Good day, ladies and gentlemen. Welcome to the Basic-Fit 2020 half-year results conference call and webcast. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session after today's prepared remarks, at which time, if you would like to ask a question, you may do so by pressing STAR 1 on your telephone. If at any time during the call you require audio assistance, feel free to press STAR 0, and a conference coordinator will be happy to assist you. Please note that this conference is being recorded. I will now turn the call over to your host for today's conference, Richard Piekaar, Head of Investor Relations. Sir, you may begin.
Thank you, Tracy, and good afternoon and welcome everyone to our conference call, during which we'll discuss our results for the first six months of 2020. With me today are CEO Rene Moos and Hans van der Aar, Basic-Fit CFO. This call is being broadcast live on our website, and a recording of the call will be available shortly afterwards. As usual, I would like to point out that safe harbor applies. We will start with Rene, who will discuss the highlights and the operational developments, followed by a more detailed look at the financial results from Hans. We will then take your questions. The call will finish no later than 3:00 P.M. With that, Rene, I would like to hand over to you.
Thank you, Richard.
Welcome, ladies and gentlemen, and thank you for joining today's call. On the first slide, you see the usual highlights overview. With the COVID-19 pandemic and the related club closure, we have a very unusual set of results. Due to the club closure and the membership freezes and member compensation schemes, we missed nearly three months of revenue this period. A period that started very well with strong membership developments and a record number of club openings in the first two months. The number of club openings in First Quarter was 44, and in the month that followed, we opened not more than three new clubs, bringing the total network to 831 clubs, an increase of 22% year on year. During this period of club closure, the number of joiners was almost zero, while we continued to have leavers, but at a lower level than normal.
As a result, the number of members was 2,017,000, up 9% year on year. As mentioned, we have lost a significant period of revenue. Year-over-year revenue decreased by 24% to EUR 183 million. The underlying EBITDA decreased by 9% year on year to EUR 62.2 million. We ended the period with EUR 189 million cash at hand after obtaining additional bank financing and after a successful equity raise last month. In this exceptional period, we were able to show the responsiveness and flexibility of the company. I was also proud to see the commitment and dedication of our staff to help the company sail through the storm and come out of it even stronger than before. On the next slide, I want to recap what we did after we had closed our clubs.
Mid-March, we were confronted in all our countries by different lockdowns due to the COVID-19 outbreak, which forced us to close all our clubs. The first thing that we did was inform our members about the club closure and the fact that they would be compensated for the period that they would not be able to visit our clubs from mid-March till May. As of the 1st of May, all memberships were frozen. Following this communication, we did not see a significant spike in the number of leavers, while at the same time, we could continue to collect the membership fees of around 75% of our loyal membership base, who agreed to be compensated for this once our clubs were open again. During the period of club closures, we frequently communicated with our members and kept them engaged, among others, by promoting the use of our online group classes.
We have seen that our investments in the Basic-Fit App and our GXR Virtual Group Classes have been of added value during the club closures. The usage of GXR group classes in April increased sevenfold compared to the start of the year. To further stimulate people to exercise at home, we organized a big home gym day event in April, which was attended by more than 800,000 people in Europe. At the same time, our club employees could no longer work at the club, but all were retained and kept being paid in full. They were kept up to date on the latest developments and informed about the safety and hygiene protocols that we put in place once we could reopen the clubs.
At the headquarters, many people worked harder than ever before, adjusting to the new reality and at the same time preparing for clubs' reopening in a world with COVID-19. We also took action to manage our cash flow and increase our liquidity in this uncertain period. We halted the construction and opening of new clubs and minimized maintenance activities like replacement of equipment and big refurbishments to bring the capital expenditure to a minimum. In addition, we lowered the club operating cost and the overhead cost. We received support from governments who provided compensation for staff cost, and we made use of the possibility to postpone tax payments. We also received strong support of our long-term business partners, including landlords, contractors, and suppliers, which helped us to limit our monthly cash outflow during the months of club closures.
The Basic-Fit leadership team contributed by reducing their own salary by 50% for the period that the clubs were closed. To increase our financial liquidity, we obtained an additional bank finance of EUR 100 million, of which EUR 60 million is used to absorb the impact of the COVID-19 lockdown-related club closures. Last month, we also successfully raised EUR 133 million through an accelerated book-build offering of new shares. With the strengthening of the balance sheet, we will also be able to resume again our growth strategy. On the next slide, we show in chronological order the reopening of the clubs in different countries. At the end of May, Luxembourg was the first country in which we could reopen our clubs. The clubs in France, except for Paris and Île-de-France, followed shortly after on June 2nd.
We reopened the clubs in Belgium and the clubs in Spain outside Madrid on June 8th. The clubs in Paris and Île-de-France reopened on June 14th. The clubs in Madrid were reopened on June 22nd. Finally, on July 1st, we could reopen the clubs in the Netherlands after being closed for 15 weeks. Of course, the clubs reopened in a different environment with limitations and new regulations in order to assure a safe environment to work in and to work out in. Which brings me to the next slide. The safety of our members and staff in the clubs is, of course, our main priority. Before we reopen the clubs, we made sure we could fully comply with the local regulation and inform our members on all the measures by email.
In all clubs, we work with a reservation system which enables us to manage the flow of members to our clubs and the maximum numbers of members in our clubs at any given time. We also integrated triage in the process and asked people to confirm that they do not have any symptoms and have not been in contact with people that do. If they cannot confirm this, they need to stay home. This also applies for our staff, of course. We have adjusted our already strict cleaning protocol. Our staff and external people spend at least six hours on cleaning on a daily basis, and we asked our members to clean the equipment before and after use. To this end, we added additional cleaning stations in the clubs.
There is clear signage in the clubs to regulate the flow of people in the clubs and to assure the required social distancing. In addition, we communicate in our clubs that members need to wash their hands frequently, preferably after each change of equipment. The usage of showers and dressing rooms is not allowed in France yet. In the other countries, we make sure that also here social distancing is applied. We optimize the club staffing schedules to make sure that extra employees are present at peak hours or at heavy traffic clubs. In addition, our remote surveillance center is helping our club staff to enforce the COVID-19 health and safety protocol. To conclude, I would like to emphasize that we have optimized the ventilation in our clubs to make sure that there is no recirculation of air and there is ample inflow of fresh air.
Now that we have reopened all our clubs in all our countries, we see members coming back and visits recovering to pre-COVID-19 levels. First, the frequently visiting young men and women, and during the next weeks that followed the other members. We have seen this pattern in all countries. A good way to illustrate this is by taking a close look at the visiting trend in our mature French clubs. That is the chart on the left-hand side. The visiting levels are now nearly similar to pre-COVID levels. You see that this year the number of visits is a bit higher at the start of the day, which is explained by the extension of our opening hours this year, starting weekdays at 6:00 A.M. Also noticeable is that the usual peak hours between 6:00 and 8:00 have become less pronounced.
This is explained by the fact that many people are still working from home and the increased flexibility to visit the club. While we have reduced club capacity to comply with the new hygiene protocols, the chart on the right-hand side shows that in spite of these adjustments, our members can go to the club without major limitations. We also see a strong development in numbers of joiners. The chart shows the strong trend in joiners we had for the group in January and February, and now also after the reopening. Obviously, the number of joiners in April and May were very limited as all our clubs were closed. In July, the increase in joiners is very high. Actually, the number of new members is 70% higher than the number of joiners in July last year. This tells me that we cater to a real need.
I also believe that fitness can contribute to battling the COVID-19 pandemic. By exercising in our clubs, people can work out in a safe environment and increase their fitness and improve their immune system. With the positive trend that we have seen after reopening, we have restarted construction of the clubs that we paused in mid-March. Next to the positive membership developments, we see increased availability of potential sites, and we are also able to negotiate better terms, including in many cases a pandemic clause, which will give us postponement of rent payment during forced club closures in the future. The strengthened balance sheet enables us to resume our club rollout plan, and we expect to open around 100 clubs this year. Our long-term strategy has not changed, and neither have our targets for the medium and long term.
Of course, we will continue to closely monitor the development relating to the COVID-19 pandemic, and if necessary, we will again adjust our plans accordingly. If there will be no massive lockdowns with forced closures of a significant part of our clubs in the coming quarters, we will continue to target to have a network of 1,250 clubs in 2022. I'm confident that based on the very good start of the year, the swift action taken at the start of the corona crisis, and the support of all our stakeholders, as well as the additional financing we have secured, we are well equipped to cope with any potential further impact of the COVID-19 pandemic and come out of this as a stronger company. This concludes my part of the presentation, and I would like to hand over to Hans for the financial review. Thank you, René.
I would like to start with the income statement and the underlying results for the first half of the year. As René mentioned, we were forced to close all of our clubs for a significant period, which had a significant impact on revenue. We reported a 24% decline in revenue to EUR 180.5 million. Because of the compensation that our members receive for the time that they paid their fees while the clubs were closed, we will ultimately lose around 25% of the membership fees this year. France was, after Luxembourg, the first country to reopen its clubs and reported a modest 7% decrease in revenue, thanks to the strong membership development prior and after the club closures. Countries that had to deal with a longer period of club closures, like Spain and the Netherlands, reported more significant decreases in revenue.
To give you a better understanding of our performance and how we internally look at the business, I will focus on our underlying performance. I will start with the bottom half of the slide. Club EBITDA was EUR 96.5 million compared to EUR 152.4 million in the first half of 2019. The decrease is, of course, a result of the aforementioned lower revenue. Despite the achieved cost savings during the club closures, particularly on personnel expenses thanks to the various government support schemes, total club operating costs were about the same as last year. This is the result of the strong growth of our club network by 149 clubs the past 12 months. To come to the underlying Club EBITDA, we take the reported EBITDA and adjust for the cash rent costs of the active clubs in our network and exceptional items.
In the first half of the year, the underlying Club EBITDA was EUR 91.5 million compared to EUR 104 million in the first half of 2019. In line with the past practice, we treat the cost associated with closed clubs to the extent that we could not reduce the cost base and could not make up for it through government compensation schemes or discounts received from landlords as exceptional items and exclude such costs from underlying EBITDA. The total exceptional club costs relating to COVID-19, consisting of cash rent, employee, and other club operating costs, were EUR 46.8 million, of which EUR 41.4 million has been recognized in the first half of this year. Total overhead expenses were EUR 26.5 million compared to EUR 32.9 million in the first half of 2019. The decrease is mainly explained by cost saving measures we implemented following the club closures.
We were able to reduce costs by postponing head office projects and spending less on marketing. We were also able to receive employee cost compensation in the various countries where we operate. Underlying EBITDA, which is calculated by adjusting the reported EBITDA for, again, cash rent costs and exceptional items, was EUR 62.2 million compared to EUR 68.3 million last year, a decline of 9%. The cash rent costs in the first six months of 2020 were EUR 49.1 million compared to EUR 52.4 million in the previous year. The lower cash rent costs reflect temporary COVID-19-related rent reductions and postponements. On the next slide, I would like to mention a couple of line items that need a bit of elaboration. Depreciation and amortization costs rose by 28% and reflect our higher club count, which is up by 22% year on year. A new line item in the P&L is lease concessions.
We recorded EUR 8.6 million lease concession income in the period. These relate to property rent discounts received from our landlords, which did not entail an amendment of lease contracts. In case of lease contract amendments, adjustments were made to the right of use assets and lease liabilities. We recorded a pre-tax loss of EUR 67.3 million, resulting in a corporation tax income of EUR 15.4 million compared to an expense of EUR 0.6 million last year. The effective tax rate in the first half of 2020 was 23%. Underlying net result was a loss of EUR 2.7 million compared to EUR 13.5 million profit in the first half of 2019. I want to mention again that that loss is fully explained by lower revenue due to COVID-19. The reconciliation table shows the adjustment for PPA-related amortization, interest rate drop valuation differences, exceptional items, IFRS 16, and lease concessions, and the related tax effects.
On the next slide, I would briefly like to discuss our mature club development. As you know, a club is mature if the club is at least 24 months old at the start of a year. I'm sure you understand that also our mature KPIs are significantly impacted by the COVID-19 crisis. We started the year with 530 mature clubs, which is a 25% increase compared to the 405 mature clubs that we had last year. 323 of those clubs are located in the Benelux, with the balance in France and Spain. The mature clubs represent approximately 62% of the total number of clubs, and they recorded EUR 137 million of revenue, or 75% of the total revenue. The average number of members per mature club showed a decrease to 3,078 members, a 9% decrease to 3,029 in the first half of 2019.
During the period that our clubs were closed, the number of members that left was about the same average monthly rate as in previous years. However, while it was possible for members to leave, the number of joiners during the closures was close to zero. Next, we go to the slide on capital expenditure. Maintenance CapEx was EUR 17.8 million in the first half of 2020, compared to EUR 11.9 million in the same period in 2019. The investments were mainly done in the weeks before reopening, when we used the opportunity of the empty clubs to do a number of refurbishments. In addition, we spent a significant amount of money on the installation of Smart Camera Systems in our existing clubs in the Benelux. The average maintenance per club was EUR 22,000 compared to EUR 18,000 in the first half of 2019.
For the full year, we expect to spend, on average, around EUR 50,000 per club on maintenance. In 2019, the average spend was EUR 55,000. Expansion CapEx was EUR 67.5 million compared to EUR 80 million in the first half of 2019. The decrease is explained by fewer club openings during the period than in the first half of 2019. We opened 47 clubs versus 57 last year. On average, we spent EUR 1.23 million per newly built club, and we expect a similar amount for the full year. Another reason, of course, for the decrease in expansion CapEx is that the EUR 80 million for 2019 also included the EUR 10 million prepayment for the Fitland acquisition. Other CapEx was similar to last year and included the acquiring of the full IP rights of our exclusive membership administration software.
We expect other CapEx to be at around EUR 10 million for the full year, which is similar to last year. Next, on our balance sheet. At the end of June, our net debt on a pre-IFRS 16 basis amounted to just under EUR 400 million compared to EUR 451 million at the end of 2019. As we have stated before, IFRS 16 does not have any impact on our bank governance because these are based on frozen GAAP. On this basis, our leverage ratio decreased to 2.3 times from 2.5 times at the end of 2019. In spite of a tough first half year due to COVID-19, we were able to improve our financial flexibility thanks to the issue of 5.3 million new shares, which gave us gross proceeds of EUR 133 million. We also arranged additional bank financing of EUR 100 million, of which EUR 30 million is still undrawn.
This means that at the end of June, we had EUR 189 million cash at hand, which we could increase to EUR 290 million. I would like to finish the presentation looking forward. With the strengthened balance sheet and in combination with the positive membership development after reopening, we have restarted the construction of the clubs that we paused mid-March. We expect to open around 100 clubs this year. Our long-term strategy has not changed, and neither have our targets for the medium and longer term. The pipeline of new clubs looks as strong as ever. If there will be no massive lockdowns with forced closures of a significant part of our network in the coming quarters, we will continue to target a network of 1,250 clubs in 2022.
Of course, we will continue to closely monitor the developments relating to the COVID-19 pandemic, and if necessary, we will adjust our plans accordingly. This concludes my part of the presentation. Operator, please open the line for questions.
Thank you, sir. If you would like to ask a question, please signal by pressing Star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press Star 1 to ask a question. We will now take our first question from Marc Zwartsenburg from ING. Please go ahead.
Yeah, that's about right. Good afternoon, gents. A couple of questions. First, on the payments, the cash rent costs, part of that is, of course, a delay or some subsidy from landlords. Hans, do you have the full number?
If there were no COVID closures, what would have been the run rate in terms of cash rental costs in the first half, please?
Mark, thank you for your question. As we said, we have EUR 8.6 million as the lease concessions that will be part of the reduction that we had without any amendments. Also, we have postponement of cash. If you look at the run rate and you look at the property rent that we paid in February, that's around EUR 11 million.
A total of EUR 11 million higher. Normally, it would have been EUR 11 million higher.
Oh, higher? That's the run rate of the property rent that we pay each month. Oh, on a monthly basis.
Yeah. Okay. And how much? Okay. And how many postponements do you have to pay then in the second half, roughly?
Because what has been really the holiday and what has been more of a postponement that you have to pay it in the second half? Do you have a number for that as well?
The total holiday was around EUR 50 million. That was the rent reduction that we got.
One-five?
One-five. That is really the reduction. Some one month, some 50% for six months, some three months rent reduction, but also a few agreed with the postponement of the rent.
Okay. That is still to come, that EUR 50 million will be paid in the end in the second half?
No, the EUR 50 million is really the rent reduction that we received. Okay. We do not have to pay that. Some will be paid later, but it is the minimum amount.
Okay.
On the memberships, when do because currently, still, people are having discounts on their membership fees, if I'm correct, from the credits from April, May. When will those credits really end? When will people start paying their normal monthly fee again?
What happened is when people stopped paying was May 1. 75% of our members kept paying till May 1. That means, let's say, EUR 30. What we agreed on is that in the coming six months, the coming six months that we were open, we would deduct EUR 5 per month from that fee that they're normally paying. If they have to pay EUR 20, they're paying EUR 15 now for the coming six months.
After six months, only at the end of the year, then people start paying the full amount again.
Yeah. We opened the 1st of July, all clubs.
For the Netherlands, it is till the end of the year. In France, it is a month earlier, so till December 1st. At the end of the year, we are fairly even with the members.
In terms of the premium, because in July, you have new people joining again, because the first months, nobody joined, but now people are joining again. What do you see in terms of membership take rate? Is it more the premium, or are they taking the basic, or what do you see?
The basic is only in Spain, so that is a very small amount. The comfort is, the premium is a little over 30%. That was before COVID and also after COVID. Still the same.
I think at this moment, it is around a little bit more than 20% of the total base, but of the new joiners, it's a little more than 30%. Okay.
Maybe a final one for you, René.
Yeah? The total base is 22%.
22%. Okay. Total base. Maybe a final one for you, René. You only have a churn of nine, and you see quite different numbers in the market, also from the association. What do you see in the competitive environment in terms of what your competitors are doing with their, first of all, their rates, but also, do you see change disappearing? Do you have a feeling that you're taking market share quite significantly? Can you share a bit with the competitive field, please?
Yeah, but it's still early days, right? The Netherlands opened the 1st of July.
It is too early to really speculate about that, but you've seen some bigger change, especially in the US, that already went bankrupt is 24 Hour Fitness, for instance, and Gold's Gym, two really big brands in fitness. It's the number two of the world, 24 Hour Fitness in turnover and members. They are in bankruptcy. Gold's Gym has already sold again to a German player. Yeah, it's for sure that companies or smaller clubs are struggling, but how big that is and how big that's going to be, we will know more in the coming months.
Is there potential for you to pick up a chain that you see an opportunity somewhere, or is the balance sheet with still the 100 clubs rollout this year restraining you a bit from moving fast there?
Yeah, I think if there is an opportunity and we think it's a good fit with us, we will definitely look at it seriously, but then we will also work with banks to finance a potential acquisition. I think we will definitely look, but for now, we're focused on our own business.
Okay.
All right. Thank you very much.
Thank you.
Thank you, Mark.
We will now take our next question from James Rowland Clark from Barclays. Please go ahead.
Hi, good afternoon. I've got three questions, please. The first is on your attendance being back at almost pre-COVID-19 levels. Could you just talk about who it is that is attending the gyms and who isn't? The second part of that would be, how does that look in your city locations versus your towns or regional towns or sort of villages?
Secondly, just on leverage, obviously, you just alluded to you would look at M&A if the opportunities came up. What sort of leverage are you happy with in the medium term, given there is still some uncertainty over localized closures? Finally, just on new member growth that you are seeing, so 70% up in July versus the new members of last year, how does this compare across your geographies and demographics? Is there a difference if there are new members who have never been members before, or are they returning members? Thank you very much.
To start with attendance, it is so what we saw, and then we saw that in all countries, is that the younger people showed up in the first one, two weeks, also mainly male. It was like 65-70% of the joiners were male members.
After two weeks, that changed and more normalized, and also the older member and more female members showed up. It is still that the biggest percentage of joiners are the younger members, and the older members show up less, especially the people who work out in the strength department. They are visiting heavy visitors again, so they're showing up again two, three times a week. That is the attendance. Who is showing up? I think the young people and old people is more normalizing, but still, the focus is still not the focus. The 65 age group is still limited active in our gyms at the moment. The leverage, maybe Hans, you can say something about that.
Yeah, leverage is one thing, but what is more important, what we're very happy with at the end of June, that we have a huge amount of cash at hand to be able to, if something happens, we can use it for the growth, but we can also look at what happened with any other COVID-related lockdowns or on a major scale. The cash at hand is more important because leverage is, of course, also connected with the EBITDA that we make. On a normal level, we always said that you want to have a leverage below three. Around three is, for us, a healthy number to work with.
Again, at this moment, with all the uncertainty with the COVID, cash at hand, being able to make sure that you have enough cash to also be there when tricky times come, like we saw, that's the most important thing. Now we're very happy with the more than EUR 200 million that we have available for growth, but also for major problems.
Maybe to add to the first part about who's showing up, I just explained already that especially the younger people are showing up, but that's also the big group that is also our members, of course. If you look at the amount of people that is older than 50 years in our members' base, that is only 10%. So 10% of our total member base is older than 50. Our biggest group is between 18 and 35.
To compare countries, I think if you look at Belgium and Spain, they are a bit behind. If you look at Netherlands and France, they are really above target. The biggest growth comes out of Holland and France. Belgium is similar to what it was last year, and Spain is a little bit behind on last year. That is the cities and the big cities and the villages. There is another big difference that we see there. Does that answer your question?
That does. Thanks very much.
Thanks, James.
We will now take our next question from Hans Pluijgers from Kepler. Please go ahead.
Yes. Good afternoon, Gentlemen of Kepler Cheuvreux. Yeah, a few questions still left for me.
First of all, on your construction, you plan to open 100, but at the same time, you also said that for this year and 1,250, still target for end of 2020 or, let's say, in 2022. I mean, how flexible are you, let's say, in the agreements with your construction companies? How long, let's say, for example, if there could be a next wave, you could delay construction on clubs you already started with and contracts already closed to start with in the near future? Secondly, we already a little bit discussed the yield for H2, but I make it quick from the back of the envelope calculation, and I come to, in principle, you should, let's say, quite easily calculate the yield for H2, and I come to about €16 per month per member.
Is that a good number, including, let's say, also that, of course, as of December, some countries already get back to the normal level? Thirdly, looking at your leavers turnover, your average over the, let's say, the last few months is about 6.5%, but at the mature clubs, it looks to be slightly higher. Is that indeed the case? Yeah, we would say tell about, let's say, the underlying trends at mature clubs, what you also expect going forward. The last question is, I see, let's say, that receivables go up by about EUR 15 million. Is there any specific reason behind that? Are, let's say, some members paying late, or is there some issue with members paying? Could you be a little bit elaborate on that?
I forgot the first question. You asked quite the construction. Oh, construction, yeah. How flexible you are.
About the construction companies, we are very flexible. We have in our contract the possibility to stop, I think, one or two weeks. If COVID hits us again and we have to close down all our clubs again, we will close down all construction within two weeks without any penalties. We are flexible on that side. About the landlords, different story. Of course, if we decide to close down the clubs for, let's say, six months, we will have to pay some of the rent. What you saw in the first lockdown, we were able to get EUR 15 million-€16 million of rent reduction, partly without extension, partly with some extension. I think if we have in the same year a second big lockdown, I am not sure we will get that again.
On new construction, what we normally get is between three and six months rent-free so that during construction, we do not have to pay cash-wise rent. If we stop building while the rent contract started, the first three-six months, we will not have a problem. Of course, it will be costly if we have 40 clubs under construction that we do have to pay the rent but have no income. Of course, that is always better than also making an investment of a million. Yes, we are very flexible. That is what you also saw. The first lockdown, we stopped immediately, and now that we are open again, we are finalizing the constructions of the clubs that were under construction. That is what we are doing right now. The yields, I am not sure if Hans also took the back of an envelope to check the yield, or?
If you saw the yield development in the Second Quarter compared to First Quarter, we obviously had a real downfall of that yield. It went from more than €19 in First Quarter to €1 3, a bit more, in the Second Quarter. Of course, that makes sense because we did not have any revenue. The compensation schemes and also the discount that people get will have an impact on the people who took the spread option, the 75% of our members will have a negative effect on the yield. We will not have the € 19. The €16 is, yeah, I am not going to tell you that you are absolutely right, but you are coming close.
We had a question about leavers, about mature club.
I think it is true that the leavers on the mature clubs are a bit higher than the immature clubs, which is in a way logical because on the mature clubs, we have more flexible memberships. So members are a member longer already, so they're not in the first contract. When you open a new club, most of our customers sign a year contract, around 90%. When we had the lockdown, it was also they were still in contract. That means that after the lockdown, the contract restarted again. What we have seen in the July month is that the biggest growth of members is on our mature clubs. The big step that we lost on the mature clubs is almost back already in the first month that we opened.
You had a question about the trade receivables, trade and other receivables, that went up from the end of 2019 to now, June 30. That is just a timing issue. It's not really something happening with members not paying or higher member receivables. We have no issues in there. That's a timing issue.
Okay. One follow-up question from my side on flexibility. I understand you can stop, let's say, within two weeks, but there is also in the contract any, let's say, agreement when you have to, let's say, how long you can stop the construction, or you have one moment in time you have to restart the construction?
We have over, I think we have nine, ten construction companies, and then we also have a lot of construction companies under the head. We have different contracts, but we are very flexible.
Okay. Thanks, Rene.
Yeah, we've proven that, of course, in the first lockdown, that we had a lot of clubs on schedule, 150 clubs that we expected to open this year, and we were very good on schedule. After the first lockdown, we were able to stop all those opening of clubs. I think that shows that we are very flexible in our relations with the construction companies. Thanks.
As a reminder to ask a telephone question, please signal by pressing star one. We will now take our next question from Charles Mortimer from Citi. Please go ahead.
Very good. Good afternoon, everyone. I think most things have been asked, but a couple other questions. Just you've closed a few clubs in Belgium again. I'm sorry if I missed it. What's the situation with how members are paying? Have you immediately frozen memberships?
Going on from that, if there is a larger second wave, will you deal with memberships and other features differently?
The clubs that are closed in Antwerp are 22 clubs. In Antwerp, we have a very big cluster, so we do have a lot of clubs close by to where we had to close our clubs. At the moment, we have not decided yet if we would compensate or not because what we see is that a lot of our members are taking the club closest to their home that is open. That is, of course, the big advantage of the cluster strategy that we picked. We do have still a lot of clubs in a very near area of where the people live. For now, we have not decided yet if we would compensate.
We were going to look at it for at least a week to see how many people are visiting other clubs, but it's a huge amount. We've seen that already in the first day. The clubs around those 22 that were closed were very busy. We are still thinking about it. We also think that we are talking to local or trying to talk at least to different local authorities in the Antwerp area. We do not really agree with the fact that the clubs were closed. What we also have seen in Barcelona, which also closed the clubs a week ago, is that the judge overruled it, and now all clubs in Barcelona are open again, including the one we have over there. That is also an option for the Antwerp area, but we hope we can discuss with the local authorities to reopen our clubs again quickly.
Of course, if a fitness club would have been a place where everybody gets sick, we personally want to close our club. It's not the case. We also really do not understand the decision made in Antwerp to close our clubs and to continue having the restaurants, party centers, etc., open. We were not completely happy with that decision.
Sure. In the event of widespread second lockdowns, you just saying how would you react differently this time, perhaps in terms of the memberships, perhaps in terms of live clubs or whatever other bits? Is there a plan in place for that?
Yeah, there are different plans in place, but I think personally, of course, but that is my personal opinion. I do not think that countries will do a complete lockdown again on all businesses. I think it will be temporary. It will be local closures.
We've seen that in other countries as well. We think that's also what will happen in Europe. For us, we are working cluster strategy. We have, of course, a lot of clubs. If I look at competition that have one club in Antwerp or two clubs in Antwerp and that's it, that is, of course, a disaster because then you have after three months again no income. They are extremely struggling. For us, that we had to close down 22 clubs in Antwerp is not, of course, it's not helpful, but it's not a huge disaster, especially because we have very clubs closed down. It depends. If it's cities that will close down, is it areas, is it a whole country that is closing down? We have different plans in place.
We were overall happy how we did it in the first round of club closures, but we are prepared if we have to do that again.
Sure. Just on a slightly separate point, there has been discussion in the U.K. and other areas actually around government support for various industries, but one of them being the fitness industry. Do you see any chance of sort of some extra government support to try and get people back fit again and with health being at the center of everyone's minds at the moment?
Not sure. We do not expect too much on the short term, but we are focusing on our own business model. I think what you see is that people are really aware that if you have overweight or not feel fit, it is not helping when something like this hits you.
We do see and we do really think that fitness is really going to be a part of more people's daily routine.
Yeah, sure. Okay. Thanks, everyone.
Thank you.
We will now take our next question from Christoph Bicken from Kepler Cheuvreux. Please go ahead.
Hello everyone. Good afternoon. I have one question left. Can you remind us, please, once again what the payment terms are that you have with large suppliers from, yeah, fitness equipment like Matrix or Technogym?
What do you mean, payment terms? When we have to pay?
Yeah, exactly. After how many days, how many months after delivery, typically? We have normal payment terms. Nothing strange.
Like 30 days? 30 days. And some suppliers, 30, 60 days?
30 days, 60 days. We do not have a long payment schedule. Okay. Okay. That is clearer than what I wanted to know. Okay. Thanks.
I think we have reached the end of— Sorry. Go ahead. Please go ahead. Please go ahead. Hi, sir.
We have reached the end of today's conference call. I would like to hand over to Richard Piekaar for any closing remarks. Please go ahead, sir. Apologies, we do actually have another question. Would you like to take it?
Yeah, sure. Sure. We still have some time. Perfect. We will now take our next question from Patrick Vermeulen from Ascot House Advisors. Please go ahead.
Hi, good afternoon. I was just keen to know to what extent, given that to what extent the changes in society, if there are any, will affect your opening plans.
For instance, the one thing I'm thinking about is, given that people are working a lot more from home and less at the office, does that mean that you're going to try to change the mix of where you open? If that is the case, does it make openings more difficult in rural areas than in or where people are actually living than in places where people are working?
It is early days, I'm not sure if we will see any change and what the change will be in how people will behave. We can only talk about the clubs that we open. In France, we opened our clubs in the beginning of June, so that is open almost two months. What we see there, it's more or less business as usual. Nothing really changed a lot.
Also, talking about more in—to be honest, it is more easy to find locations in smaller villages than in big cities. If one day we would change to more locations in places where people live, that will only make it more easy for us, I think. The openings we are doing right now are the openings that were under construction already. We have not really started any new constructions yet. When we closed down half of March, we had a lot of clubs under construction, and those are the ones that we are opening right now. That is also how we are coming to the number of around 100 clubs to open this year. Forty-four clubs were already opened when COVID-19 hit us, and the other clubs are the clubs that already started, were halfway or almost finished even.
That is why we come to the number of 100, and we take it from there to see what is happening with infections in different cities and different countries to make sure we do not open too quickly, too fast.
Thank you.
We have reached the end of today's conference call. I would like to hand over to Richard Piekaar for any closing remarks. Please go ahead, sir.
Thank you, Tracy. And thanks, everyone, for dialing in today at our half-year results conference call. If at any point later on you have further questions, don't hesitate to contact us, and hope to speak to you soon. Thank you all. Bye-bye.
Bye-bye.
This concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.