The Gym Group plc (GYM.L) Q2 2026 Earnings Call Transcript

Will Orr : Good morning, and welcome to the 2026 half-year results presentation for The Gym Group. Thank you for making time to join us in the room and on the dial-in. After the presentation, we will take your questions in the room first, and then from the webcast. Our CFO, Luke Tait, and I will be doing the presenting today. Here is what we plan to cover. I will start with an overview before handing to Luke to share our 2026 half-year financial results. I will then provide a further progress report on our Next Chapter growth plan, and summarize before taking your questions. Starting with the overview. I am pleased to report a strong performance for the first half of 2026. Average membership was up 5%, with revenue for the period up 10%, 3% on a like-for-like basis. With this revenue growth and continued cost discipline, EBITDA LNR was up 12% to GBP 30.8 million. The market remains highly attractive. U.K. gym penetration has reached another new high at circa 18%, with high-value, low-cost gyms continuing to grow share. Within our Next Chapter growth plan, we continue to strengthen the core, supporting further progress in mature site performance and ROIC. We continue to accelerate the rollout of quality new sites. We expect to open at least 20 gyms in 2026, all funded from free cash flow. We have maintained strong momentum through the first half and remain confident as we look to the full year 2026 and beyond. I will now hand over to Luke for the financial results.

Luke Tait : Thank you, Will. Good morning. Starting with a summary of our financial KPIs. The key revenue KPIs, which were released in July, have both shown good growth year on year. Average members were just over 1 million in the first half, up 5% year on year. Average revenue per member per month was GBP 22.14, also up 5% on prior year. As a result, revenue was GBP 133.1 million, up 10% on the first half of last year. The additional revenue converted well to profit, with EBITDA LNR of GBP 30.8 million, up 12% or GBP 3.4 million year on year. Adjusted profit before tax increased by 31% to GBP 6.4 million. Free cash flow was GBP 27.7 million, up 10%, supporting our accelerated rollout and the ongoing share buyback. Non-property net debt was GBP 58 million. This was GBP 6.8 million higher than June last year, reflecting the new gym investment and share buyback program, but GBP 1.3 million lower than 2025 year-end. Adjusted leverage remained at 1x. We will look at each of these key financial metrics in more detail in the following slides. Starting with the income statement. EBITDA grew strongly in the first half of the year, up 12% versus last year. Revenue was GBP 133.1 million, up by GBP 12.1 million, reflecting growth in both the like-for-like estate and our new openings. Cost of sales increased by GBP 0.3 million, reflecting the revenue growth. Site costs of GBP 63.7 million were slightly better than expected due to energy optimization initiatives, including a new energy purchasing program. Central costs increased by GBP 0.9 million or 7%, well below the rate of revenue growth. As a result, central costs as a proportion of revenue dropped below 11% as guided. Normalized rent of GBP 22.2 million increased by GBP 1.3 million or 6%, reflecting new site growth and underlying lease inflation. As a result, EBITDA less normalized rent was GBP 30.8 million, up GBP 3.4 million. EBITDA margin increased by half a percentage point to 23.1%. Moving down the P&L, the growth in EBITDA converted well into profit before tax. Depreciation and amortization increased by GBP 2.1 million, reflecting the larger estate and continued investment in technology and data. Net financing costs increased by GBP 500,000 to GBP 10.9 million, reflecting the growth in the property lease base. The higher net debt was broadly offset by lower interest rates. The non-cash share-based payment charge of GBP 3.1 million increased by GBP 0.6 million, largely due to the recent share price growth. Adjusted profit before tax was therefore GBP 6.4 million, up 31%. Non-underlying items of GBP 1.5 million relate principally to the non-capitalizable costs associated with upgrading our member management and payment systems. Statutory profit before tax increased by 48% to GBP 4.9 million. The accounting tax charge reflects the initial unwinding of the deferred tax asset. We expect a full year effective tax rate of circa 18%, but no cash tax charge. As a result, the profit after tax was GBP 4.3 million. Turning now to revenue. Across the total estate, revenue grew by 10% in the first half, with both member volume and average revenue per member per month contributing strongly. Average members increased by 5% to just over 1 million. Average revenue per member per month increased by 5% to GBP 22.14, with maturing sites growing fastest as usual. In the like-for-like estate, revenue grew by 3%. Member volume was maintained, with the growth delivered through a 3% increase in average revenue per member per month. Looking now at site costs in more detail. Like-for-like site costs increased by 3.5% in the first half, better than our expectations. In utilities, lower commodity prices offset the increase in non-commodity charges that took effect in the fourth quarter of 2025. We also benefited from a new peer-to-peer energy purchasing program and other ongoing energy efficiency initiatives. Staff and cleaning costs increased as a result of the National Living Wage increase and the annualization of the national insurance change from the second quarter of last year. We also made an additional investment in brand awareness during the period. We expect the rate of site cost inflation to slow in the second half as the non-commodity electricity increase annualizes in the fourth quarter. Commodity rates are now fixed through to October 2028, with further reduction in future commodity rates secured. We are also implementing time management software to optimize staffing schedules further. As a result, we expect full-year like-for-like site cost inflation to be at the lower end of our guided range of 3%-4%. Turning now to cash flow. Strong cash flow generation in the first half enabled us to self-fund our expansionary CapEx and buy shares for the EBT and buyback program with no change to net debt. The working capital inflow of GBP 7.4 million reflects the cash generative nature of the business model when growing, although some unwind of this inflow is expected by year-end. After deducting the cash spend on maintenance CapEx of GBP 7.1 million, operating cash flow was GBP 31.1 million, in line with EBITDA LNR. The cash element of non-underlying costs was GBP 1.2 million and bank interest was GBP 2.2 million. As mentioned earlier, there is no cash tax in the first half. In fact, we do not expect any cash tax until 2030 due to losses incurred during COVID and accelerated capital allowances. Free cash flow was GBP 27.7 million, up 10% year-on-year. Expansionary CapEx was GBP 18.5 million. We acquired GBP 4.1 million of shares for the employee benefit trust to avoid dilution and GBP 3.8 million for the share buyback, leaving net debt materially unchanged. This demonstrates the strength of our cash generative model. We are funding a faster rollout, investing in tech and the existing estate, and returning capital to shareholders while maintaining leverage at one times. We continue to reinvest free cash flow to grow the business and maintain a high quality estate. Total cash CapEx in the first half was GBP 25.6 million compared to GBP 19.9 million last year. Maintenance CapEx was GBP 7.1 million. Property maintenance spend was GBP 5.9 million, equivalent to 4% of revenue, and technology and data maintenance spend was GBP 1.2 million. Expansionary capital expenditure increased to GBP 18.5 million. This included GBP 12.9 million on new sites, GBP 2.1 million on tech and data growth initiatives, and GBP 3.5 million on the member management and payments program. The member management and payments upgrade is well progressed, with all members now successfully migrated to the new system. We opened four new gyms in the first half and currently have a further 11 gyms on site. We are still expecting to open at least 20 gyms by year-end. Turning to net debt. Non-property net debt was GBP 58 million at the end of June, GBP 1.3 million lower than the December 2025 position of GBP 59.3 million. Adjusted leverage remained at 1x, and fixed charge cover improved to 2.2x. In June, we amended our facilities, increasing total committed facilities by GBP 15 million to GBP 117 million. The facilities now comprise a GBP 60 million term loan and a GBP 57 million revolving credit facility with maturity in June 2028. This provides appropriate headroom and flexibility as we continue to accelerate our self-funded rollout and share buyback. The new site cohorts continued to perform well. The six sites opened in 2023 are currently tracking towards an average ROIC of approximately 25%, with this small cohort affected by the unusual competitive environment at one site. The 12 sites opened in 2024 are tracking to deliver more than 30% ROIC. The 16 sites opened in 2025 continue to progress well, with strong early member acquisition. Overall, the performance of these cohorts supports our confidence in the 30% ROIC hurdle for new openings. We continue to operate in line with the capital allocation policy we set out in 2023. Our first priority is maintaining the existing estate, with property maintenance CapEx continuing at approximately 6% of revenue over the full year. Our second priority is to maintain leverage below 2x. At June, leverage was 1x. Thirdly, we are prioritizing organic new site growth with our accelerated target of approximately 75 new sites over three years. Finally, we are returning excess capital to shareholders through the GBP 10 million share buyback. Finally, turning to the full year outlook. We remain on track to deliver like-for-like revenue growth of approximately 3% for the full year. We now expect like-for-like site cost inflation to be at the lower end of our guided range of 3%-4%. As a result of the first half performance, we expect the full-year EBITDA less normalized rent to be at the top end of current analyst forecast range of GBP 60.5 million-GBP 62 million. In terms of full-year expectations for capital allocation, we have opened four new gyms to date with a further 11 on site, and another five exchanged and two expected to exchange imminently. We expect to deliver at least 20 new openings this year. We have also completed 15 major refurbishments to date, with six further planned by year-end. We expect total capital expenditure to be GBP 60 million-GBP 65 million, in line with our previous guidance. Finally, we expect the GBP 10 million share buyback to be completed by year-end. Year to date, we have acquired 3.1 million shares for just under GBP 6 million, an average price of GBP 1.81 per share. Now I will hand back to Will for the Next Chapter progress report.

Will Orr : Thank you, Luke. In March 2024, I set out our Next Chapter growth plan, and today I wanted to give you another progress update. Firstly, a reminder of the investment case and our commitment to deliver sustained growth from free cash flow for our shareholders. Starting at [12 o'clock] on the circle, health and fitness is a large market benefiting from continued structural growth. Within gyms, the high-quality, low-cost sector is growing quickly, supported by consumers' appetite for high-quality, no-frills value and by ever more committed generations of gym-goers. We address this growing demand with a winning proposition that delivers strong member satisfaction at low cost through an advantaged labor-light business model. We also have multiple drivers of growth listed on the right-hand side of the slide, and strong execution against those growth drivers is increasing returns from our mature estate and generating the free cash flow that funds our accelerating new site rollout. The whole model is powered by data and technology, enabling us to deliver our growth plans with precision. The U.K. gym market continues to grow strongly. There are now 12.1 million gym members in the U.K., spending approximately GBP 7.3 billion a year. Gym penetration increased again in 2026 to 17.6% of the population versus 16.6% prior year and 12% in 2012. Most of that long-term growth has come from high-value, low-cost gyms. Of the 5.5 percentage point increase in penetration since 2012, 4.6 points have been delivered by our segment. High-value, low-cost gyms now account for 29% of U.K. gym members, reflecting the inherent strength of the proposition. In this growing market segment, we are one of two brands that account for around 80% member share. A major driver of that growth is the generational shift in fitness engagement. The younger the consumer, the more likely they are to be a gym member. The bar chart on the left shows that 85% of 16 to 34-year-olds have or have had a gym membership. Gyms and fitness is increasingly hardwired into the way young people live. In fact, fitness is the leading discretionary spend priority for Gen Z, and as you can see on the right-hand side, its lead has increased year-on-year. That is particularly powerful for The Gym Group, where nearly half our members are Gen Z. All that gives us continued confidence in the long-term growth prospects for the market and for The Gym Group. Managing weight has always been a motivator for gym members, and developments in this area are another emerging tailwind. PwC estimates that approximately 3 million U.K. adults currently use GLP-1s, with that number potentially increasing to 7 million or 13% of the adult population during 2027. We are already seeing this growth within our own estate. In a recent internal survey, 75% of Gym Group personal trainers said they train someone using GLP-1s. The important point for our sector is what happens to fitness behavior. PwC's research indicates that fitness is one of the categories where spending increases during treatment and remains elevated after treatment ends. We are actively evaluating the most responsible, sustainable and profitable way to participate in this new ecosystem. The Gym Group has a clear plan to keep turning these market tailwinds into sustained growth. As a reminder, there are three elements to the Next Chapter growth plan. Strengthen the core is about increasing returns from our existing sites and members, driving like-for-like revenue and free cash flow. That cash generation allows us to accelerate the rollout of quality sites in the U.K. Those first two cogs are our primary focus because the headroom in both is so substantial. But we are also taking selective opportunities to broaden our growth, and I will return to those later. So turning first to strengthen the core. In H1, we continued to strengthen the core across revenue management, acquisition, and retention. On revenue management, we continued to increase new member pricing in a measured and data-led way. This includes a new pricing decision engine using observed site-level elasticities to support more precise decisions. We are also further optimizing promotional spend, and for example, in H1, we ran revenue-enhancing trials offering different discounts to different lapsed members based on their modeled propensity to rejoin. We continued to grow our successful member add-ons with yield from members buying these increasing by 26%. On acquisition, unprompted brand awareness increased again by 5 percentage points, building on recent gains. In social media, we further increased our reach, and web conversion improved by another 10%. On retention, the proportion of members on higher lifetime value fixed memberships increased to 10% of the base. We are also progressing our payment success program, addressing members who churn because they inadvertently fail a payment. In H1, we improved payment success on credit card by 6%. Moving forward, our new payment platform will enable several new initiatives of this kind. Overall, our average member tenure increased again to 18 and a half months. These are just some examples of incremental gains we're driving, and together they compound into strong like-for-like revenue, higher returns, and more free cash flow. The data on this slide and the next clearly show the ongoing pricing opportunity we benefit from. Our members pay around GBP 27 a month for a large, well-equipped gym with friendly expert teams and 24/7 access. It's not surprising that members score us so highly on value for money. While we're similarly priced to other high-value, low-cost players, the mid-market is 55% higher. Our market segment has a clear advantage on value, supporting pricing headroom and ongoing trade down from the mid-market. We continue to have headroom versus direct competitors in competing locations. The ongoing pricing opportunity is also clear in our consumer data. The graph on the left-hand side of the chart is output from a large quantitative study we refresh each summer with pricing experts, Simon-Kucher. It plots perceived price on the y-axis against perceived value on the x-axis and shows that we, along with other high-value, low-cost players, remain underpriced with the opportunity to sit nearer or in the blue corridor shown on the chart. We continue to have both competitor and customer headroom when it comes to pricing. As you can see on the right-hand side of the slide, while we've modestly increased prices for several years, our value for money scores remain high at around eight out of 10. To support that value for money equation and our ongoing price increases, we continue to enhance the value of the proposition in several ways. This includes the ongoing modernization of our gyms, and I'll cover that in some more detail shortly. This summer, we reached an important milestone, successfully migrating all our gyms to modern cloud-native platforms for member management and payments. I wanted to share more on this and some of the other ways we've modernized our technology in recent years. The new member management platform unlocks several new commercial opportunities. These include member referral, new tools to increase payment success rates, and new member payment options. The new platforms will also enable us to innovate faster, offer members more self-service options, and simplify processes for our gym teams. Our digital channels are also continuing to improve. We've been continually making the app and website faster and more reliable, adding new features, and increasing the breadth of our A/B testing capability. This drives both a better member experience and continued improvements in sales conversion. As you'd expect, we're also applying AI in practical areas where it can improve speed, productivity, and decision-making. In software development, for example, we estimate that AI-enabled tools are increasing delivery speed by around 30%. We're also using AI to automate marketing content creation and analyze member feedback more quickly. Behind all of that, we've continued to modernize our cloud data and network infrastructure, improving the speed, resilience, and scalability of our systems. We strengthen the security and operational monitoring, bringing better detection and resolution of issues and ultimately a more reliable service for our teams and members. All of these investments help to strengthen the business, enabling growth in profit and reduction in risk. That is some of the ongoing progress we are making to strengthen the core. The resulting free cash flow is being deployed to accelerate the rollout of quality new sites and to enhance our mature estate. At the heart of that rollout is the commitment to modern, high-quality gyms. Across both new sites and major refurbishments, we are continuing to elevate our product. The evolution is visible right across the member journey: more welcoming arrival areas, continued kit innovation, better zoning, improved group exercise areas, more considered lighting and better changing rooms. We are also responding to how members use gyms today, including dedicated strength areas, women's workout spaces, and equipment that reflects the latest training innovation. The objective is to create more premium feeling, more memorable experiences, while retaining the cost discipline that sits at the heart of our model. We are continuing to accelerate the self-funded rollout of new gyms. As a reminder, we expect to open at least 20 sites in 2026 and 75 sites over the three-year period, with an average ROIC of at least 30%. The rollout is supported by a bigger prospective site pipeline, data-driven site selection, our improved design template, and ever better launch marketing programs. Looking beyond that three-year period, a recently updated PwC assessment reinforces the scale of the U.K. opportunity. PwC has increased its estimates of total potential to between 1,500 and 750 high-value, low-cost gyms in the U.K. That means despite significant sector openings in the last two years, the headroom is still there for a further 600-850 locations. PwC's increase in estimated total potential is being driven by growing fitness demand, population growth, and the increasing ability for high-value, low-cost operators to succeed across a wider range of trade areas and formats. On this assessment, the segment still has more than 10 years of expansion potential. Alongside the new site rollout, we are also increasing the number of major refurbishments in the mature estate. We completed 10 major refurbs in 2025 and have tracked their performance. I am pleased to say the results have been strong. For this cohort, we have seen strong member feedback, leading to an average of 10% membership growth. Most importantly, the sites are tracking to deliver a 30% return on the refurbishment capital. As a result, we have accelerated the major refurb program to 21 in 2026. This is consistent with our capital allocation policy and current CapEx budget. By the end of 2026, the elevated design will be present in over a quarter of the estate. That comprises 41 new sites and 31 major refurbishments, or 72 gyms in total. If the data on the previous slide continues to show a strong return on capital, while simultaneously making our estate more competitive for the long term, we will continue to accelerate the refurb program. That is the progress across the first two elements of the plan, strengthening the core and accelerating the rollout of quality sites. Turning to the third cog, we continue to pursue selective opportunities to broaden our growth. The quality hurdles remain unchanged. Any opportunity must align to core competencies, be highly incremental, and offer strong returns. On new channels, our partnership with Wellhub is performing ahead of expectations, providing an incremental B2B2C route to market. Another new channel could be our existing members. We're currently exploring a scaled member referral scheme enabled by a new member management software. We're also backing new site formats. Early performance in both smaller catchment and larger destination gyms is encouraging, with more of these now in the pipeline. When it comes to new products and services, we're exploring commercial partnerships in the broader health and fitness ecosystem, including GLP-1s, the opportunity I described earlier. That's the latest progress report on our Next Chapter growth plan, and I'll now summarize. The Gym Group has an advantaged labor-light business model in a large market with structural growth. We have multiple opportunities to grow like-for-like revenue and significant U.K. white space. In the first half of 2026, revenue grew by 10% and EBITDA less normalized rent by 12%. We're accelerating the pace of both new site rollout and our refurb program. With continued elevation of our gym product, both programs are achieving 30% ROIC. Our capital allocation priorities are unchanged, and this year's GBP 10 million share buyback is ongoing. Looking to the full year, we expect 2026 EBITDA less normalized rent to be at the top end of the current analyst forecast range of GBP 60.5 million-GBP 62 million. Finally, I'd like to thank our committed and expert people across our gyms and support center. The quality of our team is one of the many reasons I'm very optimistic about our sustained growth prospects. Thank you, and we will now take your questions with a briefing coming in from above.

Operator : Thank you both. If you have a question and you are in the room, please raise your hand and wait for a microphone. If you are joining us via Zoom and have a question, please use the Raise Hand function and we will prompt you to unmute and ask your question. If you could please state your name and the company you represent. We will start with any questions from the room.

Douglas Jack : Yeah, thank you. Douglas Jack at Peel Hunt. Two questions if it's okay. Just in terms of the enhanced format refurbs, how many do you think you might do next year, and what's the typical cost of one of those on average? Then the second question was, in terms of expansion, in terms of the site size, you're looking at big, medium, small, any preference towards that? Any orientation towards type of location and what the site availability is looking at?

Will Orr : Yeah maybe I'll do the second one first. I think in terms of site availability, still very good. I think, as we said, the openings this year are quite back-weighted, but we've been seeing a pipeline of really strong opportunities, and we're seeing that into next year and even the year beyond in terms of some really good sites coming through. I think the core will remain that sort of 14,000 sq ft, 15,000 sq ft, Greater London, other of those sorts of urban locations. But then at the margins, more of that smaller catchment, the one that we opened is performing extremely well, and then more of those sort of big 20,000 sq ft, more destination sites like the site in Norwich, which is going extremely well. But I think at the core, it'll remain that relatively familiar format that we know works very well, and we continue to be able to make a range of high street, retail park, mixed-use development. I think we can make a nice wide range of sites work. So an acceleration, I think along similar lines, but just with a bit more flexibility around trade areas.

Luke Tait : Second one was refurbs?

Will Orr : Yeah.

Luke Tait : On refurbs, for the moment, we are still sticking to that capital allocation policy of 6% of revenue. But obviously, revenue's increasing year on year, so I think we would be looking at more like sort of 25%+ next year. I think we have a decision to make that if when we get really comfortable that that 30% ROIC is being consistently delivered, I think there is always an option to actually go a bit faster.

Operator : Anna?

Anna Barnfather : Thank you very much. Anna Barnfather from Panmure Liberum. Just back onto the sort of rollout and the sort of Q4 weighting. I know it's the future of the industry, but I imagine it puts quite a lot of stress on your delivery teams on that. Is there anything you can do internally to smooth that progress, particularly as you step up to 25 and then 30?

Will Orr : Yeah. As you say, it's always been somewhat back weighted. In truth, it's a bit more back weighted this year than I would want it to be, though I am still expecting that we'll open at least the 20. I think what we're looking at for next year is a quite specific thing, really, which it sounds fairly basic, but to deploy a team now working on early 2027 sites. So in terms of doing the sort of necessary groundwork to get those openings in place in the early part of next year. So yeah, sort of back weighted next year. I think it will be back weighted every year, but I'd like to think it'll be a bit smoother next year. We've got quite a specific plan in place to try and do that.

Anna Barnfather : Okay. Thank you. Luke, technically, when we're looking at the mature ROIC, and we're looking at the refurb ROIC, how are those calculated? Is the mature ROIC still on initial capital investment, or do you adjust it for those refurbishments?

Luke Tait : The mature, it's still on the original investment.

Anna Barnfather : So the refurb ROIC is the EBITDA uplift on the refurb spend. Is it?

Will Orr : Yes, exactly. Exactly that. It is the incremental EBITDA on incremental CapEx, essentially.

Anna Barnfather : Okay. Just a final question. You mentioned before the worker-dependent sites kind of bringing down that mature site ROIC. Do you have any loss-making sites, and are there any kind of action plans to address that?

Will Orr : We have got the benefit of being a high margin business. The sort of tail, the loss-making tail is very, very small. We have got literally a handful of loss-making sites. We have been closing about one or two of those a year as they naturally come up for lease exploration. We will close, I think, two this year. We are bit by bit working our way through that tail.

Anna Barnfather : Thank you.

Operator : Ross, I think you had your hand up a few times.

Ross Broadfoot : Okay. Ross Broadfoot from RBC. What would being in the magic blue corridor mean for pricing versus the sort of 27 headline rate? I know this might sound like an obvious question, but what is the primary aim of these refurbs? Is this about driving new members through the door, with the structural underpins that you have talked about, or is this about being able to charge the existing group more for a better product? Thank you.

Will Orr : Yeah. I think the second part of that question, I think there is more than one aim, but I think that's okay because I think they're all positive things. I think it is about good capital allocation, 30% return specifically on that refurb capital to the previous question. It is about supporting member volume, it is about supporting pricing, and it is about making it a better experience for the members. All those things are true. If it's doing all those things and it's a good use of capital, I think it's also ensuring the estate is competitive and sustainable over the long term. We're extremely committed to making sure that the estate matures with real quality so that, for many years to come, they can continue to deliver high returns. So I'm afraid there are a few elements to it. The second one was about the corridor. Do you want to take the corridor? The corridor question. Corridor. George. That was a good question. I don't think I can give you a precise answer. What I think I can say is that we know we have taken reasonable levels of pricing, always considering what our cost inflation is each year. For a number of years now, we've not seen it move materially. So, I don't know the answer, but I think the fact that we don't seem to be moving into that corridor does give good confidence that there's a decent long-term pricing opportunity. Down the front, and then we'll go back to Tim.

Jack Cummings : Thank you. Jack Cummings at Berenberg. First question, just on the refurbs, how are you deciding on which sites to refurbish? Is it headroom, or how is that decision being made? Second question is, I think in the release, members are now visiting more often. The average tenure of your members is also going up. Could that support faster than 3% like-for-like growth, or does that kind of play into the 3%? Final question, leverage at 1x, target 2x. I know you've mentioned maybe a bit of a working capital reversal. There's obviously a lot of CapEx in H2, but you're still well below 2x. Should we anticipate potentially an additional buyback when it comes to the full year results, given you are 50%-60% through the current one? Thank you.

Will Orr : Yeah. The first one, in terms of how we prioritize that, we've done a lot of work on that, and we've got quite a sort of quite multi-dimensional piece when it comes to how we choose the refurbs. It's a combination of, you sort of said it, headroom. We talked before about we sort of built this statistical model with Simon-Kucher again actually to look at where we think the headroom is on volume in the estate. So that's one piece. Then we would look at some of the sort of trade dynamics as well. So we take in competitive factors as well. Then we would look at the gyms themselves and just kind of go, "Is there an opportunity to turn this from a really good gym into a really great gym?" So it's sort of a combination of factors. I think on what it does on like for like, I think we continue to guide that we've got strong members per gym, sort of 3,800 members per gym. I think it's a much higher level than contract gyms. We want to sustain that, and then it's a year-weighted revenue growth. I think, again, these refurbs are kind of, I would say at the moment, are kind of underpinning that sort of revenue growth path. The third one was that leverage and buyback, is it? We increased our facility size this year, as you have seen in the presentation, which gives us the opportunity to do another buyback next year, as you are asking. I think that as long as we are going as fast as we think is appropriate on the other areas of spend, which are delivering really high ROIC and leverage still, as you say, remains nice and low, I think there's a good chance we would go again next year.

Operator : Then Tim.

Tim Barrett : Morning. Tim Barrett from Deutsche Numis. Quick question on some of the costs that Luke mentioned. You talked about peer-to-peer energy and investment in brand awareness. I just love a bit more detail on that, if you could lift the lid. Then just coming back to the volume question just asked, really, is there still volume upside in those pre-COVID gyms that you talked about? I know it's ancient history, but it would be interesting if in the medium term volumes could move on. Could you answer that one? Thanks.

Will Orr : Yeah. I think on that one, Tim, it's probably a little bit similar to we're always wanting to sort of beat that number, but I think we'll continue to guide to hold the like for likes. There is a sort of 1%-2% drag on that from competitor rollout, and we expect us and others to continue to roll out for some time to come. I think, yeah, I'd say we'd guide to hold that like for like volume number, and if we can beat it, we'd obviously be pleased to do that. I might leave peer-to-peer energy matching to you, Luke.

Luke Tait : Sure. It's a scheme we started this year whereby committing to specific energy producers, particularly in renewable energies, we can actually reduce the commodity rate that we're paying. On the second question around brand awareness, we did do a trial, as I mentioned, on brand awareness. We did see, as Will said, a good jump in unprompted brand awareness as a result. What we're still monitoring is how that actually converts to incremental members. I think when we get to once we've completed that analysis, it would help guide us into next year as to whether we do that sort of thing again or not.

Tim Barrett : Could you call out a GBP 1 million figure? Is it too small to quantify?

Luke Tait : It was less than GBP 1 million.

Nigel Parson : Good morning. It's Nigel Parson from Cavendish. I just had a couple of questions on actual gym usage. Are you seeing any difference in trends, say, between strength and cardio? Is GLP-1 starting to affect how people want to use the gym? Does that affect how you allocate the equipment that you buy and so on? Are there any other trends you are beginning to spot that are interesting?

Luke Tait : Yeah, I think that you sort of, in a way, I guess, referenced it. I think there has been a sort of ongoing, the rise of strength. I think you've seen that over the last few years, continue to see that. So I think people really, across age ranges, actually sort of increasingly understand the benefits of strength training, sort of physical, mental, and health benefits of strength training. So we will allocate a bit more space now to strength and to sort of functional training, a little bit less to cardio. But it's still a balance and you want to get, okay, you want a gym that's rounded and allows people to work out in a rounded way. But I think certainly we'll allocate more to strength. GLP-1s is referenced in the presentation. We know penetration's growing, and we know that people look to gyms, again on that sort of strength piece, to sort of sustain muscle mass while they're on those programs. Also to sort of build sustained habits. Also, I think that if people are doing that, for some people, doing the GLP-1 treatment will give them some additional confidence to come into the gym. So, still relatively early day. Well, it's not that early days. It's 3 million people we think now, using GLP-1s, it's growing. So yeah, I think a strong tailwind for the gym market there. I think more to come on that.

Will Orr : Okay. Any on the coming in-

Operator : We have no raised hands on Zoom. So I'll hand back to you.

Will Orr : Okay, great. Well, thanks very much for coming. I think that's it. So thank you.