Escape Hunt plc (LON:ESC) has announced its audited final results for the year ended 31 December 2020.
FINANCIAL HIGHLIGHTS
· Group Adjusted EBITDA loss reduced to £1.4m (2019: loss £1.7m) despite COVID-19 restrictions
· > 25% like-for-like sales growth on a 12 week rolling basis in the two months prior to lockdown
· Group revenue of £2.7m (2019: £4.9m) was 46% lower than FY19, driven by COVID-19
· Revenue from digital and other play at home products was £230k (2019: nil)
· £0.4m positive site level Adjusted EBITDA from owner-operated sites (2019: £1.0m) was driven by a strong performance pre-lockdown and encouraging trading when allowed to open under COVID-19 restrictions
· Franchise EBITDA of £0.3m (2019: £0.4m)
· Group operating loss of £6.4m (2019: loss of £5.9m)
· £4.0m net of expenses successfully raised through an equity placing and open offer, share subscription, and a convertible loan note in July 2020
· Cash at year end £2.7m (2019: £2.2m) and £3.3m on 31 March 2021
OPERATIONAL HIGHLIGHTS
· Owner-operated estate expanded by 56% to 14 sites (2019: 9 sites) including Watford (which was scheduled to open on December 27th) and the acquisition of Dubai
· Record opening performances at each of Norwich and Basingstoke sites
· All eight sites open for more than 12 months were named by TripAdvisor™ as a Travellers’ Choice Winner in August 2020 and continued five star TripAdvisor™ ratings across the UK estate
· Transition to new, lower cost games supplier and installation of first fully modular games in Watford
· COVID-19 closures of all UK sites resulted in 45% of available days lost and restrictions impacted a further 36% of available trading days
· Estimated 40% of trading days lost by franchise estate due to COVID-19 closures and a further 42% of days operating under COVID-19 restrictions
· Successful launch of digital and remote play propositions
· Acquisition of Middle East master franchise, including owner-operated site in Dubai
POST YEAR END
· Full UK lockdown enforced shortly after Christmas 2020 with UK sites re-opened on 17 May 2021
· Acquisition of French and Belgian master franchise including owner-operated sites in Paris and Brussels
· Placing to raise £1.3m (after expenses) in January 2021 to fund French and Belgian acquisition and provide further working capital
· Majority of French franchise agreements extended for further six years
· Kingston opened on May 17, taking the owned and operated estate to 17 sites
· Heads of terms agreed on site in Milton Keynes; legals close to completion
· Work commencing shortly at new site in Lakeside
· Inclusive of Milton Keynes and Lakeside, owner operated estate will have grown 111% compared to 31 Dec 2019
· Digital and downloadable sales continuing to perform, generating £92k revenue in the 3 months to 31 March 2021.
· £1.0m convertible loan note facility put in place to provide further flexibility to continue UK roll-out in the event of further lockdown restrictions or continued adverse impact on trading from COVID-19
Richard Harpham, Chief Executive of Escape Hunt, commented:
“We are delighted that our UK sites have finally been able to re-open and are excited to be building on the substantial strategic progress we have been able to make in the last year, notwithstanding the extremely tough conditions brought about by Covid-19. Escape Hunt is in a much stronger position today than it was twelve months ago, and subject to reasonable assumptions on demand returning, we are confident that we now have a platform established capable of supporting a profitable business. We have significantly grown our owner-operated estate, launched our digital and remote-play propositions, made progress with our franchisees, and re-capitalised the business. We are hopeful that consumer and corporate demand will return strongly in the coming months and look forward with cautious optimism.”
Chairman’s Statement
2020 was undoubtedly the most difficult year for the leisure industry in recent history, with government enforced closures impacting businesses in all parts of the world. Notwithstanding the challenges, the Company has used the time productively, launching new digital and play-at-home products, significantly expanding its UK owner-operated estate, establishing improved games manufacturing and installation processes, progressing the potential for the business in North America, and acquiring the Middle East master franchises along with negotiating the acquisition of the French and Belgian master franchises. As a result, the Group finds itself significantly better positioned for the future than was the case a year ago.
The progress would not have been possible without the support of stakeholders at all levels. Firstly from our shareholders who have demonstrated their belief in the future of the business, supporting a £4.3m fund raise in July 2020 to provide development and working capital, and a further £1.4m fund raise after the year end in January 2021 to support the acquisition of our French and Belgian master franchisee and to provide further working capital. The Group has also been able to benefit from a number of government support schemes put in place to help businesses through the COVID-19 pandemic. Cash has been preserved through effective use of these schemes and careful management of costs, whilst investment in new sites has continued. I would also like to extend my thanks to all our employees who have had to endure through uncertain and difficult circumstances. Many have spent large portions of the last year on furlough, whilst all have had to cope with significant changes to the working environment. Throughout the period they have continued to work with passion and enthusiasm, helping deliver innovative new games to support our strategy, implementing the social distancing requirements at our sites, and accepting changes to their working conditions. During the first lockdown, all our head office staff agreed to a pay reduction whilst continuing to work, a sacrifice which was enormously helpful and appreciated. A number of our landlords agreed concessions on rent, allowing deferred or reduced rents, whilst number of our suppliers reduced or deferred costs. Their support was likewise both welcome and valued.
Outside of the obvious adverse impact of COVID-19, the Company delivered on a number of important milestones, further details of which are provided in the sections of the strategic report that follow. Importantly costs were managed carefully and cash preserved where possible, leaving the Company in a stronger position to take advantage of a return of demand once Government restrictions are lifted and sites are re-opened. A few highlights from the period in question are worth mentioning:
· Strong trading from 1 January 2020 to 29 February 2020 with revenue and owner-operated site performance comfortably ahead of the Board’s expectations
· Careful cash management and encouraging return of demand after lockdowns when sites were open
· Adjusted Group EBITDA loss reduced by 15% to £1.45m from £1.71m despite Covid closures
· Raised £4.0m net of expenses through an equity placing and open offer, share subscription, and convertible loan note issue in July 2020
· Successful launch of digital and other play at home products generating revenue of £230k (2019: nil)
· In the year to 31 December 2020, the owner-operated estate expanded by 56% to 14 sites (2019: 9 sites) including the acquisition of Dubai
· Constructive progress within our franchise estate, both in the US and the rest of the world
· Post year end completion of a new site in Kingston, acquisition of the France and Belgium master franchises together with £1.4m fundraise by way of an equity placing
The year started positively, with both our owner-operated and franchise estates entering January 2020 on the back of strong sales performances over Christmas. Performance in the period before Covid-19 restrictions came into effect was ahead of the Board’s expectations.
In March, the onset of COVID-19 forced immediate action which saw significant cost cuts and a period in which the business was effectively put into hibernation. The team worked proactively to launch new products which could be played remotely, initially launching a range of print-and-play games, followed by ‘zoom-in-a-room’ and other digital propositions. We have been pleased with the success of these products and it is our expectation that they will continue to be an important part of our portfolio of games in future.
At the same time, significant effort was put into seeking further investment to secure the future of the Company. In July we were delighted to raise £4.3m (£4.0m net of expenses) through an issue of new equity and convertible loan notes which was supported by our major shareholders as well as a number of new investors who joined the register. At the same time, the Board announced a five-point plan as follows to build shareholder value.
1. Roll-out of our owner-managed network through direct investment
2. Sustain and support growth in performance from our existing franchise network
3. Deliver the US franchise opportunity in partnership with PCH
4. Enhance returns and margins through broadening our product set and target audience
5. Investment in infrastructure and operations to improve efficiency and scalability
I am pleased to report good progress in all of these objectives, details of which are given in the sections of the strategic report that follow.
The Board saw a number of changes during the year. Graham Bird joined as Chief Financial Officer on 3 January 2020 and has worked extremely well with the existing team, playing an important role in securing the support of our shareholders in the two fund-raises whilst adding significant additional experience and capability to our senior leadership team. Adrian Jones, who was one of the original management team which established Escape Hunt prior to its acquisition by Dorcaster and Admission to AIM in 2017, stepped down from the Board as a Non-Executive Director at the end of May 2020. At the end of September 2020, we welcomed John Story to the Board in his place as a Non-Executive Director.
We took steps to ensure that our key employees are aligned with shareholders, implementing a new executive share incentive scheme in July 2020. Since the year end, we have implemented a wider scheme available to all our employees in the UK which will enable anyone working for the Company to acquire shares in a tax efficient manner and to be rewarded with matching share awards after a three year holding period.
The pace at which the vaccination programme is being rolled out in the UK and the reduction in serious cases of the disease together with the fact that our UK sites have been able to open on 17 May 2021 as was initially indicated by the Government sets a positive outlook. Evidence on re-opening after the 2020 spring/summer lockdown was very encouraging and, as a result, the Board is hopeful that both consumer and corporate demand will return strongly when the restrictions currently in place are lifted. At the same time, property market conditions in the UK are increasingly favourable for those seeking to take on new space and the Company has been able to capitalise upon that opportunity. There is clearly a growing demand for experiential leisure and the Board has been actively exploring ways to broaden our sphere of activities.
In February 2020, the Company had 9 Escape Hunt branded owner-operated sites, all in the UK. Post year end, the completion of the acquisition of our French and Belgian master franchises and the build-out at Kingston, has expanded the network to 17. Heads of terms have been signed for a site in Milton Keynes and, in addition, the Company has carved out a space at a unit at the Lakeside shopping centre in Essex which was previously trading as Market Halls. These two further sites will potentially become the Company’s 18th and 19th owner operated sites respectively. Further sites are now also in contemplation. When we raised money in July 2020 we set a target of 20 owner-managed sites within two years. We expect to achieve this before the end of 2021, six months ahead of our target. Importantly, with the footprint already established, the Directors believe that once new site performance has matured and conditions and demand have normalised post COVID-19, the Escape Hunt network should be capable of supporting positive EBITDA and positive cash generation, subject to reasonable assumptions in other areas of the Group.
On the international front, the Board is excited about the potential of bringing the French and Belgian master franchises in-house alongside the Middle East business which was acquired in September 2020, and the progress being made in the US with partners Proprietors Capital Holdings, is encouraging. Whilst a small number of the Company’s existing international franchise network look like they will not survive the challenges of the pandemic, the opportunity for the other parts of the network to rejuvenate after COVID-19 is now much closer to being a reality.
Finally, the significant progress made by the Company in establishing digital and other play-at-home products has provided a new, scalable revenue stream and growth opportunity, which the Directors expect to remain an important part of the product suite in the future.
We are still at an early stage in delivery against the objectives we set in July last year. However, it has been very pleasing to see a positive response by the markets so far. Money was raised at 7.5p per share in July 2020 whilst the placing conducted in January 2021, partly to fund the French acquisition, was completed at 17.5p per share.
We remain confident that we have a valuable business and that if we deliver on our objectives, we have an opportunity to create significant further value for our shareholders. As a result, notwithstanding the continued uncertainty that the coming weeks and possibly months hold for the whole leisure industry, the Board has reason to look forward with cautious optimism.
Richard Rose
Chairman
17 May 2021
Chief Executive’s Report
Notwithstanding the huge disruption caused by COVID-19, the Group ended the year in a significantly stronger position than before the onset of the crisis, and much better placed to benefit from a return of demand. Throughout the year, the team continued work on delivering the strategic plans across all five areas identified. With the benefit of the COVID-19 related Government support schemes, the outturn for the year was better than expected given the pro-longed enforcement of restrictions.
Importantly, the expansion of the Group’s owner-operated network together with the launch of our digital and other remote-play products has created a platform which we believe is capable of supporting a profitable, cash-generative group, once COVID-19 restrictions are removed, trading normalises, new sites have matured and subject to reasonable assumptions in other parts of the business.
Owner-Operated site performance
Revenue from our owner-operated sites fell 46% to £2.1m (2019: £3.8m), inclusive of digital and remote-play turnover of £230k (2019: £nil). The fall in revenue reflects the significant impact of both enforced closures and social distancing rules prohibiting households mixing which were implemented by the UK Government in response to the pandemic.
Prior to COVID, the first two months of 2020 were very strong for the business and we saw continued growth across all Escape Hunt branded UK sites, with target site economics for turnover and EBITDA contribution being met. Moreover, the like-for-like sales growth was particularly encouraging, with even the most mature sites delivering 25% growth vs prior year on a 12 week rolling basis.
Table 1: Like-for-Like Growth in first two months of 2020
| Year-on-Year Growth | ||||
| (Rolling average period) | ||||
| Data as at 1 March 2020 | 4 weeks | 12 weeks | 24 weeks | |
| First 3 sites | 18% | 25% | 30% | |
| Next 5 sites | 70% | 99% | N/A | |
| All 8 mature sites | 44% | 59% | N/A |
The impact of COVID
Around the second week in March 2020, the impact of COVID-19 began to be felt, culminating in the implementation of the first UK national lockdown on 23 March 2020.
In July 2020 we raised £4.0m (net of expenses) by way of a placing, open offer, share subscription and convertible loan note issue. This additional funding enabled the group to continue its planned roll-out of sites and provided working capital to survive the pandemic.
Whilst all UK sites were closed during the national lockdowns, sites were also affected differently during periods when the UK Government applied a tiered regional approach to restrictions. In total, we estimate 45% of trading days in the year were completely lost due to closures and a further 36% of trading days in the year were impacted by varying levels of restrictions, such as the ‘rule of six’, bans on household mixing or other social distancing measures.
Notwithstanding the restrictions, we were encouraged by the performance of our sites between July and October, after re-opening at the end of the first national lockdown. In the first eight weeks after re-opening, sales grew from an initial level of around 25% of the equivalent week’s sales in 2019 to over 90% of the equivalent prior year sales in each of the last two weeks of the first eight-week period. In September, the pace of recovery softened as expected, notably as the UK Government began to implement incrementally stringent social distancing and mixing rules. Nevertheless, revenue inclusive of digital and remote sales over the week beginning 26 October 2020, which coincided with schools’ half term week, was 25% ahead of the same period in 2019. During that week, on a like-for-like basis, the Company’s eight mature UK sites traded at 96% of the 2019 level, despite four of the sites being adversely affected by either the Government’s tier 2, tier 3 or the Scottish COVID-related restrictions.
Throughout the year, when sites were open, we continued to delight our customers. Before the onset of the pandemic, all nine of our sites had five star ratings on TripAdvisor™ and in August 2020, all eight of our sites that had been opened for more than 12 months were named by TripAdvisor™ as a Travellers’ Choice Winner. The awards placed all our longer standing sites in the top 10% of attractions worldwide. We were equally delighted that our then newest site at Birmingham Resorts World, which only opened in December 2019, was ranked the top attraction in Birmingham and the West Midlands, and #7 across the whole of the UK. We have continued to receive positive customer feedback, and at the time of writing, all our UK sites are five star rated by TripAdvisor™.
The strong performance prior to the onset of the pandemic, coupled with encouraging trading performance after the first lockdown and positive consumer feedback gave us confidence to continue with the UK site roll-out strategy we outlined in July 2020. During the year and subsequently, we expanded our Escape Hunt branded owner-operated estate by 89% from 9 to 17 sites, inclusive of the acquisitions of our Middle East master franchisee (“EHE LLC”), and French and Belgian master franchises (“BGP”) which brought sites in Dubai, Paris and Brussels into our owner-managed estate respectively. All three of these were previously franchised sites.
We opened a new site in Norwich on 23 September 2020. The site had originally been planned to be opened in the spring, but had to be delayed when all capital expenditure was put on hold and construction work was halted in the first national lockdown. We were delighted with the performance of the site in the few weeks during which trading was permitted, as performance was in line with a number of our mature sites.
Basingstoke was opened on 29 October 2020 only a few days before the second national lockdown came into force on 3 November 2020. Trading in its opening three days was the strongest of any of the Company’s new sites to date.
A new site in Cheltenham opened on 3 December 2020. Early trading was encouraging, although the tiered restrictions and subsequent closures in the run up to Christmas curtailed any meaningful launch.
Two additional sites have been able to open in the week beginning May 17 2021. Watford was completed and was due to open before the year end, but was prevented from doing so by the COVID-19 restrictions. Kingston too is now complete, and at both we have newly recruited teams that are excited to begin welcoming customers.
Work is soon to begin on a unit in Lakeside shopping centre in Essex, where Escape Hunt has carved out 4,000 square feet in a space that was previously trading as Market Halls. Lakeside is a very high dense and popular retail and entertainment destination, and the business will be well positioned amid some strong adjacent operators. The site is expected to open in Q4 2021.
Additionally, we have also ordered games for a further site, most likely Milton Keynes, where we have agreed heads of terms and are in the final stages of legal agreements.
Government support through COVID
A total of 152 employees in the Group were registered on the UK Government’s Coronavirus Job Retention Scheme (“CJRS”) at some point during the year to 31 December 2020. Of these, 145 were employed within the owner-operated segment. The total benefit received from the CJRS during the year was £756k, of which £699k is attributable to the owner-operated segment.
Importantly, the ‘flexible furlough’ version of the scheme was critical in ensuring that sites were able to make a positive contribution when they re-opened but remained subject to restrictions. This flexibility led us to re-examine our service contracts to ensure that the business will be able to manage fluctuations in revenue better in future, when the scheme will no longer be in place. In November we implemented changes which have enabled us to convert over 80% of what were previously fixed costs to variable costs. This change will result in lower break-even points at all our UK sites and ultimately should lead to higher operating margins as a result of the better flexibility the changes afford.
The pandemic has been extraordinarily tough on all kinds of businesses and people, and many of our owner-operated employees have spent a large proportion of the year on furlough, facing uncertainty about the future. However, I have been humbled by the loyalty and dedication shown by our teams, and am delighted to welcome everybody back to once again delight our customers as we reopen.
Franchise network
Our franchise network has had a broadly similar experience of 2020 as our owner-operated segment. Whilst the impact of the pandemic has differed regionally, turnover from our franchise network fell 46% to £0.6m (2019: £1.1m), whilst EBITDA from the segment fell 18% to £297k (2019: £361k).
In total, we estimate that our franchisee base lost 40% of their potential trading days in 2020 to government mandated closures, whilst a further 42% of trading days would have been impacted by some form of COVID-19 restrictions.
The pandemic has put many of our franchisees under tremendous financial strain. In some parts of the world there has been little or no financial assistance. Sadly, as a result, a number of our franchisees have closed permanently, including Amman and Jeddah, and since the year end, two sites in Buenos Aires look certain to close. Dubai became an owner-operated site, joined by Paris and Brussels post year end. At the date of writing, we have 29 franchise sites in the estate.
Given the uncertainty from the pandemic, there was little we could do by way of direct financial assistance to our franchise network. However, we have provided support by way of relief against fixed fees whilst franchisee sites have been closed and, in addition, we have made our digital and remote play propositions available to the network. Where taken on by the franchisees, these remote-play products have contributed meaningfully to their respective underlying performance.
In the USA, progress was slowed by the pandemic, but we have nevertheless moved forward. We achieved an important milestone when our first US franchise disclosure document was filed in December 2020. This enables our area representative, PCH through its subsidiary GoXperia, to begin selling proactively. Since the year end, we have held our first ‘discovery day’ for potential franchisees and conversions in the US, and the pipeline of potential franchisees is beginning to build. GoXperia has recruited a senior brand director to augment its team and we remain optimistic about the potential for the region.
During the year we have invested in our communications and user journeys for franchisees, introduced new global communications tools and forums, improved the user experience on our websites, introduced country level homepages and made other enhancements to the service provided to the network.
With the majority of our existing franchisee base now converted to the catalogue approach and our improving level of interaction and communication with the network, we are again beginning to look at opportunities to expand our franchise estate, and plan to leverage the capabilities and experience which have joined the Group through our Middle Eastern, French and Belgian acquisitions. Whilst the size of the network has reduced during the pandemic, it has been pleasing to a number of sites recording strong recovery performances in the early months of 2021. We have seen sites in both the Middle East and Australia performing at record levels. We believe that the changes made during the last year are a step towards significantly improving the level of service we provide our franchisees and will, in time, lead to a stronger, larger and more profitable network.
Content strategy
A year ago we outlined our strategy to broaden our customer mix and to create games which are not constrained by the size and capacity of our physical sites.
During the year we introduced three new remote-play formats including print-and-play, ‘zoom-in-a-room’ and digital games. In total, our remote games generated £230k of revenue within our owner-operated network. Of this print-and-play contributed £94k and £21k came from ‘zoom-in-a-room’. The balance of £115k was almost all earned in December, shortly after launching our digital products aimed predominantly at the corporate market as part of our EH for Business proposition.
We currently have 20 remote play products in the portfolio which we intend to expand further.
We have made progress in building our product set for EH Retail. As mentioned above, the downloadable print-and-play games have proved successful and are aimed predominantly at a retail audience. Whilst we launched our first virtual reality rooms in December 2019 at our site in Birmingham Resorts World, the onset of the pandemic has meant that it is still too early to judge the full potential of this format. We have nevertheless established VR rooms at all our new sites opened since then, bringing the total number of VR rooms that will be open in May to 7 and eagerly await for the return of customers. We have also invested in the outdoor formats, utilising the software license signed in the Autumn, which enables us to develop our own content for outdoor games.
The success of our digital products in particular, has advanced our EH for Business proposition. In December we were delighted with the response from corporates and now have a truly scalable proposition. In the run up to Christmas performance surpassed our expectations, as we received over 200 bookings, comprising over 1000 corporate teams and 6000 individuals. The largest single game had 347 people playing, split between 57 teams playing from multiple countries.
EH for Brands saw a major success in September when we secured an agreement with Netflix™ to develop a game based on the Netflix™ original film, Enola Holmes©. The game, which was free to download, led to c.19k downloads from individuals, many of whom have since returned and purchased other Escape Hunt products. We also launched a Doctor Who themed print-and-play game, “The Hollow Planet” in conjunction with the BBC. This followed the launch of our newest Doctor Who escape game, “A Dalek Awakens”, which was launched just before the pandemic struck in March 2020. We plan to roll out further instances of “A Dalek Awakens” at a number of our new sites.
We are in discussions with other IP owners about forming partnerships which make sense for both parties, and believe that there is a role for these types of opportunities. However, we have also found that games built around IP that is out of copyright, such as Aladdin and Alice in Wonderland, have proved hugely successful and are much more cost-effectively deployed. We therefore expect to continue with a product portfolio which has a mix of genre, copyright-free IP and bigger brands.
Strategic progress and objectives
In June 2020, the Board set out a five point plan for value creation which was implemented following our fundraising in July 2020. As set out above, significant progress has been made in all aspects of the plan since then, placing the business in a substantially stronger position to benefit from any recovery in demand when COVID-19 restrictions are lifted.
The progress since July 2020 under each of the five components of the strategic plan is summarised as follows:
1. Roll out of owner operated sites
· 89% increase vs 2019 in the size of the Escape Hunt branded owner-operated estate, including sites acquired and completed post 31 December 2020
o 5 sites completed in the UK
o Acquisition of the Escape Hunt Middle East master franchise, including Dubai as owner-operated site
o Post year end acquisition of BGP Escape and the resulting addition of the Paris and Brussels sites to the owner operated estate
· Heads of terms signed for Milton Keynes; games ordered
· Lakeside due to open in Q4 2021; work commencing shortly
· Expect to achieve target of 20 owner-operated sites by end of 2021, six months ahead of plan
2. US Franchise network progress
· Franchise disclosure document filed in December 2020
· Decision to use the Houston site as the ‘master site’ and education centre for North America
· Two instances of the new generation games have been ordered and are in transit to be installed in Houston. A pipeline of both new and potential conversion franchisees is now in active development
· Two ,discovery days’ held with potential franchisees
3. International Franchise network progress
· Acquisition of Middle East master franchise
· Acquisition of France and Belgium master franchises
· Australian franchisees moved to catalogue approach with new terms
· Majority of French franchisees extended to 2027 and moved to catalogue approach
4. New products and markets
· Launch of first remote-play products, generating £230k revenue in 2020
· Proof of concept for large scale, scalable products
· Development of ‘Escape Hunt for Business’ concept
5. Investment in Infrastructure
· Completion and implementation of software with allows games masters to manage multiple games at the same time at new sites
Whilst a number of other projects to improve efficiency and improve scalability have been identified, the Board intends to delay further work on these until COVID-19 restrictions are lifted.
Strategic objectives for 2021
The Board plans to build on the success in progressing the strategic objectives in 2020 and believes that the focus for delivering growth by continuing to focus on the same objectives. At the same time, property market conditions in the UK are increasingly favourable for those seeking to take on new space and we are therefore actively looking at ways in which we can capitalise on the opportunity and build our platform to cater for the growing demand for experiential leisure activities and engagement. We believe there will be opportunities to expand the range of products and markets we serve in the wider experiential market.
We have taken steps to ensure that we can continue to pursue our strategic objectives notwithstanding the continuing uncertainty over the ongoing impact of COVID-19 on our trading, or the possibility of a further temporary lockdown and have therefore established a £1.0m convertible loan note facility with one of the Company’s non-executive directors, John Story. The availability of this facility ensures we can continue to commit to capital expenditure in new sites such as Lakeside and Milton Keynes without the need to preserve cash in the event of further, unforeseen adverse impacts from COVID-19. There is no obligation to draw any of the facility. Details of the facility are given in note 35 of the consolidated financial statements.
Our key performance indicators by which we monitor progress and performance are set out in the Financial Review below.
Outlook
The pace at which the vaccination programme is being rolled out in the UK and the reduction in cases attributable to COVID-19 together with the fact that our UK sites have been able to open on 17 May 2021 sets a positive outlook which we have planned for. Many economic commentators are expecting a strong recovery in the UK economy in the second half of the year, which would be positive for Escape Hunt. As mentioned above, evidence on re-opening after the 2020 spring/summer lockdown was very encouraging and, as a result, the Board is hopeful that both consumer and corporate demand will return strongly when the restrictions are lifted. At the same time, property market conditions in the UK are increasingly favourable for those seeking to take on new space. We have already been able to benefit from these favourable conditions in recent property negotiations and the Board is actively looking at further ways in which the Company can capitalise on the opportunity and build on the platform to cater for the growing demand for experiential leisure activities and engagement.
Within Escape Hunt, we are confident we can build on the progress we have made in our owner-operated estate, and look forward to working closely with our new colleagues in France and Belgium and the UAE. We believe all these acquisitions will contribute meaningfully in future. Progress in the US remains encouraging, and our challenge now is to provide the level of support to allow it to reach its true potential, which itself could be transformational for the business as a whole.
Finally, the significant progress made by the Company in establishing digital and other play-at-home products has provided a new, scalable revenue stream and growth opportunity, which we expect to remain an important part of our product suite in the future.
As a result, notwithstanding the continued uncertainty that the coming weeks and possibly months hold for the whole leisure industry, the Board has reason to look forward with cautious optimism.
Richard Harpham
Chief Executive Officer
17 May 2021
