The Gym Group plc (GYM) Earnings Call Transcript & Summary

Good day, and welcome to The Gym Group plc Interim Results for the 6-month Period Ended 30th of June 2021. At this time, I would like to turn the conference over to Richard Darwin. Please go ahead, sir.

Good morning, everyone. Welcome to The Gym Group's Interim Update. I'm Richard Darwin, the CEO; and with me is Mark George, our CFO. The Gym Group has shown its resilience in the past year and is emerging from the crisis in a very strong position. We're now back open with very strong levels of member acquisition on the reopening, 730,000 members at the end of June and in line with our expectations at the end of August at 721,000. Restrictions have been removed. The vaccine program is proving successful in reducing serious illness from COVID. And we, as a business, really feel that we have a once-in-a-generation opportunity to expand our estate and drive market share as results of the changes we've seen in the property market and the impact on the rest of the health and fitness sector. And we're already making good progress on that, having opened 7 sites year-to-date, and we are well on course for the 40 in 18 months that we set out in the equity raise. And of course, thanks to the support of our shareholders and our banks, we've emerged as the best capitalized business in the sector with the funding to be able to expand our estate very rapidly. Most of this presentation will be forward-looking. We will look at some of the trends relevant in the post-COVID world and set out some of the steps we are taking to enable us to grow very rapidly now that we are open. But our overall message is that we've had a strong start, but there is more recovery to come. We feel very confident about our ability to capitalize on the opportunity, our positioning in the market and our growth opportunities overall. Let me hand over to Mark, who's going to run you through the financials.

Thank you, Richard, and good morning, everyone. I'll start with a summary of the key financial headlines. This half year was in many ways itself a tale of 2 halves. For the first 3.5 months, we were in lockdown with no revenue and burning around GBP 5 million worth of cash per month. And then for the remaining 2.5 months when we were open, we traded very well and exceeded our expectations, in fact, and we were profitable and cash generative. We closed the half with 730,000 members, as Richard said, a stronger recovery than we expected from our lockdown low of 547,000 members in February. However, this lower level of membership and the loss of trading days through closures meant that revenue for the first half was down 21.4% versus the first half of 2020. As we'll come on to show in a moment, a combination of cost mitigation and government support meant that despite the lower revenue in H1 this year, we were able to maintain the loss of EBITDA level at GBP 8.1 million. Our primary focus through the crisis has been cash and liquidity. Though careful cash management including the slowing of CapEx, we ended the half with GBP 60 million worth of net debt. On July 2, we raised GBP 30 million in a well-supported equity placing to fund the accelerated growth program that Richard referred to. But in the short term, this cash injection lowers our leverage further, bringing our net debt down to GBP 30 million, which is GBP 71 million of liquidity versus our GBP 100 million bank facility. So we come into the second half in a very strong position with low leverage, growing revenue and a recovering membership. So turning now to the income statement. This shows the impact of the closures from revenue down to the PBT level. So we will close for 55% of the trading days in the first half of the year, and this was very similar to the number of trading days in the first half last year, but a big difference was that our trading last year was at our peak membership level, growing towards 900,000 members prior to the first lockdown. Whereas this year, our membership was recovering from a low of 547,000 members in February up to 730,000 by the end of the period. And as a result, we had -- of this lower membership level, we had lower revenue year-on-year. Now we reduced costs as far as possible to minimize the impact to profit and to cash, in particular, in the periods of closure where we were able to reduce operational costs, such as cleaning and maintenance very significantly. We also benefited from GBP 16.7 million of government support in the form of business rates relief, furlough income and local government support grants. As you can see on the EBITDA bridge on this chart, the government support was greater in H1 this year than it was last year, and it was sufficient to offset the lower revenue. And as a result, we maintained a similar level of group-adjusted EBITDA. This increase in government support came in 2 parts. REITs relief was for the full 6 months of H1 this year compared to just 3 months in H1 last year. And also this year, we saw the introduction of local government support grants for closed businesses. And for us, this amounted to GBP 6.5 million worth in the year. Once again, we're very grateful to the government for the support provided to businesses like ours that were severely impacted by the lockdowns. Our cost below EBITDA level were broadly similar year-on-year, except for a swing in LTIP costs due to a credit last year resulting from the impact that COVID had on the expected payouts of in-flight share plans. In terms of the key revenue drivers, we talked about the recovery membership volume, which has been strong, but we're also encouraged by yield, too. The 2 key drivers of yield are the headline price and the proportion of members that take our premium membership, LIVE IT. Over the last 18 months or so, we've continued to invest in developing our expertise around price optimization, and we continue to find opportunities to increase the headline price in certain sites. The average headline price for our standard DO IT membership at the end of June was GBP 19.11 versus GBP 18.81 in December and GBP 18.55 in June last year. Now this reflects the price paid by new members joining, but it also gives us an opportunity to increase the prices of existing members who may have been on a lower rate, and we've been doing this with increasing effectiveness in the last year or so. We continue to see growth in the take-up of LIVE IT., as you can see on the chart, reaching 24.7% of our membership by the end of June. The most popular benefit of LIVE IT. used by our members is the ability to use multiple gyms. It's too early to tell whether changes in people's working patterns, with time more evenly split between home and work, is adding to the appeal of LIVE IT., but we do believe it could be a factor helping to support this increase. Also, it's worth noting that with the accelerated rollout of new sites planned over the next 18 months, we'll be significantly increasing our network of gyms, thereby increasing the chance that a member will be able to access more than one of our sites, and this should be a driver of further LIVE IT. take up in the future. Just moving to CapEx now. As previously flagged, our expansionary CapEx has been reduced during the lockdown periods, and just 4 new openings we had in the first half of this year. Once we reopened in April and it was clear that we were trading well, we started on a number of new sites that would open in the second half. And following the equity raise in early July, we're now ready to rapidly accelerate the site rollout. Outside of new site CapEx, we've continued to invest in technology and data to improve our trading capability and member experience. Maintenance CapEx has been focused more on core health and safety items, while we've been preserving cash during the closure periods. And we'll start to increase our spend in this area back towards pre-COVID levels as a percent of revenue over the next year or so. The next slide summarizes our cash flow for the period. I won't go through each item on this chart as we've covered most of the points already. But the headline here is at the end of June, we had GBP 60.4 million of net debt, plus additional outstanding amounts of GBP 1.7 million in VAT payments and GBP 5.5 million in deferred rent. Two days after the period end, we successfully raised GBP 30 million from the placing, which brought the net debt down further to GBP 30.1 million, putting us in an excellent position to fund our expansion. This next slide summarizes the recent refinancing both the equity raise and the amendments to our bank facilities that were agreed at the same time. Our bank facilities are in 2 parts: a GBP 17 million RCF that runs to October 2023 and a GBP 30 million extension facility implemented during COVID that runs through to June 2022, at which point all the terms and covenants revert back to those of the GBP 70 million facility. Up until June 2022, we have quarterly EBITDA covenant tests. And as a result of the closes in H1, we received waivers from our banks on both the March and the June tests. In conjunction with the equity raise, the banks agreed to amend the restrictions we had on CapEx spend to enable us to accelerate the rollout program, and they also permitted us to take on some additional funding in the form of finance leases with other lenders up to GBP 10 million. The placing itself raised GBP 30.3 million of net proceeds, and this will fund a good proportion of the 40 new sites that we plan to open in the next 18 months. Overall, we believe we have the best balance sheet of any company in our sector and can, therefore, provide a strong covenant to landlords, which is very important as we look to build our pipeline of new sites quickly. And finally, from me, I wanted to give you an update on trading since the end of the half and say a few words on the outlook for the rest of the year. Trading over the summer has been exactly as we expected. Membership was broadly flat with 721,000 members at the end of August versus 730,000 at the end of June, a smaller drop than we would normally have across the summer months. We expect membership to grow in the autumn with the return of students and then, of course, with our main growth period in January-February. Profitability is good with membership recovery and yield increasing, and we have low levels of leverage with net debt at the end of August at GBP 28.3 million, which means we're very well placed to fund our accelerated growth program. We're continuing to fund investment in our central capabilities in technology, data and marketing. But where we'll see the biggest step change in investment is in our new site rollout. At the time of the placing, we indicated 40 new sites over the 18 months to the end of 2022. And our confidence in this forecast is based on the very strong pipeline of around 80 sites that we're currently bringing to fruition. Importantly, these are all sites that we believe can deliver our target 30% return on invested capital at maturity. We've been making fast progress since the fundraise with 3 sites opened since the half year and several more under construction for opening later this year. So in summary, we emerged from the COVID period with confidence. We have shown the strength of our business model by operating profitably immediately after reopening, and we have low levels of debt. We have a significant growth opportunity to go after, and we're very well placed to take advantage of that opportunity. With that, I'll hand back to Richard.

Thank you, Mark. On to Page 12, I want to cover 3 things. Firstly, the strength of the recovery in the first 4.5 months of reopening. But importantly, how we're also supporting that with ongoing investments in our tech, our commercial and marketing capability and our people. Secondly, how we're seeking to capitalize on the opportunity, that's really looking at pipeline growth and the performance of new sites. And then sustainability, where we generally feel that we are sector leaders within health and fitness, on sustainability matters. In March, as you'll recall, we announced some work on social value, and we can show how we're building on that work. So on to Page 13. We've now been open 4.5 months. Mark has shown how that 3.5-month closure that we had impacted the half year numbers. But when we reopened, we've had a very strong start to our recovery in April and May, June to August has been more in line with our normal expectations for the time of year. But as we look forward, we think there's more membership recovery to come in the coming months. Overall, our membership numbers were at 730,000 at the end of June, up 1/3 from our COVID low point in February. And the seasonal pattern that we've seen in the summer is what we expected, and that's simply because more people choose to work out outside during the summer months, but we're pleased just how our overall membership has held up at 721,000 members overall, a small positive impact within those numbers from the 3 additional openings that we've had. But importantly, people have come back, and they are using the gyms. So our member visits per week is 1.4 currently, up from 1.2 against the comparable period in 2019. And that's very consistent with some of the survey data that we saw at the end of last year that indicated people intended to exercise more frequently. Now we should just say that it's early days and that trend is not fully established yet. But we do think, overall, it's been helped by restrictions being removed. So our product is being normalized, particularly in terms of things such as GroupEx, our all equipment being in use and the capacities in our gym. And when we talk about there being more to come, that would come from students as they go back in September and October. And again, we're seeing very encouraging data about the number of youngsters going into higher education. And we've seen a good start on the fixed term packages that we sell associated with students in August so far. We've got a small number of sites that are workforce dependent. And clearly, we'll watch the return to the office trend carefully, really before we expect to see significant recovery from those sites. But our initial membership recovery really exceeded our expectations. And as Mark said, meant that we were cash flow positive almost immediately post the reopening. Now we're also doing a number of things to support the recovery. Firstly, on technology: we've continued to invest into our tech infrastructure to support that reopening process. Very few low-cost operators have the resources to make the sort of investments necessary to run a successful business at scale. In terms of some of those investments in tech infrastructure, we've really worked on increasing the capacity of the website and how we can drive online optimization to both get traffic to the website and also aid conversion. And we did see real record-breaking levels of trade at the beginning of April when we reopened, and our systems were able to cope and convert good levels of membership. To give you an indication, 1 hour on that opening day, we saw 37,000 web sessions. That was equivalent to over 600 a minute, which is about 3x greater than we've seen previously in our business. But we're also very much concentrated on the member experience, so we've refreshed the app. We've now got 50% of our members are using it regularly. And we've recently relaunched it on the App Store and improved our iOS rating up to 4x. Our second area is on commercial and marketing improvements. And these are being concentrated, as you saw some -- from the data that Mark showed both on yield, that's pricing and LIVE IT., but also how do we drive more traffic to the website from our national and local marketing. So the yield data is encouraging, up to GBP 19.11 from GBP 18.81 at the start of the year on the back of 60 price increases. And we've really seen increased sophistication in the way that we use data to be able to decide where we can take price. And then on LIVE IT. 24.7%, again, good progress. Mind you, is that a multisite offer will have very strong benefits in a world where there is more hybrid working. And we've also been working as to how do we optimize the take-up of LIVE IT. at the point of purchase. And then on traffic optimization, we've worked with a new performance marketing agency. And that was helped in terms of driving traffic in the early days of April and May by running the Jan-Feb campaign that we previously had delayed. And our third focus has been on the team. As I said in my statement this morning, this has really been fundamental to our recovery. It's been a strong performance from the team has enabled us to be able to perform as strongly as we've set out in the statement. So as you know, we gave our team support in the crisis. Many of them were furloughed. We made sure that we topped up their furlough. We gave rent-free to personal trainers. But we also decided that having done that, we needed to continue to support our fitness trainers once we are reopened because they needed to rebuild their business. And then in other developments, we've really embraced the Kickstart program, one of the companies that really have taken a significant number of kickstarters, and we have 250 positions approved by the government and 17 of those have already made their way through our business and are now working full time overall as fitness trainers. So the evidence of all this is that our vacancies have settled at pre-COVID levels. And when you compare that to what the rest of hospitality and leisure is reporting, then I think you can see some of the success of the measures that we've taken. And our strong teams are really fundamental to our success and a personal thanks from myself to everything that they've done in the past 18 months. So on to Page 17, where our primary focus as a business has really been about how do we capitalize on the opportunity as we see it? And we've set out here 4 key reasons why we see this as a unique opportunity for growth. So firstly, demand for health and fitness is higher than ever. That survey data that I referred to said that 30% of people surveyed expected to work out more frequently post-COVID. And that is very encouraging data. Currently, we access about 49% of the U.K. population with our sites, and we see the potential as we expand for that to grow to 75%. Market competition clearly has weakened. I think some of that is still to play out post-COVID. But clearly, we've been helped in the strength of our recovery by some competitors not reopening. Very strong financial strength, as Mark has spoken about, on the balance sheet, and an attractive property market, as good as we've seen in the 12 years that we've been going as a company. So let me talk a little bit more about how we are executing against the opportunity. So firstly, how are we translating what is a very strong property market into our pipeline from which we will open new sites. As Mark mentioned, we've got a pipeline of 80-plus sites and that's giving us a lot of confidence about our ability to be able to open the 40 sites in the next 18 months that we spoke about. And we continue to see very strong market potential here. Our point of reference is the PwC research that we did a couple of years ago that said the low-cost gym market could grow to 1,400 sites overall. And we continue to see the ability for us to double our number of sites and increase our market share in low cost. And for us, it's really the availability of sites that is key. Previously, what we didn't see was enough that hit our criteria at the levels of rental, the quality of locations that we expected. But right now, we're seeing really good levels of availability, and that's down to some of the changes in the retail market. But also, importantly, helped by the very strong relationships that we've built up with our landlords. We put a couple of case studies here on the slides of places that we've recently opened: Perth, for instance, is a very busy retail park in the center of town with no low-cost competition in the town. And London Sydenham is very much our bread and butter within London, a suburb with some very strong demographics and a great site for us to be able to convert. And on Page 19, we set a fuller list of the sites that we've opened in H1. And what you see is some very strong locations, predominantly retail parks, and they have performed very well in the first 2 months post the reopening. And the reason retail parks work for us is that they are accessible, have great signage and parking. Just in terms of the performance overall, we're very pleased with the progress of the sites that we opened in the first half, reaching 78% of their membership after 3 months. And that, along with the pipeline, gives us a lot of confidence about our ability to be able to do the sort of levels of rollout that we've spoken about. And then finally, what does this all mean for the market? Our starting point for acceleration really comes from the market share we already have, which is 25% and our positioning as the lowest-priced operator of the major low-cost chains. And we think that positioning gives us the scope for a very rapid market share growth along with selective increases in headline price where we see excess demand in particular markets. So clearly, we're at 190 sites today and pushing for the symbolic level of 200 sites overall. And even though we've taken 60 price increases, getting us up to GBP 19.11 in the past 5 months, we still think there is potential to take some yield given our overall positioning against the competition. But as always, we will make sure that we retain the correct balance between yield and volume. Ours is a very strong market position. And our view is that low cost as a sector will emerge as the dominant sector in health and fitness in the coming years. And let me just finish then on sustainability. As I said at the outset, we really think we have a market-leading position here, and we started with some work on social value at the year-end, which we set out in the year-end presentation. And we've now moved on to do some work on climate modeling and a materiality assessment. So just to remind you on social value, this will be an annual exercise that we do to assess our social value. In 2019, this showed that we had 3 million social value generated per annum per site. But what is encouraging is where we're seeing the increase in visitation up to 1.4x per members per week, it is strong levels of usage that drive the social value. To actually get a score, you have to be more than 1x per week. And so that's an encouraging stat for the next time we calculate social value. We've moved on to do some carbon modeling. And on the back of that, we expect to announce some carbon reduction targets in due course and also are conducting a materiality assessment using Sustainalytics to help us speak to a number of key stakeholders. And again, we'll announce the results on that shortly. And as you can see, there are a number of other improvements that we set out on this page. And one I would just kind of call out is that we are the only leisure operator that's been invited to be a member of the All Party Parliamentary Group for ESG matters. And I think that shows the credentials that we add to a group such as that. And let me just finish on Page 22 by wrapping up. The opportunity is stronger than any time in our company's history for strong and sustained growth. And we've, as a business, remain very focused on the 3 priorities that I've spoken about. Firstly, recovery in membership where we've had this strong start, but we see more membership recovery to come over the next 6 months. And as Mark spoke about there are 2 natural peaks in demand, September and October and January-February of 2022. Secondly, our opportunity to accelerate our growth, and that's on the back of the favorable property market, the good landlord relations, our strong balance sheet and the weakened competitor set. And then finally, continue to make progress on our sustainability work stream, cementing the further improvements and our overall sector-leading position. So when we put that all together, that does mean that we feel that we are in a very strong position to create additional value for shareholders. So thank you for listening, and we're going to move on to the Q&A.

[Operator Instructions] And we'll now take our first question, it comes from Owen Shirley of Berenberg.

Three, if that's okay, please. The first was Pure Gym, I think, in terms of U.K. members was a little bit ahead of you, albeit it was a couple of weeks ago. Is there anything -- I'm sure you look to them, anything, kind of, worth calling out in the differences between the 2 businesses? The second was whether you'd be able to give an indication on where like-for-like members are versus 2019, obviously excluding the new sites? And any projection on when you think that figure will get back to 100%? And finally, would you be able to give us any color on the extent to which rents are lower on new sites you're signing? And also your thoughts on whether you think the balance of how you think that will be passed on in price versus retained by the business?

Owen, thank you for the questions. Mark, do you want to take the first 2, and then I'll talk about the rent one?

Yes. Thanks, Owen. Yes, I mean, obviously, the challenge of comparing against another company is always a little bit difficult because different number of sites opening and things like that. Whenever we try and look at it without our competitor Pure Gym, we have very, very similar numbers. We're at 91% of the membership that we had in December 2019. Obviously, that includes new sites. And -- but I think we're very, very similar if we try and disaggregate the effect of new sites that they've opened versus the number of new sites that we've opened. So I think we're very similar. In terms of like-for-like, we haven't given out that number. Obviously, 91% is including new sites. So like-for-like would be in the 80s below that. But we're encouraged by the progress. And to your question about when we might recover that? I think that will be during 2022 that we expect to recover back to the level of mature membership per site we had in 2019.

And just to add one thing on that. So when we look forward, what we -- where do we see additional elements of recovery? So twofold really. One is students, so September and October, and clearly, we're expecting good levels of students because of the numbers in higher education. And then we didn't have a January and February campaign this year. And obviously, we expect to have a January-February campaign in 2022. And then, Owen, just on your question on rent, where we're able to do a direct comparison of a pre-COVID versus a post-COVID, And sometimes that's come where we were able to renegotiate particular deals. Generally, we're seeing 15% to 20% reductions overall in the rents, and that's something that we set out at the time of the equity placing. In terms of whether that then gets directly passed on in pricing. What we'll continue to do as we always do when we appraise a site is to look at the overall appraisal, work out based on the competition in a particular market, what we think the right price is and what price we can sustain, and that basically goes into our models. And then when we open the sites what we seek to do is then build price over time up to, or even sometimes beyond the appraisal level. And that is no different kind of in the post-COVID world to what it was when we're opening sites prior to COVID.

Can I just ask one quick follow-up to clarify on the second point? You're saying, expect to recover to 100% of like-for-like levels during '22 or total?

Yes, we would expect at some point during 2022 to get back to like-for-like levels, yes.

Our next question comes from Christine Zhou of RBC.

Three questions, please, as well, if I may? Firstly, on those members that have been joining since lockdown [ has eased ], just wondered if you have any color on what that, sort of, makeup is? Are they brand-new gym members, members that switched from gyms, members that canceled during COVID, et cetera? Any color would be helpful. Secondly, I think you called out about 20% of local authority gyms closed. Do you have any indication of whether that directly impacted your membership growth in those particular areas perhaps or maybe is that a bit too granular? And just finally, on the new rollout, what's the, sort of, split between large and small boxes that you expect?

So let me take the first 2, and Mark can do the split on the rollout. I mean, generally, we've seen about 40% rejoin since we've reopened, and that's been pretty consistent over the first 3 months since the reopening. And we expect to see strong levels of redoing clearly because we've had a number of existing members that had canceled. I think in terms of the overall makeup of members, slightly younger, slightly more male, but it's really not that significant. Overall, it hasn't significantly changed our dynamics, and I think we're pretty encouraged by that because we've always felt that we've had an offer that is applicable to lots of different parts of the demographic and different age ranges as well. Your question in terms of the closures of local authorities, I mean, it is quite a granular question because clearly, it really only impacts us where there is a closure of a local authority that where we have a site. And one of the stats I put in the presentation was that we cover currently about 49% of the U.K. population could access one of our sites within a 10- to 15-minute drive time. So that's still a number of areas, clearly where there would be local authority closures that wouldn't necessarily impact us. But I think it has been a factor. And I think it's partly because low cost and particularly our offer because it's so price competitive, actually, once we get those members and they try our product, we'd expect them to continue to stay with us.

Yes, on the question about the split of sites, probably about 20% of the sites will be small box, but it is worth saying that of the 80% that we would call our standard format, we have got a range there. So we'll average around 15,000, 16,000 square feet, but we'll open quite a number of sites that would be 10,000, 11,000, 12,000 square feet. So those are sort of medium sized in a way because our small box is typically 7,000 to 9,000 square feet. And then our standard format ranges from 10,000 to 20,000. And we're seeing quite a number of sites in that 10,000 to 12,000 bracket. So really, it's a spectrum rather than a binary division of large and small box.

[Operator Instructions] We will now take our next question that comes from Tim Barrett of Numis.

My first question is similar to one of the previous ones, but asking it in a slightly different way. In terms of the rent charge on the P&L, what do you think in the medium term that will come out as a percentage of sales? I guess what I'm asking is, I think it was around 17% historically, and do you think that will trend down slightly? And then another broader question, that 80 sites -- the 80 sites in the hopper, if you like, it sounds like a really good outcome. What are going to be the criteria to slimming that down to 40? And how quickly are you locking sites in?

Mark, do you want to do the rent one and then I'll do the pipeline?

Yes. I think for now, it's better to assume for modeling purposes a similar percent to sales. The rents that we're seeing coming down are really enabling us to take on a number of different types of sites that previously would have been a little bit too expensive for our model, and they're now bringing it into our range and enabling it to work for us. So I think it's more about getting access to different types of sites than it is going to be to put through a fundamental improvement in our rent as a percent of sales.

And Tim, on the pipeline, good question. I think we've given that sort of level of granular detail, we did it for the first time as part of the equity placing, really, to demonstrate our confidence in the next 18 months and that 40 opening target that we set out. If you look at a little bit more detail, then we've got 15 that either are exchanged or currently on site, we're on site with 7 at the moment. And then we've got another 17 that are heads of terms or in legals. And we would expect a good proportion of those to actually translate into sites that we actually exchange on. The rest of the makeup of the 8 Tier 1s where we've got offers out and they can clearly be at different stages. So we'd expect naturally, we wouldn't necessarily, kind of, win all those and we'd only take proportion of those would actually end up as being exchanged sites. But that kind of is quite a wide spectrum. So it can be where there's an initial kind of speculative offer or it can be where, because we've got very good relationships with a number of landlords, there's been some ongoing discussions, it just hasn't got to heads of terms or legal stage. But I think a lot of strong confidence that we're seeing. The right, sort of, quality of sites in the right locations coming through in that pipeline.

Okay. So I guess, naturally, some of those might still be around for the 2023 cohort, although that does seem a long time away, yes?

That's a really good point. So clearly, in terms of timing, some of those would then naturally kind of fall across into 2023. For the same reason why we haven't sought to give a kind of more granular split of how many more we will open in '21 versus '22. We felt at this stage, it was right to keep the overall commitment that we made in the equity raise of 40 new openings by the end of 2022.

It appears we have no further questions at this time.

Okay. Very good. Thank you all for joining. I think as we've shown in the presentation, a very strong start in our membership recovery. But as a business, we're very much focused on how we capitalize on the market opportunity to really grow our estate very rapidly. And that's clearly what we're going to be focused on in the coming months. So we look forward to speaking to you in our next update that's likely to be our January trading statement.