Thank you for joining the call this morning. We'll do a short summary of the trading statement released this morning and then open the line up for questions. Let me welcome Luke Tait to his first trading update. We're obviously very pleased that Luke has joined the business, and I know that he's looking forward to meeting you individually in the coming weeks.
I'll cover off the key headlines in the statement and hand to Luke, who will cover off some of the financial elements and what they mean for our performance. Overall, though, I would summarize this performance as being resilient with continued membership and yield growth, and we've continued to make good progress against our long-term strategy.
On the operational update, first, our membership has grown by 16.7% year to date from 718,000 to 838,000 at the end of October 2022. This is on the back of growth, both from the existing estate and also from the new sites that we've opened.
That's 21 new sites have opened in the year to date, with a further five new openings to come and two more Fitness First conversions. In the statement, we referenced that we've segmented the estate into three parts. Firstly, the sites opened up to the end of 2018. These are sites that were, for the most part, matured just before COVID. Secondly, those sites opened in the years 2019, 2020, and 2021.
We call these the growth cohorts because they include a mix of openings covering both the pre and post-COVID period. They lost a lot of their members during COVID and effectively had to restart their maturation. Thirdly, the sites we've opened this year, that's 2022. Let me deal with each of those in turn. On the pre-COVID mature estate, this is where we've been giving a like-for-like against the equivalent month in 2019. You can see how we've been recovering.
For all 154 sites, this is 90% at October 2022. However, delving deeper into performance here, we see that the 16 sites that they are the most workforce dependent are only at 67%. Excluding these means the like-for-like gets to 93% for the other 138 sites.
This is obviously a good proportion of recovery, albeit we'd ideally have liked it to have been a touch quicker. Just to be clear, we're not talking about all city center sites in our portfolio with these 16. Some city centers are strong student sites, and these 16 are the ones that rely most on the workforce population for their membership.
Now, of course, we know that people are returning to the offices, but in this hybrid world of 2-3 days per week in the office, we're seeing very slow return to gym membership in these types of site. The shift in working patterns has been well-publicized, and we've responded to that in recent years by focusing our openings in residential areas. Since 2019, none of our openings have had the characteristics of the 16 workforce gyms.
That means our growth plans are very much on track, and we are opening sites in the right places. Coming on to the second segment, then, the growth cohorts, the sites opened in the years 2019-2021, these are growing at the levels we would expect, around 85% of their revenue appraisal, and we expect that through 2023, they will continue to mature and grow.
Finally, regarding the third and final segment, the sites opened in 2022, these are building membership exactly as we would expect. For instance, sites opened in the first half of this year are already at around 85% of their expected membership volumes. What all this means is that our product proposition and business model continues to be very relevant.
We're seeing this across our estate with usage up around 12% versus pre-COVID levels and higher member satisfaction scores than ever. Our growth, as I said, is concentrated in the right locations. On the rollout, we're now committed to 28 site openings this year and plan to keep within the range of 25-30 set out in Capital Markets Day for next year.
We're seeing a good flow of sites and we're encouraged by what we've got coming in the London residential pipeline, where, as we've always said, it's generally harder to find sites. On pricing, we're pleased by how our price increases have landed. Overall, we've increased headline price to GBP 21.30 up from GBP 19.27 at December 2021.
As a result, implementing the first part of our revised pricing strategy, closing GBP 2 of the GBP 4 gap versus our immediate competitors. We spoke about that at the Capital Markets Day. This has increased average revenue per member per month in the first four months of the second half of the year, up to GBP 18.49, up 5.5% compared to the same period in 2021.
This shows how the price increases have been absorbed and how we've still been able to drive good levels of acquisition volumes. LIVE IT has also contributed to the yield benefit up to 29.8% from 28.7% at the half year. More evidence that scale really does help to drive yield. Inevitably, in the cost of living crisis, the market has become a bit more promotional.
We've built this into our average revenue per member per month expectations going forward. Finally, just a word on the markets. I think we can expect to see quite a lot of disruption in all parts of the health and fitness market as a result of the macro environment and the energy shock. The Gym Group is well-positioned due to the strength of our business model, and we expect to take market share as we continue our ambitious rollout program.
By our estimates, the low-cost gym market is now 764 sites in the U.K., and our market share by number of sites is 29.3%, and this has continued to increase from earlier in the year when it was 27.5%. Let me hand over to Luke now. He'll cover some of the financial aspects.
Thanks, Richard. I'm very pleased to be with you for my first trading update. Starting with reported revenue of GBP 143.2 million for 10 months of 2022. This arises as a result of two factors, the average revenue per member per month year to date of GBP 17.80, and an average membership number of 805,000.
What we've actually seen on memberships overall this year is a seasonal pattern, more in line with a typical pre-COVID year, i.e., strong growth in Q1 and a drift downwards thereafter, with a second spike upwards in September and October. There's typically a small seasonal decline through to year-end, so we'd anticipate a similar average membership number for the full year.
However, you can see from the average revenue per member per month in the second half that Richard spoke about at GBP 18.49, we have been able to take some yield improvements this year from the pricing initiatives, and we would expect average revenue per member per month to continue to improve to year-end.
As we noted in the statement, we've continued to see good levels of margin and cash flow since we last reported, and this is shown in the non-property net debt number of GBP 68.5 million, giving GBP 24 million liquidity against total facilities of GBP 92.5 million. These facilities are made up of GBP 80 million of bank facilities and GBP 12.5 million of finance lease capacity. We constantly review our facilities to make sure they're right size with the flexibility to meet our growth aspirations.
On cost, we've shown very strong cost control that has contributed to our margin performance, and this has helped to reduce the impact of the slightly slower than expected membership recovery in the current year. Overall, our model is able to cope well with inflation. Having no cost of sales and a labor light PT model gives us a natural advantage.
Clearly, the biggest inflationary impact is from utilities, and as we said in the statement, we've taken a middle ground on hedging for next year with all our fixed charges effectively hedged and 63% of volumes hedged. Given the uncertainty, we think that this at this stage is the right hedging approach. Although as we get closer to 2023, we may look to increase that percentage.
As we're coming off a favorable hedge last month, the expectation in 2023 is a doubling of cost, incremental by around GBP 8-10 million year-over-year. Overall, there are three elements worth calling out as they impact on our expectations going forward. Firstly, the pre-COVID mature estate has recovered well, particularly in the 138 residential and student sites, but overall, this has been slightly slower than we expected.
Given the macro environment, we're cautious about speed of recovery for the mature sites, although we do expect to continue to grow membership in this part of the estate, particularly if we have an uninterrupted January, February trading period in 2023.
Secondly, the impact of the 16 highly workforce-dependent sites that Richard spoke about means we have a small section of our estate that has been a drag on performance in the year, although they do still contribute to the success of our LIVE IT product. To be clear, these sites were not strong contributors in 2019, but post-COVID, they suffered the most.
Thirdly, the energy cost increases, which have a full year impact of around GBP 8-10 million next year, where we're partially hedged. The root causes of all of these three elements are macro-related factors, and the encouraging sign for me, as someone new to the business, is that we have a strong, profitable business with relatively low levels of leverage and an expectation that we'll continue to grow profitably as we go into 2023.
Furthermore, the fact that the newer sites are growing as anticipated is very encouraging and shows how well-positioned our business is to continue to grow. I think that puts us in a strong position relative to our competitors and should enable us to continue to take market share. Now let's open up the line for questions.
If you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Please ensure your lines are unmuted locally as you will be advised when to ask your question. The first question comes from the line of Owen Shirley from Berenberg. Please go ahead.
Morning, guys. Thanks for taking the questions. I had three, please. The first was just on would you ordinarily expect revenue per site to improve between June and October? Obviously, you sort of said it was 90% of all gyms like-for-like in June, and now we're 90% of mature gyms in October. Yeah, just if you could help us kinda bridge that, please.
Then the second question was, net debt obviously sort of crept up a bit. I know Q4 is usually the biggest period for new openings. Would CapEx align to that? I suppose in a roundabout way and what I'm asking really is should we expect net debt to go up or down by the year end? Finally, obviously revenue, the momentum seems to have slowed down a bit in the recovery.
You've got costs going up, net debt is quite high. Perhaps you could just touch on, you know, why you're not considering any sort of pause for breath on the rollout. Thanks.
Okay. Let me deal with the first one. In terms of our expectations, I think as Luke said, what we would normally expect, particularly in the mature estate, is that we would get strong Q1, there would be some drift downwards, and then we'll get a bit of a spike in September and October.
That spike in particular would be in the strong student sites because obviously you get people coming back to university. I think if you look at our like-for-like numbers, they have on that mature estate kind of marginally crept up in the comparison against June 2022. Obviously, at October 2022, we said we were 90%.
If you kind of exclude the 4 city center sites that we excluded when we reported the half year, that would be 91% and that was a comparison against 90% that we had in June 2022. I think what we've seen over this autumn period was actually a slow start to September and then some strong growth in October. Ideally, I think we'd have seen slightly stronger growth in both months, September and October. As I said, we've come off a pretty strong October overall. Do you wanna cover the net debt question, Luke?
Yes. I think you're obviously right. Q4 will have a higher level of CapEx than the previous quarters, and therefore you should expect net debt to be higher at the year-end.
I think, Owen, on your final question about should we be pausing for breath in terms of the rollout, look, we've said that we've got a range of 25-30, and I think we've also said that we're conscious of the macro environment, and we'll constantly keep that under review.
At this point, in terms of the visibility that we've got, we think we stay in that range of 25-30. Obviously, in an environment that's changing quickly, we would constantly keep that under review. That's kind of the sensible thing to do.
Thanks, Richard. Just maybe a quick follow-up on that last point. What's the minimum number of sites you could currently do next year? I, you know, have you already sort of signed on for 10 or how does that work? Thanks.
I think we're at a typical sort of level of exchanges probably of that sort of order at this point. Again, you know, we've got sites at different stages in their development. We'd have some at, as we always have, some where we've exchanged, some where they're getting close to exchange, some where we're kind of in the initial stage of legals, some are ahead to term. It kind of varies as you can imagine.
Understood. Thank you.
The next question comes from the line of Tim Barrett from Deutsche Bank. Please go ahead. Your line is open.
Hi, both of you. I had two questions, please. Just in terms of the regional performance, I wondered if you could cut the data that way. When you presented interims, the North was 99%, I think. I just wondered whether that had continued to improve, go through 100% and what the residual has done.
Lastly, secondly, on the 16 underperformers. It sounds like you're being prudent and not encouraging us to factor in any recovery next year. That feels like a worst case. What do you think the prospects are of those sites getting slightly better as office footfall comes back? Thanks very much.
I think the sort of trends on the regional performance that we've seen are pretty similar to what we've spoken about earlier, still disproportionately in the North versus the South and London. However, I think what's been encouraging is that, we've seen stronger recovery actually, particularly in the London residential most recently. That's a good trend I think. We've got obviously a very strong market position in London residential, both sites with parking and without parking.
I think, you know, we continue to see good levels of profitability coming from our London estate overall. I think on the 16 underperformers, I think what we're saying is that, there is a lack of visibility. Clearly, we will be doing things ourselves to help drive performance, particularly, make it more attractive, you know, in this hybrid world.
One of the things, for instance, that we've recently done is that we've added Fiit and the Fiit app into our LIVE IT product, and that's part of the kind of the ongoing partnership that we've got with Fiit. We think that strengthens the proposition overall, particularly for LIVE IT, but also kind of helps people that maybe have a more hybrid style of working.
I think the other thing that we'll be kind of pushing and looking to do is do a bit more corporate as well than perhaps we've done historically. I think again, that plays to those types of sites. Clearly what we're saying is lack of visibility on those 16, but we're not sitting on our hands. We'll be actively kind of seeking to improve their overall performance.
Without necessarily closing any or doing anything that drastic?
No, I think we may see the odd one where we exit if it's coming towards the end of the lease or that we've got a break. I mean, the thing about these sites is typically these were the ones that we opened in the very early days of the business.
So, you know, 2008 predominantly kind of started in the city centers, and then from there kind of spread into the more residential areas, some of the smaller towns and cities. That's just a trend that we've accelerated. But because of that, because, you know, typically we were taking 15-year leases, it means that there will be some that are coming towards the end of their lease.
What we'll judge is how much do we think it's important that we have a presence in a city center and such that it adds to the overall LIVE IT proposition. 'Cause I think it's really important to stress, whilst they're at 67%, they still contribute in that respect because it may be that somebody has a membership or their home membership in one of the residential sites and then comes in and uses it occasionally.
For instance, in some of our city center sites, you know, we may see kind of 30% of the usage is coming from members that have got a membership elsewhere. In that respect, they're contributing to the benefit of LIVE IT.
Clearly we'll look at it on a site-by-site basis in terms of determining is it worthwhile extending a lease or should we actually exit when it comes to an end.
Okay, understood. Thanks both of you.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. The next question comes from the line of James Wheatcroft from Jefferies . Please go ahead. Your line is open.
Hi there. I just wondered if you could give us a bit more color on the pricing environment. I mean, obviously on the negative we know about, you know, weaker struggling consumer. On the positive, the closures, obviously you're suffering from high utility costs, but one assumes also all your peers are as well. How's sort of your view of pricing both currently and as you look into next year change in the last few months since your Capital Markets Day?
I think overall, as I said in my script, we have closed some of the gaps that we had to our nearest competitors, and that was kind of roughly a GBP 4 gap in the locations in which we compete. That was very much kind of back on the back of some of the research that we'd done kind of about a year ago that we felt we could close that gap.
I think it's very important we say this in the statement, that we retain that natural price advantage, not just against other low cost competitors, but also against the mid-market and the premium sector. Because, you know, we would expect to see some trading down in this environment as well as taking share. Therefore, I think we've made that initial kind of close of the gap.
I think we would kind of seek to retain that price advantage of kind of, you know, roughly about GBP 2 that we've got against our other lower cost competitors to make sure that we are really competitive and that actually we can use that in some of our marketing messaging as well. Because I think in this environment, what we expect is that there will be value will be very important, I think, for members, both on an ongoing basis, but also in terms of getting that initial acquisition.
On that price increase, I mean, obviously the math would say it covers, you know, comfortably the utility cost increase. I assume when you first started putting those price increases through, you weren't expecting such utility cost increase. Is that fair?
Yeah. I think it's fair to say that when we're doing the work, we were hoping that we could get the yield increase, and it wasn't having to kind of cover some of these kind of cost increases overall. I mean, look, do you wanna talk a little bit more about the 5.5% Average Revenue Per Member Per Month? I mean, I think that's an encouraging kind of number that we've seen in terms of our increase in yield.
Yeah, I think that's growing well, and it takes a while to come through. I think we will continue to see that yield, you know, improve in the coming months. I'd say so I think it's a reasonably positive trend.
Thank you.
The next question comes from the line of Anna Barnfather from Liberum. Please go ahead. Your line is open.
Thanks very much. I just wanted to ask about sort of marketing and promotions in light of the sort of slight slower recovery than you expected. You know, ahead of the sort of January to March big sign-up period, has your thinking changed in terms of marketing budgets or style of promotions versus historic levels? Thank you.
I don't think it's necessarily changed, Anna. I think as I said again, in my opening remarks, that in this sort of market, then obviously kind of typically the market will become a little bit more promotional. Now, what does that actually mean? It means that, typically there would be a first month offer that we would need to make to actually get people to join.
Now, of course, the thing is that actually we're not looking for them to join just for a month. We're looking for them to join at least kind of 9-10 months. So that's kind of, you know, the typical lifetime value of people joining us.
Therefore, you know, it is well worth it in our view, and we've done, you know, a number of these obviously through 2022, to be able to give a strong offer to members to be able to kind of join for that first month, you know, with the hope that they will then continue to have quite a long period of membership. You know, we've seen that sort of tenure begin to normalize.
When we first reopened post-COVID, actually we were seeing some slightly shorter tenure simply because we were kind of putting so many new members into the base. I think over time, you know, we're now 18 months since we reopened, we're seeing that kind of normalization of tenure, and that's in line with our expectations overall.
I think there's an element by which, you know, there will be a promotional element to the market. I think the other thing is that, and you'll have seen this in September and October, we've begun to do a little bit more brand marketing than we have done previously. There was very little point us doing too much brand marketing when we had this very generic brand.
Now, obviously going to The Gym Group means that actually we've got a unique brand name, we've got a recognizable visual identity, and so therefore it's worthwhile doing a bit more brand marketing. You know, we constantly are looking at that mix between performance marketing and brand marketing to make sure that we've got that at the right sort of level.
In terms of the pricing, the aim is to hold headline prices, grow headline prices, but to give first month and no joining fees as you sort of push in January, February?
I mean, that's what we've done previously, Anna.
Yeah.
Not just this year, 2022, but even if you go back to the last period, which would've been January, February 2020, prior to COVID, those are the sort of offers that we'd have driven in January, February. I don't see a great deal of difference in terms of what we'll be offering this January, February compared to what we've done historically.
sort of last sort of related question on the 16 underperforming, or sort of lagging sites, has there been a price reset there as part of the sort of rejuvenation plan?
What we have done is treated them a little bit more like new sites. What that means is that, for those 16 sites, you'll be able to get a 3-month kicker. We'll effectively reduce the price, for a 3-month period, and then you would kick up to the more normal price.
That's something that is a tactic that we've deployed very successfully on new sites. It's one of the ways that we grow the volume quite rapidly, and so we've been trialing that. Hasn't been in for that long, probably about 3 to 4 weeks overall, but we'll continue with that probably through to the end of the year.
Sorry, apologies. I did have one other question. Just in terms of the market supply, have you seen? I mean, local, there's a lot of press about local authorities and, you know, traditional gyms sort of struggling with the cost base. Have you actually seen tangible closures near your sites? Or is that something that you expect to see in the next six months?
Yeah. I think so. I mean, we saw obviously kind of post-COVID, or post the reopening, there were some local authorities that never reopened. I think, you know, there's been a lot of press about the fact that over this winter the leisure centers will struggle to pay some of their energy bills, and so therefore will have to close.
Of course, then the interesting question is, do they close the entirety of the leisure center, or do they actually kind of keep their gym element open, you know? I think that's kind of a question for them. I think more generally what we've seen is some closure of independents. We've also seen.
You remember on the market there is a group of chains that we've never really expanded, kind of typically 8-10 sites overall, and we've seen some of those begin to close sites or kind of shed sites overall. The other thing that we said this at the half year is some of the low-cost gym sector actually put their price up so much that they were no longer defined as low cost by LDC.
I think all that together is one of the reasons why we're growing market share. We're obviously kind of expanding our network and growing our number of sites, but you know, we're just under 30% or 29.3% overall by market share against the overall number of low-cost gyms, which is 764.
That's an environment really where there's only two players that are expanding. I think, you know, one of the questions we had at Capital Markets Day was, are we being too conservative on our market share assumptions? Actually already we've seen our market share increase just from a more normalized kind of level of rollout, and that's partly because of the impact overall on the low-cost gym market.
Thank you.
The next question comes from the line of Sahill Shan from Singer Capital Markets. Please go ahead. Your line is open.
Morning gents. A few questions from me. Can we just probably talk a bit more around what your experience has been with students, given they make a fairly significant proportion of your membership base? Just a bit more color around the sites that are exposed to the student population. The second question is around the energy point, which to me it seems like sort of slightly new news in terms of the new guidance you're given.
What's fundamentally changed since what you said back at the interim stage in July vis, you know, vis-à-vis energy and cost guidance going forward? The final question is, given you're effectively almost 11 months into the year, can you give us some kind of guidance as to what kind of ballpark net debt figure we should be expecting for the current year? Thank you.
Okay. Let me take the first one, and then perhaps Luke you can do the energy and the net debt one. I think what we've said previously is that probably about 25% of our estate has a strong student component. That's not always university, sometimes it can be colleges, as well, that are located very close to one of our sites .
Our experience was that this goes to kind of the overall membership trend, that September was a little bit of a slow start, but then we saw strong volume pickup in October. Obviously, that was on the back of effectively the students returning and taking up our membership. I think overall we're pleased with the level of student take-up.
I think we would've liked September as a whole to have been a bit stronger than what we saw overall. What I say about student is what I say about the market as a whole, which is you know, unsurprisingly, students look for value . Just as we think kind of other people seeking out a gym membership look for value, which is why it's important about our price points and also kind of goes to some of the things I was saying about our promotional strategy.
Therefore, you know, we've sought to make sure that we can give as much value to the students, whether it be them buying a fixed term product up front for nine months or buying our kind of normal price, but you know, with some sort of discount. Depends where they have purchased it. Overall we've seen, you know, strong level of uptake from the students this year.
On the second question around the energy levels and costs going into next year and our guidance of a sort of year-on-year movement of GBP 8 million-GBP 10 million. I mean, a couple of things to say. Firstly, obviously there's a lot of uncertainty around that price. I think prices are slowly declining at the moment, but you know, very, very difficult to call that. Secondly, I don't think the 8-10 should be new news. I think probably about a third of that's probably you know, sort of an adjustment to our guidance. Then on your second question on net debt, as I mentioned earlier, Q4 it is a high CapEx quarter.
I think you should expect sort of net debt, certainly to be sort of above GBP 70, but maybe somewhere between GBP 70 and GBP 75.
Great. Thank you. If it's okay, can I just have one quick follow-up, if that's okay, Richard? It's related to the 2018 cohort and prior to that. Giving you about 90% at the moment or thereabouts, can you give us any confidence that that particular cohort and that membership level is generating the kind of return that you'd actually targeted?
Well, I think I'll refer to what we said in the statement, which is that, you know, our mature estate is strongly profitable. You know, clearly what we've called out is the fact that 138 of them are at 93% of where they were in October 2019.
As we said in our opening remarks, we would've liked that to have been a bit stronger, but it's, you know, it's on that trajectory to get to 100%. I think what a lot of these sites need is a uninterrupted January, February. Even if you go back to January, February of this year, the first two or three weeks, which are important weeks for acquisition, were impacted by Omicron.
As we come into 2023, even though we've got these macro headwinds that, kind of, everyone knows about, to have an uninterrupted kind of period of acquisition in January, February, I think will be important in terms of kind of continuing to show that trajectory of recovery and to continue with that recovery.
But overall, you know, if you think about our estate clearly, the mature estate, that kind of pre-2018 is strongly profitable. Is it back at the sort of level of return that we were pre-COVID? No, because obviously, that's reflected in that like-for-like number, but we think we're on a kind of trajectory of recovery.
Super. Thank you, Richard.
The next question comes from the line of Chandni Patel from Barclays. Please go ahead.
Hi. Thanks for taking my question. Putting together what you've sort of discussed so far on the city center sites being slower to recover and the cost headwinds as well, can you comment on your outlook for consensus EBITDA for both 2022 and 2023, please?
Well, I think what we've said overall is that our recovery expectation is a little bit slower than we would've hoped for through September and October. Now, obviously, clearly that will be reflected in the full year forecast for 2022. Because we, you know, we start with a slight kind of lower membership number and obviously all the analysts will update for the energy as well going into 2023.
We'd expect, you know, that to be reflected into 2023. Now, clearly we don't tend to do a direct forecast of what we expect the number to be for either 2023 and 2022 and 2023. That is what's forecast by the analysts.
We would expect some revisions to forecast on the back of what we put out this morning. I think, you know, we've given a 10-month year-to-date sales number. I think we have some momentum, you know, month-on-month in sales growth. It should be, you know, it should be pretty helpful guide to where the full year sales number will come in this year.
Great. That's helpful. Thanks.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of James Wheatcroft from Jefferies . Please go ahead.
Hi there. Sorry, just a follow-up question to net debt. Just looking back at your capital markets presentation, I mean, you've given us some helpful guidance, obviously, as to where this year will end up. Do you still hope for sort of net debt, you know, to start, you know, ever so slightly trending downwards as we look over 2023? I'm just looking at that chart that you put in the capital markets that showed it just coming down slightly, starting to come down next year.
I mean, I think what I'd say on net debt overall is that what we're seeking to do as a business is get back to the position that we were in in 2019, where we were effectively self-financing and financing our growth from the cash flows that we've generated. That still absolutely is our aspiration to get there as quickly as possible. We're hopeful that that's, you know, even if we're not completely there, that we're pretty close to that in 2022.
Oh, sorry, carry on. Carry on, please.
I was just gonna say that, you know, that will also depend on where we fall within the 25-30 range. At the 25 end, you know, I think that's right at the top end. I don't think debt will come down much in 2023.
Okay. That's helpful.
The next question comes from the line of James Michael Thorne from Columbia Threadneedle. Please go ahead. Your line is open.
Morning, Richard Darwin.
Morning, James.
Yeah, just one from me. I just wanted to ask about the value proposition and just if you can share with us anything about usage and the churn at sort of the lower usage rates and whether you're concerned about churn increasing as we go into 2023 or continued pressure on the consumer.
The answer to that is what we've said previously, which was that post our reopening in April 2021, we've generally seen higher levels of churn. The reason for that is that our whole estate was effectively acting a bit like a new site. Typically in a new site we see higher levels of churn compared to the mature estate overall.
The reason for that is simply that we're putting a lot of new members into the site. Some of them stick and like the experience, and stay with us for quite a long period of time. Others may kind of churn out relatively quickly. Effectively what happened was the entirety of the estate acted a bit like a new site.
Now we've seen that moderate a bit, but offsetting that, I think is the fact that obviously the general macro environment plus an element by which we bring people in on promotion would be kind of, you know, things that go the other way against that. We're not seeing anything on churn that concerns us at the moment as a result of the macro environment overall.
Clearly it's something that we will monitor very carefully. I think it goes to this point about why it's so important that we have this very strong value message and very strong value proposition because, you know, that price point of GBP 21.30 is still around GBP 2 lower than competitors in the locations in which we compete.
Therefore we think that that insulates us to a certain extent. You know, when you break it down based on visits of just over five member visits per month, then effectively you can see it's just over GBP 4 per visit, which we think is exceptional value. I think particularly as people prioritize their kind of mental and physical wellbeing, then it kind of puts us in good shape as we go through the next few months.
Clearly, you know, we expect the next few months to be difficult from a macro environment. I think the other thing I'd just say is what's interesting is one of the things I called out, which is overall, you know, our usage is up around 12% from 2019 for the members that we've got.
The reason that's encouraging is that we know that members that actually use our gyms tend to stay a bit longer. You know, we're actually pretty good at predicting churn. One of the early indicators that somebody may kind of churn is if their pattern of usage changes over time. Actually the fact that we're seeing that higher usage I think is pretty encouraging in terms of what we can expect for churn going forward.
That's really helpful. Thank you, Richards.
We have reached the end of the Q&A section of the call. Richard, I will now close the call.
Thank you for joining the call this morning. 2022 to date has been a year of recovery from COVID for this business, one in which the mature estate has begun to deliver good levels of profitability once more. At the same time, we've implemented the biggest organic program of expansion in our history, along with the launch of the new tech infrastructure earlier in the year and the brand transformation more recently.
We've got a strong executive team strengthened with the addition of Luke, many of them presented at the Capital Markets Day. We are seeing some structural change around hybrid working impacting a small proportion of our sites, the 16 that we've spoken about. Of course, the macro environment does impact the speed of recovery and obviously the cost base with the energy shock.
However, overall, we continue to think that we are very well-positioned to take market share over the coming months and to generate strong levels of profit and cash flow. Thank you for listening.