Boom Battle Bar slows down expansion plans over falling sales

The announcement sent group shares tumbling in early trading

Boom Battle Bar revealed plans to scale back new venue openings as consumer spending remains weak (Boom Battle Bar)

XP Factory, the company behind popular escape rooms and experiential bars, has issued a warning that it expects to miss its sales and profit targets, citing "challenging" market conditions.

The announcement sent shares in the London-based leisure group tumbling in early trading on Monday.

The firm also revealed plans to scale back new venue openings as consumer spending remains weak.

Its Boom Battle Bar brand, known for activities such as augmented reality darts and Bavarian axe throwing, has been particularly impacted by market pressures.

Like-for-like sales for Boom declined over the festive period and into the new year, although new openings provided some offset.

Despite a 2.5 per cent rise in overall sales at its owned and operated Boom sites, this was overshadowed by a 7.2 per cent like-for-like sales drop in the 13 weeks to 28 December compared to the previous year.

Strong corporate bookings were ultimately insufficient to counter the decline in consumer spending.

Boom Battle Bar brand, known for activities such as augmented reality darts and Bavarian axe throwing, has been particularly impacted by market pressures (XP Factory/PA)

In contrast, XP Factory's Escape Hunt venues performed better, with total sales up 10 per cent and like-for-like growth of 6.4 per cent, also benefiting from new sites.

The brand benefited from new openings in Canterbury, Kent and Sheffield, South Yorkshire.

However, the group said it is “moderating” the pace of its new site openings due to uncertainty caused by market conditions.

It said it still believes it can grow the Escape Hunt business to around 100 venues across the UK despite slowing down openings.

XP Factory said weaker consumer confidence means it expects revenues and earnings to miss targets for the current financial year, with earnings before interest, tax, depreciation and amortisation set to be between £5 million and £6 million.

It added that it has been impacted by increases to the national living wage and national insurance contributions last year but has not been able to “fully mitigate” the impact of higher costs due to consumer weakness.

Boom Battle Bar benefited from new openings in Canterbury, Kent and Sheffield, South Yorkshire (XP Factory/PA)

Richard Harpham, chief executive of XP Factory, said: “Against a backdrop of well-documented industry challenges, we have continued to outperform the wider experiential leisure market and make progress against our strategic objectives.

“While near-term trading within Boom has been impacted by market pressures, with strong market positions and a compelling UK growth runway, we remain well positioned to emerge as a long-term winner as the sector continues to consolidate.”

Shares were down 16.6 per cent to 11.68p on Monday morning.