Momentum at XP Factory has remained strong leading to a positive H1 update. This has been driven by high double-digit LFL performance from both brands and margin progress. New openings are on track, July has been strong and H2 corporate / group bookings are at record levels. This underpins confidence in meeting FY market expectations. We maintain our forecasts and believe the update provides further proof points to XPF’s attractions. Management is executing well, consumer trends remain in favour of low-ticket experiential leisure and trading is proving resilient. We retain our Buy and 32p TP. Shares are excellent value, trading on an undemanding FY23 EV/EBITDA of 5x with a 21% FCF yield (pre expansion capex).
