XP Factory’s Q3 update is mixed and necessitates a reset: Escape Hunt remains the standout performer, while Boom continues to soften amid sector-wide pressures. We rebase FY26 EBITDA to £5.5m (-35%), which we view as a conservative floor ahead of consolidation in FY27 and growth in FY28. While the reset is significant, it provides a clearer base for the strategic framework the incoming Chair will define. The appointment of James van den Bergh, CEO of TruFin plc, adds a proven strategic and capital-allocation lens, shaped by his work with Playstack and Oxygen Finance. Clearer direction is expected in the months ahead. Reflecting divisional divergence, we move to a SOTP framework and set a new 12-month target price of 20p. On revised forecasts XPF trades on 6x FY27 EV/EBITDA with a 9% FCF yield. Some volatility is likely, but the reset is necessary and constructive, with EH’s structural value and a sharper strategic lens offering meaningful upside on a 12m view. We stay at Buy.
