Escape Hunt : UNAUDITED CONDENSED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2021

ESCAPE HUNT PLC

Registered number 10184316

UNAUDITED CONDENSED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2021

Contents
FINANCIAL AND OPERATIONAL HIGHLIGHTS.........................................................................................	3
CHIEF EXECUTIVE'S REPORT ..................................................................................................................	5
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE CONDENSED INTERIM
REPORT AND CONDENSED FINANCIAL STATEMENTS ............................................................................	11
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..........................................	12
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...................................................	13
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ....................................................	15
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................	16
NOTES TO THE UNAUDITED INTERIM REPORT ......................................................................................	17
COMPANY INFORMATION .....................................................................................................................	26

28 September 2021

Escape Hunt plc

("Escape Hunt", the "Company" or the "Group")

Half Yearly Results for the Six Months ended 30 June 2021

Escape Hunt plc (AIM: ESC), a global leader in the growing escape rooms sector, is pleased to announce its unaudited interim results for the six months ended 30 June 2021.

	Half year ended 30	Half year ended 30
	June 2021 (£'000)	June 2020 (£'000)
Revenue	1,178	1,306
Gross Profit	801	900
Adjusted EBITDA1loss, pre-IFRS 16	(796)	(816)
Loss per share	(2.81)	(11.48p)

HIGHLIGHTS

• Strong post lockdown bounce back from UK sites whichre-opened on 17 May 2021
  oH1 revenue £1,178k with UK sites open for only six weeks in the period (H1 2020: £1,306k from c.11 weeks UK trading)
  oSite level EBITDA for the half year £441k (H1 2020: 499k)
  oImproved EBITDA conversion ratios benefitting from technology investment and labour changes
• Downloadable and play at home games continue to be additive, contributing £151k in the period (H1 2020: £53k)
• Adjusted EBITDA loss in the half year reduced to £796k (HI 2020: £816k)
• Basic loss per share ('EPS') of 2.81p (H1 2020 loss per share: 11.48p)
• Dubai acquisition performing ahead of expectations with payback expected in less than 12 months
• Completion of £1.4m placing of new shares at 17.5p per share to fund acquisition of master franchise in France and Belgium and provide working capital
• New UK owner operated sites opened in Watford and Kingston on 17 May 2021 bringing total UK owner operated sites to 14; further sites secured and in build at the Lakeside shopping centre in Essex and in Milton Keynes. This brings us to 16 owner operated sites in the UK and 19 in total

POST PERIOD-END HIGHLIGHTS

• Strong bounce back in sales continuing
• Mature LFL sites delivering 117% ofpre-COVID (2019) sales with total sales (including new sites) delivering 192% of 2019 level in the 16 weeks between re-opening and 5 September 2021
• July and August both profitable at Group EBITDA level (even stripping out UK Government COVID support) which validates our previous assertion that with the existing estate, the Company could become cash generative over a full year
• All owner operated sites trading with positive contribution
• On track to be operating from 20 owner operated sites well ahead of target of July 2022

1See Consolidated Statement of Comprehensive Income for reconciliation to operating loss

• Build finally commenced at US franchise 'super centre' in Houston after considerableCOVID-related delays
• Awarded TripAdvisor™ Traveller's Choice awards at all eligible UK sites for second year in a row
• Strong cash management ensured cash balance of £2.4m at 30 June 2021 (31 Dec 2020: £2.7m) and £2.4m at 31 August 2021
• Receipt of further £0.95m (net of advisory fees) R&D credits from HMRC in September 2021 which will be recognised in H2 2021 (H2 2020: £0.2m) further boosting cash resources

Richard Harpham, Chief Executive of Escape Hunt, commented:"It has been extremely pleasing to see such a strong bounce back of consumer demand in the UK over the summer. Encouragingly, we are now beginning to see an increase in corporate activity which we expect to show further growth asoffice-basedwork begins to return over the Autumn. Our acquisitions in both the Middle East and France / Belgium are performing well and we believe they will generate a very attractive return on investment underpinning our international franchise efforts whilst our new sites have all traded profitably virtually from day one. It is clear that escape rooms have now entered the mainstream consumer psyche underpinning confidence in our strategy and the significant strategic progress made in the last 18 months. Notwithstanding the incredibly tough conditions for the leisure industry during this period, the Company has emerged stronger and with a platform with significantly greater critical mass. We look forward with optimism."

Enquiries
Escape Hunt plc	[phone]
Richard Harpham (Chief Executive Officer)
Graham Bird (Chief Financial Officer)
Kam Bansil (Investor Relations)
Shore Capital - NOMAD and Joint Broker	[phone]
Tom Griffiths, David Coaten (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Zeus Capital - Joint Broker	[phone]
John Goold
Daniel Harris
IFC Advisory - Financial PR	[phone]
Graham Herring
Florence Chandler

About Escape Hunt plc

The Escape Hunt Group 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. Its products enjoy consistent premium customer ratings and cater for leisure or teambuilding, in small groups or large, and are suitable for consumers, businesses and other organisations. Having been re-admitted to AIM in May 2017, the Company has a strategy of creating high quality premium games and experiences delivered through multiple formats and which can incorporate branded IP content.

CHIEF EXECUTIVE'S REPORT

INTRODUCTION

It has been very encouraging to see the return of consumer demand as COVID restrictions have lifted in both the UK and many of the other regions in which Escape Hunt operates. While recognising that the pandemic is not yet over, we are hopeful that, with the success of the vaccination programme, life can resume without the need for further economically damaging restrictions.

The strong performance of our franchisee Escape Rooms in Australia in the early part of the year when Australia initially came out of lock down gave us optimism that demand would return in the UK and Europe once sites were allowed to re-open. We were correct in our expectation that demand would take a few weeks to return to full strength and we have been delighted to see that it continued to build through July and August to very encouraging levels. It is increasingly evident that Escape Rooms have entered the consumer psyche and it is now becoming a natural consideration of 'things to do' alongside more traditional leisure activities. We see this as part of a growth trend in experiential leisure.

Perhaps one of the most satisfying aspects of the recent performance has been the energy with which our staff have returned to work and the resultant five-star consumer ratings all our sites in the UK enjoy, including our newly opened sites. In August 2021, all the UK sites which had been open for more than a year, and therefore eligible for consideration, received the prestigious TripAdvisor™ Travellers' Choice awards, placing them in the top 10% of businesses listed on TripAdvisor™.

We have made further strategic progress in the period, which we discuss in more detail below. Significantly, we added to our owner operated estate through the acquisition of our French and Belgian master franchise which gave us an owner operated site in both Paris and Brussels. We also opened two new owner operated sites in the UK in Watford and Kingston respectively and we are in the process of building two further sites - one at the Lakeside shopping centre in Essex and one in Milton Keynes. Given the excellent returns we are achieving on new sites, we are actively evaluating a number of further sites helped by favourable property conditions.

The performance of our owner operated estate since re-opening has further demonstrated the attractions of our business model. The estate as a whole has outperformed against our target 'box economics', whilst still showing growth. The site level EBITDA margins we are achieving, notwithstanding the short-term help from a lower VAT rate and business rates holiday, have been particularly encouraging.

Within our franchise estate, different countries have been affected in varying ways. However, overall, the estate has performed well and, whilst we have lost a small number of sites which have been forced to close as a result of financial hardship under COVID, it is pleasing to see those that have survived performing again with a number registering record weekly revenue performances.

There is a significant opportunity both in the UK and more widely in the retail property market and we believe that Escape Hunt is well positioned to take advantage of the more attractive terms on offer. In turn, we expect this to make future sites even more financially attractive than before. With our 'box economics' now unequivocally proven and the evidence that consumers enjoy the Escape Hunt offering, the Board looks forward to the next phase of our progress with optimism.

OWNER OPERATED SITES

The owner operated estate comprised 17 sites at the end of June 2021; 14 sites in the UK and 1 in each of Paris, Brussels and Dubai. Total owner operated revenue in the period fell by 8% to £936k (H1 2020: £1,017k), although both periods were severely impacted by lockdown restrictions and the periods are therefore not easily comparable. Site level EBITDA fell 12% to £441k (H1 2020: £499k).

UK

The UK estate re-opened to the public on 17 May 2021, following a protracted COVID lockdown enforced by the UK Government. As a result, the reporting period includes only six weeks' trading where physical indoor games were available. Trading since re-opening has been very encouraging. Although there has undoubtedly been a 'post COVID bounce', the duration of which is unknown, there has to date been a low level of corporate bookings