Greetings, and welcome to the Brait's half-year results presentation. All participants are currently in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star, then zero. Please note that this call is being recorded. I would now like to turn the conference over to Peter Hayward-Butt. Please go ahead, Sir.
Many thanks, and thank you very much to all the investors and stakeholders who've taken the time to listen in to our interim results today. I'm very pleased to say that we have Kobus, who will be actually dialing in from London. He's there on an investor roadshow from Premier, the CEO of Premier, and then Dean and Mark from Virgin Active, who will cover off the Virgin Active section. Again, presently, you won't have to listen to myself drone on. In terms of a year, I think we're very happy to be where we are today.
I think a year ago, I think we were just about to announce the restructuring of the Brait balance sheet, and the whole rationale behind that was to buy Brait some time to ensure that its assets that were starting to perform well really had the ability to grow into their full potential. I am really pleased to say today when we look at the results, and again, it is a massive credit to the management teams and not to us, that Virgin Active in particular and Premier have both had unbelievably good performances over the last, well, the year to date and over the last 12 months, which absolutely vindicated the decision to buy more optionality by extending the convertible bonds and the exchangeable bonds.
Again, a massive thanks to the management teams and obviously to the management teams at NÜ Look as well, who've done a great job of turning that business around in tough circumstances. I'll cover off the executive summary. Sabelo will then talk to the NAV slides, and then we'll get on to the underlying portfolio companies. Starting with Virgin and Dean and Mark will cover it, it really has been a transformational year. Transformational in the fact that I think the business has moved from a recovery mode to one of growth focus, lots of opportunities to grow the business, and really some significant prospects, both in terms of the existing estate where we continue to invest money behind the REFIB program, but also in terms of new operations and new gyms in specific countries. Dean will talk to that.
Overall, the membership across the territories was marginally up, but remember, this is a seasonal low point for memberships. As you remember, people in Europe largely go on freeze during the months of August and September. We only see that really unfreeze and start to come back in the October and November numbers. Overall, year to date, the membership base is up 1%. This is despite us having a number of clubs that have been closed for REFIBs, both in South Africa in particular and some in the U.K., which obviously has an impact. Most of those members then go on to freeze, and you can only get them back when you open the club three to six months later. There have been higher terminations in some territories. Some of those have been driven by the yield strategy, so an intentional strategy.
Again, Dean will touch on some of the management strategies to address that. Very pleasingly, all territories saw very strong revenue growth. The U.K. up 12%, South Africa up 15%, both largely as yield-driven as a result of the significant REFIB CapEx that has been spent on those two territories to justify the increase in the overall pricing. Italy up 7%, but Italy has a number of new clubs, three new clubs that are opening up either now or in the first quarter of next year. We should see the benefit of that start to play out in the new year. The Asia-Pacific region up 13%, largely being driven by Singapore and Thailand, which had fantastic performances.
I think if you look year- on- year, and I mentioned at the beginning to say that it's a transformational year moving from recovery mode to growth, one of the key things of that is we've seen a massive increase in the capital expenditure in the business from GBP 58 million in 2024 to what will be forecast to be nearly GBP 100 million, GBP 96 million for this year. It has been a very, very significant refurbishment program and new club development. The benefit of that will only start to see coming through in next year's numbers. This year, obviously, we will have seen some of the startup costs that are incurred when you're starting up a club. We obviously have what we now start to call we're going back to having embedded CapEx. That is, sorry, embedded EBITDA.
That is CapEx that has been spent, but it's not yet reflecting in the EBITDA. The capital spend on the estate has resulted in EBITDA fantastically by 45% YoY . It is very pleasing to be able to talk to a last twelve months number of GBP 112 million. You'll remember we've been talking about GBP 120 million for some time, and we're nearly there even on an LTM basis. Mark will touch on where we're likely to end up for the year. Very pleasingly, it's slightly north of the GBP 120 million number that we've been talking about. Credit to Mark and Dean and the team on a great performance in Virgin Active. From a Premier perspective, it's hard to say how fantastically this business has done. Credit to Kobus and his team there.
If you look at it, revenue growth of 6%, which is partially price-driven and obviously some recent market share, but EBITDA growth of 14% YoY , most pleasingly, headline earnings per share up 28% and a very impressive nearly 25% return on invested capital. Pleasingly, the performance has been driven by all of the divisions. Millbake is obviously a core driver. It is a huge part of the business, 85% of EBITDA, but all of the divisions contributed very significantly with the other non-Millbake part of the business, I think growing EBITDA by about 14% YoY . You all know that Premier recently announced a transformational merger with Rhodes Food Group. The shareholders will vote on that in mid-December.
To the extent it goes through, it will significantly diversify the product mix of the group with about 25% of the combined EBITDA going forward coming out of the RFG group. Very pleasingly, the very strong cash generation, nearly ZAR 1.3 billion, and I'll repeat that number, ZAR 1.3 billion of free cash flow from operations in the first half of the year. The business continued to spend CapEx, nearly ZAR 500 million was spent in the first half of this year, which is again in line with its strategy of ensuring that it continues to invest in its operational performance, which we've seen come through both in increases in margin and obviously the return on invested capital still remaining at a very lofty 25%.
Pleasingly, that degearing will allow, has been announced, the company to look at either an interim dividend, which was announced the other day, but also a share purchase program, which I think will be a massive support for the share price going forward. Again, massive credit to Kobus and the team, a great result coming out of Premier. NÜ Look, as we all know, only is about 5% of our NAV, but again, a pretty reasonable performance in a very tough operating environment. I think anyone who follows the U.K. retail environment will know because pressure has been intense from inflation, policy uncertainty, the increase in national insurance contributions, and the impact that's had on employment generally. I think it has been an extremely difficult environment to operate in. Pleasingly, EBITDA for the year- on- year is up 34% to GBP 21 million.
It will veer off a low base, but certainly it's progress in the right direction. We've been talking about for some time the next phase of the process is to assess strategic options for the business. The company has appointed an advisor who continues to work with management around assessing those strategic options for the business. From a Brait perspective, the growth outlook looks good. If you had to say, I think the outlook is to grow at a very significant click above our cost of equity. If you look at Virgin Active growing its EBITDA at 45% YoY , and I'm not saying that that's going to continue into next year, but I think there is growth forecast for the business with the CapEx it is spending.
With Premier growing headline earnings at 28% and having a 25% return on invested capital, I think with some confidence, the Brait board can say that we are going to continue to see the portfolio grow in terms of NAV at above our cost of equity, which is very pleasing. From a strategy perspective, it remains exactly the same to unlock value and optimize exits and return capital to shareholders. That will be done, as we've said, we bought ourselves till 2027 to be able to do that, and we're starting to see the benefit of that in the underlying portfolio companies. The company repurchased GBP 10 million of its convertible bonds at a discount during the course of the last six months. The RCF within Brait isn't drawn at the moment, and obviously that leaves about ZAR 0.7 billion, which is the full RCF as facilities available for the group.
From an NAV per share perspective, as of September, the NAV per share was ZAR 3.21. If you had to plug in today's share price for Premier, which is up from the ZAR 155 odd as of September to about ZAR 172, that would imply the current NAV is about ZAR 3.45. At ZAR 3.21, this is about a 5% increase over the numbers to March, and we should start to see a significant increase in that as Virgin Active starts to grow into its growth EBITDA above the GBP 120 million level. With that, I'll hand over to Sabelo to talk to the NAV numbers.
Thanks, Peter. Good afternoon all. Starting with slide seven, as Peter stated, Brait's NAV per share is ZAR 3.21, which represents a 5% increase on March. Total assets of ZAR 16.9 billion at reporting date outweighed at 59% Virgin Active, 37% Premier, 3% NÜ Look, and 1% in cash and receivables. Total liabilities of ZAR 4.6 billion comprise of ZAR 2.7 billion on the convertible bonds and ZAR 1.8 billion on the BIH exchangeable bonds, as well as accounts payable of ZAR 170 million, which largely comprises the coupon accrual on these two bond instruments. The resultant NAV is ZAR 12.4 billion, which equates to ZAR 3.21. Slide eight sets out movements in balance sheet positions for the half year. Virgin Active's GBP carrying value was unchanged.
The company is valued on a maintainable EBITDA of GBP 120 million, which is unchanged, and the valuation multiple has been increased from 9x to 9.25 x, which represents a 15% discount for the peer average multiple of 10.9. Net debt, partly stated, of GBP 411 million includes GBP 1 million of normalization adjustments for deferred costs. Premier's carrying value increased by ZAR 1 billion. It is valued at its closing JSE price as of September of ZAR 152.33 per share, which equates to an implied EV/LTM EBITDA multiple of 8.7 x. Brait's shareholding in Premier remains 32.3%, representing its 41.7 million shares. NÜ Look's carrying value still reflects a maintainable earnings number of GBP 30 million based on LTM. The unchanged spot multiple of 6.5 x represents a 36% discount to the peers, and no normalization adjustments were considered in net debt, partly stated.
Brait's equity participation in NÜ Look remains 17.2%, which will be diluted to 8% once the shareholder warrants are exercised. The decrease in cash and receivables of ZAR 364 million was largely due to the April 2025 repurchase of GBP 10 million of convertible bonds at a discount to their par value, as well as coupon payments on the bonds. Turning to page nine, the liability movements were mainly driven by ZAR 111 million for the exchangeable and convertible bonds, reflecting their IS32 liability components. Slide 10 analyzes Brait's liquidity and debt and is set out on a consolidated basis. A dividend of ZAR 102 million was received from Premier in July 2025, and GBP 10 million was used to purchase convertible bonds in April. As of September 2025, the BML RCF was undrawn, resulting in available liquidity at reporting date, including cash amounting to ZAR 710 million.
Brait is in compliance with all debt covenants. Thank you, and back to you, Peter.
Thanks very much. We will now go through the portfolio companies. Before I hand over to Dean and Mark, I just want to give a word of appreciation to the two of them, but to the whole team for stellar performance, but not only that, the amount of effort and time that the two of them in particular put into this business really does not go unnoticed. I know the investors do not see it, but certainly as the advisor, we do, and we are massively appreciative of that and very grateful for the two of you to spend time this afternoon with us. Over to you, Dean and Mark.
Thank you, Peter, and good afternoon to everyone. I mean, just to start off, Peter, just to say it's what we do at Virgin Active, Mark, myself, the whole Virgin Active team. We're very passionate about the space we play. We love the space we play, and we have a very strong belief and determination in terms of where this business can go to. Everything we do is really a work of passion and, as I said, absolutely committed and believe where the hearts of this business can reach. From an investment point of view, I think I'll just start off with having a look at the sector and having a look at some of the major structural consumer trends that are shaping consumer behavior today and consumer spending today and how those are playing into the Virgin Active strategy.
We've spoken before about the focus on wellness and how consumers are prioritizing health and wellness, a larger portion of their disposable income being allocated towards wellness. This structural, this mega trend continues. We don't see it slowing down. We see it actually increasing. Consumers today are much more health conscious. There's a rise of lifestyle related diseases, loneliness. All of these things play into the growth of the wellness industry. We see this growth in wellness across all age groups, across all demographics. Older adults, 55+ , are seeking longevity. They're looking for ways not only to live longer, but how to live better, and longevity is top of mind today. When it comes to teenagers, a growing and increasing participation amongst teenagers in the fitness and the wellness space. This is really the new generation that's creating long-term demand for wellness.
The habits formed as teenagers are generally carried through into adulthood. That long-term demand through the youth today bodes well for our business. We're also seeing a new cohort starting to come into the wellness sector, what we call new to wellness, the previously sedentary individuals that were not interested in wellness pre-COVID. Post-COVID, the narrative has changed. It's motivated this sedentary new to wellness cohort to join gyms, to join fitness clubs, to join wellness clubs. In particular, this new cohort requires guidance and support. It's often the first time that they enter in a wellness club, a fitness club, a recovery zone, and they require guidance and support. Often that type of guidance and support is not found in what we call the HVLP operators, the high-value price, the low-cost operators.
That has seen these new to wellness cohorts gravitating to a slightly premium offering where they get the support and guidance that they want. As we said, consumers are definitely far more discerning, far more knowledgeable when it comes to fitness. They do not look at fitness today as purely around physical activity. They are knowledgeable. They understand the benefits of recovery, rest, sleep, nutrition. They are looking for overall wellness. Something else that is also having a halo effect on the wellness industry is something like GLP-1s. We are seeing with the absolute rise of the various GLP-1s, the weight management, the obesity drugs, the positive impact that this is having on healthy eating and exercise. These individuals understand that they cannot stay on these drugs forever, and they need some sort of off-ramp to be able to come off these drugs.
We're also seeing when you're on these drugs and you don't exercise or you don't eat healthy, there's a lot of muscle mass that's lost through the process. There's a growing awareness that on these GLP-1s, you need to exercise. You still need to eat well. Over time, we provide the perfect off-ramp for consumers on GLP-1s to continue their weight managing program without the need to continue on to GLP-1s. As I said, major structural trend in the industry around wellness, continual knowledge, continued growth in the wellness sector. The other major consumer structural trend that we think will benefit Virgin Active is a move amongst consumers to what we call in real life experiences. In an increasingly digital world today, there is growing digital fatigue. People are spending more and more time online.
Consumers are starting to look to ways to disconnect and engage in these real-world activities. We see it in the restaurant space post-COVID. People are gravitating. They want to spend time in restaurants. We see the exact same trends in our social wellness clubs with people being fatigued digitally. They are looking for instead of URL experiences, what we call RRL, in real life experiences. Also, consumers are prioritizing these real life experiences over ownership of material goods. We see that a strong chain continuing, that people will pay for experience rather than material goods. The last thing in terms of these experiences around loneliness, people are becoming increasingly more lonely, and they are looking to these social spaces, to these communities to search and find for social connections. What we refer to is that the AR world is really building the online world.
is a significant opportunity for businesses that can participate in both what we call the offline world. The creation of these second spaces in wellness and Virgin Active with Kauai and the new brand can play a major role in building this offline world, which is a mega trend today. We have spoken about wellness in the sector, in real life experiences, growing people searching for experiences. The other trend that we have seen is polarization of how consumers are spending money, particularly in the wellness space, but in other industries as well. We see consumers trading down into the high value, low price, low cost gym or fitness models. That space is particularly, and talking on a global scale, is particularly competitive. There are a lot of entrants in that space, low barriers to entries in that HVLP space.
The other trend we've seen is people trading up into the premium and luxury space. It's really the middle that's under pressure at the moment. We've seen strong growth in both the low cost model, but it's highly competitive. In a space that we clearly play in, in the premium luxury space, we've seen that that is a good space to be in. The other trend that emerged during COVID was the boutiques, the rise of the small boutique operators. We've seen a change in that as well at the moment where there's some consolidation in the boutique sector. We've seen a fair amount of the boutiques not surviving today. They are in fact quite what consumers are looking for today is to assemble multiple routines, but all under the one location.
They do not want to have to go to multiple locations, multiple sources to assemble their routines. That is inconvenient. It works out incredibly expensive where you are having to take a Pilates membership, a yoga membership, a gym membership. They are looking for wellness businesses to meet them under their terms under one roof with a value proposition that provides the whole of wellness under one roof. We have seen this polarization, the pressure under the boutiques benefiting the space that Virgin Active plays in, which is the premium wellness space. That was largely sector related, so really good sector to be in. The sector continues to grow. Obviously, Virgin Active would benefit from those sector tailwinds. Specifically relating to Virgin Active, we sometimes forget how well recognized the Virgin Active and the Virgin brand is. It has strong brand awareness.
Recently, we've been visiting some countries, potentially starting to look at some new territories. The Virgin Active and the Virgin brand is welcome by most landlords, by most developers. Consumers have a great awareness. Instructors, employees in these potential locations are all very familiar with the Virgin brand. It has strong global strength. It's very aspirational, the Virgin brand. It's got a clear premium position in. That premium market, as what I spoke about, is a very proven and resilient marketing. We've got a global brand. It's aspirational in the premium resilient space. We're well developed. We've spoken about it for a long time where we're not just a gym anymore. We're well developed on that strategy to move from just a gym to what we call a social wellness club.
As we've spoken about in previous meetings, the total addressable market in that wellness space is significantly bigger than the pure gym space. In addition to that, in the wellness space, we see better yields. We see higher retention rates and high degrees of ancillary revenue in that social wellness space. We have a market leading position in six of the global markets. We're the number one luxury player in those markets. We've got largely predictable subscription revenue models. We've got an incredibly strong health food brand within the Virgin Active stable, Kauai and NÜ Health Cafe. Those Kauai's and new stores have seen exceptional growth. We don't see that slowing down. There's prime for further growth in the nutrition businesses.
On top of everything, I'm fortunate to have an incredibly strong and balanced management team, a management team that has incredible experience in the fitness and wellness space. In addition to that, we've brought on a whole leadership and team members from outside of the wellness space, from hospitality and other sectors. I think today we've got an exceptionally well-balanced and innovative management team. As Peter said, it's a team now that sets us up for growth. We're out of the recovery stage. It's a team that can deliver growth. From an investment proposition, strong sector tailwinds. In addition to that, Virgin Active is incredibly well positioned to take advantage of those sector tailwinds. Specific growth drivers. Peter, if you could go to the next slide. Specific growth drivers for Virgin Active.
We still have a significant amount of operating leverage in our business. You have seen that in terms of how our 2024 and 2025 results have played out. We have an opportunity still to grow volumes into existing capacity and into the existing cost base. In addition to that, we talk about reinvestment into the existing estate, the physical estate, but also reinvestment into our product offering, investment into our people. We have a project around exceptional hospitality. All of those things play into retaining members, ability to increase our yield, and also into acquisition. I mean, if you go into our clubs today, there is conversion from gyms to social wellness clubs. We have dedicated recovery zones which have hydromassage beds, recovery compression boots, self-service massage guns.
We're starting to roll out spa spaces with improved sauna or infrared offerings, cold plunge pools, the coworking spaces, food and beverage, social spaces, fire-improved gym floors. We're slowly starting to play longevity spaces, longevity suites, and medical suites. That reinvestment into the estate and the product offering continues. That will drive incremental growth both from a yield point of view, from a retention point of view, and also from an ancillary revenue point of view. There's a big focus within the business on our digital and data and AI transformation. We're using all of those digital data and AI to personalize our member journeys, our journeys from acquisition through to engagement and retention, all the way through to in-club experiences. How do we use digital? How do we use data and artificial intelligence today to deliver a highly personalized, high-touch business?
The tools and the support we need come from data and AI. We recently appointed a Chief AI Officer in our business. We are seeing the benefits of AI across operational efficiencies and cost savings. How do we schedule maintenance, class and instructor scheduling, optimizing of club resources? We can also start using AI to identify at-risk members, behavior analysis to predict which members are more likely to churn, and then automate personalized messages, comms, experiences, coaching towards those high-risk members. The integration of wearables and other devices provides us with real-time data collection and the ability to give real-time feedback and virtual coaching to our members. The opportunity to use digital data and AI to transform our business is something we are also well advanced with.
From an ancillary revenue, how do we get greater share of our members' wallets and drive up average revenue per member? Our PT program is a key component of that. We've just recently launched in South Africa a partnership with Chad Le Clos for the Chad Le Clos Swim Academy. We see significant growth and opportunity within both the Learn to Swim programs, which is for the young kids, but also in the more competitive space, a space that Virgin Active has traditionally not played in, and it's just rented out the pools. Globally, we have one of the largest indoor heated pool estates in the world. It is something we should leverage better. We see opportunities in the Learn to Swim space for ancillary revenue.
We spoke a little bit about moving into the longevity space, longevity suites, where we're doing different types of testing, diagnostics, body composition, grip strength, various data collection, and then leveraging those data points to drive ancillary revenue. Once again, trying to capture a greater share of our members' wallets. That's really growth in Virgin Active, but it can come from a like-for-like business. In terms of new opportunities, we see in existing territories the opportunity to open new clubs. Italy has a particularly strong rollout plan. Italy has an attractive club model in that we have what's called a hot shell model. The landlords fund a considerable proportion of our CapEx for new clubs. It's an attractive market to rollout new clubs.
We do see new clubs rolling out in existing territories: Italy, but we still see some opportunities, for example, in South Africa with some new clubs, Singapore, and the U.K. with some new clubs. Existing new clubs in existing territories. It is time for us, as we said, as we're in our growth phase now, to identify new territories to leverage the knowledge, the cost base, the teams that we've got in place in Europe to look wider across continental Europe. We are looking at areas such as Vienna, Brussels, Switzerland, where we're fairly close to confirming some new sites. We've got letters of intent or heads of term signed for some of those locations. We see opportunity to move into new territories with our social wellness club concept.
In certain non-core territories like we've done in Qatar, we also see an asset-light model, which is effectively a management franchise agreement model. We'll use that in areas like the GCC. The Qatar club will open on the 1st of December. It's an absolutely beautiful club, but it's on a management contract where we haven't had to invest into the club. We see an opportunity across Saudi and the rest of the region to use that capital-light management contract model as well in other areas in Southeast Asia and India where that model would work well, where we don't want to invest ourselves into those club estates. There's great opportunity to expand the Kowarski and New Health Cafe model. We have at the moment around 18 Kauai's and NÜ Health Cafes in our clubs within the U.K.
We're expanding quite rapidly and receiving really good results in Italy within the Virgin Active clubs. There is an opportunity now with the establishment of the brand, with the establishment of operating models in the U.K., in Italy for us to start looking at sites for Kauai and NÜ outside of the Virgin Active clubs. On an opportunistic strategic basis, there may be opportunities for M&A. We would certainly look at those opportunities going into the future at the right valuations, at the right pricing, provided they're fitted into our social wellness club premium strategy. I think from a Virgin Active point of view, it's an amazing sector to be in, the wellness sector. Virgin Active is particularly well positioned in that premium wellness space, which is incredibly resilient, ability to drive volume and yield at that premium level.
It makes it a very exciting space to be in. We have seen great EBITDA growth from 2024 to 2025, 2025 to 2026. We see this ability to open new clubs, new territories, new ancillary revenue streams as continued growth in the business. A good place to be. We look forward to continued growth going forward. I am going to hand over to Mark Field now. Mark will take us through the numbers.
Thank you, Dean. Good afternoon to all participants on the call. I am going to start with the last 12-month territory trading update to September 2025, starting with South Africa, which makes up 35% of our group revenue. Revenue was up 15% YoY . Membership was up 1%. Sales year- on- year were marginally ahead of prior year. Our churn rate was 3 percentage points higher year- on- year.
That was driven by a combination of yield increases. We increased yields by an average of 11% across the estate during the year, much of that related to club refurbishments. We did find some affordability issues in certain markets. The churn was adversely impacted by certain clubs due to closure during refurbishment periods. Moving in terms of refurbishments, we spent GBP 14.1 million year to date on upgrading the estate. We expect that to yield both volume and yield benefits going forward as a result. Moving on to Italy, which makes up 27% of our group revenue. Revenue was up 7% YoY . Membership was up 2%. Sales in Italy were marginally ahead of prior year levels. Churn rates were two percentage points higher than prior years. In Italy, a number of clubs are reaching capacity.
We have intentionally put prices up at those clubs in order to manage volumes. As a result of that, we have seen a 4% increase in yields year- on- year in a 1% CPI environment. We have been able to offset churn by higher yields. As Dean touched on, we are starting to see significant growth opportunities in the Italian markets and a pipeline building up. We have identified and signed leases for a number of clubs that will be opening in 2026 and 2027. Moving on to the U.K., which makes up 24% of our overall revenue. Revenue was up 12% YoY . We saw membership increase 3%. Sales were 7% higher than prior year. A strong year in terms of sales. That is despite the fact that we have increased yields by an average of 10% YoY .
Those yield increases were centered around refurbishments that we've been conducting over the last 12 months. Despite those price increases, churn was flat year- on- year. That's indicative of being able to sell at a higher rate than prior year at high prices and not impact churn, which is testament to the impact of the refurb program in the U.K. There are a number of more clubs that still require refurbishment in the U.K. and will continue to affect those in 2026 and 2027. Overall, a strong result for the U.K. business. Finally, looking at APAC, Australia, Singapore, and Thailand, we saw lower sales in the Australian business, which were a drag on volume growth. In Australia, that was offset by high yields as a result of our yield management strategy there.
We had a very successful opening of our new Bondi Westfield club that opened in August. As of the end of September, that club's membership was double what we'd budgeted for. Incredibly strong performance. That club is the first of our proper social wellness club concepts. It just indicates how that concept resonates in the market. Within Australia, we've put in a new management team. We've transferred two senior managers out of our South African business, senior and experienced, to do the Country Director and the Sales Director role. We're starting to see some green shoots in terms of that redeployment. In terms of Singapore and Thailand, both territories have enjoyed strong growth in both membership and yield.
Looking across that territory, volume was down, membership was down 3%, mainly because of Australia, but we saw an 8% increase in yield and a 2 percentage point increase in churn. Peter, can we move on to slide 15? Looking at the trends in membership over the last 12 months, our membership is seasonal. We have high points in March and November each year. The low points tend to be August. That is northern hemisphere summer period and the southern hemisphere winter. Around December, both northern and southern hemispheres have their holiday period. That will explain why you will see fluctuations. Overall, year- on- year, membership is up 2%. That is membership if we exclude closed clubs in the prior month period. That is the most comparable year-on-year impact.
Our focus in the year has been very much on quality of sales and yield management, particularly around the refurbs. In the light of that, we've achieved an overall 9% increase in yield. We're satisfied with a 2% volume growth in the light of a 9% overall increase in yield. Moving on to slide 16 for me, Peter. Putting that all together on a year-on-year basis, the sales are up 2% YoY . Our attrition rate is 4 percentage points adverse for the reasons I articulated on earlier slides. Overall membership is up 1% YoY . If we exclude closed clubs in a prior year period, that would be 2 as per the previous slide. You put that 1% growth in volume, 9% growth in yield, that gives us an 11% growth in revenue, excluding Kauai, to GBP 447.5 million.
That, because of our operating leverage, translates to a 42% increase in EBITDA to GBP 78.5 million. Our margin has increased by 400 basis points, our EBITDA margin from 14% to 18%. On the right-hand side, just looking at the split of that EBITDA, it is made up of 56% South Africa, 27% Italy, 13% U.K., and 4% APAC. We can move on to slide 17. These results include Kauai and therefore the nine months to September 2025. The revenue for the period is GBP 475.9 million. That is a 12% increase. EBITDA including Kauai is GBP 81.5 million as a 43% year-on-year increase. Breaking that down into its various segments, looking at revenue, all territories have delivered positive year-on-year growth in revenue, particularly South Africa and the U.K. at 14% and 12% respectively have driven the revenue growth.
We have seen very strong performance in some of our smaller contributors, particularly Thailand, Singapore, and Kowarski. Looking at that segmental EBITDA, similar trends in terms of year-on-year with the exception of Australia, where we have had the Bondi startup losses that have been a drag on the performance in Australia and in terms of our head office cost, which would have some CPI-related increases. We have also boosted our capabilities in terms of our digital AI team that has resulted in some increase in our group costs. Moving on to slide 18. Slide 18 indicates the progression of our revenue, our EBITDA, and our operating cash flow. The September 2025 number here represents September year-to-date annualized, so increased 12 months. On an annualized basis, September revenue would be GBP 646 million at GBP 70 million or a 12% increase over the prior year.
EBITDA at GBP 112 million would be a 40% increase over the prior year. Looking at operating cash flow, which is cash before interest and growth CapEx, the annualized number is GBP 56 million. Importantly, in the context that our annual cost is circa GBP 46 million, the business is now in a position where it is generating cash after debt servicing. It is in a position to start funding growth projects. Looking at our CapEx in a little more detail, maintenance CapEx, we aim to spend about 7% of our revenue on maintenance CapEx. Maintenance CapEx was GBP 39.2 million, relatively consistent with the prior year. That is the investment that we spend in the estate to ensure we maintain the value proposition. Looking across in terms of major refurbishment CapEx and new club CapEx, we have invested GBP 25.1 million in major refurbishments, particularly in the U.K. and South Africa.
That's helped support the revenue growth in both those businesses, which we touched on the earlier slides. There has been some adverse impact. When we do major refurbishments, we do need to close the clubs for a period. That can aggravate churn and it can cause freezes. We get those members coming back in the post-opening period. In terms of new club CapEx, we spent GBP 13.4 million. That's across Bondi Junction, which is in Australia, which I mentioned, and three new clubs in Italy. One opened in October. One is opening next week. The remaining one will open early 2026. Collectively, that means we spent GBP 77.7 million on CapEx. Moving on, if I may, to the following slide. As I touched on earlier, our membership and therefore our earnings is seasonal. We need to look at it in that context.
When we compare half one 2024 to half one 2025, a 47% increase in EBITDA. If we look at that across half two 2025 versus half two 2024, we've seen a 37% increase in EBITDA. Within the half two numbers, within the 2025 numbers, there are some items which we call non-recurring or once-off that won't be repeated in future years. That's what we made up of. There'll be certain clubs in the EBITDA in the prior period, which we've closed. That's about GBP 0.3 million impact. There's about GBP 2 million of startup losses related to the clubs I mentioned earlier that won't repeat going forward. Finally, we've had about GBP 1 million impact due to the club closure, which obviously won't impact EBITDA going forward once those clubs reopen.
If we look at it in terms of how we're looking at EBITDA, I've mentioned the GBP 112 million September annualized number. If we take the adjustments of GBP 3.3 million, which won't be repeated, that means that our normalized EBITDA on a September year-to-date annualized basis will be GBP 115.3 million. On top of that, those new clubs that I mentioned, there's embedded EBITDA, i.e., that will be the EBITDA that those clubs will make at maturity on CapEx that has already been spent. If we add that to the normalized EBITDA, we get to a mature EBITDA of GBP 121.2 million, which is similar to the GBP 120 million maintainable EBITDA in the Brait valuation. With that, Peter, I will hand back to you.
Perfect, Mark. Thanks again to Mark and Dean. A great set of results and massively appreciative for all the hard work.
Moving on, talk about hard work and good results. Moving on, we've got Kobus online. Kobus is going to touch on the Premier results. Thanks for taking the time, Kobus. Really appreciate it.
Thank you, Pete. Just confirm that you guys can hear me nicely.
Yeah.
Good stuff. Pete, I'm just waiting for the first slide from the Premier presentation to show up. Okay, there we go.
Have you got it, Kobus? I think it's up.
I think it might take a moment or two to refresh. I've been seeing the Virgin sides flipping over.
I've got it. It's slide 22. Let me see if it hasn't. Have you got slides up there, Kobus? It should say.
Still seeing the financial performance. There we go. There we go. All right. Good. It's come through.
This is the summary of the results for Premier for the first six months of our financial year to 30 September. Revenue growth of just over 6% to just over ZAR 10 billion. I think that from a revenue perspective, we were quite heavily impacted by deflation in the maize category in particular, where on the back of good harvest and strong rainfall, our revenue has increased, or I guess maize prices have come down by over 30%. We pushed that through as price reduction on super maize meal sold into the market and certainly put the maize category for us into a deflationary environment. From EBITDA perspective, up just under 40, around 14%, ZAR 1.3 billion for the six months. Nice improvement in the margin, up to 12.7%, driving EBIT performance with a fairly flat depreciation charge, up 17% to ZAR 1.1 billion.
are also seeing a nice uptick in the EBIT margin now going into double-digit territory. Our return on invested capital is marching upwards. We never adjust for any unproductive CapEx. All the CapEx that we have spent on projects like Eriton and a few other areas have all formed part of that calculation. As the profitability of those projects runs ahead of the increase in our assets, we expect that to continue to drive up more than that. The net profit margin is now at 7%, giving us HEPS of just under ZAR 5.60 a share with a leverage ratio now at 0.7 x EBITDA. That is a summary of the performance for the first six months. Peter is just waiting for the next slide.
I have moved it on, I think, on 23.
Okay.
Sorry, there just seems to be a slight delay in the slides actually going live on the presentation.
Yeah, I think just keep going. I think it's showing on the screen. I don't know why it's not on yours, but it's on the RFG Limited transactions.
Yes, right. So I've got it. In summary, the details of the Rhodes transaction really focused around seven Rhodes shares for every one Premier share. We did the deal on a ZAR 22 value for Rhodes and a ZAR 154 for Premier, but obviously the seven swap ratio is the important component of that. As Premier share price moves north of ZAR 154, obviously the Rhodes shareholders also benefit from that increase in value.
I think the important part for us to note is that at that deal value parameters, we're paying around about 10 x PE ratio for Rhodes and 5.6 x EBITDA, which we view as a fairly good valuation for both the buyer and the seller in the transaction. We expect the transaction to be approved before the end of our financial year, which is 31 March. The circular was posted out to shareholders this morning, went out on SENS, and which calls for the shareholder meeting to be held on 11 December. We're fairly confident that the shareholders of Rhodes will vote in favor of this transaction, especially with the changes in shareholding that has occurred since the announcement of the deal, where a lot of shareholders have viewed Rhodes as an entry point to get their hands on more Premier shares.
Finally, the Competition Commission approval, which has got no set timeline, but the commissioners are fully engaged. We're working on providing more information on queries that we've already received, and we're quite hopeful that we should be able to conclude that process in a reasonable time.
Yeah, I've flipped over to 24.
Okay. Sorry, Pete, I don't have the presentation. If I don't see it, it's hard for me to see.
For the rationale.
Oh, the rationale for the transaction. Basically, I view it as three stages on the rationale. I think in the short term, we'll have an EPS enhancement just because of the valuation of Rhodes, where it will be accretive at a Premier level to our EPS.
We have some duplication of costs, things like audit fees, board costs, listing fees, insurance programs, etc., where we can rationalize quite easily that we see a short-term opportunity to reduce costs for the combined business. In the sort of one to two-year timeframe, harmonizing procurement and other areas like logistics and merchandising, etc., should give us another round of reduction in costs, which really does de-risk this whole transaction from a Premier perspective quite significantly. Accelerating some growth opportunities that Rhodes has had in the pipeline for a while, but that for various reasons has not been executed on yet, is also possible. I think that within a combined larger Premier business, we can accelerate to drive growth in the three to five-year time period.
I think first and foremost, Premier engaged in this transaction as a means to continue driving towards a double-digit EBITDA growth on a sustainable basis with a further uplift in EBIT and then continuing to try and get to that 20% continued growth in EPS. I think the product portfolio of Rhodes is a very strong portfolio with a lot of categories where they're number one or two in the market and certainly very complementary to Premier's portfolio. We've got total overlap in customer base, although I do believe that Premier might be slightly stronger in the informal trade and can probably add there to the Rhodes portfolio. We've also got the Rhodes management team remaining intact. I've actually had a very constructive relationship with Peter Hayward‑Butt in particular throughout this process so far. I do really want to compliment him in particular for working with us.
I think that with that combination, we will significantly de-risk the cultural integration between our businesses as well. From an enlarged group perspective, I think just having a much bigger free float, a larger market cap certainly puts us on the radar screen for larger funds that in the past have elected not to invest in Premier because we just did not have the liquidity or the size that would make it worth their while. I think all in all, across the board, quite a strong case for embarking on this acquisition.
Perfect, Kobus. I have turned over to the Millbake slide.
From a Millbake perspective, we have seen a continued strong performance across the whole wheat category from Snowflake into our bread business. We have had a good period where wheat prices in particular have stayed fairly stable and to downwards.
Especially with the improvement in the rand against the dollar on the importation of wheat, it is going to continue into the second half to give us a little bit of relief on wheat prices, which we think we would mostly be able to use to offset inflationary pressures like wage increases, etc., in other areas and would allow us to also remain fairly flat in terms of our pricing through to the end consumer for the remainder of our financial year. We have seen a much improved performance from our maize business during the last six months, where last year in particular, with the massive inflationary pressures that we had that I have alluded to earlier, caused us to put through price increase after price increase and that made it difficult to at times sustain profitability.
We have certainly seen the normalization of that business and had a nice addition to our profitability for the six months, although certainly not on the upper end of the range that we experienced two or three years ago. Eriton, I think, is very exciting. We have been talking about this bakery now for almost three years. We shut it down at the end of July 2023. We have been constructing it for two and a half years, and we will start commercial production at the end of this month in time for the Christmas trading season. December traditionally is the highest volume month for bread overall from a calendar perspective, just given the additional spending power that consumers have with 13th checks and Stokvels, etc., all going towards the food category.
I think very exciting for us, and we're certainly looking forward to Eriton continuing to help us to drive our growth going forward. On the groceries basket, we've seen a very nice performance starting to come through in our sugar confectionery business. We've imported or onboarded more than 150 SKUs or products for Woolworths, a lot of products that Premier has never made in the past, especially in the chocolating side of the business. It has been a huge effort to onboard all of that manufacturing. I think we've bettered it down quite nicely, and we're really starting to see the benefit of that flowing through into our profitability. I think for the next year, we will benefit as that flows into our base versus the prior year.
On the Lelit side, we've made quite significant investments in aligners, pads, facilities where we manufacture products that we used to import in the past, with very good automated packing lines associated with those machines. We will see in the second half the benefit of that lower cost coming through into our cost of sales as we make more of our own products and import less. On the U.K. side, we've done exceptionally well launching a cotton wool range under the Lelit brand. We're pretty much the only branded cotton wool range in the U.K., with all other cotton wool options being private label done by the various retailers.
In particular, with the growth of our business on Amazon, where there are no private label players, we really find ourselves in a unique position where Lelit has very limited competition from other branded players, given that it is mostly private label competitors that we have. I think that overall, the U.K. market online shopping for products, in particular like Femcare products, is an area for big growth going forward, as the convenience of that channel just makes it a compelling value proposition for the consumer. From a SEM perspective, we have continued to see an improved performance from SEM following the political unrest that subsided in the middle of January. That has continued in this first six months.
We've dealt with fairly difficult foreign currency availability problems, in particular to get hold of dollars to pay for wheat imports and also for rands to pay for maize imports into country. We've also had that same problem on our rice imports. Given that we are an established business in that market, we've managed to find by hook or by crook the foreign currency that we needed, and it's put us in a good state where we were able to bring product in where others or other importers couldn't. We've actually continued to benefit in a perverse sense from the currency shortage in market. In particular, we were a very marginal player in rice, doing about 50 tons a month, and we've actually now are doing over 1,000 tons a month of rice.
Very nice recovery in that business, but still a long way from where we would like it to be. We are certainly hopeful that the improvement in the gas industry and with the force majeure and Total restarting their gas extraction projects that we will see improved liquidity conditions and some of that money flowing through to the consumers within the country. Next slide, please, Pete.
Yeah, I have got the next slide up, the income statement.
Right, from an income statement perspective, I have alluded to the highlights. I think that Premier has tried to continue to drive this narrative where a single high single-digit revenue growth with good margin management and cost control drives us into positive or double-digit on an EBITDA perspective, which then kicks through to a high EBIT number and puts us through into a high EPS growth rate.
I think that's certainly part of the planning that we will continue to try our best to keep this upward trajectory going.
Yeah, I think the cash flow's up.
From a cash flow perspective, we've benefited from those reductions in grain prices to see quite a nice cash generation for the period, especially the maize category in particular, releases working capital that we've had to invest in the prior year. We saw good strong cash conversion, and that has enabled us to continue to reduce our debt facilities, invest in our CapEx program, especially with the final numbers coming through for Eriton to get that planned, the spending on that project done. At the same time, we continue to deleverage our leverage ratio and get the benefit of the combination of lower debt and lower interest rates, lowering our interest charge.
Ultimately, taxation is a little bit up as a result of that. I think overall, a very strong cash flow generation and showing that the profitability is really flowing through to the bottom line. We're touching on the share repurchase program there. We are in the market at ZAR 154 a share, and we will keep on updating the market as we progress with that program. It is being done through the general authority that was granted to us at our annual general meeting in September, where we're allowed to repurchase up to 10% of our issued shares, and we will continue with that program.
Thanks, Kobus. Thank you very much to you and your team for a fantastic set of results. Stay on board in case there are some questions. We'll finish up. Just quickly on NÜ Look.
Obviously, as I mentioned, NÜ Look's not a huge contributor to our overall NAV, just under 5%. Very pleasingly, the business has had a pretty decent performance in light of the very tough conditions that are there in the U.K. I think we are starting to see the green shoots of the hard work that management's put in over the last two years, to be honest, to turn the business around and increase the digital part of the business. Overall, revenue down 2% YoY , but there were obviously some store closures to take account of. On a like-for-like basis, it was flat to slightly better. In terms of the gross margin, which is probably the most important point, slightly up year- on- year, which I think is very key. The business has had very good stock turnover and destocking.
It really is going into the Christmas season well positioned this year, whereas last year, I think it was still somewhat overstocked. I think it has talked to good margin management by the team. That and obviously cost reductions that have happened over the last 12 months have seen EBITDA increased to GBP 21 million, which is a 34% increase year- on- year, with margins up to just under 6%, so one and a half percentage points increase year- on- year. I think very importantly, the new digital transformation, the new strategy that the team embarked on sort of a year to 18 months ago really is starting to pay dividends. If you look at the right sizing of the cost base, that is partly in line with that, and that has driven the increase in the EBITDA growth year- on- year. Most importantly, customer migration.
I mean, the whole key issue of having retail customers, and if you do close those stores, can you migrate those customers onto your online platform? It's currently tracking in line with or slightly ahead of management's plan, which is fantastically good news and which shows the resilience and the benefit of the nearly 10 million customers that NÜ Look has. Again, just touching on the numbers, the retail segment, if overall it was down 1.6%, that was actually driven by the retail segment, so the bricks and mortar part of the business, which fell 5%. That was largely driven as a result of store closures. There has been an active management of underperforming stores across the country, and NÜ Look has closed down those stores and obviously the Irish business as well, as it becomes a more digitally focused business.
From a digital perspective, the digital part of the business actually grew nearly 8%, significantly ahead of many of its competitors. This has shown that the conversion rates, as I mentioned, of moving those customers from retail to online has continued to be at or in line or slightly ahead of management's forecast. Overall, a good start to the first six months. It was not something we could say this time last year. Clearly, as we've said before, the golden quarter starts now, with November and December in particular being key months for this business. As I mentioned at the beginning, an advisor has been appointed to assess strategic options for the business. We won't comment any further at this stage on that. I think that's a key milestone for all of us, and credit to the management team for continuing to turn the business around.
Just moving quickly onto the valuations, I won't dwell on it. From a Virgin Active perspective, the GBP 120 million that you will have seen before is now almost reached, and if Mark's numbers are to be believed, have been reached, which is a great milestone for the business. We've kept the GBP 120 million the same. Hopefully, going forward, that number should start to tick up as we see the benefits of the operating leverage in the business. The EBITDA multiple increased slightly to 9.25, a reflection of the fact that the PSET increased from 10.2 to 10.9. We kept the same discount and increased our multiple slightly. That has resulted in a relatively flat enterprise value. In terms of net debt, the GBP 379 million has gone to GBP 410 million. That is wholly a function of the incremental CapEx that has been spent on the business, that extra GBP 30 million.
As Mark alluded to, the business has now covered itself from a cash flow perspective, including interest and cut. Obviously, with the incremental CapEx that was spent on the business, some of the cash that we had in the business has been spent on that. We have seen the positive benefits of that, and I think I'm very confident that management will continue to see growth on the capital that has been spent. Overall, at the bottom, the carrying value for the Brait investment goes from GBP 432 million to GBP 433 million, so effectively flat. Obviously, a slightly stronger exchange rate means that in rand terms, the valuation is slightly down from ZAR 10,209 million to ZAR 10,064 million.
On the right-hand side, we've done what we've shown before to say that at the current market value, so the ZAR 2.11, the implied multiple on the Virgin Active business is 7x , which is a rise three compared to some of the other peer group things that we showed you on a previous page. TheZAR 3.21 is the current NAV of the business, as you will see there, which values the Virgin Active business at GBP 433 million at the 9.25x. Obviously, if you value the Virgin Active business at 10 x, the look-through NAV goes from ZAR 3.21 to ZAR 3.57.
The table below, again, just shows that to the extent that management is able to grow the business from the GBP 120 million where we are now today, next year to GBP 140 million-GBP 160 million, depending on where the business ends up, again, what multiple you use to value the business at, what would be the impact on the NAV per share for Brait. In terms of NÜ Look, very little change there. To be honest, we've kept the maintainable EBITDA the same, the multiple the same. As you go down, compared to the March 2025 number, the carrying value remains almost identical to where it was. Obviously, a slightly stronger exchange rate means that in rand terms, the value has gone from ZAR 485 million to ZAR 474 million. One final slide, just talking again about the strategic outlook for the business. I don't think anything has changed.
The strategy remains to unlock value through the sale and monetization of the asset base over time. The key next step from our perspective at Brait is to raise capital or a listing of Virgin Active. Much work is continuing on that. We are in London next week with Dean and Mark and the team. That continues to progress. In terms of other work ongoing, I mean, clearly, there are always options. We continue to proactively look at what to do with the Premier stake. We remain very confident of the ability of Kobus and the team to grow that business, particularly if you have got a cost of return on invested capital of 25%. We remain strong holders of that business, but clearly, we remain open to looking at various options around that as well. From a refinancing of Virgin Active global facilities, that is something that is in process.
We would hope to conclude by the end of the first half of next year. Again, that'll be a key unlock for that business's growth going forward. We continue, as I mentioned, to assess options to raise capital in Virgin Active and/or list the business. That remains an active ongoing task for us and the Virgin Active team. Clearly, as we mentioned, at some point in time, there will be a sale of NÜ Look that continues. We won't comment on the process at the moment, but as I mentioned, an advisor has been appointed to look at the strategic options for that business. Finally, obviously, what the optimal capital structure is for Brait to facilitate the exit. Are there different ways to optimize the capital within the business? We continue to look at all of those going forward.
I think importantly, the recapitalization this time last year really has brought flexibility to optimally monetize the asset base. I think, as I mentioned at the beginning, the asset portfolio has never been in as good a shape. We remain very, very confident that this portfolio will grow at or most likely significantly above the cost of equity going forward. As I mentioned, if you've got 45% growth this year in EBITDA in Virgin Active, you've got 28% HEPS growth in Premier and a return on invested capital of north of 25%, I think you can be relatively confident that we can grow those businesses. Therefore, there's no reason to jump to do something. We will continue to optimally look to monetize the portfolio, but there's no urgency necessarily to do so.
The increase in CapEx at Virgin Active, I know that's one of the questions that's going to come up, is important. The business continues to show really good growth, really good return on that invested capital where it puts money to work. We want to consolidate and grow as a shareholder in that business in the key markets and prove out the wellness strategy. That remains a core strategic objective for the business. I think that brings the presentation to an end. I think there are a number of questions. Firstly, we'll hand over, I think, to the telephone line for any questions first.
Thank you, Sir. For those on the conference, if you would like to ask a question, please press star and then one now. If you decide to withdraw your question, please press star and then two to remove yourself from the list. For those on the webcast, if you would like to ask a question, please submit it via the text box on the webcast page now. At this stage, there are no questions on the conference call. I will now hand back to the management team to take us through the webcast questions. Please go ahead, Sir.
Thanks very much. I think there's three questions currently. The first is from Nick [Kocher]. Hello, Nick. Good to hear from you. The question is, can you list some of your, I presume it's Virgin Active, can you list some of your flagship gyms by region that best represent the lifestyle strategy, I presume wellness strategy that Virgin is targeting? How material are ancillary fees relative to total revenue in these flagship stores? Mark or Dean?
Thanks, Pete, and thanks for the question. Our absolute flagships, what we call the social wellness clubs, are the ones that we've been able to bolt greenfields, new clubs. There we have clubs, for example, like Bondi in Sydney, Australia, which was a new development, new club, which opened in August. Just in terms of, as Mark pointed out, that club's performed exceptionally well. Normally, we budget our clubs to get to break even in approximately 12 months. That club hit break even within three months. It is way ahead of our expectations in terms of the demand for social wellness club in a particularly challenging market like Sydney. That would be a really good example of a social wellness club. The new club that we opened in Doha in Qatar is also an absolutely beautiful club. We're in the pre-sales phase at the moment.
Once again, we normally expect to break even membership after break even EBITDA and break even membership. After around 12 months, we expect that club within one, possibly two months of opening to have its break even membership achieved. That just also strengthens that social wellness club in Doha. In other territories, speaking more to some of the refurbished clubs, and this is not just the catch-up or maintenance CapEx, this is where we've done significant revamps to upgrade the gyms to social wellness clubs. In the U.K., good examples of that would be Chiswick Riverside or Mayfair. In South Africa, we have our collection clubs like Silos and Alice Lane. Those are good examples of premium social wellness clubs, but they're not at the same level, to be honest, as a Bondi or a Doha, which we call almost our limited edition social wellness clubs.
We have secured a new site in Riverlands in Cape Town, and there we will be doing one of the limited edition clubs in South Africa. We have other examples in Singapore, Thailand. Numerous examples of clubs that we have refurbished from gyms to social wellness clubs. Generally, what we see with all those clubs that have converted to social wellness is a much broader wellness offering. We see the ability to yield those clubs up, and at the same time, we have seen improved retention and ancillary rates. In terms of the question around ancillary revenue, currently we are at around 14%-15% on a group-wide basis. Ancillary revenue is a percentage of total revenue. We have easily been able to get in excess of 20%.
Why I say that is the current model, for example, in ancillary revenue in many of our territories, for example, like South Africa, is what we call a tenant model. For example, we rent out swim lanes to tenants, and we receive a rental for that. As I indicated now with the partnership, for example, with Chad Le Clos, we start to take back those pools like we did in Learn to Swim and effectively charge our members directly when we own the relationship with the members. Obviously, we have unlimited upside with the rental model. We get a CPI increase in rental every year, and we are less incentivized to grow the swim program. Owning the swim program makes a significant difference. The same model applies to PT revenue.
We have a tenant model in many territories where we just rent out our clubs effectively to a personal trainer. We are starting to look at a more hybrid model where we own the member and we effectively invoice the member with some sort of profit share with the personal trainers. All the new ancillary products that we launch around the longevity programs, the medical suites, bios, physios, we see significant opportunity to monetize those ancillary revenue streams. That is why I say our target would be in excess of 20% to move ancillary revenue to.
Thanks, Dean. Next question, probably for Mark. Will the elevated CapEx in Virgin continue in the second half of the year and the year ahead, presumably 2026? What is the maintenance steady state CapEx for Virgin post these refurbs?
Thanks, Peter. We're looking to deal with steady state CapEx first. We target sort of 67% in terms of maintenance CapEx. The numbers that we showed on slide 19 of GBP 39.2 million maintenance CapEx is consistent with that, and we expect that to continue at a similar rate going forward, yeah, subject to inflation. In terms of the, what we call, let's call it elevated CapEx, that's the refurbishment of clubs and new club CapEx. We expect the refurbishment number to be similar in 2026 compared to what it is in 2025, and thereafter it will normalize. From a new club CapEx perspective, we expect that number to increase as we bring more fine new sites and accelerate the growth strategy of the business. I'd expect that to increase significantly, but with those clubs come as sort of 20%-30% hurdle return on capital.
That is a clear part of our strategy, as Dean alluded to early on, that space growth is a priority for us. In addition to that, we are going to be investing in our digital and AI capabilities, whether that's improving how we acquire, engage, retain members, or just generally driving operating efficiencies. We'd expect that to be a key part of our CapEx line over, certainly over the next three years.
Thanks, Mark. The last question that I have, again from Nick, can you provide some guidance on the corporate actions and timelines that Brait are considering to unlock value? What are your plans to deal with the Premier position? Would you consider selling Virgin or possibly listing it on an offshore market? Yeah, Nick, as I mentioned, there's lots of different things that we continue to look at. There's not one specific thing. I think most importantly is to provide great capital to these underlying businesses. Part of that is about restructuring the debt at Virgin Active level, which we're working very closely with Mark. From a Brait perspective, in terms of unlocking value, it's relatively simple. The strategy remains to return the assets that we have today directly to shareholders, and therefore Brait will no longer exist.
If that does not get rid of the discount, then nothing will. Clearly, to get there, what have we got to do? We have got to get to a point where Virgin is listable, to be honest, so that we can unbundle those shares directly to our investor base. We have got time to do that. If you are talking about the timelines, I think the obvious one is December 2027, which is when the bonds mature. We need to come up with a solution prior to that. In terms of would we consider selling Virgin? I mean, obviously, our strategy is to list it. We still think that our investors in Brait would like to retain their ownership of a stake in Virgin Active going forward as a listed entity. We would look to list that business.
If you had to say where would we list it, I mean, it is a U.K.-based business with a very significant U.K. presence. So it has a guess that maybe the logical place, I'm not saying it will be London, but I would suggest a logical place to start. Obviously, there would be a secondary listing back into the South African market if we had to do that. We will continue to look at that. In terms of the Premier position, as I mentioned, we remain very confident that Kobus and the team will continue to drive value there. At the end of the day, we have a position where we need to monetize it. We have a liquid position that we can do. We aren't looking necessarily to do something outside of the lines of what Kobus and the team have been alluding to.
They have a buyback program already there. That will, I think, set a very good base to the share price going forward. I think we'll be able to facilitate potential structured transactions around that. There is nothing major that's likely to happen on that front. I would imagine we remain, particularly for most of us, very, very convinced and long-term shareholders in that business. Anything else? I think that's the end of the questions. Again, thanks very much to all the investors for taking the time. We remain very open to having one-on-ones. If there are any additional questions, please forward them to the investor portal, and we'll endeavor to get back to you as soon as we can. Again, thanks very much to everyone, in particular to Dean, to Mark, and to Kobus for taking the time. Thank you.
Thank you, Sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.