Viva Leisure Limited (VVA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for joining us on the conference call today for Viva Leisure's financial results for financial year ended 30th of June 2020. Earlier today, various documents, including the investor presentation, were uploaded to the ASX, and we will be referring to these today during our presentation. This is Viva Leisure's second set of results since listing on the ASX in June 2019. And what a year it has been. I hope that everyone is doing well and managing during these unprecedented times. The agenda for today's presentation: a quick refresh of how COVID-19 has affected our business, followed by full year performance highlights. I will then pass on to our CFO, who will run through our financial results, after which I will provide an update on the outlook and what our focus will be for the current financial year. At the back of the investor presentation, starting at Page 36, is a reconciliation of the accounts against AASB 16, which I'm sure you are all familiar. We will not be going through this today. However, if you have any questions, please e-mail us directly or feel free to ask a question at the end of the presentation. COVID-19 has affected the health club industry significantly. After mandatory shutdown of facilities occurred on the 23rd of March, our Viva Leisure's income effectively reduced to 0. Since then, my team and I have worked diligently to return the business to pre-COVID levels. The FY 2020 full year result is an outstanding result during, as I'm sure you have heard before, an unprecedented period. I believe the business is in an excellent position to capitalize on the foundations we have established over the past year and to continue its growth from here. Moving on to Slide 7 of the presentation. Upon receiving less than 24 hours' notice to cease operating due to the mandatory shutdown for COVID-19, the business was able to pivot quickly. We pivoted into a digital offering to keep our members engaged. Our digital offering was a triple-pronged approach, which fits with our strategy that one size does not fit all. Viva offered multiple apps and access to digital content via website, Apple devices and Android devices to our members. A significant portion of this content was already under development. And this is why we're able to activate it so quickly. By being able to essentially put the physical part of the business to sleep and pivot to a digital online offering meant we were able to continue to engage with our members. There is no doubt that some members were concerned about COVID-19. And this resulted in approximately 14,000 cancellations over the first weeks of shutdown. This was at a time when the media were reporting shutdowns were likely to last 6 or more months in our industry. During the shutdown, we were also able to secure a $6 million emergency overdraft facility from the Commonwealth Bank. I'm pleased to advise that we did not need to utilize any part of this overdraft, and we canceled the facility as clubs started to reopen. JobKeeper and the commercial rent concessions introduced by the Commonwealth government so assisted the business significantly during this time. The reopening of Viva Leisure facilities commenced on the 30th of May in the ACT. This is significant for the business as approximately 50% of our members and locations are based in the ACT. Reopening was with restrictions, but it permitted our members access to the facilities, which is something a lot of them were craving. Our Queensland locations followed the ACT and reopened on the 4th of June with New South Wales locations reopening with the least amount of restrictions at the time on 13th of June. In Victoria, locations reopened on the 21st of June and then subsequently closed in metro Victoria on the 9th of July. Viva operates 5 locations in metro Victoria. In regional Victoria, locations were also closed on the 6th of August, where Viva operates a further 3 locations. Our Victorian locations remain closed and represent approximately 6% of our membership or 8 of our 82 operating locations. Moving to Slide 8. This slide highlights our pre-COVID revenue by month and compares it to our post-reopening revenue. As you can see, our June to August '20 revenue is approaching a similar level to pre-COVID levels. The pre-COVID amounts do not take into account a full month of FitnFast ownership. So we still have some work to do, but we are clearly getting there. Similarly, with membership, pre COVID excluding FitnFast, we were averaging approximately 450,000 visits to our facilities. In July, notwithstanding we still had locations closed due to ongoing refurbishments, we nearly achieved 500,000 visits, including FitnFast. The chart on the right-hand side also includes, on the second axis, unique members. What this refers to is how many unique members visited in the thousands. It is important to remember that we still have approximately 15,000 members on suspension. So these will skew the unique member visits down slightly. What is encouraging, however, is that nearly 70,000 unique individual members used the facilities in July, amounting to 500,000 visits. This is approximately 80,000 -- this is out of approximately 80,000 active members. Moving to Slide 10, performance highlights. Revenue for FY 2020 was $40.9 million, an increase of 23.6% over the previous corresponding period. EBITDA was $6.07 million ex AASB 16. This represents a 16.7% decrease from FY '19. Whilst this was an understandable decline in EBITDA, Kym has a slide which will detail the first 8 months of the year and compare that to the last 4 months of the year. This information is significant as it highlights how well the business was performing pre COVID. I won't steal Kym's thunder any more, so I'll let him expand on this. The other statistics on the page are self-explanatory, and I won't go through them right now. Moving to Slide 11, operational achievements. There were 79 open locations at the end of the financial year. Today, we have 82 open locations, and we have another location, a HIIT Republic, opening on Monday next week, making it 83 locations. This includes the 8 currently closed Victorian locations. Our current forecasting is showing we will have 98 locations open at the end of the current financial year. This includes the 200 -- this excludes the 215 forecasted locations operating under our newly acquired Plus Fitness franchise network. At 313 locations forecast for the end of financial year, the opportunities this presents us are significant. More on that later in the presentation. I will now pass on to our CFO, Mr. Kym Gallagher, to present the financial results commencing on Page 13.

Thank you, Harry, and good morning, all. As I mentioned, I'm on -- as Harry mentioned, I'm on Slide 13. Firstly, a note on the results reported in this presentation. The FY 2020 results throughout are predominantly based on an ex AASB 16 basis. So that makes them consistent with the prior year statutory results or results presented in this presentation. In addition and where appropriate, the FY 2019 results have been reported on the basis of being an aggregated group under common control. For those that have been investors for a while will recall that in July 2018, we restructured the group to put it into a consolidated group. So in effect, these results are presented on a like-for-like basis. A quick look at the P&L. At the end of February, we're on track to meet our guidance numbers of $58.7 million in revenues and $14.2 million in EBITDA. Once COVID hit, we removed that guidance. And then on 23rd of March, under government mandate, we closed the doors to all of our 76 gyms and revenues were effectively reduced to 0. We stopped all rollouts, except those that were pre-committed, and ceased discussions on any acquisition target. Despite this, as Harry mentioned, we exceeded our prior year revenue results by 23.6%. This was achieved with a mix of organic growth, greenfield sites and acquisitions, which I'll discuss in a bit more detail on a later slide. With expenses, our overall cost base is now substantially different to the previous year with the addition of 39 new clubs across FY '20, including acquisitions and greenfield site rollouts. When COVID hit, we immediately stood down significant numbers of staff, nearly 1,000 in total, mainly casuals but also many full-time staff. We also removed a large number of controllable costs from the business effective immediately. To put this in perspective, our total cost base in February was around $4.4 million per month. And by April, we've reduced this to around $600,000 per month. We also received assistance from JobKeeper and mandated rental reductions across the last quarter, as Harry had mentioned. But despite this, we're unable to prevent losses over this same period. This translated to a final EBITDA position of $6.1 million and 16.7% shy of the previous year. In addition, we had over $1 million in one-off legal costs across the year for the various projects and capital raises. So without those, the result would have been more in line with the 2019 results despite the impacts of the COVID-19. Finally, depreciation, amortization and interest expense experienced a large increase, as you would expect, with the addition of new clubs, leading to an ex AASB 16 NPAT of $1.43 million. Moving on to the next slide, 14. This slide highlights the tale of 2 periods for the Viva group, pre COVID and during COVID. As mentioned, at the 8 months to February, we're well on track to meet guidance. At that point, we had only just completed the FitnFast acquisition, and approximately 15 days of results of that business were included in the February results. We were tracking 61.9% above last year in revenue, 73.1% over in EBITDA. In fact, we were already trading well ahead of the previous year's full year result after only 8 months. As well as that, we were tracking a very healthy margin of 23.4% on the EBITDA line. Post February, the bulk of the revenues came in the first 3 weeks of March pre shutdown and in the month of June, when we started to experience some club reopenings. Over this 4-month period, we experienced a loss of $1.7 million on the EBITDA line and our margin reduced to 14.8%. This result, again over the last 4 months of the last -- of FY '20, included one-off costs of nearly $700,000 of the $1 million that I mentioned previously for the finalization of the FitnFast acquisition, this is legal costs, and the capital raise in June and the due diligence costs, which we'd already started commencing for the AFM acquisition, which was recently completed. Jumping across on to Slide 15. Revenue is showing compound annual growth rate of 17.3% between FY '16 and FY '20 with growth to $40.9 million in revenue in FY '20. For perspective, even with all of our Victorian clubs closed, New South Wales still not operating at 24 hours and 8,000 members still on voluntary suspension, August is tracking to reach nearly $5 million in revenue, which puts it just behind the pre-COVID numbers. EBITDA has a CAGR of 27% between FY '16 and FY '20. And with JobKeeper and rent reductions still in place until at least the end of September, we will continue to benefit into FY '21. EBITDA margin, as mentioned, has dropped to 14.8%. But we expect that to improve rapidly as the revenues recovers. Just looking across to the next slide, Slide 16. It was very encouraging to see the majority of our members stick with us through the COVID uncertainty. At June 30, 2020, we were tracking approximately 2,000 members below the pre-COVID highs of 96,400 members in February. Members by state continue to diversify as we consolidate our position outside of the ACT. We're starting to track now by brand as well, particularly with the acquisition of the Plus Fitness network. All of the Healthworks sites have now been rebranded to Club Lime as well as several of the FitnFast sites. Within the next couple of months, all FitnFast sites will be converted to Club Lime, Plus Fitness will be introduced to the portfolio and HIIT Republics will continue to roll out. Moving on to the next slide, Slide 17. So as mentioned on the previous slide, at 30 June, we were approximately 2,000 members shy of the all-time highs. There's been a slight decline in organic member numbers, given the impact of COVID-19 and obviously with much of the population still with uncertainty as to how this is all going to end. We had actually forecast for this moving into FY '21. So the results are as expected by the end of June. We fully expect, however, our lost members to gradually return over time as conditions improve, and we're certainly seeing that well into August. Acquisitions contributed nearly 38,000 members of the member growth. And clubs that opened during FY '20 contributed approximately 4,000, giving the total members number of 94,196 at 30 June. Moving on to the next slide, which is Slide 18. The good news is that despite the slight shortfall in the pre-2020 member numbers, revenue is showing growth. This is in part due to the impact of our hub-and-spoke methodology and the fact that we had significant membership upgrades pre shutdown with the success of our HIIT Republic rollouts. For reference, at 30 June 2019, we had 50% as multi-club memberships. But by 30 June 2020, this had increased to 55%. Unfortunately, we haven't yet had a full month's result contributed on our FitnFast acquisition as we only owned it for 15 days in February. It was then closed at the back end of March. And so far, we've still got Victorian clubs which are closed. So we would expect that revenue will continue to contribute at a much higher rate into FY '21 as things start to recover. Total revenue for the year of $40.89 million. Moving on to Slide 19. This is the balance sheet. And you can see 2 capital raises during the year netted approximately $43 million in funds. And that has allowed us to quickly expand with the acquisitions of the FitnFast group as well as the AFM network, which settled last week. That and continuing with the aggressive rollout strategy out of nearly $24 million in net plant and equipment. Debt has remained under control with a total of $22.5 million in debt, of which $14.5 million of that is equipment lease finance and $8 million in CBA loans. You'll note on the balance sheet the first time we've recorded the AASB 16 numbers. And as you can see, they've put some really crazy results in there with the assets, the deferred tax balances and the liabilities that have come in line with AASB 16 application. Just clicking across to the next slide, similar to the comments on the balance sheet. With the capital funds raised, the capital raise funds deployed to aggressively expand the business, you can see that there in the acquisition of businesses, obviously at FY '20, that does not include the recent settlement of the Plus Fitness acquisition. But from a cash perspective, when COVID hit, we paused all capital expansion programs, we halted acquisition discussions and slowed the rollouts to ensure we had sufficient liquidity to navigate the issues that we're confronting us at the time. As Harry mentioned, we also got the $6 million overdraft facility in place, which has now been canceled as we didn't require it. And what that's left us with is a very strong cash balance as at 30 June. But obviously, since that date, we've now settled on the AFM acquisition, which was just over $18 million worth of cash. And we've continued to roll that program post 30 June. So as I said, it leaves us with a very strong cash position despite that. Thank you. I'll now hand that back to Harry.

Thanks, Kym. Moving to Slide 22, the outlook. As mentioned earlier in the presentation, we currently have 82 locations open, although that includes 8 locations currently closed in Victoria, not permitted to reopen. We have signed lease agreements for a further 22 locations, 12 of which are currently in fit-out and expected to open in the next 6 to 8 weeks all at different times, the first of which, as I mentioned earlier, opens next week. We have another 11 locations under negotiation for lease and another 16 locations which we're in discussions to acquire, which may or may not result in an acquisition. As mentioned in previous presentations, the market has shifted with COVID. And we are now seeing a significant shift towards a tenants market with various landlords offering us better deals than we were being offered pre COVID. In addition, all the acquisitions we are in discussions with, we are discussing multiples below 3.0x historic normalized EBITDA. COVID has definitely provided challenges for all industries, including ours. But at the same time, it is now providing significant opportunities. Moving to Slide 23. I'll now give a quick rundown on some of our goals and targets for our different brands. Starting with GroundUp, the first GroundUp location has been secured and we will open in a subdivided previous FitnFast location in Belconnen, ACT. What this -- this means the location will open with no additional rent payable by Viva. What we did is carve off 500 square meters of space from the FitnFast in Belconnen as Viva already operated multiple locations in the area. Using our hub-and-spoke model, we were able to convert a standard-sized 400-square meter club into a 700-square meter club, which is our Club Lime sweet spot. Fit-out for the GroundUp is expected to commence in September and open in November this year. Additional locations are currently being negotiated for GroundUp. Pricing has been set at a competitive $34.90 per week for a single GroundUp membership, which gives members access to Pilates, barre and yoga, all within dedicated studios. The unique part of our GroundUp membership that we've explained previously is that it can be joined with a Club Lime or HIIT Republic or both types of memberships. This forms a premium membership, which is all-inclusive. Such an offering is unable to be matched by any of our competitors as no other competitor in the market has an offering similar to GroundUp and HIIT Republic and Club Lime nor is able to combine them into the one membership option. Our team is excited about this opportunity. And the demand is significant based on internal modeling and research we have conducted. Moving to Slide 24, HIIT Republic. We now have 13 HIIT Republic clubs open and operating, the first of which opened in March last year. We have been opening a new location, excluding down months of COVID, nearly every month. We have a new location opening in Canberra City next Monday, as mentioned. In addition, we have a further 9 locations locked in, some of which are currently undergoing fit-out. HIIT Republic has over 3,500 members or an average of 270 members per club. The average revenue per member is over $34 per week, which represents more than double the current Club Lime revenue per member. Current recurring revenue for HIIT Republic is in excess of $522,000 per month, remembering that this was from a standing start in March last year, when we opened our first location. Moving to Slide 25, FitnFast. You will recall that the FNF acquisition completed on the 13th of February this year, just a month before the COVID shutdown. The shutdown allowed us to accelerate some of our back-office integration, including refurbishment and rebrandings to Club Lime. Of the 13 locations acquired, the 2 Victorian locations have been refurbished and rebranded and the 1 ACT location has been fully refurbished and rebranded. We commenced with the ACT and Victorian locations in order to capitalize on the Club Lime hub-and-spoke model in these areas without having to advertise and promote 2 different brands. This means that the FNF brand is now only operating in New South Wales. This ACT location is the one previously mentioned that had approximately 500 square meters carved away for the first GroundUp. We have 8 locations still trading as FNF, of which 2 will commence fit-out and refurbishment shortly. Moving to Slide 26, Plus Fitness. The acquisition of Plus Fitness was announced last month and it completed last Friday on the 21st of August. As mentioned at the time, this is a very exciting opportunity for Viva and provides significant opportunity and upside. The network of approximately 175,000 members, together with Viva's 95,000-plus members, is a formidable network to market and promote to. Since the acquisition was announced, 2 additional Plus locations have opened and a further 8 franchise locations are scheduled to open before the end of December 2020. Moving to Slide 27, opportunities for growth, Plus Fitness. This was a slide taken from the Plus Fitness investor presentation deck. It provides an update on the opportunities we have identified and the current status. Noting that we have not yet owned the business for 7 days, we have made significant progress in our objectives for the first 12 months. I won't go through each one of those points, but I look forward to updating the market on our progress with Plus Fitness, both in Australia and internationally, specifically in New Zealand, over the next few months. Moving to Slide 28, Network Operation Centre. Now this is a very exciting -- this is very exciting for me and my team. We have built essentially a Network Operation Centre with live feeds into each of our 82 locations. So previously, you would know that we have live data streaming from all the clubs, so we know what's going on in regards to memberships and visitations and things like that. We now have very clear visibility physically into the clubs. The purpose of the NOC is to monitor all locations remotely. Our goal, however, is not simply to monitor locations. Eventually, we want to get to the stage where we can open and operate totally unstaffed clubs with only cleaners and roaming managers monitoring the locations physically on site. This is an exciting opportunity for us as it allows us to open in locations where we may previously have not considered opening due to staffing and other reasons. Everything else being conducted remotely like we do now can be done from the NOC but on a much larger scale. The NOC provides us with other synergies also, including bringing our alarm monitoring in-house and being able to offer alarm monitoring to the entire Plus Fitness network as the NOC operates 24/7. The NOC is currently in final testing and is expected to go live next month. This concludes the presentation part of the investor call. As mentioned, there are 2 appendixes in the investor presentation, being the AASB 16 leases reconciliation and some background information on Viva, which has appeared in previous presentations and is provided for the information of new investors who may not have heard the story before. We would now like to open up for any questions.

[Operator Instructions] Your first question comes from the line of Nick McGarrigle from Ord Minnett.

Well done on getting through the COVID period relatively unscathed. Obviously, the acquisition of Plus knocks some of the cash off into July but great investment in my view, given the bigger network you've got now to roll this around. Can Kym give us a sense on where the cash balance is today? Because I know there's been in the announcement, JobKeeper and rentals and other things.

Yes. So at the moment, Nick, we're sitting, and this was only done within the last couple of days, but somewhere around the $8 million mark post the acquisition of Plus. With that came a little bit of a cash balance, which we haven't integrated in yet simply because there was a working capital adjustment and a net debt adjustment at conclusion. So we actually had to outlay that $18.5 million cash, which we'll get most of that back. But the current cash balance is sitting around about $8 million.

Okay. Great. The HIIT Republic slide is really interesting, just given the metrics that you're seeing there in a relatively still growing and maturing phase for that new concept. But is it fair to think that around the 200-plus fitness clubs, that you would see a compelling opportunity to roll out HIIT? Do you think -- given that you don't own those clubs, do you think that you can supplement a Plus Fitness member with a HIIT membership in between 2 Plus clubs, particularly in states like WA, SA, where you don't have an own club presence at the moment?

Thanks, Nick. The introduction of HIIT Republics into the Plus network will be a little bit difficult because of the revenue sharing-type approach. So owning the Club Limes and owning the -- every HIIT Republic makes it easier in the back office for us to share the revenue and work out which location is performing well. When you introduce a franchise network into that, it's a little bit difficult because you obviously need to pay the franchisees something for HIIT Republic members to use that network and vice versa. So what we're looking to do is to expand with a HIIT Republic equivalent in the franchise model. So we'll open the HIIT Republic equivalent as franchise -- as franchisees as well as existing franchisees will be sole territories so that they can start to create their own hub-and-spoke around that. The HIIT Republics for us will predominantly hub-and-spoke around the Club Limes, however. And a new concept for franchising, we'll work with the Plus Fitness network, if that makes sense. We're also looking at some other exciting...

Does that mean you'll be looking to franchise the HIIT concept? Or you -- is it just a different concept with a more clear economic split?

Look, in the end, HIIT is a high-intensity interval training. It's exactly the same as what you're going to find in F45 and everything else. It's just -- it's that form of training. So we'll be looking to introduce a completely different brand and keep HIIT Republic as 100% company-owned locations, which gives us much more flexibility and much more uniqueness.

Okay. Great. And the profile for greenfield rollouts of the 22, is it right to assume that 10 of those are HIITs and the rest are sort of standard clubs or GroundUps?

That's correct. Yes.

And then what is that 16 acquisition club -- under -- 16 acquisition clubs under negotiation? Can you give us a sense of what does that constitute? Are there any sort of multi-club networks in there? Or are they all sort of single clubs? How does that look?

There's 3 multi-club chains in there. The -- one of them was -- we've been in negotiation for a while is in Victoria. But we've obviously put that on hold, pending when Victoria reopens. So we'll pick that back up. We're very advanced with that one. And I think we've mentioned that one previously. But that's a multi-club chain in Victoria. And then we're also in discussions with a multi-club chain in New Zealand.

That's great. And can you give us a sense of the remaining members that are on suspension amongst that 15,000. I think you've indicated in the presentation, I just want to clarify the split between those in Victoria on permanent -- on sort of forced suspension and those who were voluntarily suspended at the moment.

Yes. So we have 8,000, 8,500 voluntarily suspected -- suspended across the network, excluding Victoria. Victoria members, we don't actually suspend them because they can get access to our digital offering. And when you're suspended, you can't. What we actually do is just stop billing. So there's about 6,000 in Victoria, 6,000 members in Victoria that we just stopped billing for while we're closed. And then we have 8,000 members -- 8,000, 8,500 members on voluntary suspension. Remembering that our model is a no-contract offering. So if they want to cancel, they can just cancel. And we're not enforcing any specific rules over COVID. Because if people have lost their jobs or anything and need to cancel, we're allowing them to cancel straightaway without any notice period. So we know that those 8,000, 8,500 members will return because they've got every opportunity to cancel if they want to. They're just not comfortable returning now. Or, for example, New South Wales is not operating 24-hour mode, so they're just holding back not having to pay their fees and waiting for that to open up.

And can you give us a sense on the cancellations that you've seen through this process? Has it been higher-than-normal churn or people have just been happy to be suspended? Because obviously, the reengagement post the reopening has been quite strong based on those visit numbers. So I just want to get a sense of there was -- I guess, pre-FY '20 clubs, there was a reduction of 1,500 members. Was that in the acquisitions? Or was that people churning off?

When COVID first hit, in the first approximately 3 weeks, we canceled 14,000 members. So 14,000 members requested a cancellation and didn't want to go on to voluntary suspension. Essentially, we've regained the majority of those, as Kym mentioned. We're about 2,000 short from our peak in February. So from new members transferring from other clubs to those members that canceled coming back, we've recovered the majority of those 14,000 already. Does that answer your question?

That's got to mean that most of the people are going back in the net of -- you've retained like 95% of the numbers pre and post COVID. So that's great. You mentioned just the multiples that you were looking at clubs at. Is that less than 3x both the franchise buybacks and for these 16 clubs under negotiation, they're all sort of still trading at around that sort of 3x pre-COVID sort of run rate of earnings?

Yes. So we've made it quite clear. And when we start negotiations, we make it quite clear what our range is and all the negotiations currently underway. We've made it quite clear to them that it will be below 3x EBITDA because we don't want to waste our time. We've got plenty of opportunities out there. And those -- they've accepted that, the multiples post COVID are going to be lower than what we were paying previously.

[Operator Instructions] We have a follow-up question from Nick McGarrigle at Ord Minnett.

I'll continue. There was -- you didn't put it in the presentation, but I noticed that in the accounts that there was $2.8 million of JobKeeper. Maybe, Kym, how does that present through the P&L? And then I think that there's some commercial considerations around reviewing the rental abatements and waivers. But if you can give us a rough sense on how that shaped up or how it's continuing to develop.

Yes. Sure. So the JobKeeper plan at the moment, we're getting $948,000 across the 4-week period each month. And how that effectively works is that anyone that applied for JobKeeper, and that would go right down to our casuals, who may very well have been making, call it, $250 a week. Working group fitness shifts are obviously entitled to get the full $750. So the impact to us through the P&L is obviously only the saving of the $250, the rest is a complete flow-through to those particular employees. But it's obviously costed through the P&L anyway at the full gross rate and then the gross JobKeeper amount comes straight off that. So it's effectively grossed-up wages with the JobKeeper applied against those gross wages, if that makes sense, going through the P&L.

So you're not taking JobKeeper as revenue and then the cost is sort of just netted off in the expense line?

That's correct. It's netted off straight through salaries and wages. So it's pretty much in and out for. We work as administrators for the government on a lot of that income going out to our employees. As far as the rent side of things is concerned, across the back quarter, we've received from probably about half of our landlords an agreement to either waive, defer or change the terms of the rental agreement such that we agreed a fixed rate for a period of time. So that was about half of them. By the time we got to 30 June, some of the bigger real estate -- commercial real estate holders, such as your Stocklands, Westfields, et cetera, they just kept on saying, "Look, we'll just wait for legislation to come out or wait to see what everyone else is doing." So there's still -- out of the 80-or-so leases, we're still around about 15 to 20 that we're still trying to work with and negotiate. But at this point, we're now the best part of 5 months into the program, where the rental mandates came through or the COVID came through. So at this point, we would assume that it's going to be all agreed on a 50% waived, 50% deferred basis. But what it's meant from a cash flow perspective is that on a full rental basis during FY '19, say, June, for example, we're expecting total rentals to be in the order of about $1.7 million for the month. And we came in more like about $400,000. So -- and July, a similar amount of rent we had expected and would come in now at about $650,000. So we're still getting some significant savings of that. And we do anticipate that will continue until the end of September.