Brait PLC (BAT) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Brait Interim Results Presentation. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn it over to Mr. Peter Hayward-Butt. Please go ahead, sir.

Thank you, Chris. Thank you very much to all of our investors who've taken the time today to listen in. It's been an extremely busy period, and I think there's a lot of information to get through. So obviously, I won't nor Mark try and talk to every slide but more to give you an overview and then be happy to take questions at the end. Starting with Page 4, for those of you following it on the screen. To give you an overview of the performance, it's been, as I mentioned, a very busy 6 months, pleasing in many respects but obviously very difficult given COVID and many others. I think we started off the 6 months setting operational and strategic resets across the various portfolio companies, sitting with management, aligning behind the new exit strategy and ensuring that we had incentives and management alignments in place around that. And that's gone extremely well. I think across all of the portfolio companies, we're now in a position where we have a very aligned management team, a management team that recognizes we are on a divestment strategy over the next 3 to 5 years and that the story really is about value maximization over that period of time. The COVID response, obviously, when it hit, we -- I think we took over on the first of -- as Ethos took over on the 1st of March, I think the sort of first casualties of COVID started to come in the middle of March. So pretty much the last 6 months has been a significant COVID response in assessing the risks that COVID had for each of the individual businesses, and some of them were opportunities as opposed to risks. But understanding that from a liquidity perspective and what the requirements were in the businesses was key. And then finally, look, assessing where the opportunities were that came out of COVID and looking 2 to 3 years down the line. So again, spent a huge amount of time with management on that. And again, I think there have been some pleasing opportunities that have come our way. But obviously, we dealt with some very significant issues particularly around the Virgin and New Look businesses, which have been closed for a significant portion of the 6 months that we operated. And then very importantly, the divestments in the portfolio, about ZAR 2.8 billion of exits happened over the last 6 months. DGB was sold pretty much at the NAV that we held the asset. And very pleasingly, Iceland was sold for just about ZAR 2.3 billion, which is a significant premium to our value in the books. So the exits have gone relatively well, and those proceeds have been used to pay down the debt at the Brait level. And then finally, with the management teams, developing exit theses, understanding where we want to take the businesses, what do the businesses need to look like to maximize the exits has been another key theme that we spent a huge amount of time with the portfolio companies. Moving on to Page 5, just quickly on liquidity management. There have been a very significant reduction in gross debt, nearly ZAR 5.6 billion of debt repaid over the period of time, and a very significant reduction in net debt as well from ZAR 4.6 billion as of March down to ZAR 2.7 billion largely as a reflection of the disposals that we did during the course of the last 6 months. There's also been a very significant focus, as we mentioned at the time we took over, on cost reductions in the -- across the Brait infrastructure. Very pleasingly, over that period, we managed to reduce costs by -- in excess of ZAR 500 million on an annualized basis. The team integration between Brait and Ethos has gone very well. And credit to the Brait team for that. And we've put new -- a new Board in place in the last 6 months as well. It's starting to work. We've had 2 or 3 Board meetings with them, very constructive from the new Board members and the old Board members and, I think, very importantly for shareholders, at a very much lower cost, circa 50% less in terms of Board costs year-on-year. And then just the last point which we put on the slide here is the adviser volunteered to the Board last week to reduce its advisory fee. What we did when we took over as Ethos at the back end of -- well when we agreed the deal at the back end of 2019, early 2020, as we said, if we could achieve any synergy benefits from putting the 2 teams together, we would reflect that in a low management fee to shareholders. And we've agreed or volunteered to reduce our management fee as Ethos next year from ZAR 105 million down to ZAR 90 million on an annualized basis, which results in an overall saving of about ZAR 21 million, including the voluntary reduction we had to our advisory fee in the last quarter. And just to reflect, I think from the peak of the management fee of about just north of ZAR 250 million, we think that is a relatively significant saving for shareholders. Just moving on to briefly giving you an overview of the portfolio companies, we'll go into these in a lot more detail, but to give you a helicopter view quickly. Virgin Active, the clubs we opened across Italy, Thailand, Singapore, pretty much in the sort of Australia, the U.K. and then South Africa, different points of the year. Usage levels have grown gradually across all territories as membership engagement has improved. And we think that's very important as a precursor to how the members are seeing the offering. How many members come back and use it is obviously a pretty key indicator. Total members are down 11% since the 2019 numbers -- December 2019 numbers with active members, and those are members who are not currently on freeze, down by 33%. So we still have about 25% of our membership base on freeze as at September. By freeze, we mean those are members who haven't terminated their membership but have decided not to come back to gym. And in many of the territories, they remain on a free freeze. Despite the positive performance indicators, i.e., the usage and the -- so we still believe it's going to take somewhere between 18 and 24 months to get back to 2019 levels. And I think we -- obviously, a key concern for the business in terms of Virgin and New Look is the fact that across Europe, we're starting to see second-wave lockdowns. Obviously, it will have an impact on those businesses. We'll touch a bit on that later. And understanding how we get out of the second lockdown and obviously avoid a third lockdown when the vaccine comes is going to be a pretty key performance indicator for those businesses next year. Talking to Premier. Premier's had a very, very strong performance. We're very pleased with the performance. First half revenue increased 14%, EBITDA up nearly 21% despite pretty significant COVID-related costs that went through the business during the last 6 months. That performance has continued. We'll touch again in a bit more detail. And it's really been volume-driven, which is very important. This hasn't been about increasing prices. It's been about gaining market share across the categories and increasing volumes, which has been great. The strategy still remains to look for infill acquisitions in some of our underweight categories. We're relatively advanced on at least one of those, which we think will be -- which will be a positive for the group going forward. Iceland, we touched on. We sold that business to management during the course of the 6 months. Total proceeds received on that of about GBP 108.5 million, call it ZAR 2.35 billion. As I mentioned, it was about an 80-odd percent premium to where we held it in the books as at March. New Look. Pleasingly, the turnaround strategy was really starting to gain some traction pre the first lockdown. I think what COVID has done for that business has enabled it to really grow its e-commerce platform, and we'll touch a bit on that when we talk to the slides later on. And that has been a net positive for the business. We engaged in a capital restructuring of that business and a CVA program and managed to turn most of our rentals in that business into turnover-based rents, which I think really does set this business up both on a -- with the new capital going in, the restructured capital base plus the CVA process really does give us business optionality to grow once the second lockdown is closed. And Consol is a business that ramped up pretty quickly. It then had a second lockdown during the 6 months, came out of that probably 2, 3 weeks later and is currently ramping up to full capacity, which is pleasing and a credit to the management team in that. So if I have to just -- if I move to the executive summary slide just to give you an idea of what we're going to talk a bit about later. In terms of NAV per share, the NAV per share is down about 6-and-a-bit percent, 6.5%-odd to ZAR 7.71. There's swings and roundabouts as there normally are in these things. Premier performed very, very strongly and is up from a value perspective. Iceland, the realized proceeds were significantly up on where we held it in the books. And the real decline really around New Look, which you wouldn't be surprised about. And obviously, with Virgin as well going into a second lockdown, we've reduced the valuation of that business. Mark will go into a bit more detail on that later. And I touched a bit on the Slide 8 for those who are following it. The degearing there of ZAR 5.6 billion, with investment proceeds of about ZAR 2.8 billion, was very pleasing for the year. ZAR 508 million of annualized cost savings at a Brait level really does set the business up on a sustainable basis and a new trajectory for growth. Moving on to the Brait NAV. I'll let Mark talk to those slides.

Thanks, Peter. Good afternoon, everyone. On Slide 10, we've set out Brait's September 2020 NAV per share of ZAR 7.71, which represents a 6.8% decline compared to March's ZAR 8.27. The column on the right of the slide shows the carrying value movement for the current 6-month period, with note references covered in Slides 11 and 12 of the presentation. Looking at the breakdown of Brait's balance sheet at reporting date. Total assets of ZAR 16 billion is weighted 49% Virgin Active, 44% Premier, 5% other investments and 2% cash and accounts receivable. Total liabilities halved during the 6-month period from ZAR 11.4 billion to ZAR 5.8 billion and, at reporting date, largely comprises Brait's drawn borrowing facility of ZAR 2.7 billion, which has a February 2023 maturity date, and the GBP 150 million convertible bonds due December 2024, which are valued at ZAR 2.9 billion. The ZAR 5.6 billion reduction in liabilities for the 6 months is due to net repayments on the borrowing facility of ZAR 1.9 billion using realized cash proceeds from the portfolio together with the settlement of Brait's remaining 2020 convertible bonds, which used cash that was held in pounds following the February 2020 rights offer. The resulting NAV is ZAR 10.2 billion, which reflects a decrease of ZAR 733 million for the 6-month period, with NAV per share using Brait's 1.32 billion shares in issue at ZAR 7.71. Turning to Slide 11. This sets up an overview of the movements in investment carrying values for the current 6-month period. Note 1, Virgin Active, the ZAR 1.5 billion decrease in carrying value is due to a reduction in the maintainable EBITDA from GBP 108 million to GBP 100 million impacted by the later reopening of clubs in South Africa and the U.K. and membership reengagement. The valuation multiple is unchanged at 9x, whilst the peer spot average has increased over the period 39% to 15x. Net debt is essentially unchanged at GBP 441 million, which includes an GBP 82 million normalization for working capital and deferred costs as a result of coronavirus when compared to actual net debt of Virgin Active at September 2020 of GBP 359 million. The ZAR 942 million increase set out in Note 2 for Premier is largely a result of the 10% increase in the last 12 months EBITDA to September 2020, with Premier having achieved ZAR 1.1 billion of EBITDA. The valuation multiple is unchanged at 8x, whilst the peer average spot multiples increased over the period by 8% to 9.5x. Net debt has improved to ZAR 1.8 billion, which is post-Premier's ZAR 123 million shareholder loan repayment to Brait during the period. Turning to Note 3, Iceland Foods. As Peter mentioned, reflects an increase in value to Brait of ZAR 958 million for the current period. And this is represented by the ZAR 2.35 billion proceeds received as final consideration for the sale compared to the ZAR 1.4 billion carrying value at the 31st of March 2020. Key at Note 4, this reflects a decrease of ZAR 718 million when considering the movement in aggregate carrying values for the New Look senior secured notes, other investments and accounts receivable. The New Look SSNs were equitized on the 9th of November pursuant to the completion of New Look's comprehensive recapitalization transaction. Brait's resulting 18.3% holding of New Look shareholder loans and equity is valued at reporting dates using an earnings multiple approach and has been included in the other investments portfolio. The sale of DGB at the March 20 carrying value, which was higher than Brait's other investments, resulted in the receipt of the first tranche of realization proceeds of ZAR 370 million, with the remaining deferred proceeds of ZAR 100 million included in Brait's account receivable at reporting date. Turning to Slide 12. This talks to the net movements in cash and liabilities for the period. Note 5 sets out the aggregate decrease of ZAR 459 million, comprising the decrease in cash of ZAR 3.7 billion, which is largely due to the settlement of the outstanding 2020 convertible bonds during the period; the net decrease of ZAR 1.9 billion of Brait's drawn RCF; the decrease in accounts payable of ZAR 370 million, with September 20 balance comprising the GBP 7 million pro rata share of new money investment pursuant to New Look's recapitalization transaction, which was paid away in the 9th of November 2020, and the accrual of coupon on the 2024 convertible bond; and lastly, adjustment for the cash proceeds received from the sale of Iceland Foods, which we considered in Note 3, as discussed earlier on Page 11. Note 6 reflects the ZAR 46 million reduction in rand carrying value of the 2024 bond largely as a result of the rand having strengthened against the pound over the period. The aggregate of amounts discussed in Notes 1 to 6 gives the decrease in reported NAV of ZAR 733 million for the current reporting period. Turning to Slide 13, which sets out Brait's available liquidity, debt and covenants. Starts with opening cash of ZAR 3.9 billion, which, as I mentioned, largely comprised the cash held in pounds following the February 2020 rights offer. Brait received proceeds during the reporting period of ZAR 2.9 billion made up of 2.35 from the sale of -- ZAR 2.35 billion rather, proceeds from the sale of Iceland Foods; ZAR 370 million being the first tranche of DGB sale proceeds received; and ZAR 123 million shareholder funding repayment from Premier. Total expenses and tax paid during the period was ZAR 102 million. The purchase of investments of ZAR 376 million all relates to Virgin Active and comprises Brait's GBP 16 million pro rata shareholder funding injection in June 2020, which was given to support the U.K., Italy and Asia Pacific territories in navigating the impact of coronavirus; and GBP 1.2 million as a result of the exercise of put option agreements with certain members of Virgin Active's management team, which resulted in Brait's economic participation of Virgin Active increasing to 79.4%. Net cash outflows from financing activities of ZAR 6 billion comprised ZAR 3.7 billion settlement of the 2020 convertible bond, ZAR 1.9 billion net capital repayments on Brait's drawn borrowing facility and ZAR 380-odd-million finance cost paid, which was the coupon on the convertible bonds and interest service on the borrowing facility. Together with the FX translation loss of ZAR 76 million, this gives closing cash balance at reporting date of ZAR 200 million. In terms of borrowings at reporting date, in line with the BML RCF facility agreement, the reduction in utilization during the period resulted in the quantum of the facility decreasing from ZAR 6.3 billion to ZAR 4.4 billion as well as the interest rate decreasing from JIBAR plus 460 basis points to JIBAR plus 400 basis points. The available facility of ZAR 1.7 billion is in line with that at the beginning of the period. Including cash of ZAR 200 million, this results in total cash and available facilities of ZAR 1.9 billion, which is in line with the closing balance at the end of March 2020 when adjusting for the cash that was used to settle the 2020 bonds during the current period. The bar chart on the right of the page shows the progression of Brait's debt over the last 12 months. Starting with ZAR 12.75 billion, which was made up of the ZAR 6.4 billion drawn on Brait's RCF and ZAR 6.3 billion current liability for the 2020 bond. The second column reflects the March '20 closing debt position of ZAR 10.83 billion, which is made up of long-term liabilities of ZAR 4.6 billion drawn on the RCF and ZAR 2.9 billion for the new 2024 bond. The current liability of ZAR 3.3 billion, reflecting the portion outstanding for the 2020 bond. The third column reflects adjusted March '20 net debt position of ZAR 6.5 billion, with adjustment to eliminate the 2020 convertible bonds given that Brait held cash in pounds for that settlement as well as the reduced drawn balance on the RCF of ZAR 3.5 billion, taking account of the initial proceeds that we received in June 2020 from the sale of DGB and Iceland Foods. The fourth column shows the net debt position as at reporting date of ZAR 5.6 billion, comprising ZAR 2.9 billion carrying value for the 2024 bond, which has a conversion price of 52p. The draw on RCF balance of ZAR 2.7 billion having decreased by a further ZAR 850 million compared to column 3, being the receipt of GBP 48.5 million final early settlements of deferred proceeds from the sale of Iceland Foods less the accrual of interest and payment of coupon on the 2024 bond. Brait at reporting date is in compliance with all debt covenants on its RCF and convertible bonds. I'll hand back to Peter.

Thanks, Mark. So we'll move on to a bit of an overview of the key portfolio companies, starting obviously with Virgin. So just moving on to Slide, whatever this is, 15, I think it is. What we thought would be useful is to show you firstly the 9-month year-to-date update, although with all due respect, it's not that relevant given that for 4 to 5 months of that period, we have been closed. But for good reference purposes, we put it there. We'll talk a bit about it. What we've also tried to show you is some trend analysis on how the various territories performed during and then coming out of COVID to give you some idea of the recovery and the trend lines associated with it. So on the financial overview of the last 9 months. From a revenue perspective, revenue was around about 50% down year-on-year given that 4, as I mentioned, 5 months of the year, we weren't receiving revenue from -- in many of our territories. If you take Italy, for example, Italy was the first territory to open up. Italy's revenue is probably down 33% year-on-year reflecting that it opened up earlier than some of the other territories. Australia, Thailand and Singapore are somewhere between 35% and 44% down year-on-year. And the U.K., which is 58% down, is largely a reflection of the fact that, a, it spent more time in lockdown; and then b, since it's come out of lockdown, there have been higher terminations and freezes in that territory. From a South Africa perspective, it was locked down for the longest period of time out of the other territories. Its revenue is down 51% year-to-date compared to last year. From an EBITDA perspective, the 9 months to September last year had an EBITDA of about GBP 102 million. That's reflected now as a loss -- EBITDA loss of GBP 8.5 million, which is reflective obviously of the fact that this is a very -- it does have a high cost -- fixed cost base, this business. That said, from a revenue perspective, that was largely offset from a cost perspective by favorable rental costs. So across most of the territories, we've got very significant cost reductions, whether they be deferrals or permanent in nature across the rental cost base, very significant reductions in employment costs and further operating cost and CapEx reductions. And to give you some context to that, if you take the 2019 cost base and you move it forward to 2021 in terms of our forecast, around about GBP 30 million of sustainable savings has been stripped out of the cost base, which I think is a significant credit to the management teams across those territories going forward. Importantly, as we mentioned, from the perspective of when the clubs are closed, many of the costs can be effectively hibernated and put on us. And so the cash costs when a particularly territory is closed is about 2/3 of the normal cash costs -- sorry, the saving is about 2/3 of the normal cash costs in any particular territory. Just moving on to give you a bit of a deeper dive into the various territories. Starting with Italy, which is around about 20-odd percent of the 2019 revenue base in the business. That business was reopened in May, which, as I mentioned, was probably one of the first territories to reopen, very strong membership engagement and retention there. Usage levels remained very strong, peaked at about 68% just before the second lockdown. And actually in Italy, some of the constraints was more driven about the 50% capacity restriction that the government had imposed on various clubs than it was around the membership base coming back. A very successful launch of Revolution, which is their digital content in September, already have more than 10,000 members signed up. We'll talk a bit more of that in -- later on. But really, that was a significant achievement by the management team during this period. The clubs are now closed. The Italian government closed them down on the 26th of October alongside the second national lockdown. They talk about an opening date of the 24th of November. To be honest, I think it's likely to be probably closer to early into the new year rather than November. But the date that we have currently is the 24th of November to reopen those clubs. And talking about Australia. Australia opened 8 of its 11 clubs. Some of its clubs in Melbourne remain closed until very recently. There was very strong membership engagement. Usage levels, more than 80%, especially in the suburban clubs. So inner-city clubs under a bit more pressure just as people didn't return to work in city, but the suburban clubs had very strong membership engagement. The lockdown restrictions in Melbourne have been lifted, and the clubs have opened very recently in Melbourne. So all the clubs are now opened except for one Sydney club, which we are using as a studio. The digital offering has also been launched, and it will complement the physical experience. And I think that does really give the ability to cross-sell into the membership base that we currently have in Australia. Thailand and Singapore, they all reopened in about June across Thailand and Singapore. Very strong membership engagement with Thailand, very low terminations, no freeze. I think it was largely because Thailand was less impacted by COVID. Very high usage in Singapore actually. Ironically, despite the significant number of members still on freeze, the usage levels in Singapore remain very high, and we've seen the freeze level start to come down. And a very strong operational performance in the new clubs. You'll remember this time last year, we had spent a bit of money on those clubs. And we were hoping that they would develop, and they have continued to do so. So the growth in the developing estate has been a very positive part of the performance. They launched the digital+ offering in both markets relatively recently and are getting good traction on that as well. The U.K., which is about 28% of 2019 revenues, it reopened quite a lot later than we had expected. We've got 36 clubs that are opened on the 26th of July. Seven inner-city clubs in London remain closed, and it's largely because many of the members -- well, most people haven't started to return to work. Very low numbers have started to return to work in inner-city London. So we've kept some of our clubs closed in inner-city London. There were also higher terminations and freeze levels especially in London. I think the London freeze levels were significantly higher than our suburban areas, which again is a reflection of the fact that, a, some of our clubs are closed; but, b, more importantly, people probably haven't returned to work in London. There have obviously been different changing competitive dynamics in that market. I think we've talked a bit before about some of the boutique casualties. The high-end boutique operators have really been a significant casualty of COVID. That said, there has been a lot of trading down, a decent amount of trading down to low-cost operators who offer less contracts or no contracts than sort of the more premium players where Virgin Active is playing. The impact of the second wave is obviously still uncertain. We will see -- this, it's probably -- we closed from the beginning of November. I think the open date is the 2nd of December. And from our -- what we read in the market, that's probably likely to be the case that the U.K. will open sometime in early December. From a South Africa perspective, South Africa, which is 38% of revenue but obviously a much more significant contributor to profits, reopened on the 24th of August in addition to the 2 clubs in Namibia and Botswana, which has opened in June. It's been slow but very steady membership engagement. The usage levels are now up at north of 57%, which is very positive. And I think the contract nature of most of the South African membership base has been a positive for the business. A lot of members still remain on freeze. That number is about just over 27%. I think the number is as recently as today. And what we had offered all those members until the beginning of November, there would be a free freeze for members. From November, to the extent you want to remain on freeze, there's a number you have to pay. It's about 20-odd percent for the public members of their membership fee. So the focus there really has been around improving the offering around digital as well. And again, we're pleased that it has been launched. I think it's still got some way to go, but we're pleased with some of the uptake and the customer feedback on that. Just moving to Slide 18, just pictorially to give you a view on the various territories from a total membership, an active membership, which is effectively the members that are paying you, and a usage perspective. As I mentioned, Italy's total membership in February pre-COVID was about 170,000 members. That is reduced by about 16% down to 142,000. Its active members moved from 165,000 as at February down by 21% into September at 130,000. But you can see the usage levels remained relatively high post-lockdown. From a U.K. perspective, total members down about 26% from 188,000 to 138,000 members, and from an active membership base, which is probably more important, from 182,000 down by about 40-odd percent to 107,000. That said, if you look at the usage stats on the right-hand side, there has been positive membership engagement since August when it opened up at the back end of July. And we're seeing those -- pre the second lockdown, those were continuing to trend in the right direction. From an Asia Pacific perspective, as I mentioned, the usage levels remained very high, somewhere between 90-odd percent in Australia down to 82-odd-percent in Thailand or in Singapore. So that was very pleasing. And from an active membership base, the membership base is down somewhere between 25 and 30-odd percent across those territories. But we started to see sales pick up in that territory. From South Africa's perspective, the total membership base dropped only by 7%. And that's largely as a reflection of the fact that many of the members were allowed to remain on free freeze. From an active membership perspective, it moved from 734,000 down to 482,000, which is a 34% reduction. But that is definitely trending in the right direction. And as I mentioned, the free freeze came to an end at the beginning of November. And we're starting to see an unfreeze of some of those members and heading in the right trajectory. So when we opened up in South Africa in the first couple of weeks of August, we had 7% usage. That has grown to north of 57% in terms of the latest numbers. Just a quick slightly deeper dive into Italy and its operating performance. On the top chart, what we show is the month-by-month active members and the usage. So just starting at the top chart of 166,000 members as at January, you can see what obviously happened in March and April whilst it was closed. It came back at 147,000, but obviously, there were a number of members who remained then on freeze and didn't continue to pay. But by September, that number was back to 130,000, which is about 82% of the prior year active membership base. And importantly, on the right-hand side, terminations were actually lower year-on-year, somewhat surprising, 13% lower than they were year-on-year but obviously a relatively significant increase in the number of members on freeze. So 9% of the total membership base in Italy as at September remained on freeze. From a revenue perspective, again, you can see what the business generates in pounds, millions of pounds. So about GBP 11 million a month is what the business normally generates. As at September, it was already back to GBP 8 million. So very positive from a trajectory perspective. And from an EBITDA perspective, in the bottom chart, what we try to show is broadly what the businesses made leading up to the closure. The closure period was April, May for Italy. You can see the negative EBITDA during that period. But very pleasingly, since the end of the last 4 months have been EBITDA positive from an overall net contribution to EBITDA. So again, a relatively decent bounce back. Things were trending in the right direction. As I mentioned, this business has been subject to a lockdown recently, second lockdown. Talking to the U.K., the story is quite different here. As I mentioned, active members of about 182,000, drop down -- over that 4- or 5-month closure period, dropped down to about 108,000. And that number has remained relatively constant since then. And I think that's a reflection of a couple of things. You'll see the 9% higher terminations as opposed to Italy year-on-year, which was lower; and secondly, a very significant number of members remaining on freeze. And I'd say at least half of those are London-based members where the clubs remain closed. From a revenue perspective, this business makes somewhere between GBP 13 million and GBP 14 million. We made GBP 13 million to GBP 14 million of revenue in any particular month. And as at September, you can see how it's clawed its way back to probably 2/3 of those levels at about revenues of GBP 8 million a month. And from an EBITDA perspective, obviously, relatively significant EBITDA losses during the closure period. But very pleasingly, when it came out of the lockdown, it only took 1.5 months to become EBITDA positive. Moving to Asia Pacific where we've grouped the Asia Pacific region. Again, going into lockdown with about 70,000 active members. It was around about a 3-month lockdown in the various territories. It opened up at about 58,000 and has remained relatively constant. So 53,000 active members, which is around about 81% of prior year. Yes, across the different territories, about 13% higher terminations year-on-year, so more akin to what happened in the U.K., with about 13% of the members still remaining on freeze. So those are members that are still active from a participation in the business perspective, but they're just not paying and they're not coming back to the gyms as at yet. From a revenue perspective, this is a business combined that makes around about GBP 7 million of EBITDA, EBITDA I wish -- GBP 7 million of revenue per month. And it's clawed its way back to -- not far from those numbers at about GBP 5 million a month as at September. Again, from an EBITDA perspective, you can see the closure impact of negative EBITDA during those 3 or 4 -- 3.5 months. But very pleasingly, this is a business that wasn't EBITDA positive last year. And you can see in the last 3 months of the year, there's a positive contribution to EBITDA across these 3 jurisdictions. And then lastly, on Virgin Active territories in South Africa. From a South Africa perspective, we went into lockdown with about 734,000 members. These are active members. That number is about 482,000 as we speak. But in November, we've seen a number of those members that were on freeze unfreeze. So that number is obviously -- is significantly higher now than it was as at September. But interestingly, from a terminations perspective, very much lower terminations year-on-year. And I think it does talk to the solidity of the membership base, so 27% lower year-on-year terminations but a lot of members, as I mentioned, as at September remaining on free freeze. From a revenue perspective, this business makes somewhere around GBP 20 million, depending on the currency obviously, of revenue. And very pleasingly, as at September, it was already back to GBP 13 million, and the trajectory was definitely in the right direction and continues to be in the right direction for this business. But you can see the impact on EBITDA for the closure period. This business was closed for nearly 5-and-a-bit months. And if you look at the September EBITDA, a very significant contribution, again, back to the group, which was positive. And we would hope to see that continue. Just before we move off on Virgin Active, I think one of the key things that has come out of the last 6 months of COVID has been the focus of the business on digital. Revolution is a business that we've grown out of our Italian business. It talks to the digital content. It's effectively the digital content that drives the Italian business. So I just want to focus on that. They've probably been maybe a year ahead of the curve both in terms of their competitors in Italy but also the rest of the Virgin Active group. But very, very pleasingly, they launched in September, already have 10,000 or 10,500 new members. These are not members that we had before as existing members. These are new digital members, who are charged around about EUR 15 a month. So call it about just under GBP 2 million of revenue, incremental digital revenue per month. But probably even more pleasing is, if you look at the charts below, in terms of the membership type. So on the left-hand chart, the new members, 77% of them are new members as opposed to existing members that have taken up a digital offering. So again, these are new members that we're reaching outside of the catchment area of existing clubs. And the next chart talks to the catchment area that I referred to. 66% come from outside of the catchment area. By that, we mean it's 15 -- it's a 15-kilometer radius outside of the club, which is sort of our definition of people who are unlikely then to come to an existing club. So 66% of these members were people that we couldn't attract into our clubs because they lived outside of the catchment area. So again, positive on those 2 stats. And then on the right-hand side, the chart showing the male and female stats, 78% of the new members are female, which is interesting in its own right. But probably more personally for us is, if you look at the age group of the members that we're attracting, so somewhere between 25 and 44, our average age group in the -- certainly in the Italian gyms are significantly higher because of our price point. So we're managing to attract a new age of member and obviously more female members into our clubs, which again has been very positive. And if you look at the trend at the bottom chart, what we try to show there is just the sort of cumulative and linear increase in the number of members since October, remembering that we only launched this at the back end of September. So again, so very positive stuff on the digital side that has come out of COVID. Moving on to Premier. Premier is actually a totally different kettle of fish to what we've seen in Virgin. It really has a very significantly positive last 6 months. So if I talk to Page 26, revenues of -- for the 6 months of just under ZAR 6 billion, up 14% year-on-year; EBITDA of ZAR 572 million, which is up 21% year-on-year. I do caveat that by saying last year's first half was relatively weak. We caught up in the second half, but it's still a fantastic result. And even included in that is about ZAR 76 million of incremental COVID-related costs that we put through the business. So excluding those COVID costs, obviously, the number would be ZAR 76 million higher than the ZAR 572 million. A very strong performance really driven by MillBake, we'll touch on a bit of that in detail over the page, where EBITDA was up 55% and, I think very pleasingly, around 2 things. Firstly, the EBITDA margin, we've been focusing on that with management for some time, increased from 9.1% to 9.7%. And importantly, return on equity over the 6 months increased from 8.7% to north of 11% -- well, to 11.3%, which is a massive step-up in the right direction and we think is one of the critical elements that, if we're going to monetize this business, we need to get right. Importantly, on the bottom right, net third-party debt continued to decrease. As Mark said, there was a shareholder loan repayment of about ZAR 123 million to Brait. But even including that, saw the leverage ratio drop down to 1.9%. Moving on to the next page, Page 27, to give you a bit more detail. From an operational perspective, as I mentioned, revenue up 14% largely driven by MillBake. MillBake's revenue growth of 17%. Lil-lets over the 2 businesses, U.K. and South Africa, grew by 2%. Flat in terms of the sugar confectionery business, but remember, that was closed for a couple of months. And we'll dwell on that. And then revenue in CIM, that's the Mozambican business, up by about 4%. Very pleasingly, that led to a 21% increase in EBITDA. I think importantly, as I mentioned at the beginning, this performance has largely been driven by volume growth. We'll go into that. So you talk about market share growth. We've seen market shares hold or grow across the various formal and informal sectors of the bread market, the maize market. But in particular, we increased our market share in maize. And even in the sugar confectionery business in the areas that we play, where we actually have an 11% market share, this is across all territory, all categories, we have 7.7% increase, which is broadly positive. And I think this has been driven by the operational efficiencies, which management have been focused on for some time. So this is not something that's been coming only over the last 6 months. And it's credit to the team that they manage both on direct and indirect costs to keep inflation below 4% of those costs. Capital expenditure continued to be relatively high. We continue to spend money which we invest on our Inland Bakery consolidation, which will bring operational efficiencies to that in time. That will be commissioned on the 21st of August. It's been slightly delayed obviously by COVID, but we're very excited about the benefits that's going to bring to the group. Moving over just to look on a 6-month basis. I won't dwell on this slide in particular. But as I mentioned, revenue up 14%, EBITDA up 21% and EBIT up 28%. And over the page, we'll touch on free cash flow, which is up even significantly more than that. From an EBITDA perspective, which is up 21%, this was largely driven by MillBake EBITDA increasing by 26% to ZAR 633 million with EBITDA margin of 12.8%. But Groceries and International increased by 7% to ZAR 101 million with a margin of around 12%, just over 10% before central cost allocation. Moving to the cash flow generation in this business, a fantastic 6 months. If you look at what it generated, cash flow from operations of ZAR 570 million compared to ZAR 353 million for the first half of last year. And I think it talks to management's focus on working capital and extracting ZAR 20-odd million of working capital from the last 6 months compared to an investment in working capital of ZAR 92 million in the prior year. So again, credit to the management team who've delivered. And if you talk about net third-party debt, the net third-party debt reduced in this business to just about ZAR 2.1 billion and will continue to do so despite the CapEx that we spent of ZAR 213 million. Just talking quickly about each of the various categories on Page 30. Bakeries, what we've tried to show here is 2 things. To reflect the fact that the first half of last year was relatively poor compared to the second half, so we tried to show you both year-on-year -- and sorry, LTM as well as half year-on-half year. But I think very pleasingly, year-on-year, up 9% in revenue in bakeries, which is a very strong performance driven by all the bakeries, to be honest. All of them contributed to that. And I think the normalization of the Cape Town bakery from the strike of last year resulted in about a 13% revenue growth in our Cape Town bakeries. Cost of sales has risen slightly due to obviously increase in the wheat prices. But production costs really have been kept under control, which has resulted in EBITDA increase of 19% for the bakeries business. Business contributes about 48% of the total businesses' revenue. Milling had a spectacular 6 months. Really, it was a fantastic 6 months. From a revenue perspective, up 20% year-on-year. It increased 23% if you look at just the first 6 months on last 6 months, but 20% year-on-year, which is really driven by both strong volume growth in the wheat business but also increased pass-on of the wheat price increase. And if you look at the market share in those divisions, Premium maintained its market share at about 20-odd -- 26% or 38% across the cake mixes. If you take the maize business, this grew by -- revenues by 27% primarily driven by volume increases. And Premium managed to maintain its formal retail market share across all of its brands, which is about 17% and growing it slightly. So again, a very pleasing performance from those 2 divisions, which constitute somewhere between 19% in the case of wheat and 16% of maize to the overall revenue of Premier. Move to this last slide on this on groceries. The Mozambican business, as you'll know, didn't have a particularly good 2018, the back end of 2018 and start of 2019, really has bounced back well despite the COVID issues. So it had very difficult trading conditions. Revenue is down slightly, but with cost control and margins slightly up, EBITDA in local currency increased 48% or 60% in rands to about ZAR 38 million EBITDA for the 6 months. So very positive. If you annualize that number, you get pretty close to a run rate that's approximating where this business has been in the past and we think has got potential to increase. In terms of Lil-lets and Dove, slightly a story of 2 different halves in terms of the U.K. The U.K. sales increased dramatically through Amazon, not greatly surprising, increasing, I think, it's 1,500% from the prior year, which obviously offsets some of its lower sales on the high street. EBITDA increased by 5% in the U.K. and, given the ZAR weakness over the period, in rand terms has actually increased by about 27%. The South African business struggled more, to be honest, with a 24% decline in EBITDA largely driven by lower and softer sales volumes. That has changed over the last couple of months, and we are confident that this business can get back to growth. Just talk about other groceries. Sugar-based confectioneries, as we mentioned, grew 11 -- sorry, 13% in this half of the year, which was a good performance given that it was locked down for a part of that period. We've gone through a Section 189 in this business to restructure the cost base, which I think will set the business up for growth. But EBITDA was up 6% across this business during the 6 months. Nutritional beverages, which is obviously very small in the greater scheme of things, it had a very tough 6 months, largely COVID-related. EBITDA down slightly, but this business is starting to bounce back, and we're starting to see the benefits of that come through in the last couple of months. Then just moving quickly on to New Look. New Look has had obviously a very difficult period of time from a trading perspective. But I think what is very pleasing, if you look at the chart on Page 33, is the fact that e-commerce and third-party e-commerce is nearly -- well, it's over 50% of the revenues of the business. And I think that really talks to how the management team has taken what was a great retail platform and overlaid that with an e-commerce strategy, to hire a new e-commerce team. And it really has paid dividends. Obviously, COVID and the lockdown has played a role in that, but it really has supported keeping this business cash flow positive during the lockdown period. The business from a perspective of the turnaround really has started to see the benefits of the management interventions during the course of the last 12 to 18 months. And pre-lockdown, we're actually very positively inclined to how the business was performing. Obviously, COVID's had an impact. It's had an impact on in-store sales. But actually, from an e-commerce perspective, we've seen a very, very significant increase in e-commerce, which has been a positive in the business. Obviously, with the rest of the U.K., this business has now gone into a second lockdown. Pretty much like the first lockdown, e-commerce sales remain relatively strong. And I'll touch a bit later on in terms of the cost base that we've restructured. I think we are in a significantly better position in this business going forward over the medium term. Moving to Slide 34, just talking about the restructuring. There were 3 elements to the restructuring. All were interrelated and interconditional. The first was a rebasing of the U.K. leasehold obligations through a CVA. So we effectively went to all our landlords. And what we have now got is turnover-based rents. I think there were many people who thought it wasn't possible to achieve it. Credit to the business. They have done that. And that process we informed probably a couple of weeks ago. The second was a debt-for-equity conversion of the senior secured notes. On the right-hand side, you would see pre the transaction, it had about GBP 605 million of debt in the business. That number has reduced to gross debt of GBP 165 million and with the new capital injection. Actually, the net debt in this business is currently only GBP 36 million. So a massive change, both from an operating cost perspective in terms of having variabilized rents, but probably equally importantly, having reduced our net debt in this business down to GBP 36 million, it really has set this business, I think, up for 6 years. It's going to be a tough time to come out of the second lockdown. But if ever the business was positioned to grow and with a good management team with an e-commerce platform that's now starting to hum and with the capital -- restructured capital base, I think it's now. Just in terms of the CVA, the CVA resulted in reduction in rental costs, as I mentioned, to turnover-based rents for the next 3 years post which they will revert to a market norm, which will be concluded at that point in time. In terms of the debt-for-equity conversion, we managed to extend the operating facilities to '23 and '24, respectively, RCF and the operating facilities. So I think again, as I mentioned, this business now has the requisite liquidity to trade through some more tougher times but, probably more importantly, a flexible cost base to enable it to thrive once we get out of the second lockdown. In terms of the injection of new capital, GBP 40 million was injected by all shareholders. Brait remains an 18%-odd shareholder. So we injected GBP 7.3 million as our contribution to the new capital going into the business. I'll now just hand over to Mark to talk about the portfolio valuations.

Thanks, Peter. Looking at Page 36, which sets out Virgin Active's valuation. The peer group, which is unchanged for the current period, is set out at the top of the page. The chart shows the 39% increase in the peer group's average spot multiple from March '20 to September '20, going from 10.8x to 15x. Brait's valuation multiple remains unchanged at 9x, which results in the level of discount compared to the peer spot average increasing from 17% at March to reporting date 40% discount. Maintainable EBITDA has reduced from GBP 108 million to GBP 100 million. The level of maintainable EBITDA based on a look-through to medium term post-coronavirus, sustainable level of GBP 100 million, which represents a 30% reduction to the GBP 142 million, which Virgin Active achieved for its financial year ended 31 December 2019. The resulting enterprise value is GBP 900 million. Taking off net third-party debt of GBP 441 million, which is in line with that considered in the March 2020 valuation, and the makeup of that net debt being GBP 359 million reported by Virgin Active at September increased by GBP 83 million to take consideration of the estimated impact of working capital and costs deferred as a result of the effect of coronavirus, gives equity value of GBP 459 million. Brait's participation is 79.4%, resulting in carrying value to Brait of GBP 364 million. Translated at the closing rate of ZAR 21.57 gives Brait's rand carrying value for Virgin Active of ZAR 7.9 billion, which represents a 16% decrease for the period obviously impacted by coronavirus. Turning to Page 37 and the Premier valuation. The unchanged peer group is set out at the top of the page. Clear from the chart that the peer group's average spot multiple has increased during the current period from 8.8x to 9.5x. Brait's valuation multiple is unchanged at 8x, which results in the level of discount to the peer spot average increasing from 9% to 16%. Maintainable EBITDA is based on Premier's last 12 months EBITDA to September 2020 of ZAR 1.1 billion, which represents a 10% increase to the last 12 months as at 31st of March 2020. Enterprise value is ZAR 8.9 billion. Net third-party debt of ZAR 1.8 billion has improved, and that considered at March 2020, noting that Premier also repaid ZAR 123 million shareholder funding during the period. Shareholder funding all from Brait is ZAR 3.2 billion, which results in an equity value of ZAR 3.8 billion. Applying Brait's shareholding of 98.5% gives a carrying value of ZAR 7 billion, which represents a 17% increase for the period. Turning to Page 38, provides an overview of Brait's other investments portfolio, which has a carrying value of ZAR 833 million at reporting date. During the current period, Brait realizes 91% shareholding at DGB for a total consideration equal to its March 2020 carrying value of ZAR 470 million. Following the equitization of New Look's SSNs pursuant to the recap transaction, which concluded on the 9th of November 2020, Brait's resulting equity and shareholder loan investments valued on a maintainable EBITDA basis is included in other investments. The remaining carrying value relates to Brait's remaining private equity fund investments, which is mostly Brait IV's investment in Consol Glass, the largest manufacturer of glass packaging in Africa. I'll hand back to Peter to wrap up.

Thanks, Mark. I recognize that's a lot to get through in terms of, whatever, 52 minutes of speaking. Just on the last slide, I'll try and give you an update on -- and an outlook for the next 6 to 12 months. It says 12 months, but Lord only knows the way things move these days. From a Brait perspective, what -- the focus is going to remain on reducing company gearing. We've mentioned to shareholders many times that the strategy is to maximize value from this portfolio and exit where we can. We are myopically focused on doing so. And so that will be the continued and main focus of the group going forward. That said, we think there are a number of growth initiatives in the portfolio companies. I think there have been opportunities. We talked a bit about them in the form of, say, Premier on bolt-on acquisitions and the like that come out of these sorts of tough times. And we really want to try and drive those growth initiatives to ensure that the portfolio companies themselves are optimally positioned to exit. So we are in no rush to exit. I think Mark mentioned the point of ZAR 1.9 billion of available liquidity. That is a number that we look to. If we need to put money into the businesses, we will. But most importantly, for us, it's about saying, what do these businesses need to look like in -- somewhere between 1 and 3 years' time so that we can exit them optimally? We've agreed the exit strategies across the various businesses with management and with the Board. Clearly, a lot of these things, when you talk about an exit, are time-dependent, time in terms of where is the operating performance of the company at that point in time, but secondly, where's the market for an exit. So COVID hasn't helped in many cases. But in some cases, it does help to facilitate an exit. So we will continue to monitor that. But importantly, as a team, we have a very good idea of how we think we can maximize value from this portfolio. Talking a bit about Virgin. I think we've talked about the significant cost optimization program and GBP 30-odd million of costs coming out of the business is -- and on a sustainable basis, these are not temporary costs, I think, is a fantastic achievement in a business that pre-COVID made GBP 140 million of EBITDA. So I think it talks to -- if we do get back, and when I talked earlier on about getting back to 12 -- 18 to 24 months to get back to normal levels, that was a reflection of getting our membership level back to those levels. What we are myopically focused on again with management is to say, when we get back to those membership levels, both in terms of hopefully having a higher yield and a lower cost base, we should have significantly higher EBITDA if we can get back to those pre-membership -- pre-COVID membership levels. Very pleasingly for us is all territories contributed to EBITDA in September, for example. And the reason I used September is -- that was the first month really that the South African business was out. And if you looked on a run rate basis, we were very pleased with where we could get to. Clearly, the second lockdown in the U.K. and Italy will have an impact. We think it will be closed for at least a month in the U.K., probably more likely 2 months in Italy. But I think there have been a lot of learnings, both in terms of costs but also how you get out of lockdown, which we think will play to a quicker recovery hopefully potentially with coming out of the second lockdown. I think the importance of growing our digital membership base -- so we mentioned Revolution, but it's across all of the territories. 10,000-odd members in 2 months is a very, very significant number and significantly above any of our expectations. So even though we've got the most bullish management team there in Italy, and this massively exceeded by probably fourfold, their expectations of how many digital members that could get onto their platform. So we think it's an opportunity. It's something we want to drive hard. And it really talks to this lockdown period for those 2 businesses to get additional members on board. From a Premier perspective, very strong first half performance. I again reference back to a weaker first half of last year. But even on an LTM basis, as Mark mentioned, that 10% -- 20% year-on-year, but 10% on an LTM. But we continue to focus -- we had a Board meeting yesterday focused on -- it's about costs. It's about margin management, and it will continue to be so. It's how do we leverage the platform that we've got to increase our ROE and increase our margins across the business. We are focused, as I mentioned, our bolt-on acquisitions. I mentioned we're relatively decently advanced on one, which I think would be a very nice bolt-on acquisition for Premier. And I think it will enable us to get proper synergies out of putting 2 -- those businesses together in a category where we are slightly underweight. So if you look at what are the 3 things for Premier that we're focused on, it's really very simple. It's achieving above-inflation organic growth in the current portfolio of businesses. It's about acquisition-led growth and synergies, most importantly being synergies. And the last one is about ROE enhancement. We need to get our ROE above our cost of equity. As I mentioned, we moved from 8.7% to 11.3%. We're headed in the right direction, but there's still a long way to go on getting that right. And from New Look, just finally there, we've got a materially deleveraged balance sheet. I mentioned we've got GBP 38 million or GBP 36 million of net debt currently. We're very confident of the management team there both in terms of the e-commerce strategy but also the high street footprint. And I think couple that with a reduced cost base that we can now meaningfully leverage, we think that is a business that's set up for success. I will caveat that by saying I think -- and this is even pre the second lockdown, it will take time to get back to levels that we saw in the past. But I think the management team and what they've done particularly around the CVA and the recapitalization has set this business up for a good next 2 to 3 years. And there, clearly, the growth there is going to come out of e-commerce. And I think if you look at the landscape and how quickly it's changing the retail landscape in the U.K., I generally believe the management team there is well-placed to capitalize on that. So again, whilst it's been a very tough 12 months or 6 months or whatever it is from -- since COVID hit, there have been some benefits that have come out of it. We've talked a bit about the disposals. We've talked about the cost reductions that we've managed to achieve across the Brait platform. We've talked about positive Premier performance. The ability to get a New Look restructuring done, I don't think would have been possible if we hadn't had COVID. So we can't sit and moan about COVID. It has been very tough particularly around Virgin. But I think we made progress on our strategic endeavors to get this portfolio, over a 3- to 5-year period, realized in an optimal manner. So with that, I will stop boring you and hand over to any questions.

[Operator Instructions] Our first question is from Clarissa van der Westhuyzen of Fairtree.

Could you just give an -- give us an indication of the cash flow for Virgin Active? I noticed that there's no cash flow statement in the presentation. So could you talk us through how the cash flows have looked for the last 9 months and also what the situation is currently on a month-on-month basis?

So on that, I'll just try and go glean the number. So you have seen the EBITDA over the last 9 months of minus GBP 8 million. I think it's minus GBP 6 million in low current, but let's say minus GBP 8 million. So there's actually very positive working capital movements during that period of time. So I actually think the working -- and don't quote me on exactly the number, but it's around about GBP 20 million positive in terms of free cash flow. There was a working capital movement in that number. So what we've seen across different territories as they've opened up is obviously, we've negotiated rental agreements for, say, a 12-month period. So when we open up again and we've got the revenue coming in, some of those costs are not -- haven't gone back to a pre-COVID number, which has been positive from an EBITDA perspective. And the working capital management has been -- I actually don't have the actual cash flow here unless, Mark, you've got it. But Clarissa, I can actually probably try and get it for you. I don't have it off the top of my head, to be honest. Mark, you haven't got it? Clarissa, let me try and get back to you on the exact number. But as I mentioned, you can start with GBP 8-odd million of EBITDA. You can add back a decent amount of working capital movement. I think it was in the region of GBP 30 million. But obviously, then you've got CapEx and tax. But let me revert to you with that number. Sorry, I don't have it to hand.

[Operator Instructions] Sir, we have no current questions on the conference call. Would you like to take the questions from the webcast?

Yes, okay. Sure. Question from [ Sue Pila ] from Excelsior Capital. On Virgin Active, you mentioned that despite positive performance indicators, it's likely to take 18 to 12 -- 18 to 24 months to revert to 2019 levels. Question, are these profitability levels or membership levels you're talking about? Second question, what is your sense of a maintainable EBITDA if 25% of the Virgin Active members on freeze actually cancel? I presume that's referring to South Africa as opposed to -- so in answer to your question, these are -- when I talk about that, I briefly mentioned just now they're actually membership numbers that we talk about, getting our membership levels back to those levels. Clearly, as I say, no one loses money in Excel. But if you get back to that level of membership base and we've got a refined cost base and a slightly higher yield, you would hope that the profitability stats are higher at that point in time. I'm not committing to that. I'm just giving you the -- how the Excel spreadsheet works. So the numbers that we talk about is trying to get back over an 18- to 24-month period to a membership level that is of that level that pre-COVID. And if the cost cuttings that we've got and the yield improvements and enhancements around digital stick, you would hope that the business would be more profitable than it had been on that membership base historically. In terms of your question on Virgin South Africa, where you talk about the members on freeze if they all cancel, which I can tell you isn't the case. But if they did, I think the easiest way to look at that would be on Slide 22 where we talk a bit about the EBITDA and we show the monthly performance. So if you take the monthly performance of Virgin South Africa, you can see the EBITDA and the revenue there. That -- those members, that was with 30% of our members on freeze, right? So if you take 25%, you can obviously increase those numbers a bit because those members on freeze weren't paying us. So that will give you a good indication of what the profitability or revenue levels would be if that were to happen. So Clarissa, just go back to your question. I've got the -- [ Jay ] got the numbers here. Sorry, just on Page 19 -- okay. Just on the -- so to give you an idea of the EBITDA, I mentioned the EBITDA of GBP 8 million down. Working capital movement for the 9 months was GBP 37 million positive. Maintenance and head office CapEx was GBP 15 million obviously negative, fortunately. Investments in new clubs and nonrecurring items was in total about GBP 10 million, which gave us an operating cash flow post-CapEx of GBP 7.2 million for the 9-month period. Moving on to the next question. This was from Kaeleen Brown from Standard Bank. What was the EBITDA in the first half of Virgin Active? And then what was the first half for New Look? And what is the maintainable EBITDA? Mark, do you want to...

So for the 9 months, we report Virgin Active for a 9-month period given that, that twins with Brait's September reporting period. So EBITDA for last year to September 2019 was GBP 102 million.

Yes. And look, the New Look number hasn't been set out, and that's for a variety of reasons. As we mentioned in the pack, the CVA process is still underway. There were a couple of objections. And clearly, tactically, it's not -- we wouldn't want some of those numbers out there. But if you had to say to me from a maintainable EBITDA perspective -- and again, this is just a view, and it might be 2 years out. But a business like this going into pre-COVID, it made GBP 60-odd-million, between GBP 60 million and GBP 75 million of EBITDA, we would hope with the cost reductions that are in place, the e-commerce strategy, et cetera, that that's a number that we could in time -- and I'm not saying today, I'm saying in time, get back to, which would be a very positive result for the group. So it's not a short-term EBITDA I'm giving you. I'm just saying over a period of time, we see it at least getting back to where it was on a pre-COVID level of somewhere between GBP 60 million and GBP 75 million. The next question is [ Wallace Bonds ]. Virgin Active, what's included in the GBP 83 million adjustment to net debt as at September? This does seem excessive given the business only generated GBP 8 million of EBITDA loss in the last 6 months. Look, it's a good question, [ Wallace ], and we grappled with it. So the first thing is you've got accrued costs, right? So there's 2 elements to the question. The first is accrued costs, which is, I would say, 2/3 of that number, where we haven't paid them, but the -- for example, in rand. We haven't paid some of the landlords, but we have agreed obviously a proposal to do so. Once you come out of lockdown or when we get to 2021 and we start paying that, clearly, some of those accrued costs would have to be paid. What we've done is taken all of those accrued costs and assumed that they were paid in cash today. So you can assume it's conservative. That's probably right, but that's 2/3 of the adjustment. The other adjustment is what we did look forward and say, what do we think between September and March, the next reporting period for our purposes, we would see in terms of cash burn in the business. And again, we've upfronted that to say, take that as net debt today. So I don't disagree with your view. It's a conservative approach. It's not how other companies do it. It's clearly adding to net debt. But I think we just think it's a prudent approach at the moment one, on accrued costs that we are going to pay them in time; and secondly, where there's cash burn over and above that, we've reflected that in the normalization adjustments. The next question is from [ Olga Fuhrmann ] from the Branson Family Office. For the Virgin valuation, is this based on EV LTM EBITDA or full year plus 0 or full year plus 1 basis? What is the reference year for the multiple and the peer set is based on what reference year? So very simply, there's a simple answer to that. What we've tried to look forward is say, as at December 2021, we've got an assumed membership base. We then put it into the model, and it determines for you what your likely EBITDA at that point with that membership base would be. That is reflected in the GBP 100 million of EBITDA that you see in the model. So effectively, it's a December -- run rate December 2021 based on the last quarter, really reflected of the last quarter of 2021. We then apply a multiple of 9x. To give you an indication, the current LTM multiple for peer groups, the peer group is about 15.9 or something -- Mark is nodding his head. We haven't used 15.9 because ours is a year out. If you take the next 12 months for that peer group, it's about 10.7. So again, we're probably at a -- doing maths in my head, 20-odd percent discount to that number. So just to get it right again, we've got an assumption on a membership base in December 2021 that's reflective of an EBITDA of 100. We apply 9x multiple, which is either probably more likely a 20-odd percent discount to the NTM multiple that the peer group is trading on. Okay. [ Boyd Pillow ] from Investec. Was the MillBake print -- was the MillBake profit, I presume, at the expense of competitors? Or was it just strong trading period across the market? Now I think -- look, I don't want to comment on our competitors in that market, but you've seen their performance. Their numbers are all out. I think it was a reflection of 2 things: one, market share growth and volume growth. Some of that didn't manifest itself in our peers in that -- across Premier. So I think it's -- I'm not saying it's unique to Premier. But if I look across all of the peer groups, both on an absolute and a relative basis, the business really has outperformed its peer group. So I think it's about volume and market share gains as opposed to general increase across the portfolio. So now from [ Wallace Bonds ] of [ Stein Capital ]. What percentage of SA members are still on freeze in November now that the freeze option has fallen away? Look, the latest number on that is probably, I would say, 25-odd percent remain on freeze, so down from 30% to 25%. I don't have the latest numbers. If I had to give a projection, we think -- round numbers, if you had to assume that half of the people who remain on freeze come back and half remain on either a freeze or they terminate, that would give you a pretty much a good indication over the next 3 months what we think would happen to that membership base. So what -- I would expect in time, a good part of that membership base, the 30% that we talked about to unfreeze and remain as members, but we're 2 weeks into that. Robbie Proctor from Odyssey. How has the relationship with Vitality developed? Will Virgin receive the same payment per member when members unfreeze? Yes. And I think we do need to credit Vitality. We've got a very strong relationship with them between Virgin and Vitality. It saw through some very tough times during the lockdown. And I think both parties were very, very sensible about how they approach it. None of them stuck to the letter of the law. Both parties got what I think was a decent outcome from that. But yes, since we've opened up, it's gone back to the original contract terms. And those are the only questions we have, but I'm always worried because they accuse us on that if the other questions are coming late. So if there any other questions, we're very happy to take them or verbally.

[Operator Instructions] We have no questions on the conference call, sir.

Okay. And as I said, between Mark, myself and Rohan, we're always available to take questions. So you don't have to wait until twice a year. So if there are any questions, feel free to reach out to us. But again, thank you very much for, a, your interest and your participation in today. And we look forward to growing value in the business together with you. So thank you very much.

Thank you.

Thank you very much, sir. Ladies and gentlemen, that concludes this event, and you may now disconnect.