Hollywood Bowl Group plc (2H4.F) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for taking the time to attend our financial year 2024 half year results presentation. Just in terms of agenda, I plan to take you through the highlights of the half year, our operational highlights and the progress that we've made out in Canada. Laurence will take you through the numbers and an update on how we've been investing capital and the return to [indiscernible]. We'll then move on to questions, first from those in the room and then from those [indiscernible]. The first half was a successful period for the group with revenue growth of 8.1% and an EBITDA growth pre-IFRS 16 of 10% versus the prior period. Despite very tough comps in 2023, we grew revenues by 1.3%, like-for-like basis, supported by a 3% increase in [indiscernible]. We posted an EBITDA on a pre-IFRS basis of GBP 38.6 million for the half. The group's strong earnings growth, coupled with its highly cash generative business model resulted in net cash at the period end of GBP 41.4 million. This strong financial position is after the payment of the final ordinary and special dividend for FY 2023 as well as our continued investment in new centres, acquisitions and refurbishment during FY '24. In line with our progressive dividend policy, which as a reminder, is 55% of registry profit after tax on a 1/3, 2/3 split, an interim dividend of 3.98p per share will be paid in July. So on Slide 4. In the half, we invested GBP 23.5 million in enhancing the customer experience in the overall quality of the estate. We opened new centres and completed acquisitions in both the U.K. and Canada. We continued to drive innovation and make investments in improving our technological capability. During the half, we completed refurbishment of space optimization projects in 3 centres, which included adding 2 Puttstars courses in Hollywood Bowl Centres to complement [indiscernible]. The average return on investment from our refurbishment remains well ahead of the target of 33%. We acquired further 2 centres in Canada, opened 1 new centre in the U.K. and added 5 more centres to our group pipeline of new openings. Pins on Strings were installed in further 6 centres during the first half and by the end of the financial year, all but 2 of our centres in U.K. will benefit from this cost saving and customer experience enhancing technology. In Canada, we're now up 25% on the state of the technology and plan to roll out to all Canadian centres over the years. Our people team has made further progress with our industry-leading training and development programs. Internal candidates represented more than 60% management appointments in the half. We've retained our one-star ranking status as one of the best big companies to work. On Slide 5, we give a reminder of our growth strategy, and we've made some good progress in the half with our simple but effective and proven strategy for growth. As a reminder, our growth strategy is focused on 2 main areas: organic growth through yield enhancing customer-led initiatives and secondly, through investment-led growth, driving returns through investment in the quality and size of our estate and strategic acquisitions in the 2 main geographies of the [indiscernible]. We're meeting our ambitious targets of opening new centres in both the U.K. and Canada and delivering solid returns at or above the target levels from our ongoing refurbishment programme. Now I'll hand over to Laurence.

Thanks Stephen. On Slide 7, just representing our results for the first half and [indiscernible]. On the back of exceptionally strong FY 2022 and FY 2023, it is pleasing to see a continued like-for-like growth in the U.K. with 1.3% growth and 8% like-for-like growth in Canada in the first half which, with new sites, took the total group revenue to over GBP 119 million in the first half, which was growth of 8.1% compared to same period of [indiscernible]. This very strong trading performance, coupled with our discipline on costs led to a record group adjusted EBITDA on a pre-IFRS 16 basis, GBP 38.6 million, which was up 10% on the first half of FY 2023. Along with a strong operating profit margin, which was up 50 bps on the prior year, adjusted EPS was 13.6p per share, which was up 6.2% despite the increased corporation tax rate during the first half versus last year. On Slide 8, we set out growth for total revenues compared to last year, which was noted of H1 in FY 2023 revenue included the small GBP 0.2 million benefit on the reduced rate of VAT. So like last year, we rebased the group revenue splits out giving us GBP 110 million of true revenue last year. On the back of significant growth over the past 2 years, it was, as I mentioned previously, pleasing to see continued like-to like growth with the U.K. centre like-for-like growth of 1.3%, with spend per game growth up 3.2%, taking like-for-like average spend for only GBP 11.21 and a marginal decline of 1.6% in the like-for-like U.K. game volumes. The like-for-like growth alongside the performance of the new centres resulted in record U.K. revenues exceeding GBP 100 million in the first half for the first time at $103.3 million, and a growth of 4.4% compared to the very strong underlying revenues of [indiscernible] in the prior year. It's worth noting that the U.K. business has seen like-for-like compound annual growth rate of 5.9% every year since 2019. Canadian like-for-like growth, we're reviewing Canadian dollars to obviously allow for disaggregating the foreign currency effect was 8%. Alongside the strong like-for-like revenue growth of GBP 0.7 million, new centres performed well, also adding GBP 4.2 million or CAD 7.8 million, resulting in total revenues on U.K. pound basis, GBP 15.9 million and on a dollar basis of CAD 27 million in Canada, which was growth year-on-year with 46.9% on a constant currency basis. Splitsville Bowling Centre's revenue was up CAD 9 million to a total of CAD 24.5 million and Steve will talk more on [indiscernible] of the presentation. Total group revenues for the half, as mentioned, were GBP 119.2 million. An average family of 4 could still bowl [indiscernible] to GBP 25. And we believe that maintaining its value for money, pricing strategy is a contributing factor to our continued like-to-like revenue growth alongside our investment strategy across the estate. So on to Slide 9, where we set out the income statement. I'm going to throw a lot of numbers, but please note that everything I speak about easing the [indiscernible] and therefore, you'll be able to tally over and I'll take any questions as well. Gross profit on cost of goods sold, which excludes just for anyone to note any payroll costs was GBP 99.4 million, which was an 8.9% growth on the same period last year. And gross margin on cost of goods was 83.4%, which was up 60 bps year-on-year. Gross profit on cost of goods sold for the U.K. business with a margin of 83.9%, which was up 10 bps on the previous year, while Canada was at 80%, which was up 6.4% on the prior year. Now this margin increase is in due part to the significant revenue growth we've seen in the Splitsville centres as we mentioned. And the bowling centres now make up a larger proportion of total revenue in Canada versus our Striker Equipment business, which obviously operates at a much lower margin. The Splitsville bowling centres on their own had a gross margin on cost of goods sold of 84.8%. Striker year-on-year saw revenues decline by CAD 0.4 million, mainly because installation contracts weren't signed off in the first half. I'm going to declare the revenue asset signed off. But also due to the huge increase in respect to the supply and installation equipment into the Splitsville centres, which obviously is counted as intra-group revenue and eliminated on consolidation. On to admin costs, [indiscernible] admin costs excluding depreciation and amortization were up 9.3% to GBP 48.5 million. Employee costs make up the large proportion of that at GBP 22.3 million, which is an increase of GBP 2.3 million when compared to the same period last year. This is due to a combination of salary increases, the impact of higher like-for-like revenues, new centres as well as the significant growth in our Canadian business. Total centre employee costs in Canada of the GBP 22.3 million was GBP 3.8 million, which is CAD 6.4 million and that's an increase year-on-year of GBP 1 million or CAD 1.9 million. Whilst the U.K. centre employee costs were GBP 18.5 million, which is an increase of GBP 1.4 million when compared to the same period last year. The increase in like-for-like employee cost in U.K. were mainly due to the national living wage increase that we saw last year, and we expect to see this increase to about between 8% and 9% in the second half when compared to the same period last year due to the higher than inflationary increase in national minimum and living wage from April 2024. Total property-related costs accounted for under pre-IFRS 16 were GBP 20.6 million, with GBP 18.7 million for the U.K. business, which is an increase year-on-year of GBP 1.1 million. Of those U.K. costs, half of those are rent and that increased by GBP 0.4 million year-on-year, up less than 2% on a like-for-like basis. We received some further business rebates in the first half in relation to the 2015 revaluation, but most of those were received in the second half of last financial year. Canadian property costs were in line with expectations of GBP 1.9 million, CAD 3.2 million, which is an increase year-on-year, but all to do with the increased size of the estate with no cost increases on a like-for-like basis. As noted in the FY '23 preliminary results, we were pleased to have agreed a new electricity commodity price, which we now hedged up to the end of FY 2027, with FY '25 forecasted to increase by GBP 1 million compared to our FY 2024 costs. Whilst we will still be able to take advantage of any lower costs should market conditions prevail during this period. Utility costs increased year-on-year versus FY '23 by GBP 1.1 million, with U.K. centres accounting for GBP 1 million of that, and all of it due to the sell-off that we had in the first half of last year due to the fact that we hedged more than we needed due to our successful solar panel installation program. Total corporate costs increased by GBP 0.6 million to GBP 12.3 million when compared to the same period last year. U.K. costs actually reduced by GBP 0.4 million to GBP 10.6 million. But as we continue to build our support team in Canada, corporate costs increased there by GBP 1 million. Group adjusted EBITDA pre-IFRS 16 increased by 10% to GBP 38.6 million and includes a contribution of GBP 4.4 million or CAD 7.6 million from our Canadian business. This increase overall of 10% is due to a combination of like-for-like revenue performance in both the U.K. and Canada as well as the new centre growth pipeline. Now Slide 10 sets out the inflationary pressures. Whilst the inflationary pressures will still continue, but we are better protected the most with 72% of [indiscernible] is not impacted by the cost of goods inflation. And the labour costs of less than 19% of revenue at centre level, we won't see as large an increase on a pound basis as always do. The [indiscernible] obviously led to a 9.6% increase in terms of national living wage, which is, as noted before, 3.5 percentage points higher than we had originally forecasted, which is worth about GBP 0.5 million in the second half. What we are seeing in Canada is more modest increases, mostly in line with inflation, and those are spread throughout the year, most of them coming towards the end of our financial year and to the beginning of FY 2025. In relation to energy costs, as I mentioned, we're extremely well protected and we've sized our new hedge. But what we are also seeing is continued installations of our solar panels. So in the first half, we installed an extra 1,824 panels. So what does that mean? Well, in total, we've got over 14,500 solar panels now to have an annual yield of 4.7 million kilowatt hours, but we used just over 20 million kilowatt hours in the U.K. So we're getting around about 20% of all of our energy, either through there or able to sell off back to the grid. Property costs have been well controlled with underlying rate increases of 4.9% and some small rebates seen in the first half. Like-for-like rate increase have been less than 2%, and we've actually seen net increases on 4 of our 7 rent reviews in the first half, as we continue to incentivize our third-party experts in attaining lease. Capital cost inflation still impacting as it was at the end of FY 2023, but it has started to level out, and we're hoping to see some of this start to come down in the near future. All of this, plus our wide demographic appeal and strong portfolio allocations, we were able to lower the CPI pricing pieces when needed. We drove strong free cash flow in the period, which is set out on Slide 11. The group adjusted operating cash flow of GBP 31.3 million. The group spent GBP 5.7 million on maintenance CapEx in the U.K., including continued spend on the rollout of Pins on Strings, as Steve mentioned earlier, to the tune of GBP 1 million and solar panels installations as I just mentioned, which costed GBP 600,000. A total of GBP 5.7 million was also invested in our reversal program with 3 centres in the U.K. for a total cost of GBP 3 million as well as investments into the Canadian estate of GBP 2.7 million. Now a significant proportion of the refurbishment spend in the U.K., nearly GBP 2 million of it, was in relation to the extension and refurbishment of our centre in Stockton, which we've got a case study on Slide 13, and I'll talk more about it later. Despite these inflationary pressures that we saw in [indiscernible] previous slides, returns on the U.K. refurbishments continue to exceed the Group's hurdle rate of 33%, more on that later. New centre CapEx was a net GBP 4.8 million and this relates, in the main, to 2 centres that have actually opened early in the second half. One was opened in the second half and one was due to open at Hollywood Bowl Dundee [indiscernible] and that was GBP 2.2 million of that GBP 4.8 million spend. And then our centre in Waterloo in Canada with GBP 1.9 million and that will open at the end of June. Post tax and interest capital lease payments were generated GBP 16.5 million of free cash flow. It's also of note, as Steve mentioned earlier, we paid out GBP 19.4 million on final ordinary and special dividend as well as GBP 7.6 million for the centres we acquired in the first half, 1 in the U.K. and 2 in Canada. All of this left us with a cash balance at the end of H1 of GBP 41.4 million and undrawn revolving credit facility of GBP 25 million. On Slide 12, [indiscernible] refurbishments. We continued to see those payback in [indiscernible] rates. This led to spend per game performance up 11.2% and lineage up 2.9% versus year [indiscernible]. Our average payback on capital investment is over 50% from the last 14 refurbishments. On top of that [indiscernible] an increase of over 3 percentage points in our Net Promoter Score from our customers and our refurbished centres as a testament to our continued evolving designs, new elements into each investment, caters a local market and essentially not having that cookie-cutter approach. We also noted on the graph through stars, those centres that are on their second and third generation refurbishment, which is still generating strong returns. We have plans for further 4 investments in the second half [indiscernible]. And on Slide 13, we give an example of a piece of asset optimization we've undertaken at our centre in Stockton. This is a unit that has a strong [indiscernible] performance and was largely furbished way back in 2016. We worked hard with the landlords to try to unearth some extra space, either upwards to a site. And finally, did a deal on the units left of [indiscernible]. In conjunction with a new lease for a period of 15 years and investment into the existing space, the group also extended into the adjacent unit, adding extra 5 lanes, Puttstars mini-golf course, and a large amusements area. The refurbishment was completed in time for Easter and early signs are extremely encouraging with multiple record revenue days and very strong customer service metrics. On Slide 14, we discussed the other area of investment growth with a strong new centre pipeline in U.K. Steve will talk more about the new centre pipeline in Canada later on. We continue to see strong performance from our new centres in U.K. and against our case study on Slide 15. We have an excellent track record of opening new centres as we continue to focus on our long-term goal, the sustainable EBITDA with strong demographics being key. Having acquired Lincoln in October 2023, we refurbished and rebranded this centre now to Hollywood Bowl and that was reopened as a Hollywood Bowl in time for Easter. And when I say reopen, we didn't close. It was fully opened in time for Easter. Local feedback has been excellent, and we definitely see record days and record weeks there. Our second site to open in the year with Dundee, which opened in early half 2, and there's 2/3 of the planned for the second half and a strong pipeline for FY '2025 and beyond. Our strong covenant, good relationships with landlords and importantly, our investment cycle, made is first choice on [indiscernible] looking for a long-term sustainable tenant. Now on Slide 15, we got a case study on our Merry Hill site. And this opened in September of 2023. It's an area we've been looking at for a long time, and we determined to only be in the Merry Hill shopping centre, not necessarily just in the surrounding areas. There's a significantly strong local population with over million households within that key demographic drive time of 16 minutes. The Acorn demographic categories, we know [indiscernible] the success of the Hollywood Bowl centres, those indexes are over 110 with 100 obviously being more than ideal. And the shopping centre itself includes an exceptionally high performing cinema as well as lots of retail space. So we were keen to work with the landlord to ensure that we have the new creation of a leisure space within that with restaurants nearby. If this has been a true retail space, it's just retail around it, we'll be taking the space. So we know that, that does really work for us longterm. We on the anchor in this new scheme alongside restaurants as well as extra space being made available in the [indiscernible] future for other leisure opportunities as well. And you can see the layout on the slide that was finally agreed as well as some pictures of the interior.

So on Slide 17, we look at some of the operational highlights from last year and the improvements that we've made to our [indiscernible] in revolving, we continue to roll out into streets Tech extolling for centres during the half. 90% of the state now benefits from the technology and we'll be installing into at least 5 more centres during the second half of FY '24, really all 2 of the U.K. stable progeny technology. We continue to learn from the refurbishments and new centre openings, rolling those learnings into new projects. Our mantra has always been good enough isn't and we constantly improve the designs, music and lighting, so they offer this relevance to the [indiscernible] we're serving. Through our space optimization projects, we've introduced the Puttstars mini-golf courses in 2 lanes with 9 holes added. And as you've heard early from Laurence into Stockton with 12 holes added -- all of these efforts have helped us drive record customer satisfaction scores with our Net Promoter Score of 6.7 percentage points on last year 67%. Our reasonable areas see more investment, 18% of the new machines added so far this year have been above the GBP 1 per play price point. As we continue to evolve the mix of sheets to good, better, best and then priced in according. We've seen a 4.5% increase in amusement spent per game during the half. So the game is also grew both our Barberio offers, our Manager of delivery parity products quickly, consistently at value from price point continues to reset our customers. [indiscernible] albeit tweaking them slightly to include extra sets and shares that are popular lanes, without impacting the pace of play during the busy period. We saw a 4% increase in food and beverage spent organic during the half. Turning to Slide 18. Our product really is truly unique within the [indiscernible]. A key to our success is our inclusivity appealing to an incredibly wide demographic, is therefore very important we keep our prices accessible and the experience that we offer fabulous [indiscernible]. Due to the very limited exposure our business model has to a lot of the recent inflationary cost pressures coupled with our dynamic pricing framework, we've only needed to make very modest price increases over the last 5 years, resulted in the relative price of the game of bowling actually decreasing since 2021 when compared against the retail price increase. Price index rate increases in national minimum and national living wage. Despite the well-invested estate and an industry-leading experience, Hollywood Bowl Group remains the lowest price branded bowling operator with a family of 4 still able to bowl for less than GBP 25. Turning to Slide 19. For the full year results presentation back in December, we talked about how we were developing our own reservation system. A lack of functionality of the existing bowling products and the closed nature of the technology coupled with the growing size of our business, [indiscernible] us to invest in creating our own more configurable and sustainable systems. As a brief reminder, the new system is much simpler and quicker for our teams. It's a better user experience for our customers, removes the reliance on external companies and their development road map and will be a core enabler for our technology enhancement ambitions. After a successful pilot across a number of centres, we've installed the system into all U.K. bowling centres and our 55 best customer contact centres [indiscernible]. Phase 2 will be the rollout of our Canadian centres towards the back end of this financial year. There are a number of operational differences and changes to configuration right provincial tax selling time rather than games that we'll be working through. But once installed, we'll leave the Canadian centres more comprehensively with the U.K. and allow us to accelerate the digital marketing integration. Phase 3 is the future road map with our [indiscernible] developers building out further enhancements, including self-serve features, booking shortcuts and crucially integrating the other software systems. So turning to Canada. Our Canadian business has grown from strength to strength and we have had a fabulous first half of this financial year. Like-for-like revenues were up 8%, solid growth from a very tough compared to last year with growth in both spend and volume as well as improvements in [indiscernible] 1 percentage point versus same period last year to 84% with the Canadian centres delivering CAD 10 million of EBIT in the half. The recently acquired centres contributed CAD 7.8 million of revenue in the half and this you can see on the graph, the like-for-like decline, the GBP 200,000 from our Kingston Centre is actually due to closures discovering an abundant seller with asbestos contamination under leakyrcades during the reversion issues getting energy upgrades and contracted delays or poll earnings as we plan for the necessary refurbishments. As Laurence mentioned earlier, the like-for-like [indiscernible] of Striker business is actually all down to the timing of installations and invoicing and the amount of intercompany work that the team is completing supporting our refurbishments and new site fit-outs has actually saved the group over GBP 1 million. As we show on Slide 22 in addition to the strong financial performance from operational success, as we have seen on a state investment in the half becasue we acquired 2 new centres. The first was the acquisition of an owner-operated family entertainment centre in Guelph, Ontario for CAD 4.7 million. That's a 36,000 square foot centre with 24 lanes of 10-pin and 8 lanes of 5-pin bowling [indiscernible]. Second was the acquisition of the assets and lease of family entertainment centre in Vancouver for a total consideration of CAD 425,000, site that's in need of reconfiguration of refurbishment, is located on a popular leisure scheme with cinema and ice rink and offers 34 ten-pin and 6 five-pin lanes, small [indiscernible], a large bar and diner. Both businesses have had temporary signage installed rebranding them to Splitsville and some essential maintenance capital invested prior to their full refurbishments and [indiscernible]. On new builds, works are progressing well in our site in Waterloo, Ontario with 24-lane centre due to open by the end of this month. Two of the new centres have been [indiscernible] in the half at locations Creekside, Calgary and then Kanata, Ottawa. We'll be on-site in both locations during the second half of this financial year. We've got a pretty busy second half planned out in Canada in addition to the new sites and acquisitions, the full refurbishment of our centre in Kingston is now complete, and we'll be on site in Highfield, Calgary and Glamorgan, Calgary completing full refurbishments and rebrands. On Slide 24, [indiscernible] financial outlook, we still expect a lot like-for-like growth in the second half despite the euro and a very tough comparative period. [indiscernible] absolutely basis will be supported by the full year effect of the refurbishment of centres, new centres opened during FY '23 and at least 3 new centre openings in the U.K. and Canada during the second half of FY '24. We remain well protected from the inflationary led costs with 72% of our revenues not subject to cost of goods inflation. We do, however, see payroll inflation of 9.6% and business rate inflation of 6% versus H2 of FY '23. We'll be investing between GBP 35 million to GBP 40 million on our available capital in the year on new centres, positions and refurbishmnets and are confident that we continue to deliver for [indiscernible] target returns to our shareholders. So in summary, it's been another successful and this period for the group. We remain the market leader in both the U.K. and Canada. Our growth is funded by cash from our balance sheet, and we remain very confident about the future success. Happy to take any questions that you may have.

Just in terms of the second half on the cost and just remind us what the rate rebates [indiscernible] second half on 2023. And in terms of landlords, what kind of concessions you get on new sales [indiscernible] on to new things. And the third one would be you're white space in new pilot expansion?

Yes. So in terms of [indiscernible] during the second half, it was over GBP 3.2 million. We do on a cash basis [indiscernible] and look, you don't get that hedge. In terms of concept so sort of incentives from landlords, it's not changed massively, in line with where it's been previously, but we are in Mexico when I'm there, but we've also always say what happens sale capital as far investment entries for the end not saving the new red the any way as part of that. That doesn't effect me now either way. There's obviously a depreciation bait. It contains capital depreciation for it. And there's a small P&L benefit. [indiscernible]. In terms of white space, we've always said that if you read the papers to white space and then we look simple in Scotland [indiscernible] example. -- that we still believe that there's opportunity to hear our long-term growth ambition that we set out last year at the year-end results to get to 91 bowling centres [indiscernible] we've got 4 signed up for this year, 2 of which bring open for [indiscernible] next year. We also got some sign up to 2026 in cash, [indiscernible]. We're not going to be pushing into a quantity plate. Obviously, it's still likely important. What we are seeing is, there are more competitors out there. As Steve mentioned, the full year results last year, that we're seeing more competitors coming into markets where we intended to have the only real fruit offer. But actually, our offer is still the one that [indiscernible].

Roberta from Investec. How do you see the pull back in the environment changing in the past few months? I think [indiscernible] especially since that entertainment was sold, has there been any changes on the undecided opinion?

So in terms of the last few months, that. I mean in the last -- it depends on how many months if we say, in the last, say 24 months, there's been quite a significant that last day. We've seen some really aggressive expansion from lots of other operators of experiential measure. And it kind of dropped in towards the back end of the full year results presentation [indiscernible] Roxy Lanes, Lane7, Tenpin accelerated the growth. There's also been some new entrants to market for the experiential [indiscernible] which we're all competing in. It tends to be a bit more focused on the adult market though rather than the family focus. And we've actually seen growth in volumes from our family business during cost class and that's off a backdrop of what decline in overall as versus last year. So what we see is a bit more of a drop from the yieldable market. And I think that that's been a consequence of increased competition, but also real squeeze on the student market that they've seen [indiscernible] the relative loans that you can get to stay the same. So they'd be squeezed from both ends and therefore, less spend on the disposable. It doesn't have as much of an impact on those given to be really very small part of overall customer mix.

No changes. I don't really the last system sale of components, and we've seen that change.

No activity and no real changes. I mean the metrics were surprising, but in a normal cost of business.

Just going to the dividend growth to our group EPS exact because you changed the payout in the middle of the last year.

This is a mix of the 2, so we have amended our [indiscernible] policy in our year-end last we expect 5%, but that's likely to be. But also talk about we see group [indiscernible]. So it's extremely [indiscernible].

And then just to understand what you said about the labour outlook, but obviously, you were a bit caught out 18 months ago. Is it wise to put it like 9%, 10% [indiscernible] think 2025 [indiscernible]?

No. So, That's a -- so what we're saying is that it's 9% or half year FY '24 and the FY '25, we're assuming it's going to go back to more historic levels that we've seen [indiscernible] got 5% and 6%.

[indiscernible]You mentioned Stockton was a 7-year repo cycle. Is that typical for the group now?

No. So the reason it didn't and we waited so long for that one is that, that one was on a lease from the landlord and the lease actually ran out [indiscernible] and the landlord looking to redevelop it into warehouse space. So we had a 10-year lease [indiscernible] landlord [indiscernible]. However, whereas what we would obviously invest in it while that was going on. However, once we were through, I'd say, the first 12 months of the COVID and the experience with that, landlord reviewed the opportunities, didn't actually see warehouse [indiscernible] big opportunity to show her to be in the long term, [indiscernible] anyway. And therefore the landlord [indiscernible] opportunities and we're their first opportunity, and we would indicate throughout the COVID lockdowns. And therefore, when it came to the [indiscernible] opportunities, so we will be interested in is not released as a new on same terms as we had before, but we also see interest in extra space if they had any. And the restaurant export ones was in trouble anyway so opportunity to them to secure a long-term tenet [indiscernible], so we have still 5 to 7 years.

Can I ask something briefly on Canada. You seem to be already very well on track to reach to 14 total centres that you targeted for full year 2025. I mean you are already [indiscernible]. Are you working on something else? So can we hope that there's acceleration of the pipeline there?

We are definitely working for sure. We'd like as many good quality assets as we can. I think the thing we need to really [indiscernible] too quickly. We were new team in place creating scale and bandwidth in Canada. We've now got really most of the geographical footprints in most of the geographies that we want to then expand from but it's vast. I mean we said a week ago just with the location of 7-hour internal flight from one of our sites that the other is quick [indiscernible] really is a vast country. So making sure that we've got the right regional focus and support centres, and we've just opened our contact centre out in Canada now, leveraging the learnings from the U.K. We take calls in the U.K. up to the Canadian 7 pm time and then the Canadian contact centre kicks in. So there's various different operational efficiencies that we're working through. We've just realigned the senior leadership team, recruited Martin [indiscernible] and improved operational structure and team again, providing that platform for growth. So those people need to find their feet. And the worst thing we can do is kind of stress them to mark too fast. Notwithstanding that though, however, a lot of work that's been done in the background on [indiscernible] pipeline. The Canadian capital gains tax loss changed slightly. So there's incentives for people to work to sell the businesses and we're trying to make the most of those. Any other questions from the room?

[Operator Instructions] And our first question comes from the line of Sahill Shan from Singer Capital Markets.

Laurence, could you just remind me what EBITDA work you're targeting in Canada and in the U.K. going forward relative to what it was pre-COVID?

So what do you mean by EBITDA on [indiscernible].

EBITDA on investment. What's your targets on the ...

I'm just trying to understand in terms of you mean new centre EBITDA. In terms of the EBITDA return for a new centre, we look for a 19% [indiscernible] in the U.K. and same in Canada.

Just remind me what was this pre-COVID?

It was the same.

The target was the same. We told we're targeting the same levels, 19% for new sites, 33% for the old sites. So clearly, we've been delivering ahead of that level. But equally, we were a pre-COVID environment delivering ahead of that level. Well, in terms of guidance, 19% and 33% of refurbishments.

We currently have no questions in the queue. [Operator Instructions] So I will now hand back to Stephen for some closing remarks.

Okay. Great. There are no further questions. [indiscernible].

Just one quick one. On Slide 18, which is really very useful. So if you look at the [indiscernible]. And what you say for this year and also basically, we're going to grow [indiscernible] we don't see that that's your view. So the volume growth, given that the market expectations are a little bit higher, [indiscernible] CPI. Is it coming from, again, families market, et cetera? Or do you have a specific demographic target?

Yes. I suppose I just -- there are 3 elements to like-for-like growth for us, and there aren't very [indiscernible]. So we've got volume growth [indiscernible] where we would expect to see that increase. And yes, from the [indiscernible] areas or [indiscernible] investment. The second area is price, specifically price. And then the third area is spend. And spend obviously is not price. It will be people deciding to spend more and they are with us, that can be either through the upgrading of their offer or they decide to spend on a higher-priced product, while there [indiscernible] on drinks. Or they decided just to spend more with us. So they're there in the starting to pay an extra payment in amusements or they're buying an extra drink or something like that. [indiscernible] that can be usually because the environment [indiscernible] invested in, and they're looking to be said, well, time therefore increase their spend. [indiscernible].