measures taken to mitigate those risks are as follows:

Macro-Economic

Consumer spending remains sensitive to wider economic conditions, with inflationary pressures and elevated household costs continuing to influence discretionary expenditure. Whilst inflation stabilised during the period, increases in employer National Insurance contributions and the National Living Wage from 1 April 2025 increased operating costs across the hospitality sector.

The Group continues to focus on delivering a compelling customer proposition whilst maintaining disciplined pricing. Given the high-margin nature of a significant proportion of the Group's revenue, particularly within Escape Hunt, the Group has generally sought to minimise price increases where possible.

Interest rates continued to reduce during the financial year, down to 3.75% at 29 March 2026 from 4.5% at the beginning of the period. This lowered the cost of the Group's revolving credit facility and improved the broader financing environment. The Board continues to monitor economic conditions closely and maintains appropriate liquidity and financial headroom to withstand periods of reduced consumer confidence.

Political and Geopolitical

The Group continues to monitor the potential impact of changes in UK government policy, including employment legislation and taxation. Increases in employer National Insurance contributions have increased operating costs during the year, whilst proposed employment reforms may reduce labour flexibility and increase compliance obligations.

International geopolitical tensions, including trade disputes and ongoing conflicts, continue to present a risk to economic growth and consumer confidence. The Board regularly reviews the potential impact of these developments on trading performance and liquidity.

Market

The experiential leisure market remains competitive, with relatively low barriers to entry in both of the Group's operating markets. Increased competition could adversely affect revenue growth and margins. The Group mitigates this risk through continued investment in product development, innovation and customer experience, supported by the protection of its intellectual property through registered trademarks in the UK and overseas.

Consumer preferences continue to evolve and the Group closely monitors customer feedback and trading data. The flexible and modular nature of both Boom Battle Bar and Escape Hunt enables the Group to refresh and adapt its offering quickly and at relatively low cost.

Strategic

Owner-operated sites

The Group's strategy continues to prioritise the expansion of its owner-operated estate where attractive opportunities exist. There can be no assurance that suitable sites will be identified or secured on commercially acceptable terms, or that new venues will achieve expected returns.

Each prospective site is subject to a detailed appraisal process incorporating demographic analysis, financial modelling and independent property advice. Where appropriate, the Group seeks lease structures that include turnover-linked rents or landlord capital contributions in order to reduce operational gearing and improve investment returns. Where suitable expansion opportunities are limited, the Group will continue to prioritise investment in its existing estate where returns on capital are expected to be higher.

Franchise sites

The Group continues to support its existing franchise network whilst maintaining a disciplined approach to international expansion. The current strategic focus remains on owner-operated growth and, accordingly, franchise expansion is not assumed within the Group's short-term forecasts.

Operational

The Group relies on a number of key suppliers across technology, operations and venue development. The loss of a significant supplier could disrupt operations or delay future expansion. The Group seeks to mitigate this risk by developing alternative supplier relationships where practicable and maintaining appropriate internal expertise over critical systems.

The health and safety of customers and employees remains a key priority. Comprehensive policies, regular operational reviews, incident reporting procedures and dedicated health and safety leadership support the Group's risk management framework. The Group also maintains crisis management procedures to respond effectively to any significant incident.

Franchisees may experience financial difficulty, resulting in unpaid franchise fees or lease obligations where the Group has continuing contractual exposure. The Group mitigates this risk through robust franchise agreements that enable it to assume operational control where appropriate, supported by its experience in managing owner-operated venues. The Group also maintains comprehensive franchise operating standards, monitoring processes and strengthened contractual protections to ensure franchisees operate consistently with the Group's brand standards.

Technological

The Group relies extensively on technology to support bookings, marketing, finance, operations, customer engagement and other core business functions. A significant failure of critical systems or a successful cyber-attack could disrupt operations, damage the Group's reputation and result in regulatory penalties.

The Board regularly reviews technology risks and maintains appropriate governance, cybersecurity controls, cloud-based infrastructure and cyber insurance. Critical systems are sourced from a range of established providers to reduce concentration risk.

Financial

The Group is exposed to financial risks including liquidity, interest rate and foreign exchange risk. Foreign exchange exposure remains limited as international franchise operations continue to represent a relatively small proportion of Group activities.

The finance function provides timely financial reporting to management and the Board through monthly management accounts and weekly trading reports. During the year, the Group implemented a more advanced accounting system and continued to strengthen its financial controls and reporting processes to support effective decision-making and robust financial governance.

Further information on financial risk management is included in Note 30 to the Financial Statements.

Human Resources

The Group's success depends on attracting, retaining and developing talented employees. The loss of key individuals could delay the delivery of strategic objectives and adversely affect financial performance.

The Group seeks to provide an engaging and rewarding working environment, supported by performance-related incentives and equity participation for senior employees. Key person insurance is maintained over members of the senior leadership team to mitigate the financial impact of the loss of critical personnel.

The Board also continues to monitor developments in employment legislation and focuses on improving operational efficiency through technology and process improvements to help mitigate future labour cost pressures.

Climate-related

Transition risks

The transition to a lower-carbon economy may increase compliance costs, insurance costs and reporting obligations. The Group continues to strengthen its governance processes and regulatory compliance framework in response.

Changes in customer expectations regarding sustainability may influence purchasing decisions over time. The Group continues to evaluate opportunities to improve the sustainability of its operations whilst maintaining the quality of its customer offering.

Increasing energy and raw material costs may adversely affect margins. The Group seeks to mitigate this risk through energy efficiency initiatives, operational improvements and sustainable sourcing where appropriate.

Physical Risks

Extreme weather events such as flooding could cause significant disruption to services, negatively impacting revenue and profitability. The Group has developed comprehensive disaster recovery and business continuity plans to address this risk.

Statement by the Directors in performance of their statutory duties in accordance with s172(1) Companies Act 2006

The Directors of the Group must act in accordance with a set of general duties. These duties are detailed in section 172(1) of the U.K. Companies Act 2006, which is summarised as follows:

A Director of a Company must act in the way he/she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

(a) The likely consequences of any decision in the long term;

(b) The interests of the Company's employees;

(c) The need to foster the Company's business relationships with suppliers, customers and others;

(d) The impact of the Company's operations on the community and the environment;

(e) The desirability of the Company maintaining a reputation for high standards of business conduct; and

(f) The need to act fairly as between members of the Company.

The Board considers that it has fulfilled its duties in accordance with section 172(1) of the UK Companies Act 2006 and have acted in a way which is most likely to promote the success of the Group for the benefit of its stakeholders as a whole in the following ways:

Long term benefit

Our strategy was designed to have a long-term beneficial impact on the Company and to contribute to its success in delivering an engaging and enjoyable service for customers across the world. The Board's strategy to increase the range of experiential brands within the Group and to expand both the owner-operated and franchise estates within both experiential brands as well as developing new digital and remote play options is aimed at building long term value for shareholders and other stakeholders alike.

Shareholders

The Board engages regularly with its shareholders and seeks to build a mutual understanding of the objectives of shareholders and those of the Board by discussing long-term strategy, shorter term challenges and issues and to receive feedback. For further information see page 31.

Within the practical constraints of being able to access all shareholders directly, the Board actively seeks to treat all shareholders equally. 

Employees

The XP Factory Group is reliant on the quality and performance of its employees and the commitment of its staff plays a crucial role in the success of the business. Staff in sites are given regular training to ensure they are able to fulfil their roles successfully and the Group maintains a regular two-way communication with all staff both centrally and through individual sites to ensure employee matters are identified and addressed.

The safety and wellbeing of our staff is of utmost importance to the Board. The Board implemented a 'work from home' policy for all office based staff during the COVID pandemic and implemented protocols and standards to safeguard employees in each owner-operated site. The board receives a report on all health and safety issues on a monthly basis. Many of the policies allowing flexible working have been retained to allow employees flexibility and choice. Head office staff are provided with memberships to a flexible office working facility and are regularly brought together both formally and for social interaction.

Customers

As an experiential leisure business, a primary goal is to delight our customers and provide the best immersive experience we can. TripAdvisor and other publicly available ratings form one of our key internal measures and we continually seek to improve the user journey before, during, and after their experience.

Suppliers

The Group works closely with a number of suppliers in different disciplines. We aim to promote collaborative engagement and to build long term partnerships with our suppliers with an objective to minimise risk and optimise costs through the full lifecycle of our relationship. We seek to balance this with the need to ensure the Company is not overly reliant on any single supplier.

Community and environment

The board has overall responsibility for Corporate Social Responsibility ("CSR").

The Group is committed to maintaining and promoting high standards of business integrity. The XP Factory Group's values, which incorporate the principles of corporate social responsibilities (CSR) and sustainability, guide the Group's relationships with clients, employees and the communities and environment in which it operates. The XP Factory Group's approach to sustainability addresses both environmental and social impacts, supporting the XP Factory Group's vision to remain an employer of choice, while meeting client demands for socially responsible partners.

The XP Factory Group respects laws and customs while supporting international laws and regulations. These policies have been integral in the way Group companies have done business in the past and continue to play a central role in influencing the Group's practice in the future.

Specific CSR initiatives are promoted by the senior executive management and are communicated to others in the organisation as needed. Initiatives include matters such as recycling and minimising waste, recognition of companies and individuals in the community for whom we have offered discounted or free participation in our games, as well as local community issues and interests. Many of our employees are actively engaged with charities and other causes for which we will allow the use of Company property and facilities.

Culture and values

The Board actively seeks to establish and maintain a corporate culture which will attract both future employees, customers and suppliers. The Company promotes honesty, integrity and respect and all employees are expected to operate in an ethical manner in all their dealings, whether internal or external. We do not tolerate behaviour which goes against these values which could cause reputational damage to the business or create ongoing conflict or unnecessary tension internally.

Non-financial and Sustainability Information Statement

Section 414CA of the Companies Act 2006 requires the Company to include a non-financial and sustainability information statement describing how climate-related matters are governed, managed and integrated into the business.

Governance

The Board has overall responsibility for overseeing climate-related risks and opportunities and reviews these as part of the Group's wider governance and risk management framework. Responsibility for implementing climate-related policies and integrating climate considerations into strategic planning rests with senior management.

Risk management

Climate-related risks and opportunities are identified, assessed and managed as part of the Group's overall enterprise risk management process. The Board considers both transition risks and physical risks and reviews them regularly alongside the Group's principal risks.

Principal climate-related risks and opportunities

The principal climate-related risks currently identified include increased regulatory and reporting requirements, changing customer expectations, increases in energy and raw material costs and disruption arising from severe weather events. These risks are assessed over short-term (less than one year), medium-term (two to five years) and long-term (greater than five years) horizons.

The Group's principal climate-related transition and physical risks are described in the Principal Risks and Uncertainties section.

Strategy and resilience

The Board considers climate-related matters when developing the Group's long-term strategy and investment decisions. Scenario analysis is used to assess the potential impact of different climate-related outcomes and to evaluate the resilience of the Group's business model. Given the predominantly indoor nature of the Group's operations, the Board believes climate change is more likely to affect the business indirectly through regulation, energy costs and consumer behaviour than through direct operational disruption.

Targets and performance

The Group continues to focus on improving energy efficiency, reducing waste and increasing recycling across its estate. Progress is monitored using energy intensity and other environmental performance measures.

Further information on the Group's greenhouse gas emissions, energy consumption and Streamlined Energy and Carbon Reporting disclosures is contained in the Directors' Report.

This Strategic Report was approved by the Board on 3 September 2026 and signed by order of the Board by the Chief Executive Officer.

Richard Harpham

Chief Executive Officer

3 September 2026

DIRECTORS' REPORT FOR THE PERIOD ENDED 29 MARCH 2026

The Directors present their report together with the audited financial statements of the Group for the period ended 29 March 2026.

Principal activities

The principal activities of the Group are that of operating consumer facing leisure brands offering immersive experiences.

The Group currently operates two brands, each of which is developing a network of locations, either owned and operated directly or franchised. Escape Hunt is a global leader in providing escape-the-room experiences delivered through a network of owner-operated sites in the UK, an international network of franchised outlets, and through digitally delivered games which can be played remotely. There are no overseas branches operated by UK companies within the Group.

Boom Battle Bar is a fast-growing network of owner-operated and franchise sites in the UK and UAE that combine competitive socialising activities with themed cocktails, drinks and street food in a setting aimed to be high energy and fun.

Cautionary statement

The review of the business and its future development in the strategic report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for these strategies to succeed. It should not be relied on by any other party for any other purpose. The review contains forward-looking statements which are made by the Directors in good faith based on information available to them up to the time of the approval of the reports and should be treated with caution due to the inherent uncertainties associated with such statements.

Results and dividends

The results of the Company are set out in detail in the Financial Statements.

Given the nature of the business and its growth strategy, the Board does not recommend a dividend this year, nor does it expect to in the near future. The Directors believe the Company should focus on growing the network and improving performance to generate profits to fund the Company's growth strategy over the medium term.

Business review and future developments

Details of the business activities and developments made during the period can be found in the Strategic Report and in Note 1 to the Financial Statements respectively.

Business relationships with suppliers, customers and others

Details of how the business has considered relationships with suppliers, customers and others, and the effect this regard has had, including on the principal decisions made in the year, can be found in the Strategic Report.

Streamlined Energy and Carbon Reporting

The Group presents its global greenhouse gas (GHG) emissions and energy use data under Streamlined Energy and Carbon Reporting (SECR) for the period ended 29 March 2026.

 Methodology

· Base data was provided and converted using DEFRA 2025 Conversion Factors in line with Environmental Reporting Guidelines (2019) as most of the financial year falls into the calendar year 2025, and International Carbon Factors for Global Energy

· Global energy has been included for sites situated in the UAE, France and Belgium with regional carbon factors applied.

· Spend based data was provided for business-travel, and this was converted to total distance (km) based on cost per km, extracted from Department for Transport, Office of Rail and Road, Transport for London, or other appropriate regulatory body.

· Energy for all UK sites is procured from a renewable tariff, therefore market-based emissions are reported. The international sites in Belgium, France and Dubai are not procured from a renewable tariff. Location based reporting has also been used for all sites.

· Franchise locations outside of the control of XP Factory PLC have been excluded from the environmental reporting boundary, as they fall outside the Group's financial control

· Due to a lack of available data, energy use and emissions at the Woking site were estimated using a benchmark derived from other Escape Hunt locations. The site's energy consumption was calculated at 73 kWh/m2, resulting in an estimated total of 18,736 kWh for its 280 m2 area. Energy use and emissions at the Boom Dubai site were approximated based on usage in the prior year.

This is the third year of reporting under the SECR framework, and the Group now has a comprehensive and robust baseline of energy usage across operational sites which can be compared relative to prior years. The Group actively monitors energy intensity ratios as a key performance indicator alongside other waste and recycling measures to assess progress. Further information on the Group's non-financial, sustainability and corporate governance matters is set out in the strategic report.

Research and development activities

The Group has historically invested in research and development activities relating to software and intellectual property that supports the Group's experiential leisure activities. It remains part of the Group's strategy to further invest in selected areas which will enhance the Group's operating and data analytic capabilities. Further details of the Group's strategic objectives are set out in the strategy report.

Employment policies

The Group has employment policies which give full and fair consideration for the employment of disabled persons, having regard to their particular aptitudes and abilities. Where possible, the Group will make appropriate, sympathetic changes and provide training to continue the employment of any employees who become disabled whilst in the employment of the Group and will otherwise provide training and support the career development and promotion of any such employees.

Employee engagement

The Group attaches importance to good communications and relations with employees. Information that is or may be relevant to employees in the performance of their duties is circulated to them on a regular basis, or immediately if it requires their immediate attention. There is regular consultation with employees through meetings or other lines of communication, so that their views are known and can be taken into account in making decisions on matters that will or may affect them. Employee participation in their venue's performance is encouraged and there is regular communication with all employees on the performance of their particular venue or central function and on the financial and economic factors affecting the overall performance of the Group.

Disclosure of information to auditor

The Directors who held office at the date of approval of this Directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each director has taken all the steps that he/ she ought to have taken as a director to make himself/ herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Financial instruments and risk management

Disclosures regarding financial instruments are provided within Note 30 to the Financial Statements.

Capital structure and issue of shares

Details of the Company's share capital, together with details of the movements during the period are set out in Note 23 to the Financial Statements. The Company has one class of ordinary share which carries no right to fixed income.

Post balance sheet events

Since the period end, there has been significant volatility in international markets with the implementation of import tariffs and trade conflict brought about by the Trump government in the USA, escalation and subsequent ceasefire of the war in the Middle East, ongoing conflict in Ukraine, and announcements by almost all NATO countries of planned increases in military spending. Whilst interest rates have fallen, the pace of reduction is slower than was expected at the start of the year, as inflation has remained higher than hoped. Within the UK, there have been mixed signals with fears of further tax rises offsetting other factors which could otherwise be positive for consumers. How these factors and the general economic environment will impact the business is unknown and they do not provide any further information impacting the financial performance or position of the Group as at 29 March 2026. Refer to note 33 for further events after the reporting period in respect of the Group.

Board of Directors

The Directors of the Company who have served during the year and at the date of this report are:

Richard Harpham was first appointed on 25 May 2015 and resigned on 15 June 2016. He was subsequently re-appointed on 3 May 2017.

Board Committee abbreviations are as follows: N = Nomination Committee; A = Audit Committee; R = Remuneration Committee

The Board comprises one Executive and three Non-Executive directors as at the date of this report.

James van den Bergh, Independent Non-Executive Chairman

James currently serves as CEO of TruFin Plc ("TruFin"), an AIM-listed company, where he has created significant shareholder value through a clear strategic focus, profitable growth and disciplined capital allocation. These same principles will underpin his approach as Chair of XP Factory.

TruFin was spun out of Arrowgrass Capital Partners in 2018, with James appointed CEO in September 2019. Having begun his career at Merrill Lynch, James entered investment management in 2003 and later led Arrowgrass's unlisted markets and alternative finance team. He brings deep relationships with both institutional investors and family offices.

James is a member of the Company's Remuneration Committee, Audit Committee, and Nomination Committee.

Richard Harpham, Chief Executive Officer

Richard joined the Company on its admission to AIM in May 2017 having worked since November 2016 with the Escape Hunt (now XP Factory) management team. Richard's prior role was with Harris + Hoole, having been Chief Financial Officer and then Managing Director, responsible for its turnaround. Before this, Richard spent over four years at Pret A Manger as Global Head of Strategy. Richard has also held a number of strategic and financial positions at companies including Constellation Brands, Shire Pharmaceuticals and Fujitsu Siemens Computers.

Martin Shuker, Independent Non-Executive Director

Martin has had a long and distinguished career with Yum Brands, the US Fortune 500 Global hospitality business. He spent 24 years in a variety of leadership roles, most recently as Managing Director KFC Western Europe where he had full strategic, growth and operational responsibility over 1,700 restaurants and 165 franchisees which generated £2.3 billion in sales and £120 million of profit.

As MD of KFC UK, he more than doubled sales in the UK to £1.3 billion and met or exceeded targets in 11 of 13 years.

Martin has demonstrated his ability in consistently achieving growth and bottom-line performance of established owner-operated and franchise businesses over a long period of time and has relevant experience in entering new territories through franchise routes. He successfully opened new markets in a number of European countries and has demonstrated his ability to both manage an established franchise network as well as establishing new networks in new territories.

Prior to YUM, Martin had a variety of marketing roles with United Biscuits.

Martin is chairman of the Company's Remuneration Committee.

Philip Shepherd, Independent Non-Executive Director

Philip is a former partner of PricewaterhouseCoopers ("PwC"), where he originally trained in audit and tax, qualifying as an ACA in 1987.

Following a career in corporate finance and transaction advisory services, Philip returned to PwC in 2004 working both in the UK and overseas, leading Strategy and Deals practices, with a particular focus on the hospitality and leisure sectors. Since leaving PwC in 2018, he has held a number of board and advisor roles, again with a focus on hospitality and leisure. He regularly travels abroad where he advises, and speaks, on the experiential leisure market and start up opportunities. Philip combines his experience in accounting and audit with deal evaluation and execution and has a deep understanding of the hospitality and leisure markets both in the UK and globally.

Philip is chairman of the Company's Audit Committee.

Directors' interests in shares

Directors' interests in the shares of the Company at the date of this report are disclosed below. Directors' interests in contracts of significance to which the Company was a party during the financial period are disclosed in note 28 to the Financial Statements.

XP Factory Plc owns all the ordinary shares in its subsidiary, Escape Hunt Group Ltd ("EHGL"). EHGL issued a total of 1,000 Growth shares in 2017 to three then-directors and employees. These have subsequently all been bought back. As at 31 March 2025, XP Factory owns 100% of the Growth shares. The Growth shares carry no voting rights and are not entitled to any dividends that may be paid by EHGL.

Directors' interests in options

The following options have been granted to certain Directors under the Escape Hunt Plc 2020 EMI Share Option Scheme. The options vested over three years and were subject to achieving certain performance conditions related to share price appreciation over a four year period. These conditions were all fulfilled.

No directors exercised any options during the year.

Substantial interests

As at 31 March 2026 the Company has been advised of the following significant interests (greater than 3%) in its ordinary share capital:

Except as referred to above, the Directors are not aware of any person who was interested in 3% or more of the issued share capital of the Company or could directly or indirectly, jointly or severally, exercise control.

Directors' insurance

The Company has maintained directors' and officers' liability insurance throughout the period for the benefit of the Company, the Directors and its Officers.

Going Concern

The time horizon required for the Going Concern Statement is a minimum of 12 months from the date of signing the financial statements. Consistent with prior periods, the Directors have adopted an assessment period of 18 months and run forecasts for a three-year period from the period end date of 29 March 2026.

In determining whether there are material uncertainties, the Directors consider the Group's business activities and principal risks. The Directors' reviewed the Group's cash flows, liquidity positions and borrowing facilities for the going concern period.

There has been no material uncertainty identified which would cast significant doubt upon the Group's ability to continue as a going concern. As such, the Directors considered it appropriate to adopt the going concern basis of accounting in the preparation of the Group's financial statements.

Annual General Meeting

The Annual General Meeting (AGM) will be held on 29 September 2026.

Signed by order of the board

Richard Harpham

Chief Executive Officer

3 September 2026

CORPORATE GOVERNANCE REPORT

Chairman's governance overview

I am pleased to present the corporate governance report for the period ended 29 March 2026.

The board believes that strong governance is a central element of the successful growth and development of the Group. The board and its committees play a key role in the Group's governance by providing an independent perspective to the senior management team, and by seeking to ensure that an effective system of internal controls and risk management procedures is in place. This section of the annual report describes our corporate governance structures and processes and how they have been applied throughout the period.

The AIM Rules for Companies require companies to formally adopt a corporate governance code.

On 13 September 2018, the board of XP Factory decided to apply the QCA Corporate Governance Code (2018 edition - the QCA Code). We believe that the QCA Code provides us with the right governance framework: a flexible but rigorous outcome-oriented environment in which we can continue to develop our governance model to support our business.

Our governance framework

The board currently comprises one executive and three non-executive directors.

The board has an audit committee, remuneration committee and nomination committee with formally delegated duties and responsibilities, as described below.

The chairman, who is non-executive and independent, is responsible for leading an effective board, overseeing corporate governance culture and ensuring appropriate strategic direction.

The chairman is primarily responsible for the working of the board of the company and for assessing the individual contributions of each board member to ensure that:

· Their contribution is measurable, timely, relevant and effective

· They commit sufficient time to the business to fulfil their statutory and fiduciary duties

· Where relevant, they maintain their independence

· They function collectively in a coherent and productive manner

· They receive appropriate training to stay up to date and improve performance

In accordance with current best practice and the QCA Code, the board undertakes an annual formal evaluation of its performance and effectiveness and that of each director and its committees. This evaluation is overseen by the chairman, co-ordinated by the company secretary and concluded by chairman interviews where necessary. In addition, the directors meet, informally, without the chairman present and evaluate his performance. The board currently considers that the use of external consultants to facilitate the board evaluation process is unlikely to be of significant benefit to the process, although the option of doing so is kept under review.

The chairman considers that key to his role in creating an effective board, is an effective assimilation of feedback received, and the development and effective application of recommendations.

The QCA Code was adopted by the company in September 2018 and is set out on the company's website. The Group addresses the ten principles underpinning the QCA Code as follows:

Deliver growth

· Establish a strategy and business model which promote long-term value for shareholders

· Seek to understand and meet shareholder needs and expectations:

See the section "Communication with shareholders" on page 31 and the "Corporate governance" section of our website, www.xpfactory.com.

· Take into account wider stakeholder and social responsibilities and their implications for long-term success:

See the "Corporate governance" section of our website,  www.xpfactory.com

· Embed effective risk management, considering both opportunities and threats, throughout the organisation:

See "Principal risks and uncertainties" on page 16.

Maintain a dynamic management framework

· Maintain the board as a well-functioning, balanced team led by the chairman:

See this section

· Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities:

See this section and "Board of Directors" on page 24.

· Evaluate board performance based on clear and relevant objectives, seeking continuous improvement:

See this section and the "Corporate governance" section of our website,  www.xpfactory.com

· Promote a corporate culture that is based on ethical values and behaviours:

See this section and the "Corporate governance" section of our website www.xpfactory.com

· Maintain governance structures and processes that are fit for purpose and support good decision making by the board:

See the section "Our Governance framework" below and the "Corporate governance" section of our website  www.xpfactory.com

Build trust

· Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders:

See this section "Our governance framework" and the "Corporate governance" section of our website, www.xpfactory.com

 The board considers that it is fully compliant with all the principles of the QCA Code.

Our governance framework

See below for the role of the board and its committees.

Board of Directors

The board is responsible for formulating, reviewing and approving the company's strategy, budgets and corporate actions.

Biographical details of the directors are included above.

The board comprises one executive and three non-executive directors, including the chairman. All directors bring a wide range of skills and experience to the board. The non-executive directors hold meetings without the executive directors present. The chairman is primarily responsible for the working of the board of the company. The Chief Executive's office is primarily responsible for the running of the business and implementation of the board's strategy and policy. The Chief Executive is assisted in the managing of the business on a day-to-day basis by the Chief Financial Officer.

High-level strategic decisions are discussed and taken by the full board. Investment decisions (above a de minimis level) are taken by the full board. Operational decisions are taken by the executive directors and their senior leadership team within the framework approved in the annual financial plan and within a framework of Board-approved authorisation levels.

The board regulations define a framework of high-level authorities that maps the structure of delegation below board level, as well as specifying issues which remain within the board's preserve. The board typically expects to meet monthly (other than in December and August) and in any event at least four times a year to consider a formal schedule of matters including the operating performance of the business and to review the company's financial plan and business model. Whilst specific risks are considered as they arise, a more detailed review of the potential risks facing the company and what action is being taken to mitigate the risks is considered on an annual basis. The board obtains feedback from the company's auditors on the effectiveness of the control environment, together with recommendations for continued improvement.

In accordance with the company's Articles of Association, at the Annual General Meeting of the company each director for whom it is the third annual general meeting following the annual general meeting at which they were elected or last re-elected shall retire from office and offer themselves up for re-election. In accordance with best practice, each director currently offers themselves up for re-election at each Annual General Meeting.

It is the responsibility of the chairman and the company secretary to ensure that board members receive sufficient and timely information regarding corporate and business issues to enable them to discharge their duties.

Communication with shareholders

 The board attaches great importance to communication with both institutional and private shareholders. Investors are also an important source of feedback on the business model and plans for future growth.

Regular communication is maintained with all shareholders through company announcements, the half-year statement and the annual report and financial statements.

The directors seek to build on a mutual understanding of objectives between the company and its shareholders. Institutional shareholders are in contact with the directors through presentations and meetings to discuss issues and to give feedback regularly throughout the year. With private shareholders, this is not always practical, although the directors are increasingly seeking and are investing in communication channels to create an opportunity for retail shareholders to communicate directly through online and other retail-focused forums.

The board also intends to use the company's Annual General Meeting as the opportunity to meet private shareholders who are encouraged to attend and at which the Chief Executive Officer will give a presentation on the activities of the company.

Following the presentation there would ordinarily be an opportunity to meet and ask questions of directors and to discuss development of the business.

The company operates a website at http://xpfactory.com/investors

The website contains details of the Company and its activities; regulatory announcements, Company announcements, Interim statements, preliminary statements and Annual Reports. The website is maintained in compliance with AIM Rule 26.

Board Committees

The Board maintains three standing committees, being the Audit, Remuneration and Nomination Committees. The minutes of all sub-committees are circulated for review and consideration by all relevant Directors, supplemented by oral reports from the Committee Chairmen at Board meetings.

Audit Committee

The Audit Committee was formed in May 2017 on completion of the acquisition of Experiential Ventures Limited and comprises Philip Shepherd, who chairs the committee, Martin Shuker, and James van den Bergh. The Committee held 4 meetings in the period to 29 March 2026 and has so far held 2 meetings since the period end, being the meeting held to discuss the progress of the audit and a second to approve the results announcement on 4 September 2026. Further details on the Audit Committee are provided below in the Report of the Audit Committee.

Remuneration Committee

The Remuneration Committee was formed in May 2017 on completion of the acquisition of Experiential Ventures Limited and comprises Martin Shuker, who chairs the committee, Philip Shepherd, and James van den Bergh. The Committee holds at least two meetings each year. The committee adopted the arrangements for Directors' remuneration and the share incentive plans currently in place. Further details on the Remuneration Committee are provided below in the Report of the Remuneration Committee.

Nomination Committee

The Nomination Committee was formed in May 2017 on completion of the acquisition of Experiential Ventures Limited and comprises James van den Bergh, who chairs the committee, Martin Shuker and Philip Shepherd. The Committee holds two meetings each year. Further details on the Nomination Committee are provided below in the Report of the Nomination Committee.

Report of the Audit Committee

Audit Committee

The Audit Committee has written terms of reference and provides a mechanism through which the Board can maintain the integrity of the Financial Statements of the Company and the Group and any formal announcements relating to its financial performance; to review the Group's internal financial controls and its internal control and risk management systems and to make recommendations to the Board in relation to the appointment of the external auditor, their remuneration both for audit and non-audit work, the nature, scope and results of the audit and the cost effectiveness, independence and objectivity of the auditors. Provision is made by the Audit Committee to meet the auditors at least twice a year.

Internal controls

In applying the principle that the Board should maintain a sound system of internal control to safeguard shareholders' investment and the Group's assets, the Directors recognise that they have overall responsibility for ensuring that the Group maintains systems to provide them with reasonable assurance regarding effective and efficient operations, internal control and compliance with laws and regulations and for reviewing the effectiveness of those systems. However, there are inherent limitations in any system of control and accordingly even the most effective system can provide only reasonable and not absolute assurance against material misstatement or loss. The systems are designed to manage rather than eliminate the risk of failure to achieve the business objectives.

The Group has established procedures necessary to implement the guidance on internal control issued by the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (September 2014). This includes identification, categorisation and prioritisation of critical risks within the business and allocation of responsibility to its Executives and senior managers. The key features of the internal control system are described below:

Control environment - the Group is committed to high standards of business conduct and seeks to maintain these standards across all of its operations. There are also policies in place for the reporting and resolution of suspected fraudulent activities. The Group has an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve its objectives.

Risk identification - Management is responsible for the identification and evaluation of key risks applicable to their areas of business. These risks are entered onto a risk register and assessed on a continual basis and may be associated with a variety of internal and external sources, including infringement of IP, sales channels, investment risk, staff retention, disruption in information systems, natural catastrophe and regulatory requirements. This is reviewed at least annually by the Board.

Information systems -The Board actively monitors performance against plan. Forecasts and operational results are consolidated and presented to the Board on a regular basis. Through these mechanisms, performance is continually monitored, risks identified in a timely manner, their financial implications assessed, control procedures re-evaluated and corrective actions agreed and implemented.

Main control procedures - the Group has implemented control procedures designed to ensure complete and accurate accounting for financial transactions and to limit the exposure to loss of assets and fraud. Measures taken include segregation of duties and reviews by management.

Monitoring and corrective action - There are clear and consistent procedures in place for monitoring the system of internal financial controls.

Following the Audit Committee's recommendation, the Board considers the internal control system to be adequate for the Group. The Audit Committee reviews the scope and scale of the non-audit services undertaken by the auditors in order to ensure that their independence and objectivity is safeguarded. The Committee is satisfied with the objectivity and performance of the external auditor.

Report of the Remuneration Committee

The Remuneration Committee monitors the remuneration policies of the Group to ensure that they are consistent with its business objectives. Its terms of reference include the recommendation and execution of policy on Director and executive management remuneration and for reporting decisions made to the Board. The Committee determines the individual remuneration package of the executive management of the Board. The Remuneration Committee has a terms of reference, details of which are set out in the Company's Corporate Governance Statement.

The Remuneration Report covers the period to 29 March 2026 and has been prepared by the Remuneration Committee and approved by the Board.

This Report will be put to an advisory vote at the Company's Annual General Meeting on 29 September 2026.

Committee Meetings, Attendance and Activities

Martin Shuker was appointed as Chair of the Committee and Philip Shepherd was appointed member of the Committee on 29 June 2024. Until 29 June 2022, Richard Rose was Chair of the Remuneration Committee and Karen Bach was a member of the Committee.

The Committee is required by its Terms of Reference to meet as frequently as the Committee Chairman shall require and also at regular intervals to deal with routine matters and, in any event. During the year the Committee met twice and also conducted a range of meetings with several of the Company's institutional shareholders.

Committee Objectives and Responsibilities

The Committee's main responsibilities can be summarised as follows:

· To set the remuneration for all executive directors, the chairman and, to maintain and assure their independence, the company secretary: the committee also recommends and monitors the level and structure of remuneration for senior management. The remuneration of non-executive directors (including the non-executive chairman) shall be a matter for the executive members of the board with the overriding principle that no director or manager is involved in any decisions as to their own remuneration;

· To design and determine targets for any performance related pay schemes operated by the Company and approving the total annual payments made under such schemes;

· To review the design of, and any changes to, all share incentive plans;

· To be aware of and advise on any major changes in employees benefit structures throughout the Group;

· within the terms of the agreed policy, to determine the total individual remuneration package of each executive director including, where appropriate, bonuses, incentive payments and share options;

· To ensure that contractual terms on termination, and any payments made, are fair to the individual and the company, that failure is not rewarded and that the duty to mitigate loss is fully recognized;

· To co-ordinate closely with the Nomination Committee in relation to the remuneration to be offered to any new executive director

· To ensure that provisions regarding disclosure, including pensions, as set out in the Directors Remuneration Report Regulations 2002, are fulfilled

· To review the ongoing appropriateness and relevance of the remuneration policy, including policy comparisons with market competitors;

· To consider any matter specifically referred to the Committee by the Board; and

· To make available the committee's terms of reference which should set out the committee's delegated responsibilities and be reviewed and, where necessary, updated annually.

Remuneration policy

The Remuneration Committee determines the Company's policy on the structure of remuneration of the Company's Executive Directors and if required, senior management. The objectives of this policy are to:

· Reward Executive Directors and senior management in a manner that ensures that they are properly incentivised and motivated to perform in the best long-term interests of shareholders;

· Provide a level of remuneration required to attract and motivate high-calibre Executive Directors and senior management of appropriate calibre, from and increasingly competitive talent pool;

· Encourage value creation through consistent and transparent alignment of incentive arrangements with the agreed company strategy over the long term; and

· Ensure the total remuneration packages awarded to Executive Directors, comprising both performance- related and non-performance-related remuneration, is designed to motivate the individual, align their interests with shareholders and comply with corporate governance best practice.

Directors remuneration

Annual salaries and NED fees

Salaries are reviewed annually with effect from 1 April taking into account inflation, salaries paid to other employees within the Group, salaries of equivalent roles in comparable companies, as well as Group and personal performance. Salaries of Executive Directors are determined by the Remuneration Committee with advice, as appropriate, from external remuneration advisers. The Committee concluded that there should be no increase in remuneration for the members of the Executive Directors during FY26. The salaries are set out below.

The Board collectively decides the remuneration of the Chairman and non-executive directors, mindful of the time commitment and responsibilities of our roles and of current market rates for comparable organisations and appointments. The non-executive director fees for the year commencing 1 April 2025 are set out below.

Following the remuneration review noted above base salaries and fees for non-executive directors effective from 1 August 2024 are as follows:

James van den Bergh's remuneration comprises an annual chairman's fee with a nominal value of £65,000, which is satisfied by the issue of ordinary shares in the Company. The number of shares issued is determined by reference to an agreed issue price, meaning that the market value of the shares at the date of issue may differ from £65,000. Martin Shuker's fee comprises a base non-executive fee of £30,000. Philip Shepherd's fee comprises a base non-executive fee of £30,000.

Pension

Executive directors receive a pension contribution of 5% of base salary.

Performance Bonus

The Group operates a performance bonus scheme that is applicable to the whole business including the executive directors and the Group's senior management.

Performance conditions are in line with the Group's strategy and are assessed based on the achievement of stretching EBITDA targets supported by performance against individual non-financial strategic objectives. The maximum bonus opportunity is 100% of base salary for the executive directors, with threshold EBITDA performance required before any bonus is payable.

For the financial year ended 29 March 2026, no bonuses were payable to the executive directors or the Group's central head office teams. Bonuses were payable in the year to 31 March 2025. The bonuses paid/payable to those who served as executive directors during the period are as follows:

The Committee continues to set stretching targets in order to focus the executive management on business growth.

The performance bonus scheme for FY26 has not been changed other than setting revised financial targets. The maximum bonus opportunity continues to be 100% of base salary for the executive directors.

Long Term Incentives

The Company offers long-term Incentives through the XPF Factory plc Enterprise Incentive Plan ("EMI Plan") and an Employee Share Incentive Plan ("SIP"). 

There was no grant of options under the EMI Plan to executive or non-executive directors in the period to 29 March 2026 and there are currently no un-vested awards outstanding.

The SIP has been adopted to promote and support the principles of wider share ownership amongst all the Company's employees. The Plan is available to all eligible employees, including Escape Hunt's executive directors, and invites individuals to elect to purchase ordinary shares of 1.25p each in the Company via the SIP trustee using monthly salary deductions. Shares are purchased monthly by the SIP trustee on behalf of the participating employees at the prevailing market price. Individual elections may not, in aggregate, exceed £1,800 per employee in any one tax year. The Ordinary Shares acquired in this manner are referred to as "Partnership Shares" and, for each Partnership Share purchased, participants are awarded one further Ordinary Share, known as a "Matching Share", at nil cost. Matching Shares must normally be held in the SIP for a minimum holding period of 3 years and, other than in certain exceptional circumstances, will be forfeited if, during that period, the participant in question ceases employment or withdraws their corresponding Partnership Shares from the Plan.

A breakdown of the interests in the EMI plan of those who served as directors during the period, as at 29 March 2026, is set out below.

The performance conditions for the EMI Options awarded in 2020 were based on achieving certain share price total share return targets. Full vesting required the Company's volume weighted average share price over a 30 day trading period to have exceeded 25p in the four years following the original grant.

A breakdown of the interests in the SIP of those who served as directors during the period, as at 29 March 2026, is set out below.

Further details of employee share schemes are set out in note 25 to the financial statements.

Shareholding guidelines

The Group does not have a formal shareholding requirement although executive directors are encouraged to have an interest in the Company which is individually meaningful. Inclusive of vested share options, both Executive Directors hold shares which at current share prices, represent more than a full year's base salary. Details of the directors' shareholdings are set out in the Directors' Report on page 26.

Directors' remuneration - current year

The remuneration for of those who served as directors for the period ended 29 March 2026 was as follows:

Committee Effectiveness

The Committee performed a self-assessment of its effectiveness during the first quarter of 2026. The assessment findings were reviewed during the year with no significant actions required.

Martin Shuker

Chair of the Remuneration Committee

3 September 2026

Report of the Nomination Committee

The function of the Nomination Committee shall be to provide a formal, rigorous and transparent procedure for the appointment of new directors to the Board. In carrying out its duties, the Nomination Committee is primarily responsible for:

· identifying and nominating candidates to fill Board vacancies;

· evaluating the structure and composition of the Board with regard to the balance of skills, knowledge and experience and making recommendations accordingly;

· reviewing the time requirements of non-executive directors;

· giving full consideration to succession planning; and

· reviewing the leadership of the Group.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under the AIM Rules of the London Stock Exchange they are required to prepare the Group financial statements in accordance with UK-adopted International Accounting Standards as issued by the International Accounting Standards Board and applicable law and they have elected to prepare the parent Company financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of the Group and Parent company financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable, relevant, reliable and prudent;

· for the Group financial statements, state whether they have been prepared in accordance with UK-adopted International Accounting Standards;

· for the parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

· assess the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

· use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report and a Directors' Report that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' Confirmations

The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and parent Company's position and performance, business model and strategy.

In the case of each Director in office at the date the Directors' Report is approved:

· so far as the Director is aware, there is no relevant audit information of which the Group and parent Company's auditors are unaware; and

· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group and parent Company's auditors are aware of that information.

Signed by order of the Board

James van den Bergh

3 September 2026

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XP FACTORY PLC

Opinion

We have audited the financial statements of XP Factory Plc (the 'Parent Company') and its subsidiaries (the 'Group') for the period ended 29 March 2026, which comprise:

· the consolidated Statement of Comprehensive Income;

· the consolidated and Parent Company Statement of Financial Position,

· the consolidated and Parent Company Statement of Changes in Equity;

· the consolidated Statement of Cash Flows;

· the related notes to the consolidated and Parent Company financial statements including significant accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK-adopted International Accounting Standards ('IAS'). The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion;

· the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 29 March 2026 and of the Group's loss for the period then ended;

· the Group's financial statements have been properly prepared in accordance with UK-adopted International Accounting Standards ('IAS');

· the Parent Company financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report.

We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Summary of our audit approach

Context

There are twenty nine components of the Group, twenty five located and operating in the United Kingdom (UK) and four located and operating overseas. One of the components located and operating in the UK is not a subsidiary of the Group, but has been consolidated as part of the results of the Group on the basis of control. For the financial period ended 29 March 2026, all UK subsidiaries are exempt from the requirements stipulating that they be audited since they fulfil all the conditions for exemption under section 479A of the Companies Act 2006. No reliance has been placed on component auditors and the audit engagement team have applied a risk-based approach when planning the approach to the audit, performing engagement procedures that respond to the assessed risk. Following our risk assessment and considerations of significance to the Group, the audit engagement team concluded that there are four major separately distinguishable components within the Group and therefore a full audit approach was adopted in respect of these components. Financial information from other components not considered to be individually significant or subject to heightened risk were deemed to be homogenous and considered as one population for the purpose of performing further audit procedures.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters that we identified in the current period were:

· Revenue recognition arising from occurrence, completeness and cut-off in the period;

· Management override of controls;

· IFRS 16 and the adoption of IFRS 16;

· Impairment of investments, goodwill and other intangible assets arising from business combinations; and

· Going Concern.

An overview of the scope of our audit

The key audit matters identified above are discussed further in this section. This is not a complete list of all risks identified by our audit.

We identified going concern as a key audit matter and have detailed our response in the conclusions relating to going concern section below.

Our application of materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole to be £1,193,100, based on 2% of Group turnover. Performance materiality, defined as the amount set by the auditor at less than materiality for the financial statements as a whole to reduce aggregation risk to an appropriately low level, was determined as £954,400, being 80% of overall materiality.

Based on the significance of the individual component results compared with the group, we determined that Escape Hunt Group Ltd, BBB UK Property Ltd, and XP Factory Plc (single entity) would be subject to a full audit to a reasonable component materiality.

Escape Hunt and Boom Franchise entities were combined as one component on a risk basis, and the same approach was applied to the residual entities, which were considered as one homogenous population and treated as one component. This is in line with ISA (UK) 600 sA125. It was also determined that these components would be subject to a specific-scope audit to a reasonable component materiality.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors' assessment of the Group's and Parent Company's ability to continue to adopt the going concern basis of accounting included obtaining and reviewing the forecast financial projections.

Management's assessment included the following scenarios:

· A central case which is based on opening a limited number of new Escape Hunt and Boom owner operated sites in the UK in line with the Board's stated strategy. Sites are expected to take a period of time to reach maturity based on previous experience. The central case does not assume any openings other than sites for which leases have already been secured. 

· A downside case which assesses the potential impact of a reduction in sales across the group and cost increases. In the downside scenario, the Directors believe they can take mitigating actions to preserve cash. Principally the roll-out of further sites would be delayed and cost saving measures would be introduced at head office central services. Reductions could be targeted in both people and areas such as IT, professional services and marketing. Other areas of planned capital expenditure would also be curtailed.

In both scenarios the Group has surplus working capital to meet its working capital requirements for the foreseeable future.

· We performed audit procedures, including but not restricted to the following:

· We reviewed the forecast revenues and resulting cash flows within the assessment period;

· We compared the forecast to available management information for the business post period-end;

· We considered management's sensitivity analysis and also performed an additional range of sensitivities to assess whether a reasonably likely change to a key input would result in an erosion of the revised headroom on working capital available in the downside model used by management;

· We reviewed the announcements and considered if any items will have a financial impact affecting the going concern;

· We reviewed the appropriateness of the disclosures made and its consistency with our knowledge of the business.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

· the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

· the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

· the Parent Company financial statements are not in agreement with the accounting records and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of our planning process:

· We enquired of management the systems and controls the Group and Parent Company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The Group and Parent Company did not inform us of any known, suspected or alleged fraud.

· We obtained an understanding of the legal and regulatory frameworks applicable to the Group and Parent Company. We determined that the following were most relevant: UK-adopted International Accounting Standards, FRS 102, Companies Act 2006, GDPR, Planning Consent, Alcohol Licencing, Health & Safety Standards, Food Hygiene, US Regulations relating to US Franchises, Employment (Allocation of Tips) Act 2023.

· We considered the incentives and opportunities that exist in the Group and Parent Company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.

· Using our knowledge of the Group and Parent Company, together with the discussions held with the Group and Parent Company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

· Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.

· Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

· Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, particularly regarding the value of right of use assets and lease liabilities arising from long term leases under IFRS16, valuation and impairment of intangible fixed assets including goodwill, valuation and impairment of investments, dilapidation provisions and recoverability of amounts owed from fellow group companies.

· Assessing the extent of compliance, or lack of, with the relevant laws and regulations.

· Testing key revenue lines, in particular cut-off, for evidence of management bias.

· Obtaining third-party confirmation of material bank and loan balances.

· Documenting and verifying all significant related party and consolidated balances and transactions.

· Reviewing documentation such as the Group's and Parent Company's board minutes for discussions of irregularities including fraud.

· Testing all material consolidation adjustments.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report

Use of our audit report

This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Tanya Craft (Senior Statutory Auditor)

For and on behalf of HW Fisher Audit

Chartered Accountants

Statutory Auditor

Acre House

11/15 William Road

London

NW1 3ER

United Kingdom

Date…………………………

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Period Ended 29 March 2026

Adjusted earnings per share is calculated as earnings / (loss) attributable to equity holders of XP Factory plc, before Branch pre-opening costs, Exceptional gains and losses, Gain on disposal of subsidiaries and fair value movements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 29 March 2026

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 29 March 2026 (continued)

The notes on pages 56 to 109 are an integral part of these financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 4 September 2026 and are signed on its behalf by:

Richard Harpham

Director

Registered company number 10184316

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Period ended 29 March 2026

The notes on pages 56 to 109 are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Period ended 29 March 2026

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Period ended 29 March 2026 (Continued)

Reconciliation of movements in net debt

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General Information

The Company was incorporated in England on 17 May 2016 under the name of Dorcaster Limited with registered number 10184316 as a private company with limited liability under the Companies Act 2006, limited by shares. The Company was re-registered as a public company on 13 June 2016 and changed its name to Dorcaster Plc on 13 June 2016. On 8 July 2016, the Company's shares were admitted to AIM. The company is domiciled in the United Kingdom.

Until its acquisition of Experiential Ventures Limited on 2 May 2017, the Company was an investing company (as defined in the AIM Rules for Companies) and did not trade. 

On 2 May 2017, the Company ceased to be an investing company on the completion of the acquisition of the entire issued share capital of Experiential Ventures Limited. Experiential Ventures Limited was the holding company of the Escape Hunt Group, the activities of which related solely to franchise.

On 2 May 2017, the Company's name was changed to Escape Hunt Plc and became the holding company of the enlarged Escape Hunt Group. Thereafter the Group established the Escape Hunt owner operated business which operates through a UK subsidiary. All of the Escape Hunt franchise activity was subsequently transferred to a UK subsidiary. On 22 November 2021, the Company acquired BBB Franchise Limited, together with its subsidiaries operating collectively as Boom Battle Bars. At the same time, the Group took steps to change its name to XP Factory Plc with the change taking effect on 3 December 2021.

XP Factory Plc currently operates two fast-growing leisure brands. Escape Hunt is a global leader in providing escape-the-room experiences delivered through a network of owner-operated sites in the UK, an international network of franchised outlets in four continents, and through digitally delivered games which can be played remotely. 

Boom Battle Bar is a fast-growing network of owner-operated and franchise sites in the UK that combine competitive socialising activities with themed cocktails, drinks and street food in a high energy, fun setting. Activities include a range of games such as augmented reality darts, Bavarian axe throwing, 'crazier golf', shuffleboard and others.

The Company's registered office is Boom Battle Bar Oxford Street Ground Floor And Basement Level, 70-88 Oxford Street, London, England, W1D 1BS.

The consolidated financial information represents the audited consolidated results of the Company and its subsidiaries, (together referred to as "the Group").

During the current period, the Group changed its accounting calendar so that each financial quarter comprises two four-week accounting periods followed by one five-week accounting period (commonly referred to as a 4-4-5 calendar). Accordingly, these financial statements have been prepared for the 51 week and 6 day period from 1 April 2025 to 29 March 2026. As a result, the current period is of a different duration to the comparative period and the results are therefore not directly comparable.

Basis of preparation

The audited consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards ("IFRSs").

The audited financial statements are presented in Pounds Sterling, which is the presentational currency for the financial statements. All values are rounded to the nearest thousand pounds except where otherwise indicated. They have been prepared under the historical cost convention, except for financial instruments that have been measured at fair value through profit and loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

Changes in accounting policy

There are no new standards impacting the Group adopted in the annual financial statements for the period ended 29 March 2026. The Group is assessing the impact of IFRS 18 Presentation and Disclosure in Financial Statements, which becomes effective for annual reporting periods beginning on or after 1 January 2027, and expects that its principal effect will be changes to the presentation and disclosure of information within the financial statements rather than the recognition or measurement of assets, liabilities, income or expenses.

The Directors do not expect any material impact on the Group's reporting from new accounting standards, interpretations and amendments not yet effective but currently under contemplation by the International Accounting Standards Board.

2. Material accounting policies

The principal accounting policies applied in the preparation of the audited consolidated financial information set out below have, unless otherwise stated, been applied consistently throughout.

Basis of consolidation

The audited consolidated financial information incorporates the preliminary financial statements of the Company and its subsidiaries. Subsidiaries are entities over which the Group has control. The Group controls an investee if the Group has power over the investee, exposure to variable returns from the investee, and the ability to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

Subsidiaries are consolidated from the date on which control is obtained by the Group up to the effective date on which control is lost, as appropriate.

Under the acquisition method, the results of the subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries' net assets are determined and these values are reflected in the Consolidated Financial Statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Any excess of the purchase consideration of the business combination over the fair value of the identifiable assets and liabilities acquired is recognized as goodwill. Goodwill, if any, is not amortised but reviewed for impairment at least annually. If the consideration is less than the fair value of assets and liabilities acquired, the difference is recognised directly in the statement of comprehensive income.

Acquisition-related costs are expensed as incurred.

Intra-group transactions, balances and recognised gains on transactions are eliminated. Unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the Financial Statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by other members of the Group.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary it derecognises the assets and liabilities of the subsidiary and any non-controlling interest. The profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of.

Going Concern

The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Directors have assessed the Group's ability to continue in operational existence for the foreseeable future which is at least, but not limited to, twelve months from the end of the reporting period in accordance with the Financial Reporting Council's Guidance on the going concern basis of accounting and reporting on solvency and liquidity risks issued in April 2016.

The Board has prepared detailed cashflow forecasts covering a three-year period from the reporting date. 

The Group plans to continue the roll out of new sites under both the Escape Hunt and Boom Battle Bar brands in the UK which are expected to contribute to performance in future.

The central case is based on opening a limited number of new Escape Hunt and Boom owner operated sites in the UK in line with the Board's stated strategy. Sites are expected to take a period of time to reach maturity based on previous experience. The central case does not assume any openings other than sites for which leases have already been secured. 

The Group has also considered a 'downside' scenario. In this scenario the Group has assessed the potential impact of a reduction in sales across the Group and cost increases. In the 'downside' scenario, the Directors believe it can take mitigating actions to preserve cash. Principally the roll-out of further sites would be delayed and cost saving measures would be introduced at head office central services. Reductions could be targeted in both people and areas such as IT, professional services and marketing. Other areas of planned capital expenditure would also be curtailed. These include planned expenditure system improvements and capital expenditure at sites. Taking into account the mitigating factors, the Group believes it would have sufficient resources for the foreseeable future. 

The Group's £20m revolving credit facility expires on 12 December 2028. The Group's forecasts assume that the facility will be renewed and extended beyond that date rather than being repaid. 

Based on the above, the Directors consider there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable, as well as to fund the Group's future operating expenses for the foreseeable future. The going concern basis preparation is therefore considered to be appropriate in preparing these financial statements.

Foreign currency transactions and translation

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency are recorded at the rate of exchange prevailing on the date of the transaction.

The functional currency of the Company's subsidiaries which operate overseas are as follows:

Escape Hunt Entertainment LLC Arab Emirates Dinar

Boom Battle Facilities Management Services LLC Arab Emirates Dinar

BGP Escape France Euro

BGP Entertainment Belgium Euro

Escape Hunt USA Franchises Limited US Dollar

These subsidiaries, when recording their own foreign transactions follow the principles below. At the end of each financial year, monetary items denominated in foreign currencies are retranslated at the rates prevailing as of the end of the financial year. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including comparatives) are expressed in the presentational currency which is Pounds Sterling using exchange rates prevailing at the end of the financial year. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising are recognised initially in other comprehensive income and accumulated in the Group's foreign exchange reserve.

On disposal of a foreign operation, the accumulated foreign exchange reserve relating to that operation is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:

Office equipment 5 years

Furniture and fixtures 5 years

Leasehold acquisition and improvements:

- Leasehold acquisition Expected duration of the lease

- Leasehold improvements 10 years

Computers 3 years

Games 5 years 

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Research and development expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

(i) its ability to measure reliably the expenditure attributable to the asset under development;

(ii) the product or process is technically and commercially feasible;

(iii) its future economic benefits are probable;

(iv) its ability to use or sell the developed asset; and

(v) the availability of adequate technical, financial and other resources to complete the asset under development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Certain internal salary costs are included where the above criteria are met. These internal costs are capitalised when they are incurred in respect of new game designs which are produced and installed in the UK owner-operated sites, where the ensuing revenue is tracked on a weekly basis at each site by each game. Development expenditure initially recognised as an expense is not recognised as assets in subsequent periods.

Intangible assets

Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.

With the exception of goodwill, intangible assets that are acquired or developed by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.

Game design and development costs are expensed as incurred unless such expenditure meets the criteria to be capitalised as a non-current asset.

Amortisation is charged to the income statement within administrative expenses on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite.

The estimated useful lives are as follows:

Trademarks 3 years

Intellectual property:

- Trade names and domain names 3 years

- Rights to system and business processes 3 years

- Internally generated intellectual property 5 years

Franchise agreements Term of franchise

App development 2 years

Portal 3 years

Impairment of assets

Financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows taking into account credit risk. The present value of the future cash flows represents the expected value of the future cash flows discounted at the appropriate rate. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Non-financial assets

The carrying amounts of the Group's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units, or ("CGU"). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Employee benefits

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. Employee benefit costs are recognised in profit or loss unless they form part of the cost of an asset that qualifies for capitalisation. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Revenue recognition

The Group operates a network of franchised and owner-operated branches and offsite "escape the room" type games under the Escape Hunt brand and a network of owner-operated and franchised competitive socialising cocktail bar venues under the Boom Battle Bar brand. The Group receives revenues from its directly owned branches but also from franchisees, master-franchisees and sub-franchisees.

The Group, as franchisor, develops original escape games and other fun competitive socialising games and supporting materials and provides management, creative, technical and marketing services based on its knowledge of and expertise in the relevant disciplines to enable delivery of proprietary consumer experiences.

The Group considers that its contracts with franchisees, master-franchisees and sub-franchisees provide a customer with a right to access the Group's intellectual property throughout the franchise term which is typically for a minimum term of ten years. Accordingly, the Group satisfies each of its performance obligations by transferring control of goods and services to the customer over the period of the franchise agreement. Franchise revenues are therefore recognised over time.

The Group derives "upfront exclusivity fees" as well as training fees and documentation fees from the sale and set up of franchises and subsequent "Service Revenues" in the form of revenue shares, administration fees, and other related income.

New branch upfront location exclusivity fees

The initial non-refundable upfront exclusivity fees relate to the transfer of promised goods or services which are satisfied throughout the life of the franchise agreement. Payment of the initial upfront exclusivity fee is due immediately on the signing of a franchise agreement.

The Group, as franchisor, supplies a manual and grants to a franchisee during the term of a franchise agreement, the exclusive rights to carry on its business and to utilise the know-how, intellectual property rights and games within a territory. The franchise term typically provides for an initial term of 10 years, with automatic rights for renewal of successive 10-year periods. The Group offers to:

· Assist the franchisee to establish, manage and operate the business within the territory;

· Provide advice on the choice of branch location;

· Identify equipment, furniture, props and other items required to conduct the business;

· Assist in designing the layout and fit-out of any chosen branch location;

· Provide full game and other activity design to be installed in each branch;

· Provide guidance on setting up website, booking and other online services;

· Provide the franchisee with the franchise manual;

· Train the franchisee and its staff;

· Give the franchisee continuing assistance and advice for the efficient running of the franchise business;

· Regularly update the franchisee on any changes to the services and know-how;

· Design and provide territory-specific, and branch-specific, logos for use in advertising, merchandise and uniforms; and

· Communicate at all times with the franchisee in a timely manner.

The initial fee is recognised as revenue on a straight-line basis over the period of the franchise agreement where this is 10 years (or less in case of sub-franchise agreements, where the term of the sub-franchise agreement typically equals the remaining term of the master franchise agreement). Where the franchise term is not specified or is greater than 10 years, revenue is recognised over 10 years to reflect a lack of certainty over the actual duration of the franchise arrangement. See Note 3 for more details.

Fees related to future periods are carried forward as deferred income within current and non-current liabilities, as appropriate. The amounts of deferred revenue at each reporting date are disclosed in Note 21 to the financial statements.

IFRS 15 also requires the Group to consider if there is a financing element to such long-term contracts. However, it is considered that there is no such financial element provided by the Group to franchisees as payment is received at the time of signing the franchise agreement and at the commencement of the delivery of the various services under such agreement.

Under a Master Franchise Agreement, the Group is entitled to a one-off upfront exclusivity fee representing an advance payment for a number of branches with all branches paid at a fixed rate, payable on signing of the Agreement. The contract is not deemed to be fulfilled and in force until this payment is received in full by the franchisor. This fee is recognised over the lower of the franchise term and 10 years, in the same manner as in a single franchise arrangement.

Where the Group, through a Master Franchisee, enters into contracts with sub-franchisees, the initial fee is recognised in the same manner as contracts with direct franchisees (i.e. spread over 10 years), where not already covered in the fees attributed to the Master Franchisee. In the event of termination of a franchise agreement, any remaining deferred income related to this contract is immediately recognised in full.

Documentation fees are recognised when the franchise agreement and associated leases and other legal documents are exchanged and have reached practical completion. Training fees are recognised when the franchise site is opened.

Franchise revenues

As part of each franchise agreement, the Group receives franchise service revenues at a fixed percentage of a franchisee's monthly revenues which are recognised as the income is earned.