Brait PLC (BAT) Earnings Call Transcript & Summary

Greetings, and welcome to the Brait's half year results presentation. [Operator Instructions] Please note that this call is being recorded. I would now like to turn the conference over to Peter Hayward-Butt. Please go ahead, sir.

Yes, many thanks, and thank you very much to all the investors and stakeholders who have taken the time to listen into our interim results today. I'm very pleased to say that we have Kobus, who will be actually dialing in from London. He's there on an investor roadshow from Premier, the CEO of Premier. And then Dean and Mark from Virgin Active, who will cover off the Virgin Active section. So again, presently, you won't have to listen to myself going on. But in terms of, yes, I think we're very happy to be where we are today. I think a year ago, I think we were just about to announce the restructuring of the Brait balance sheet. And the whole rationale behind that was to buy Brait some time to ensure that its assets that were starting to perform well, really have the ability to grow into their full potential. And I'm really pleased to say today when we look at the results, and again, it's a massive credit to the management teams and not to us, that Virgin Active in particular and Premier have both had unbelievably good performances over the last -- well, the year-to-date and over the last 12 months, which absolutely vindicated the decision to buy more optionality by extending the convertible bonds and the exchangeable bonds. So again, a massive thanks to the management teams and obviously to the management team of New Look as well. We've done a great job of turning that business around in tough circumstances. I'll cover off the executive summary. Sabelo will then talk to the NAV slides, and then we'll get on to the underlying portfolio companies. So starting with Virgin, and Dean and Mark will cover it. It really has been a transformational year. Transformational in the fact that I think the business has moved from a recovery mode to one of growth focus, lots of opportunity to grow the business and really some significant prospects, both in terms of the existing estate, where we continue to invest money behind the refurb program, but also in terms of new operations and new gyms in specific countries, and Dean will talk to that. Overall, the membership across the territories was marginally up, but remember, this is a seasonal low point for memberships. As you remember, people in Europe largely go on freeze during the months of August and September. So we only see that really unfreeze and start to come back in the October, November numbers. But overall, year-to-date, the membership base is up 1%. And this is despite us having a number of clubs that have been closed for refurbs, both in South Africa, in particular, and some in the U.K., which obviously has an impact. Most of those members then go on to freeze and you can only get them back when you open the club 3 to 6 months later. There have been higher terminations in some territories. Some of those have been driven by the yield strategies, so an intentional strategy. But again, Dean, will touch on some of the management strategies to address that. Very pleasingly, all territories saw very strong revenue growth. The U.K. up 12%; South Africa up 15%, both largely yield driven as a result of the significant refurb CapEx that has been spent on those two territories to justify the increase in the overall pricing. Italy up 7%, but Italy has a number of new clubs, three new clubs that are opening up either now or in the next first quarter of next year. So we should see the benefit of that start to play out in the new year. And then the Asia Pacific region, up 13%, largely been driven by Singapore and Thailand, which had fantastic performances. I think if you look year-on-year, and I mentioned at the beginning to say that it's a transformational year moving from a recovery mode to growth. One of the key things of that is we've seen a massive increase in the capital expenditure in the business from GBP 58 million in 2024 to what will be forecast to be nearly GBP 100 million, GBP 96 million for this year. And it's been a very, very significant refurbishment program and new club development. And the benefit of that, we will only start to see coming through in next year's numbers. This year, obviously, we will have seen some of the start-up costs that are incurred when you're starting up a club, and we obviously have what we now start to call we're going back to have an embedded CapEx. So that is -- sorry, embedded EBITDA. That is CapEx that has been spent, but it's not yet reflecting in the EBITDA. The capital spend on the estate has resulted in EBITDA fantastically by 45% year-on-year. And it's very pleasing to be able to talk to a last 12 months number of GBP 112 million. You'd remember we've been talking about GBP 120 million for some time. And we're nearly there, even on an LTM basis, again, Mark will touch on what -- where we were likely to end up for the year, but very pleasingly, it's slightly north of the GBP 120 million number that we've been talking about. So going credit to Mark and Dean and the team on a great performance in Virgin Active. From a Premier perspective, it's hard to say how fantastically this business has done and again, credit to Kobus and his team there. If you look at it, revenue growth of 6%, which is partially price-driven and obviously some decent market share, but EBITDA growth of 14% year-on-year, but most pleasingly, headline earnings per share, up 28% and a very impressive nearly 25% return on invested capital. And pleasingly, the performance has been driven by all of the divisions. Millbake was obviously a core driver. It's a huge part of the business, 85% of EBITDA, but all of the divisions contributed very significantly with the other non-Millbake part of the business, I think growing EBITDA by about 14% year-on-year. You all know that Premier recently announced really a transformational merger with Rhodes Food Group, the shareholders will vote on that in mid-December. And to the extent it goes through, it will significantly diversify the product mix of the group with about 25% of the combined EBITDA going forward coming out of the RFG Group. Very pleasingly, the very strong cash generation, nearly ZAR 1.3 billion, and I'll repeat that number, ZAR 1.3 billion of free cash flow from operations in the first half of the year. The business continued to spend CapEx, nearly ZAR 500 million was spent in the first half of this year, which is again, in line with its strategy of ensuring that it continues to invest in its operational performance, which we've seen come through both in increases in margin and obviously, the return on invested capital is still remaining at a very lofty 25%. Pleasingly, that de-gearing will allow -- have been announced for the company to look at either an interim dividend, which announced -- it was announced the other day, but also share purchase program, which I think will be a massive support for the share price going forward. So again, massive credit to Kobus and the team, a great results coming out of Premier. New Look, as we all know, only is about 5% of our NAV. But again, a pretty reasonable performance in a very tough operating environment. I think anyone who follows the U.K. retail environment will know that [indiscernible] from inflation, policy uncertainty, the increase in national insurance contributions and the impact that's had on employment generally. I think it has been an extremely difficult environment to operate it. But pleasingly, EBITDA for the year-on-year is up 34% to GBP 21 million, albeit off a low base, but certainly it's progressing in the right direction. We've been talking about for some time the next phase of the process is to assess strategic options for the business. The company has appointed an adviser, who continue to work with management around assessing those strategic options for the business. From a growth perspective, the growth outlook looks good. If you had to say, I think the outlook is to grow at a very significant tick above our cost of equity. If you look at Virgin Active growing its EBITDA at 45% year-on-year, and I'm not saying that that's going to continue into next year, but I think there is growth forecast for the business with the CapEx it is spending with Premier growing headline earnings at 28% and having a 25% return on invested capital. I think with some confidence, the Brait Board can say that we are going to continue to see the portfolio grow in terms of NAV at above our cost of equity, which is very pleasing. From a strategy perspective, it remains exactly the same to unlock value and optimize exits and return capital to shareholders. It will be done. As we said, we bought ourselves until 2027 to be able to do that, and we're starting to see the benefit of that in the underlying portfolio of companies. The company repurchased GBP 10 million of its convertible bonds at a discount during the course of the last 6 months. The RCF within Brait isn't drawn at the moment. And obviously, that leaves about ZAR 0.7 billion, which is the full RCF as facilities available for the group. From an NAV per share perspective, as of September, the NAV per share was ZAR 3.21. If you have to plug in today's share price for Premier, which is up from the ZAR 155-odd as of September to about ZAR 172, that would imply the current NAV is about ZAR 3.45. The ZAR 3.21, this is about a 5% increase over the numbers to March, and we should start to see a significant increase in that as Virgin Active start to grow into its -- grow its EBITDA above the GBP 120 million level. With that, I'll hand over to Sabelo to talk through the NAV numbers.

Thanks, Peter, and good afternoon, all. Starting with Slide 7. As Peter stated, Brait's NAV per share is ZAR 3.21, which represents a 5% increase on March. Total assets of ZAR 16.9 billion at reporting date are weighted 59% Virgin Active, 37% Premier, 3% New Look and 1% in cash and receivables. Total liabilities of ZAR 4.6 billion comprised of ZAR 2.7 billion on the convertible bonds and ZAR 1.8 billion on the BIH exchangeable bonds as well as accounts payable of ZAR 170 million, which largely comprises the coupon accrual on these two bond instruments. The resulted NAV is ZAR 12.4 billion, which equates to ZAR 3.21. Slide 8 sets out movements in balance sheet position for the half year. Virgin Active's pound carrying value was unchanged. The company is valued on a maintainable EBITDA of GBP 120 million, which is unchanged. And the valuation multiple has been increased from 9 to 9.25x, which represents a 15% discount for the peer average multiple of 10.9. Net third party debt of GBP 411 million, includes GBP 1 million of normalization adjustments for deferred costs. Premier's carrying value increased by ZAR 1 billion. It is valued at its closing JSE price as of September of ZAR 152.33 per share, which equates to an implied EV/LTM EBITDA multiple of 8.7x. Brait's shareholding in Premier remains at 32.3%, representing its 41.7 million shares. New Look's carrying value still reflects a maintainable earnings number of GBP 30 million based on LTM. The unchanged stock multiple of 6.5x represents a 36% discount to the peers and no normalization adjustments were considered in net third party debt. Brait's equity participation in New Look remains 17.2%, which will be diluted to 8% once the shareholder warrants are exercised. The decrease in cash and receivables of ZAR 364 million was largely due to the April 2025 repurchase of GBP 10 million of convertible bonds at a discount to their par value as well as coupon payments on the bond. Turning to Page 9. The liability movements were mainly driven by ZAR 111 million for the exchangeable and convertible bond, reflecting their IAS 32 liability component. Slide 10 analyzes Brait's liquidity and debt, and first off -- is set out on a consolidated basis. A dividend of ZAR 102 million was received from Premier in July 2025 and GBP 10 million was used to purchase convertible bonds in April. And as of September 2025, the BML RCF was undrawn, resulting in available liquidity at reporting date, including cash amounting to ZAR 710 million, Brait is in compliance with all debt covenants. Thank you, and back to you, Peter.

Thanks very much. So we'll now go through the portfolio companies. Before I hand over to Dean and Mark, I just want to give a word of appreciation to the two of them, but to the whole team for sterling performance, but not only that, the amount of effort and time that the two of them in particular, put into this business really doesn't go unnoticed. I know the investors don't see it, but certainly, as the adviser, we do, we're massively appreciative with that and very grateful for the two of you to spend time this afternoon with us. So over to you, Dean and Mark.

Thank you, Peter, and good afternoon to everyone. I mean just to start off, Peter, just to say it's what we do at Virgin Active, Mark, myself, the whole Virgin Active team. We're very passionate about the space we play in, and we love the space we play in, and we have a very strong belief and determination in terms of where this business can go to. So everything we do is really a work of passion. And as I said, absolutely committed and believe where the heights that this business can reach. From an investment point of view, I think I'll just start off with having a look at the sector and having a look at some of the major structural consumer trends that are shaping consumer behavior today and consumer spending today, and how those are playing into the Virgin Active strategy. We've spoken about -- before about the focus on wealth and how consumers are prioritizing health and wellness, a larger portion of the disposable income being allocated towards wellness. This structural, this mega trend continues. We don't see it slowing down. We see it actually increasing. Consumers today are much more health conscious. There's a rise of lifestyle-related diseases, loneliness, all of these things play into the growth of the wellness industry. We see this growth in wellness across all age groups across all demographics, older adults, 55-plus are seeking longevity, they're looking for ways not only to live longer, but how to live better and longevity is top of mind today. When it comes to teenagers, a growing and increasing participation amongst teenagers in the fitness and the wellness space. And this is really the new generation that's creating long-term demand for wellness, the habits formed as teenagers are generally carried through into adulthood. So that long-term demand through the youth today bodes well for our business. We've also seen a new cohort starting to come into the wellness sector, what we call, new to wellness, the previously sedentary individuals that were not interested in wellness pre-COVID. Post-COVID, the narrative has changed. It's motivated this sedentary new to wellness calls to join gyms, to join fitness clubs, to join wellness clubs. And in particular, this new cohort require guidance and support. It's often the first time that they're entering the wellness club, a fitness club or a recovery zone and they required guidance and support. Often, that type of guidance and support is not found in what we call the HVLP operators, the high-value, low-price, the low-cost operators, and that's seen these new to wellness cohorts gravitating to a slightly premium offering where they get the support and guidance that they want. And as we said, consumers are definitely far more discerning, far more knowledgeable. When it comes to fitness, they do not look at fitness today as purely around physical activity. They're knowledgeable. They understand the benefits of recovery, rest, sleep and nutrition, so they're looking for overall wellness. Something else that is also having a halo effect on the wellness industry, is something like GLP-1s. We've seen with the absolute rise of the various GLP-1s, the weight management, the obesity drugs and the positive impact that this is having on healthy eating and exercise. These individuals understand that they can't want to stay on these drugs forever, and they need some sort of off-ramp to be able to come off these drugs. And we've also seen when you're on these drugs and you don't exercise or you don't eat healthy, there's a lot of muscle mass that's lost through the process. So there's a growing awareness on these GLP-1s, you need to exercise, you still need to eat well. And then over time, we provide the perfect off-ramp for consumers on GLP-1s to continue their weight management program without the need to continue on to GLP-1s. So as I said, major structural trends in the industry around wellness, continual knowledge, continued growth in the wellness sector. The other major consumer structural trend that we think will benefit Virgin Active is a move amongst consumers to what we call in real-life experiences in an increasingly digital world today, there is a growing digital fatigue. People are spending more and more time online. So consumers are starting to look to ways to disconnect and engage in these real-world activities. We see it in the restaurant space post-COVID. Our people are gravitating. They want to spend time in restaurants. And we see the exact same trends in our social wellness clubs with people being fatigued digitally, they're looking for instead of URL experiences, what we call IRL, in real-life experiences. Also, consumers are prioritizing these real-life experiences over ownership of material goods. And we see that a strong trend continuing that people will pay for experience rather than material goods. And then the last thing in terms of these experiences are around loneliness. People are becoming increasingly more lonely, and they're looking to these social spaces, to these communities to search and find for social connections. So what we refer to is that the AI world is really building the online world. There's a significant opportunity for businesses that can participate and build what we call the off-line world. The creation of these second spaces in wellness and Virgin Active with Kauai and the new brand can play a major role in building this off-line world, which is a mega trend today. So we've spoken about wellness in the sector, in real-life experiences growing, people searching for experiences. And the other trend that we've seen is polarization of how consumers are spending money, particularly in the wellness space but in other industries as well. We see consumers trading down into the high-value, low-price, low-cost gyms or fitness models. That space is particularly -- I'm talking on a global scale, is particularly competitive, a lot of entrants in that space, low barriers to entries in that HVLP space. But the other trend we've seen is people trading up into the premium and luxury space. So it's really the middle that's under pressure at the moment, and we're seeing strong growth in both the low-cost model, but it's highly competitive. And then in a space that we clearly play in the premium luxury space, and we're seeing that as a good space to be in. The other trend that emerged during COVID was the boutiques, the rise of the small boutique operators. And we've seen a change in that as well at the moment where there's some consolidation in the boutique sector. We've seen a fair amount of the boutiques not surviving today. They are, in fact, quite -- what consumers are looking for today is to assemble multiple routines, but all under the one location. They don't want to have to go to multiple locations, multiple sources to assemble their routines, that's inconvenient. It works out incredibly expensive where you're having to take a Pilates membership, a yoga membership, a gym membership. And they're looking for wellness businesses to meet them under their terms, under one roof with a value proposition that provides the whole of wellness under one roof. So we've seen this polarization, the pressure on the boutiques benefit in the space that Virgin Active plays in, which is the premium wellness space. That was largely sector related. So really good sector to be and the sector continues to grow and obviously, Virgin Active with benefit from those sector tailwinds. Specifically relating to Virgin Active, we sometimes forget on how well recognized the Virgin Active and the Virgin brand is. It has strong brand awareness. Recently, we've been visiting some countries, potentially starting to look at some new territories. And the Virgin Active and the Virgin brand is welcomed by most landlords or by most developers, consumers have a great awareness, instructors, employees in these potential outlets are all very familiar with the Virgin brands. It has strong global strength. It's very aspirational, the Virgin brands, it's got a clear premium positioning. And that premium market is what I spoke about, is a very proven and resilient marketing. So we've got a global brand, it's aspirational in the premium resilient space. We're well developed. We've spoken about it for a long time, where we're not just a gym anymore. We're well developed on that strategy to move from just a gym to what we call a social wellness club. And as we've spoken about in previous meetings, the total addressable market in that wellness space is significantly bigger than the pure gym space. In addition to that, in the wellness space, we see better yields, we see higher retention rates and high degrees of ancillary revenue in that social wellness space. We have a market-leading position in six of the global markets, we're the #1 luxury player in those markets. We've got largely predictable subscription revenue models. We've got an incredibly strong health food brand within the Virgin Active stable, Kauai and new health cafe. Those Kauais and new stores have seen exceptional growth, and we don't see that slowing down. There's prime for further growth in the Nutrition businesses. And then on top of everything, I'm fortunate to have an incredibly strong and balanced management team, a management team that has incredible experience in the fitness and wellness space. But in addition to that, we brought on a leadership and team members from outside of the wellness space from hospitality and other sectors, and I think today, we've got an exceptionally well-balanced and innovative management team. And as Peter said, it's a team now that sets us up for growth. We're out of the recovery stage. It's a team that can deliver growth. So from an investment proposition, strong sector tailwinds, and in addition to that Virgin Active is incredibly well positioned to take advantage of those sector tailwinds. Specific growth drivers, Peter, if you can go to the next slide. The specific growth driver is for Virgin Active. We still have a significant amount of operating leverage in our business, and you've seen that in terms of how our '24 and '25 results have played out. So we have an opportunity still to grow volumes into existing capacity and into the existing cost base. In addition to that, we talk about reinvestment into the existing estate, the physical state, but also reinvestment into our product offering, investment into our people. We have a project around exceptional hospitality. So all of those things play into retaining members, our ability to increase our yield and also into acquisition. I mean if you go into our clubs today, there's conversion from gyms to social wellness clubs. We have dedicated recovery zones, which have hydromassage beds, recovery air compression boots, self-service massage guns. We're starting to roll out part spa spaces with improved sauna infrared offerings, cold-plunge pools, the co-working spaces, food and beverage, social spaces, far improved gym floors, and we're slowly starting to play longevity spaces, longevity suites and medical suites. So that reinvestment into the estate and the product offering continues, and that will drive incremental growth, both from a yield point of view, from a retention point of view, and also from an ancillary revenue point of view. There's a big focus within the business on our digital and data and AI transformation. We're using all of those digital data and AI to personalize our member journeys, our journeys from acquisition through to engagement and retention, all the way through to in-club experiences, how do we use digital, how do we use data and artificial intelligence today to deliver a highly personalized, high-touch business, but the tools and the support we need come from data and AI. And we start -- we recently appointed a Chief AI officer in our business, and we're seeing the benefits of AI across operational efficiencies, cost savings, how do we schedule maintenance, class and instructor scheduling, optimizing of club resources. We can also start using AI to identify at-risk members, behavior analysis to predict which members are more likely to churn and then automate personalized messages coms, experiences, coaching towards those high-risk at members. And then the integration of wearables and other devices to provide us with real-time data collection and the ability to give real-time feedback and virtual coaching to our members. So the opportunity to use digital data and AI to transform our business is something we're also well advanced with. From an ancillary revenue, how do we get greater share of our members' wallets and drive up average revenue per member. Our PT program is a key component of that. We've just recently launched in South Africa, a partnership with Chad Le Clos for the Chad Le Clos Swim Academy, and we see significant growth and opportunity within both the Learn to Swim programs, which is for the young kids, but also in the more competitive space, the space that Virgin Active is traditionally not played in and it's just rented out the pools. Globally, we have one of the largest indoor heated pool estates in the world, and it's something we should leverage better. So we see opportunities in the Learn to Swim space for the ancillary revenue. And then we spoke a little bit about moving into the longevity space, longevity suites where we do different types of testing, diagnostics, body composition, grip strength, various data collection and then leveraging those data points to drive ancillary revenue. Once again, trying to capture a greater share of our members wallet. So that's really growth in Virgin Active that comes from our like-for-like business in terms of new opportunities, we see in existing territories, the opportunity to open new clubs. Italy has a particularly strong rollout plan. Italy has an attractive club model in that we have what's called a hot shell model. The landlords fund a considerable proportion of our CapEx for new clubs. So it's an attractive market to roll out new clubs. So we do see new clubs rolling out in existing territories, Italy, but we still see some opportunities, for example, in South Africa with some new clubs, Singapore and the U.K. with some new clubs. So existing -- new clubs in our existing territories. And then it's time for us, as we said, as we're in a growth phase now to identify new territories to leverage the knowledge, the cost base, the teams that we've got in place in Europe to look wider across on Central Europe. And we are looking at areas such as Vienna, Brussels, Switzerland, where we're fairly close to confirming some new sites. We've got letters of intent or heads of terms signed for some of those locations, and we see opportunity to move into new territories with our social wellness club concept. In certain non-core territories like we've done in Qatar, we also see an asset-light model, which is effectively a management franchise agreement model. We'll use that in areas like the GCC, the Qatar club will open on the 1st of December. It's an absolutely beautiful club, but it's on a management contract where we haven't had to invest into the club. And we see an opportunity across Saudi and the rest of the region to use that capital-light management contract model as well in other areas in Southeast Asia and India, where that model would work well, where we don't want to invest ourselves into those club estates. There's a great opportunity to expand the Kauai and new restaurant model. We have, at the moment, around 18 Kauais and news in our clubs within the U.K. We're expanding quite rapidly, and we're seeing really good results in Italy within the Virgin Active clubs, but there is an opportunity now with the establishment of the brand, with the establishment of operating models in the U.K., in Italy, for us to start looking at starts for Kauai and new outside of the Virgin Active clubs. And then on an opportunistic strategic basis, there may be opportunities for M&A, and we would certainly look at those opportunities going into the future at the right valuations, at the right pricing provided they fitted into our social wellness club premium strategy. So I think from a Virgin Active point of view, it's an amazing sector to be in the wellness sector. Virgin Active is particularly well positioned in that premium wellness space, which is incredibly resilient, ability to drive volume and yield at the premium level. It makes it a very exciting space to be in. And they are -- we've seen great EBITDA growth from '24 to '25, '25 to '26, but we see this ability to open new clubs, new territories, new ancillary revenue streams as continued growth in the business. So a good place to be, and we look forward to continued growth going forward. I'm going to hand over to Mark Field. Now Mark will take us through the numbers.

Thank you, Dean, and good afternoon to all participants on the call. I'm going to start with the last 12-month territory trading update to September '25. Starting with South Africa, which makes up 35% of our group revenue. Revenue was up 15% year-on-year. Membership was up 1%. Sales year-on-year were marginally ahead of prior year. Our churn rate was 3 percentage points higher year-on-year. That was driven by a combination of yield increases. We increased yields by an average of 11% across the estate during the year, much of that related to club refurbishments. We did find some affordability issues in certain markets, and the churn was adversely impacted by -- at certain clubs due to closure during refurbishment periods. Moving -- in terms of refurbishments, we spent GBP 14.1 million year-to-date on upgrading the estate, and we expect that to yield both volume and yield benefits going forward as a result. Moving on to Italy, which makes up 27% of our group revenue. Revenue was up 7% year-on-year. Membership was up 2%. Sales in Italy were marginally ahead of prior year levels. Churn rates were 2 percentage points higher than prior years. In Italy, a number of clubs are reaching capacity, and we've intentionally put prices up at those clubs in order to manage volumes. And as a result of that, we've seen a 4% increase in yields year-on-year in a 1% CPI environment. So we've been able to offset churn by higher yields. And as Dean touched on, we are starting to see significant growth opportunities in the Italian markets and a pipeline building up. And we have identified and signed leases for a number of clubs will be opening in 2026 and 2027. Moving on to the United Kingdom, which makes up 24% of our overall revenue. Revenue was up 12% year-on-year. We saw membership increase 3%. Sales were 7% higher than prior year, so a strong year in terms of sales. And that's despite the fact that we've increased yields by an average of 10% year-on-year. And those yield increases were centered around refurbishments that we've been conducting over the last 12 months. And despite those price increases, churn was flat year-on-year, and that's indicative of being able to sell at a higher rate than prior year at higher prices and not impact churn is testament to the impact of the refurb program in the U.K. There are a number of more clubs that still require refurbishment in the U.K., and we'll continue to affect those in 2026 and 2027, but overall, a strong result for the U.K. business. Then finally, looking at APAC, Australia, Singapore and Thailand. We saw lower sales in the Australian business, which were a drag on volume growth. But in Australia, that was offset by higher yields as a result of our yield management strategy there. We had a very successful opening of our new Bondi Westfield club that opened in August. As of the end of September, that club's membership was double what we had budgeted for. So incredibly strong performance. That club is the first of our proper social wellness club concept, and it just indicates how that concept resonates in the market. And within Australia, we've put in a new management team. We've transferred two senior managers out of our South African business, senior and experience to do the Country Director and the Sales Director role and we're starting to see some green shoots in terms of that redeployment. And in terms of Singapore and Thailand, both territories have enjoyed strong growth in both membership and yield. So looking across that territory, volume was down -- membership was down 3%, mainly because of Australia, but we saw an 8% increase in yield and a 2 percentage point increase in churn. Peter, can we move on to Slide 15. Looking at the trends in membership over the last 12 months, our membership is seasonal. We have high points in March and November each year, and then the low points tend to be August, that's Northern Hemisphere summer period and the Southern Hemisphere winter, and then around December when both Northern and Southern Hemispheres are -- have the holiday period. So that will explain why you'll see fluctuations. But overall, year-on-year membership is up 2%. That's membership, if we exclude closed clubs in the prior month period, so that's the most comparable year-on-year impact. Our focus in the year has been very much on quality of sales and yield management, particularly around the refurbs. So in the light of that, we've achieved an overall 9% increase in yield. So we're satisfied with the 2% volume growth in the light of a 9% overall increase in yield. Moving on to Slide 16, so Peter. So putting that all together, on a year-on-year basis, the sales are up 2% year-on-year. Our attrition rate is 4 percentage points adverse for the reasons I articulated on earlier slides. Overall membership is up 1% year-on-year. If we exclude closed clubs in the prior year period, that will be 2% as per the previous slide. But you put that 1% growth in volume, 9% growth in yield, that gives us an 11% growth in revenue, excluding Kauai to GBP 447.5 million. And that because of our operating leverage translates to a 42% increase in EBITDA to GBP 78.5 million. And our margin has increased by 400 basis points of EBITDA margin from 14% to 18%. On the right-hand side, just looking at the split of the EBITDA. It's made up of 56% South Africa, 27% Italy, 13% U.K. and 4% APAC. If we can move on to Slide 17. So these results are -- include Kauai, and therefore, the 9 months to September '25, revenue for the period is GBP 475.9 million. There's is a 12% increase and EBITDA, including Kauai is GBP 81.5 million, as a 43% year-on-year increase. Breaking it down into its various segments. Looking at revenue, all territories have delivered positive year-on-year growth in revenue, particularly South Africa and the U.K. at 14% and 12%, respectively, have to have driven the revenue growth. But we've seen very strong performance in some of our smaller contributors, particularly Thailand, Singapore and Kauai. Then looking at that segmental EBITDA, similar trends in terms of year-on-year with the exception of Australia, where we've had the Bondi start-up losses that have been a drag on the performance in Australia and in terms of our head office costs, which would have some CPI-related increases. But we've also boosted our capabilities in terms of our digital AI team that have resulted in some increase in our group costs. Moving on to Slide 18. Slide 18 just indicates a progression of our revenue, our EBITDA and our operating cash flow, the September '25 number here represents September year-to-date annualized, so increase 12 months. So from -- on an annualized basis, September revenue would be GBP 646 million that's GBP 70 million or a 12% increase over the prior year. EBITDA at GBP 112 million, would be a 40% increase over the prior year. And then looking at cash -- operating cash flow, which is cash before interest and growth CapEx, the annualized number is GBP 56 million. And importantly there, in the context of our annual cost is circa GBP 46 million, the business is now in a position where it's generating cash after debt servicing and so it's in a position to start funding growth projects. Just looking at our CapEx in a little more detail. Maintenance CapEx, we aim to spend about 7% of our revenue on maintenance CapEx. Maintenance CapEx has been -- was GBP 39.2 million, relatively consistent with prior year. And that's the investment that we spent in the estate to truly maintain the value proposition. Looking across in terms of major refurbishment CapEx and new club CapEx, we've invested GBP 25.1 million in major refurbishments, particularly in the U.K. and South Africa. That helped support the revenue growth in both those businesses, which we touched on earlier slides. But there has been some adverse impact. When we do major refurbishments, we do need to close the clubs for a period, that can aggravate churn and it can cause freezes, but then we get those members coming back in the post-opening period. And then in terms of new club CapEx, we spent GBP 13.4 million. That's across Bondi junction, in Australia, which I mentioned. And then three new clubs in Italy, one opened in October, one is opening next week, and the remaining one will open early 2026. And so collectively, those are -- means we spent GBP 77.7 million on CapEx. Moving on, if I may, to the following slide. As I touched on earlier, our membership and therefore, our earnings is seasonal, so we need to look at it in that context. But when we compare half 1 2024 to half 1 2025, 47% increase in EBITDA. If we look at that across half 2 '25 versus half 2 '24, we've seen a 37% increase in EBITDA. But within the half 2 numbers, within 2025 numbers, there are some items which we call nonrecurring or once-off that won't be repeated in future years. That will be made up of -- there will be certain clubs in the EBITDA in the prior period, which we've closed. So that's about GBP 0.3 million impact. There's about GBP 2 million of start-up losses related to the clubs I mentioned earlier, that won't repeat going forward. And finally, we've had about GBP 1 million impact due to the club closer [indiscernible] which obviously won't impact EBITDA going forward once those clubs reopen. So if we look at it in terms of how we're looking at EBITDA, I've mentioned the GBP 112 million in September annualized number. If we take the adjustments of GBP 3.3 million, which won't be repeated, that means that our normalized EBITDA on a September year-to-date annualized basis will be GBP 115.3 million. Then on top of that, those new clubs that I mentioned, there's embedded EBITDA, i.e., those -- that will be the EBITDA that those clubs will make at maturity on CapEx that has already been spent. So if we add that to the normalized EBITDA, we get to a mature EBITDA of GBP 121.2 million, which is similar to the GBP 120 million maintainable EBITDA in the Brait valuation. With that, Peter, I will hand back to you.

Perfect, Mark, and thanks again to Mark and Dean, a great set of results and massively appreciative for all the hard work. So moving on to talk about hard work and good results. Moving on, we've got Kobus on line, and Kobus is going to touch on the Premier results. So thanks for taking the time, Kobus, really appreciate it.

Thank you, Pete. Just confirm that you guys can hear me nicely?

Yes.

Good stuff. Peter, I'm just waiting for the first slide from the Premier presentation to show up.

Okay. There you go. You got it, Kobus? I think it's up.

I think it might take a moment or 2 to refresh. I've been seeing the Virgin slide flipping over.

I've got Slide 22. See if it hasn't. Once you got slide up there, Kobus...

I'm still seeing the financial performance -- there we go. There we go. All right. Good, it's come through. So this is the summary of the results for Premier for the first 6 months of our financial year to 30 September. Revenue growth of just over 6% to just over ZAR 10 billion. I think that from a revenue perspective, we were quite heavily impacted by deflation in the maize category, in particular, where on the back of a good harvest and strong rainfall, our revenue has increased or I guess maize prices have come down by over 30%. And so we pushed that through as price reduction on super maize meal sold into the market and certainly put the maize category for us into a deflationary environment. From an EBITDA perspective, up just under 40 -- around 14% to ZAR 1.3 billion for the 6 months. Nice improvement in the margin up to 12.7%, driving our EBIT performance with a fairly flat depreciation charge, up 17% to ZAR 1.1 billion, and also seeing a nice uptick in the EBIT margin now going into double-digit territory. Our return on invested capital marching upwards. And again, we never adjust for any unproductive CapEx. So all the CapEx that we've spent on projects like Aeroton and a few other areas have all form part of that calculation. And so as the profitability of those projects run ahead of the increase in our assets, we expect that to continue to drive up more than that. And then the net profit margin now at 7%, giving us HEPS of just under ZAR 5.60 a share with the leverage ratio are now at 0.7x EBITDA. So that's a summary of the performance for the first 6 months. Peter, I'm just waiting for the next slide.

Yes, I moved it on, I think, on 23.

Okay. Sorry, there just seems to be a slight delay in the slide actually going live on the presentation.

Yes, I think you keep going. I think it's showing on the screen. I don't know why it's not on yours. But it's on yes -- the RFG Holdings Limited Transaction slide...

Yes, right. So I've got it. In summary, the details of the Rhodes transaction. We're really focused around 7 Rhodes shares for every 1 Premier share. We did the deal on a ZAR 22 value for Rhodes and a ZAR 154 for Premier, but obviously, the 7 swap ratio is the important component of that. And as Premier share price moves north of ZAR 154, obviously, the Rhodes share was also benefit from that increase in value. I think the important part for us to note is that at that dual value parameters, we're paying around about 10x P/E ratio for Rhodes and 5.6x EV/EBITDA, which we view as a fairly good valuation for both the buyer and the seller in the transaction. We expect the transaction to be approved before the end of our financial year, which is 31 March. The circular was posted out to shareholders this morning, went out on SENS and which calls for the shareholder meeting to be held on 11 December. We're fairly confident that the shareholders of Rhodes will vote in favor of this transaction, especially with the changes in shareholding that has occurred since the announcement of the deal, where a lot of shareholders have viewed Rhodes as an entry point to get their hands on more Premier shares. And then finally, the Competition Commission approval, which has got no set time line but the commissioners are fully engaged. We're working on providing more information on queries that we've already received, and we're quite hopeful that we should be able to conclude that process in a reasonable time.

Yes, I flipped over to 24.

Okay. Sorry, Peter, I don't have the presentation. So I don't see it. It's hard to...

The rationale...

The rationale for the transaction. Basically, I view it as three stages on the rationale. I think in the short term, we'll have an EPS enhancement just because of the valuation of Rhodes where it will be accretive at a Premier level to our EPS. Then secondly, we have some duplication of costs, things like audit fees, board costs, listing fees, insurance programs, et cetera, where we can rationalize quite easily that we see a short-term opportunity to reduce costs for the combined business. And then in the sort of 1- to 2-year time frame, harmonizing procurement and other areas like logistics and merchandising, et cetera, which should give us another round of reduction in costs, which really does derisk this whole transaction from a Premier perspective quite significantly and then accelerating some growth opportunities that Rhodes has had in the pipeline for a while, but that for various reasons, has not been executed on yet. And I think that within a combined larger premier business, we can accelerate to drive growth in the 3- to 5-year time period. So I think, first and foremost, Premier engaged in this transaction as a means to continue driving towards a double-digit EBITDA growth on a sustainable basis, with a further uplift in EBIT and then continuing to try and get to that 20% continued growth in EPS. I think the product portfolio of Rhodes is a very strong portfolio with a lot of categories where they're #1 or 2 in the market, and certainly a very complementary to Premier's portfolio. We've got a total overlap in customer base, although I do believe that Premier might be slightly stronger in the informal trade and can probably add there to the Rhodes portfolio. So we've also got the Rhodes management team remaining intact, I've actually had a very constructive relationship with Pieter Hanekom, in particular, throughout this process so far. And I do really want to compliment him in particular for working with us. I think that with that combination, we will significantly derisk the cultural integration between our businesses as well. And then from an enlarged group perspective, I think just having a much bigger free float, a larger market cap certainly puts us on the radar screen for larger funds that in the past have elected not to invest in Premier because we just didn't have the liquidity or the size that would make it worth their while. So I think all in all, across the board, quite a strong case for embarking on this acquisition.

Perfect, Kobus. I'll turn over to the Millbake slide.

Yes. From a Millbake perspective, we've seen a continued strong performance across the whole weak category from Snowflake into our bread business. We have had a good period where wheat prices, in particular, have stayed fairly stable and to downwards and especially with the improvement in the rand against the dollar on the importation of wheat is going to continue into the second half to give us a little bit of relief on our wheat prices, which we think we would mostly be able to use to offset inflationary pressures like wage increases, et cetera, in other areas and would allow us to also remain fairly flat in terms of our pricing through to the end consumer for the remainder of our financial year. We've seen a much improved performance from our maize business during the last 6 months, where last year, in particular, with the massive inflationary pressures that we had that I've alluded to earlier caused us to put through price increase after price increase and that made it difficult to, at times, sustain profitability, but we've certainly seen the normalization of that business and had a nice addition to our profitability for the 6 months, although certainly not on the upper end of the range that we've experienced 2, 3 years ago. And then Aeroton, I think, is very exciting. We've been talking about this bakery now for almost 3 years. We shut it down in end of July 2023. We've been constructing it for 2.5 years, and we will start commercial production at the end of this month in time for the Christmas trading season, December traditionally is the highest volume month for bread overall from a calendar perspective. Just given the additional spending power that consumers have with 13th checks and stockpiles, et cetera, all going towards the food category. So I think, very exciting for us and we're certainly looking forward to Aeroton continuing to help us to drive our growth going forward. On the groceries basket, we've seen a very nice performance starting to come through in our sugar confectionery business. We've imported or onboarded more than 150 SKUs or products for Woolworths, a lot of products that Premier has never made in the past, especially in the chocolating side of the business. And so it's been a huge effort to onboard all of that manufacturing. I think we've bedded it down quite nicely, and we're really starting to see the benefit of that flowing through into our profitability. And I think for the next year, we will benefit as that flows into our base versus prior year. On the Lil-lets side, we've made quite significant investments in liners, pads, facilities where we manufacture products that we used to import in the past and with very good automated packing lines associated with those machines, and we'll see in the second half the benefit of that lower cost coming through into our cost of sales as we make more of our own products and import less. On the U.K. side, we've done exceptionally well launching a cotton wool range under the Lil-lets brand. We're pretty much the only branded cotton wool range in the U.K., with all other cotton wool options being private label, done by the various retailers. And so in particular, with the growth of our business on Amazon, where there are no private label players, we really find ourselves in a unique position where Lil-lets has very limited competition from other branded players given that it's mostly private label competitors that we have. So -- and I think that overall, the U.K. market online shopping for products, in particular, like fem care products is an area for big growth going forward as the convenience of that channel just makes it a compelling value proposition for the consumer. From CIM perspective, we've continued to see an improved performance from CIM following the political unrest that subsided in the middle of January, that's continued in its first 6 months. We've dealt with fairly difficult foreign currency availability problems, in particular, to get hold of dollars to pay for wheat imports and also for rands to pay for maize imports into country. And we've also had that same problem on our rice imports. But given that we are established business in that market, we've managed to find by hook or by crook, the foreign currency that we needed, and it's put us in a good stead where we were able to bring product in where others or other importers couldn't. And so we've actually continued to benefit in a perverse sense from the currency shortage in market. And in particular, we were a very marginal player in rice doing about 50 tonnes a month, and we've actually now doing over 1,000 tonnes a month of rice. So very nice recovery in that business, but still a long way from where we would like it to be. And we're certainly hopeful that the improvement in the gas industry and with the force majeure and the Total restarting the gas extraction projects that we will see improved liquidity conditions and some of that money flowing through to the consumers within the country. Next slide, please, Pete.

Yes, I've got the next slide up, the income statement.

Right. From an income statement perspective, I've alluded to the highlights. I think that Premier has tried to continue to drive this narrative where single -- high single-digit revenue growth with good management, margin management and cost control drives us into positive or double digit on an EBITDA perspective, and which then kicks through to a higher EBIT number and puts us through into a higher EPS growth rate. And I think that's certainly part of the planning that we will continue to try our best to keep this upward trajectory guide.

Yes. I'm on the cash flow slide.

From a cash flow perspective, we've benefited from those reduction in grain prices to see quite a nice cash generation for the period as especially the maize category in particular, releases, working capital that we've had to invest in the prior year. So we saw good strong cash conversion, and that has enabled us to continue to reduce our debt facilities, invest in our CapEx program, especially with the final numbers coming through for Aeroton to get that plant, the spending on that project done. And at the same time, continue to deleverage our leverage ratio and get the benefit of the combination of lower debt and lower interest rates, lowering our interest charge. Ultimately, taxation is a little bit up as a result of that. But I think overall, a very strong cash flow generation and showing that the profitability is really flowing through to the bottom line. We're touching on the share repurchase program there. We are in the market at ZAR 154 a share, and we will keep on updating the market as we progress with that program. But it's being done through the general authority that was granted to us at our Annual General Meeting in September, where we allowed to repurchase up to 10% of our issued shares, and we will continue with that program.

Thanks, Kobus. And again, thank you very much to you and your team for a fantastic set of results. Stay on board in case there's some questions, we'll reach out. So just quickly on New Look. And obviously, as I mentioned, New Look is not a huge contributor to our overall NAV, just under 5%. But very pleasingly, business has had a pretty decent performance in light of the very tough conditions that are there in the U.K. I think we are starting to see the green shoots of the hard work that management has put in over the last 2 years, to be honest, to turn the business around and increase the digital part of the business. Overall, revenue down 2% year-on-year, but there were obviously some store closes to take account of. So on a like-for-like basis, it was flat to slightly better. In terms of the gross margin, which is probably the most important point, slightly up year-on-year, which I think is very key. The businesses had a very good stock turnover and destocking. So it really is going into the Christmas season well positioned this year, whereas last year, I think it was still somewhat overstocked. And I think it's talked to good margin management by the team. That and obviously, cost reductions that have happened over the last 12 months have seen EBITDA increase to GBP 21 million, which is a 34% decrease year-on-year with margins up to just under 6%, so 1.5 percentage points increase year-on-year. I think very importantly, the New Digital transformation, the new strategy that the team embarked on sort of a year to 18 months ago, really is starting to pay dividends. If you look at the rightsizing of the cost base, that's partly in line with that, and that has driven the increase in the EBITDA growth year-on-year. And most importantly, customer migration, I mean, the whole key issue of having retail customers, and if you do close those stores, can you migrate those customers onto your online platform. It's currently tracking in line with or slightly ahead of management's plan, which is fantastically good news, and which shows the resilience and the benefit of the nearly 10 million customers that New Look has. So again, just touching on the numbers. The retail segment overall, it was down 1.6%. That was actually driven by the retail segment of the bricks-and-mortar part of the business, which fell 5%, but that was largely driven as a result of store closures. There's been an active management of underperforming stores across the country and New Look has closed down those stores and obviously, the Irish business as well as it becomes a more digitally focused business. From a digital perspective, the digital part of the business actually grew nearly 8%, significantly ahead of many of its competitors. And this has shown that the conversion rates, as I mentioned, of moving those customers from retail to online has continued to be at or in line or slightly ahead of management's forecast. So overall, a good start to the first 6 months. It was not something we could say this time last year. Clearly, as we've said before, the golden quarter starts now with November and December, in particular, being key months for this business. As I mentioned at the beginning, an adviser has been appointed to assess strategic options for the business. We won't comment any further at this stage on that. But again, I think that's a key milestone for all of us and credit to the management team for continuing to turn the business around. Just moving quickly on to the valuations. I won't dwell on it. From a Virgin Active perspective, the GBP 120 million that you would have seen before is now almost reached, and at Mark's numbers that we believe has been reached, which is a great milestone for the business, and we've kept the GBP 120 million the same. Hopefully, going forward, that number should start to tick up as we see the benefits of the operating leverage in the business. The EBITDA multiple increased slightly to 9.25, a reflection of the fact that the peer set increased from 10.2 to 10.9. So we kept the same discount and increased our multiple slightly. That's resulted in a relatively flat enterprise value. In terms of net debt, the GBP 379 million has gone to GBP 410 million, that is wholly a function of the incremental CapEx that's been spent on the business, that extra GBP 30 million. As Mark alluded to, the business has now covered itself from a cash flow perspective, including interest and debt. But obviously, with the incremental CapEx that we spent on the business and some of the debt -- the cash that we had in the business has been spent on that. We have seen the positive benefits of that, and I think we're very confident that management will continue to see growth on the capital that has been spent. So overall, at the bottom, the carrying value for the Brait's investment goes from GBP 432 million to GBP 433 million, so effectively flat. Obviously, a slightly stronger exchange rate means that in rand terms, the valuation is slightly down from ZAR 10,209 million to ZAR 10,064 million. On the right-hand side, we've done what we've shown before to say that at the current market value, so the ZAR 2.11 and the implied multiple on the Virgin Active business is 7x, which rise as compared to some of the other peer group things that we showed you on the previous page. The ZAR 3.21 in is the current NAV of the business, as you will see there, which values the Virgin Active business at GBP 433 million at 9.25. And obviously, if you value Virgin Active business at 10x, the look through NAV goes from ZAR 3.21 to ZAR 3.57. The table below, again, just shows to the extent that management is able to grow the business from the GBP 120 million where we are now today, next year to GBP 140 million to GBP 160 million depending on where the business ends up, again, [indiscernible] use to value the business at, what would be the impact on the NAV per share for Brait. In terms of New Look, very little change there, to be honest, we kept the maintainable EBITDA the same, the multiple the same. And as you go down compared to the March 2025 number, the carrying value remains almost identical to where it was -- obviously, a slightly strong exchange rate means in rand terms, the value has gone from ZAR 485 million to ZAR 474 million. And then one final slide just talking again about the strategic outlook for the business. I don't think anything has changed, the strategy remains to unlock value through the sale and monetization of the asset base over time. The key next step from our perspective at Brait is to raise capital or listing of Virgin Active. Much work is continuing on that. We're in London next week with Dean and Mark and the team, and then that continues to progress. In terms of other work ongoing, I mean, clearly, there's always options. We continue to proactively look at what to do with the Premier stake. We remain very confident of the ability of Kobus and the team to grow that business. And particularly if you've got a cost of return on invested capital of 25%. And we remain strong holders of that business. But clearly, we remain open to looking at various options around that as well. From a refinancing of Virgin Active global facilities, that's something that's in process. We would like to conclude by the first half -- end of the first half of next year. And again, that will be a key unlock for that business as growth going forward. We continue, as I mentioned, to assess options to raise capital in Virgin Active and/or list the business. That remains an active ongoing task for us and the Virgin Active team. Clearly, as we mentioned, at some point in time, there will be a sale of New Look that continues. We won't comment on the process at moment. But as I mentioned, an adviser has been appointed to look at the strategic options for that business. And then finally, obviously, what the optimal capital structure is for Brait to facilitate exit. Are there different ways to optimize the capital within the business. We continue to look at all of those going forward. I think importantly, the recapitalization this time last year really has brought flexibility to optimally monetize the asset base. And I think as I mentioned at the beginning, I think the asset portfolio has never been in as good a shape. And we remain very, very confident that this portfolio will grow at or most likely significantly above the cost of equity going forward. As I mentioned, if you've got 45% growth this year in EBITDA in Virgin Active, you've got 28% HEPS growth in Premier and a return on invested capital of north of 25%, I think you can be relatively confident that we can grow those businesses. And therefore, there's no reason to jump to do something. We will continue to optimally look to monetize the portfolio, but there's no urgency necessarily to do so. The increase in CapEx at Virgin Active, I know that's one of the questions that's going to come up. It's important. The business continues to show really good growth, really good return on that invested capital where it puts money to work. And we want to consolidate and grow as a shareholder in that business in the key markets and prove out the wellness strategy. So that remains a core strategic objective for the business. I think that brings the presentation to an end. I think there are a number of questions. So firstly, we'll hand over, I think, to the telephone line for any questions first.

[Operator Instructions] At this stage, there are no questions on the conference call. I will now hand back to the management team to take us through the webcast questions. Please go ahead, sir.

Thanks very much. I think there's three questions currently. The first is from [ Nick Kiefer ]. Nick, good to hear from you. The question is, can your -- I presume it's Virgin Active. Can you list some of flagship gyms by region that best represent the lifestyle strategy, I presume wellness strategy that Virgin is targeting? How material are ancillary fees relative to total revenue in these flagship stores? Mark or Dean?

Thanks, Pete, and thanks for the question. Our absolute flagships, what we call the social wellness clubs, are the ones that we've been able to build greenfield, new clubs. And there, we have clubs, for example, like Bondi in Sydney, Australia, which was a new development, new club, which opened in August. And just in terms of, as Mark pointed out, that club performed exceptionally well. Normally, we budget our clubs to get to breakeven in approximately 12 months, that club hit breakeven within 3 months. So it's way ahead of our expectations in terms of the demand for social wellness club in a particular challenging market like Sydney. So that would be a really good example of a social wellness club. The new club that we opened in Doha, in Qatar and is also an absolutely beautiful club. We're in the presales phase at the moment. Once again, we normally expect a breakeven membership -- after a breakeven EBITDA and breakeven membership. After around 12 months, we expect that club within 1, possibly 2 months of opening to have its breakeven membership achieved. So let's just also strength of that social wellness club in Doha. In other territories, speaking more to some of the refurbished clubs. And this is not just the catch-up or maintenance CapEx. This is where we've done significant revamps to upgrade the gyms to social wellness clubs in the U.K., good examples of that would be Chiswick Riverside or Mayfair in South Africa. We have our collection clubs like Silo and Alice Lane. Those are good examples of premium social wellness clubs, but they're not at the same level, to be honest, as a Bondi or a Doha. We have -- which we call almost our limited edition social wellness clubs. We have secured a new sites in Riverlands in Cape Town, and they will be doing one of the limited edition clubs in South Africa. And then we have other examples in Singapore, Thailand, but numerous examples of clubs that we've refurbished from gyms to social wellness clubs and generally, what we see with all those clubs that have converted to social wellness, have a much broader wellness offering. We see the ability to yield those clubs up. And at the same time, we see an improved retention and ancillary rates. In terms of the question around ancillary revenue, currently, we at around 14% to 15% on a group-wide basis, ancillary revenue as a percentage of total revenue, and easily been able to get in excess of 20%. And why I say that is the current model, for example, in ancillary revenue in many of our territories, for example, like South Africa is what we call a tenant model, for example, we rent out some lanes to tenants, and we receive a revenue -- rental for that. As I indicated now with the partnership, for example, with Chad Le Clos. We start to take back those pools like we did in Learn to Swim and effectively charge our members directly when we own the relationship with the members. And then obviously, we have unlimited upside with the rental model. We get a CPI increase in rental every year, and we're less incentivized to grow the swim program, only in the swim program makes a significant difference. And the same model applies to PT revenue. We have a tenant model in many territories where we just rent out our clubs effectively to a personal trainer. We are starting to look at a more hybrid model where we own the member, and we effectively invoice the member with some sort of profit share with the personal trainers. And then all the new ancillary products that we launched around the longevity programs, the medical suites, bios, physios, we see significant opportunity to monetize those ancillary revenue streams. And that's why I say our target would be in excess of 20% to move ancillary revenue to...

Thanks, Dean. Next question, probably for Mark. Will the elevated CapEx in Virgin continue in the second half of the year and the year ahead, 2026? What is the maintenance steady-state CapEx for Virgin post these refurbs?

Thanks, Peter. Let me deal with the steady-state CapEx first. So we target 67% in terms of maintenance CapEx. So the numbers that we showed on Slide 19 or GBP 39.2 million maintenance CapEx is consistent with that, and we expect that to continue at a similar rate going forward, subject to inflation. In terms of the -- what we call -- let's call it elevated CapEx, let's call it that, that the refurbishments of clubs and new club CapEx. We expect the refurbishment number to be similar in 2026 compared to what it is in 2025 and thereafter, it will normalize. From a new club CapEx perspective, we expect that number to increase as we bring more -- find new sites and accelerate the growth strategy of the business. So I'd expect that to increase significantly. But with those clubs comes with 20% to 30% hurdle return on capital. So that -- it's a clear part of our strategy, as Dean alluded to early on, that space growth is a priority for us. In addition to that, we are going to be investing in our digital and AI capabilities, whether that's improving how we acquire, engage, retain members or just generally driving operating efficiencies. We'd expect that to be a key part of our CapEx line over -- certainly over the next 3 years.

Thanks, Mark. And then the last question that I have, again from Nick. Can you provide some guidance on the corporate actions and time lines that Brait are considering to unlock value? What are your plans to deal with the Premier position? Would you consider selling Virgin or possibly listing it on an offshore market? Yes. So Nick, as I mentioned, there's lots of different things that we continue to look at. So there's not one specific thing. I think the most important is to provide growth capital to these underlying businesses, and part of that is about restructuring the debt at Virgin Active level, which we're working very closely with Mark. From a Brait perspective, in terms of unlocking value, it's relatively simple. The strategy remains to return the assets that we have today directly to shareholders and therefore, Brait will no longer exist. So if that doesn't get rid of the discount, then nothing will. Clearly, to get there, what have we got to do? We've got to get to a point where Virgin is listable, to be honest, so that we can unbundle those shares directly to our investor base. And we've got time to do that. Now we're talking about the time lines. I think the obvious one is December 2027, which is when the bonds mature. We need to come up with a solution prior to that. In terms of would we consider selling Virgin, I mean, obviously, our strategy is to list it. We still think that our investors in Brait would like to retain the ownership of a stake in Virgin Active going forward as a potential -- as a listed entity. So we would look to list that business. If you have to say where would be listed, I mean, it is a U.K.-based business with a very significant U.K. presence. So I would hazard a guess that maybe the logical place. I'm not saying it will be London, but I would suggests a logical place to start. Obviously, there would be a secondary listing back into the South African market if we had to do that. So we will continue to look at that. In terms of the Premier position, as I mentioned, we remain very confident that Kobus and the team will continue to drive value there. But at the end of the day, we have a position where we need to monetize it. We have a liquid position that we can do. So we aren't looking necessarily to do something outside of the lines of what Kobus and the team have been alluding to. They have a buyback program already there. That I think will set a very good base to the share price going forward. And I think we'll be able to facilitate potential structured transactions around that. So there's nothing that we -- nothing major that's likely to happen on that front, I would imagine. We remain, particularly for most, I'd say, very, very convinced and long-term shareholders in that business. Anything else? I think that's the end of the questions. So again, thanks very much to all the investors for taking the time. We remain very open to having one-on-one. So if there are any additional questions, please forward them to the investor portal, and we'll endeavor to get back to you as soon as we can. Again, thanks very much to everyone, in particular, to Dean, to Mark and Kobus, for taking the time. Thank you.

Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.