How are we doing time-wise? Let's get started. I've always wondered what it would be like to be a headmaster, actually, but standing here today in this old school. Something similar. Good morning, everyone, and welcome to our 2018 interim results. First of all, as you would have seen, yesterday, we announced that we've terminated talks with the various interested parties in IWG. This was following a period of significant strategic interest in our company. We examined this interest carefully and thoroughly, I would simply draw your attention to the last bullet point on this page. We are very confident in our ability to create value as a standalone company and will only consummate a transaction that represents sufficient value for shareholders.
Turning to the results, the good news is that we saw strong top-line growth across our business with open center revenues increasing by almost 10% and group revenues rising by 7.1%, both at constant currency. Revenue from our mature business, which now includes the openings of 2016, increased by 2.4% to GBP 1.1 billion. This reflects improving performances across most of our key geographies. At the center level, this performance has allowed us to increase the gross profit margin by 60 basis points to 19.7%. Group operating profit is, however, around GBP 60 million, as we've targeted more investment in overhead to both strengthen the business going forward and also to support the additional growth levels that we have globally. The investments are going into more marketing, building up our corporate account sales teams, and of course, all the extra costs you get when you open significant amounts of space.
There's a lot of upfront costs. We are confident we'll reap the benefit of these investments in future periods. Our ability to convert profit into cash remains an incredibly attractive feature of our business model, and in the first six months, we generated cash of GBP 75.7 million. This is before net growth expenditure. This, coupled with our view of the outlook for IWG in this exciting growth industry, with the outlook for our industry, we've announced today an 11% increase in the dividend, thereby maintaining our progressive dividend policy. Furthermore, we have announced a share buyback program, and we'll supply additional information on share buyback activity periodically. We'll update on that periodically. Just a slide on the U.K. Whilst we're pleased with performance overall, I just wanted to use this slide to update you on the clear plans that we have in place for our U.K. business.
2018 will be a transitional year, it's the year of transition that will put the U.K. business in great shape for 2019 and beyond. Our plans have focused on a few areas. Firstly, we've been busy upgrading centers. Just at the moment, as an example, we have 11 major refurbishments underway. This obviously involves investment, it also means you have an interruption to revenues and clearly in profits as these centers go part or fully offline for refurbishment. You still have all the costs, you just don't have the revenue. That has been part of our issue in the first half. Again, once those centers are refurbished, we can see them coming back strong. There's plenty of demand in the U.K. Secondly, we continue to invest in expanding our estate.
We have great performance in both the 2017 and 2018 new additions in the U.K. These are performing strongly. This is an indication, again, that we're investing well on one hand, also, it's not a problem with the U.K. The U.K. is a good place to invest. There is plenty of demand for what we do. It is just a question of the restructuring of the older business that we have in the U.K. Once that's done, we think we can get the U.K. back to a good performer and a good addition to the group. We're also investing in the things I mentioned before, better sales and marketing effort, more investment behind growth, corporate accounts, and investment into basic customer service in the U.K. to improve that. Every single aspect underway, comprehensive plan, get this U.K. business to be best in the world.
Very possible for us to achieve that this year. It is a year of transition. Demand for our industry. This is a summary of a report that was done where 18,000 business leaders were interviewed in 96 countries, so very broad. These are some of our customers, most of them, not our customers. We do this survey each year to test demand and look for what companies are looking for in the future. When you look at these numbers, you don't have to read the detail. They're just all high 80s, early 90s as a % of people interested in our industry. What has happened is over the past couple of years, in particular this year, our business has become even more mainstream.
This is a business tool that is absolutely now on the agenda of nearly all medium and large corporations in most countries in the world. This is reinforcing it. I think it's good for their people. It's what their employees want. They know it's going to save them money. They know it's off the balance sheet. They know it gives them more flexibility. It's obvious. The question is, why aren't we doing it already? I've talked to you before on many occasions about us getting more corporate business. Corporate business is companies of a certain size that are using us in more than one location systematically. We're getting more and more of those every single month. That's one of the things that is helping revenue growth and has helped it in the first half.
That is another reason why we're having to strengthen even further our corporate account team to keep up with some of these conversations of complex, significant size. It required more people. Those people have been added, and we will add more in the second half. Just to take, again, stand back and look at who we are, what we are. What we think is that we are uniquely positioned to service this growing demand. We've got the leading physical network with over 3,200 locations in over 1,000 cities. We're pretty much the market leader in every country we operate in. Many others claim that somehow they're the biggest this or the biggest that, just the sheer size of our networks really surpasses anything else that's out there. We've got a unique suite of multi-brand products to address different customer requirements.
It's absolutely clear that not all customers want the same thing. The ability to offer different price, different work style is working and working well. We also continue to invest in our digital capabilities. What is critical for a company like ours with 2.5 million customers, a huge number of new demands each week, each month, is the ability to interact with customers in a digital way with great digital platforms. A key part of our business, of our model, is not only a great property platform, but also a digital platform that sits over that and that allows us to interact with our customers. On top of that, we've got by far the most cost-efficient operating model. If you look, there are many competitors out there. Their overheads are just multiples of ours in percentage terms.
We believe that this will increasingly become a very strong and important competitive differentiation as we move forward. We will continue to focus on ensuring that we find efficiencies all the time, both as we grow, just the efficiency of having more scale, but also in everything we do. That's a lot about converting, bringing more digital into the business to get even smoother self-servicing interactions with customers, which is what they want. It's obviously much cheaper for us to manage, and it's much more immediate. With all of this in mind, we believe we're in a great position, and we are sure that we'll be able to keep driving shareholder value. Again, we've highlighted this during the first half. This has been a period where we've accelerated our network growth. There's growing demand. That's very clear. We want to satisfy that demand.
We have, expanding our network at a much faster pace than we have done in previous years. This year, we've invested over GBP 130 million of net growth CapEx, and we've added 2.8 million sq ft of new space, 132 locations. What's important to understand is almost all of that growth was organic. In most years, if not all years, we're adding acquisitions, sometimes quite large ones. When we add acquisitions, they come in at a higher price, but they come in with profits. This year, of the 132 locations so far, 126 were organic openings. Those organic openings have a lot more upfront costs and clearly have a lot more drag on the profits because you have all the costs and none of the revenue. They're different to acquisitions. It's an important difference this year.
We've also continued to be successful in working with partners to drive capital efficiency and lower risk. We've got about 40% of these organic openings were done in various forms of partnering deals with hundreds of partners around the world, where we built further on the base. We've already achieved a very strong rollout of Spaces, and we added 45 new locations, taking the total to 30th of June to 124 locations. There's a lot more coming in the second half. Just again, to get it into perspective, about the end of this year, beginning of next year, first quarter, our Spaces, which is identical to WeWork, will be about half of their current size. We are catching them up quite quickly. We're in more countries, and these centers are performing very well. By performing, we like to have things that make a profit.
We're happy with the performance of these new locations. Overall, global networks up to over 3,200 locations now, 54 million square feet of space. Let's just take a look forward. What's still to come. As a reflection of our confidence, as well as the strong returns development from recent openings, we've got a significant growth pipeline for the remainder of the year as well. Just to give you our estimate for the whole year, we expect to do about 275 locations and about 6.7 million square feet of space. Remember, as we're doing large format spaces, the amount of space per location has gone up quite a lot. That's a lot more space added. It's important to focus on square meters and square feet, not just locations.
Just to put that in perspective, the 6.7 million square feet is the equivalent to the entire estates of most of our competitors. That's what we added in the year. Just to get it in perspective. This is a lot of growth. It took us probably 20 years to get to this stage. We've just done all of 20 years' work in one year. It's quite a big undertaking. We expect about 45% of that space, or the 45% growth rate in the organic growth this year. That's quite a lot more than last year. Overall, looking forward, about a net growth capital investment this year of about GBP 230 million. That's what we can see at the moment. We're a long way through the year, but maybe we can answer questions later on what we'd expect that to be higher or lower.
With that, I'll pass over to Dominic to talk to the financial review.
Thank you, Mark. Good morning to everyone. I would like to kick off with the group income statement. Mark mentioned already at the beginning, we had a good start in terms of growth in revenues. Our open centers had a growth rate of almost 10% in the first half, which basically means in the second quarter, double-digit revenue growth of our open centers. Our reported revenues were up 7.1%. However, after the adverse impact of currency movements, the revenue increase at actual rates was 2.9%, as you can see. Our revenue growth in our mature business was this 2.4% solid in the first half of 2018. We experienced a lot of markets, good revenue acceleration, and looking to our biggest markets globally, we posted, with the exception of the U.K., very solid to strong mature revenue growth rates.
Some of our biggest markets had even double-digit mature revenue growth rates. What is very encouraging is the strong sales trends in terms of new sales activity and how it's reflected in our forward order books. Basically, what we see in the business in terms of revenues coming in the second half. We see in the maturity of our markets strong sales trends for the total business but also for the mature business. On the one hand, we're filling our new centers, the 1,780, the new openings, but we see also clear occupancy increase in our mature business. If we look to the investment into overheads, we have done considerable investments. Excluding the recognition of the negative goodwill on an acquisition of GBP 6.2 million, underlying overheads as a percentage of revenues are 11.7%.
This is industry leading and a strong point of differentiation for us in a competitive market. Effective tax rate was 20.1% in the first half, and our expectation for the full year will stay around this 20% level. Finally, an increase of the interim dividend of 11% was announced yesterday. On the next slide, I presented the revenue development year-over-year for the first half, the upper part of the slide, and then sequentially, from Q1 to Q2 on the lower part of the slide. As this is a waterfall chart which walks through the development of our business based on the contribution to the overall movement, the 2.2%, which you see for the mature business, is not comparable with the year-over-year growth of 2.4% in terms of mature revenue growth.
In addition to the growth in mature business, which added 2.2%, as I just said, with a very positive contribution from our 2017 and 2018 openings, adding additional 7% to our total revenue growth in the first half. Our new centers, which we opened, performing strongly, as we also said in our statement yesterday. The chart also highlights the negative impact from closures in both periods. In H1, FX was a negative, but as you can see from the quarterly sequential chart on the bottom, the current environment became more benign in the second quarter. Looking to the sequential development. We see a nice pickup in our mature business, adding 2.4% sequentially. This is, of course, partly also related or reflected seasonality, but also underlying improvement.
The continuous maturation of the 2017, 2018 estate added additional 2.6% sequentially, while the impact of closures was a negative a half percent and currency sequentially was a benefit of 1.7%. If we have a look to the gross margin development, as Mark already said, our mature business increased gross margins. The gross margins were up 60 basis points, which is solid, and this is a positive feature since the beginning of this year, after having had several quarters of a declining trend when it comes to mature gross margin. We had incremental losses on the new openings of GBP 6.4 million, reflecting stronger growth, reflecting more organic growth. You also see the impact of closures of GBP 12.9 million. Both items are very important investments, so to say, for strengthening our earnings, but also our cash flow profile in the years ahead.
As a consequence, taking all these parts together, the group gross margin reduced in the first half from 18.1% the prior year to 16.2%. If we now have a look to our mature performance by geography. With the mature business back into revenue growth, we have been able to improve the gross profit margin. What we can see from this table is that it is were not for the U.K. performance, the margin performance would have been considerably better. The mature performance has been driven primarily by the Americas, our largest region, accounting for 43% of our mature gross profit and Asia Pacific. There's also a very solid performance from our business in EMEA, for which we see strong improving trends in the second half of this year. The improvements in our three largest regions underpins our confidence looking forward.
In particular, the good performance in Americas is after absorbing a more challenging conditions in Latin America. The U.S. is growing strongly and Canada has maintained its already high level of double-digit mature revenue growth. The improving sales momentum is a positive trend and is expected to deliver total and mature revenue growth acceleration in the quarters to come. After having significantly improved our cost leadership position in recent years, we took the cautious decision this year to strategically invest into overheads, deliver the growth achieved and planned, as well as to unlock the potentials we see for IWG in a very exciting industry. The increase in overhead of 11% is primarily a function of more headcount additions into growth organization, corporate accounts and strong focus area, as well as marketing spend and other growth-related investments.
These investments in the first half were partly offset by the recognition of the negative goodwill. For the full year, we expect a similar year-on-year cost increase as reported in the first half. Looking forward, we are convinced that these investments will allow us to scale our business further, which will bring further efficiency to it. Moving on to the gross margin before depreciation. The year group '15 shows an improving gross margin trend, while the younger years are ramping up as planned. Although this does not automatically translate into better returns performance, it is a good indicator that things are moving nicely in the right direction. The slight decline of the 2014 and older estate reflects the only modest growth we have so far achieved this year.
We expect that given the sales activity which we are seeing, revenues going forward will accelerate, and with this, gross margins will improve as a lot of this incremental revenue will, to a large extent, drop down to profit. The trend in respect of gross margin development are reflected in the development of our returns. However, the year group '15, and as Mark mentioned, there were also a lot of acquisitions in '15, as well as the '14 and older estates have had incremental maintenance CapEx, which impacting, for example, the 2014 and older estates, the returns by roughly 110 basis points on a one-time basis. Given the organic nature of the '16, '17, and '18 estates, we believe that in particular, these year groups will show in the midterm superior returns.
Even though operating profit is down the first half, we're showing a strong cash conversion as a result of good working capital inflows. We continue to spend more maintenance CapEx and had from a timing point of view in the first half, a slightly higher outflow when it comes to tax payments, leading to a cash flow before net growth CapEx of GBP 75.7 million in the first half. With the strength of the cash conversation, we have maintained a healthy and prudent balance sheet with a net debt to EBITDA ratio of 1.1 times. Furthermore, we have GBP 140 million property assets on our balance sheet, which we, at a certain moment, intend to monetize for an appropriate price as obviously, our strategy is to look towards a capital light model.
Finally, I would like to update you on the RCF, which we have increased in end of May this year from GBP 550 million to GBP 750 million, and the maturity was extended by 1 year to 2023, which provides additional flexibility to run our business. With this, I hand back to Mark. Thank you very much.
Thank you, Dominic. Thank you. In summary, we're pleased with the acceleration we're seeing in some of our key growth regions, particularly America, Asia Pacific and Europe. This reflects strong local management execution and the benefits from group wide initiatives. As you know, the business continues to generate considerable cash flow, and this is what allows us to invest significantly in our business while distributing capital to shareholders. As it relates to the outlook, we're seeing very strong sales activity, and we have an order book that gives us confidence momentum will be sustained into H2 and beyond. We also have a strong pipeline of growth investments to capture industry growth that's going on, and we're confident that these in turn will deliver excellent returns. At the same time, reflecting our excellent cash flow, we are establishing a buyback program alongside a base dividend policy.
As global leader in an exciting growth industry, we look forward to the future with confidence. With that, thank you for your attention. We'll be happy to open up to questions. Andrew?
Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypads.
In terms of the various bids that weren't executable or recommendable, and as part of that, what have you learned about your business from all the work that was done? What changes might you make going forward?
Okay. I think what happened was, I think timing more than anything else. This sort of extended takeover with two extensions, it just went on for too long. It is a distraction for the business. The bidders did a lot of work, but I think the board felt that they'd had enough time, and there wasn't anything there that would say it's worth doing another extension. It's a question of just bringing it to a head.
When it says executable, sorry, pronunciation, what does that mean? Does that mean that nobody was coming up with a coherent offer that made sense or what? I mean, apart from price.
without going into the detail because all of this stuff is NDA and so on, we could stand here and talk for an hour or two about what may have happened and what happened. In the end, the board made a decision unanimously that enough was enough. We need to focus on the business and there's huge value in the business. Again, coming back to your second question, if I can answer the second question, it helps answer the first question. We had a lot of very smart people, three separate bidders here, who forced us to do a lot of work. In doing so, sort of helped us with the roadmap of what could be achieved in value creation from what we already have and from what we would do in the future.
This was a difficult process, but a very intense evaluation and interrogation of the business. Number one. Number two, because of all the publicity that surrounds these things, naturally, we've had interest that's come in from different parts of the world. Not to bid for the company, but to say, "Look, we like this space. We see what you're doing, and clearly we can see what WeWork and others are doing, but we like your platform. Would you be interested in doing something with us?" If you come back to our strategy of partnering, what we see is there's a lot more upside in more significant partnering in some of the different countries we work in around the world already, but getting those more onto steroids, if you like, by partnering up with strong local players. Partnering is one.
Lots of focus on every number in the business. There's lots of just low-hanging fruit all over the business. During the process, we got focused on releasing those. There's a lot of programs in place that can release more cash in the medium term without any more investment. Some things that require more investment that, again, equally, Dominic referred to them, and I referred to them, investments in overhead that we make today to extract more return in the future. Look, this was a lot of extra work, but it was very worthwhile. We couldn't go on forever because we think we've got a very attractive asset here and not one that we should sell at the wrong price or on the wrong terms, and also one that we have to wait forever for the right offers to come through.
Basically, the door is closed for the moment. We'll see what happens going forward.
Thank you.
Okay.
Hi, Andy Grobler from Credit Suisse. Some slightly more micro questions, if I may. You talked about the U.K. and some of the impact of the refurbishments. Could you just talk us through how much that cost you this year and kind of what the benefit is going to be into next year on a sequential basis? I guess also, is that it, or is this going to be a normal and larger part of the business? I know you've always done this, but it's become a bit bigger. Something we're just going to have to accept kind of every year going forward.
On the U.K., you mean?
On the U.K. and across the broader business too.
Secondly, just on debt, I know you've got the buyback, which might vary, but as of now, kind of pre-buyback, what are your expectations for debt at the end of the year?
Let's look at the U.K. first of all and just deal with the U.K. and deal with it. U.K. is a special case, a unique case, and it's all tied in with There are lots of unique things about the U.K. that make it dissimilar to any other country in the world. The nearest equivalent is actually only Australia, and that's because of the way lease structures work, the way incentives work, the fact that in the U.K. there's a lot of acquisitions. We consolidated the U.K. in the early 2000s on weakness, bought things very cheaply, great returns. What we're doing now is, those are the centers that we're redoing at the moment. It's the combination of all of those acquisitions, which were great acquisitions in their time, but now they're coming to the end of life and there's a whole rash of them.
Just there, you're going to have an impact in the second half. There has been an impact in the first half. Will there be an impact in 2019? Yes, but a much smaller one. The transitional year, really the impact year is this year, but we won't finish everything this year. There'll be some rolling over into next year. Overall, when you look at them, again, we can only look at things on a very much a center-by-center basis, and you look at it on a very strict cash investment basis. Do we close this one because we can, or do we reinvest because it's going to get us a good return on that investment? Quite a lot of the closures that Dominic talked about, again, this is a closure to reopen. You're not closing to close.
The way it works in the accounts is we're closing them because they're in an older state. You open them, they come into the 2018 or 2017 estate because they're new centers. You're a closure to open. There are a few closures that are absolute closures, and we never open again. Most of them would be you're either consolidating to another center, or you are opening a new center to bring those customers into. Short answer is more impact in the second half and a little bit hanging over into 2019, but most of the heavy lifting has already been done end of 2017 and during the course of this year. Debt?
If we talk about maybe Market expectation for net debt were at the time GBP 280 million. What's happened since then, we had the trading update where we, on the one hand, increased the net CapEx by GBP 30 million and lowered the profit guidance between GBP 15 and GBP 20, which brings you to GBP 325-GBP 330 before share buybacks. Now it's of course then your view how much share buyback you consider to come net debt number. Obviously, if you look to share buybacks, we're not intending to materially change our net debt to EBITDA ratio, right? It's whatever you put in your model, you have to add to this net debt number before share buybacks.
Thank you. Just one slightly different topic on pricing.
Yeah.
In your major markets, what are you seeing in terms of pricing? Are you getting an uplift, either yourselves or market-driven uplift? Are there parts of the world where you're seeing either competitive or macro pressure?
On average, the pricing-
It's improving.
is improving.
I mean, we see month to month.
Yeah
good trends. On the one hand, when with the new clients, we have good possibilities to pass on some inflation, so in general, good trends in pricing.
We can see a steady. We talked earlier, solid forward order book. There is lots of things going on where the nature of the customers is changing, more corporate accounts.
Yeah.
More larger customers. Term has lengthened, pricing has improved. All of these things take a while to affect the book. What we have got is a steady increase, I think, throughout the first half of the year.
Yeah.
Fair to say each month in price.
Yeah.
That is a good sign. That is pretty much universal. It would be different in the U.K. because you have got so much noise going on. Okay? It is different. What we know is we get good prices on the centers outside of the noise. Again, we have got good pricing performance in the U.K. as well. It is pretty universal.
Thank you.
Steve Bull from Numis. Just to follow up to Andy's point, just on the cost of the refurbs in the U.K. Was that covered in the CapEx guidance? Just a number if possible, just to sort of to tie that off.
If you look, I mean, the refurbs are maintenance CapEx, right? They are obviously in the accounts capitalized. In the return calculation, it's a cash to cash, so it's kind of expense in the return calculation. If you look to the maintenance CapEx for the year, we had a kind of increased than one and a half years ago, we basically said it will be cross maintenance CapEx total revenues between 4%-4.5%, which is between 3%-3.5% after landlord contribution, this is the guidance. The U.K. is the prominent part of it, right? The U.K. itself is less than 20% of revenues, but more towards 40% of maintenance CapEx reflecting this refurbishment which we are undergoing in the U.K.
Just on the way you think about the corporate accounts, it mentions in the statement they're a significant proportion of the business now. What proportion of revenues would they now take up, if you can sort of put a number on that? How do you think about the returns of the corporate accounts versus other, as it were, sort of one man, two man, three man bands versus that? How does that sort of marry up? Thanks.
I think first to take is they're a significant part of new sales. I don't think they're still not a significant part of the overall base, but they are growing in the base. It takes time to grow the base. Again, what are corporate accounts? They're people using you in multiple places. The Arrow contract that we talked to you about, whenever it was, one eon ago, there are quite a number of companies that have come in like that. Most of them don't want any publicity, but they're multi-site deals, long-term deals, so they're pushing up the forward order book. When you look at pricing on these, if you look at net yield on the corporate account as opposed to just the pricing.
If I start with price, what we're providing them with is a massive reduction from what they're paying at the moment, they were paying before. Big cost save. They are interested in. They want good value, but price is not the main driver because they're already saving 30%, 40% on their previous cost. What they want is something that's reliable, something that works, something that's good for their people. They want good onboarding. They need a sort of white glove service when you're moving 1,000, 2,000, whatever the number. They don't want to have disruption in their business. The better you do that's what they're looking for. If you imagine the disruption, moving lots of people over from one office to another. Once you move them in, price wasn't the major thing. It's disruption. Do I save you money?
Is it right for my people? Am I gonna look good because I'm the property guy? It's my job to make all those things work, to have no problems. Can I tick all those boxes? Yes. The next thing is, right, well, are they stickier? Yes, they are. Once you get them in. So long as there's not someone else out there with a similar network that's going to do it for 30% say less than us. Okay, they're sticky. Even if there was someone out there with 30% less than us, it's 30% of a very small number. We'd argue that's not sustainable because that is the margin in the end or more than the margin. It's not going to be that much cheaper. It's the aggravation of moving and the disruption of moving. They're only going to do it for one big save.
There's not a continual change that they would make. That has been our experience for many years, up to and including this year. Once they move, they move. That's it. If you look at yield long term, much better overall yield from a multiple site customer than a very mobile sort of smaller business that can pick up and just move down the road for a better price. I think, also the investments we've made into systems would make it very easy. Is it the right price? Is it very easy to use? Do we get good customer service? Are the places in the places we want? If you're providing those things, you've got the customer quite some time. Much less cost of sale.
One of the issues in our business is the investment into a customer that's taking a couple of desks from you in terms of sales and marketing is not that dissimilar to the investment that you would make in sales and marketing to get a corporate account taking 1,000 people from you. Maybe it's three times more effort, but it's to get 500 times more income. Obviously, more and more corporate accounts coming in is a very, very good sign. We have to invest in advance. We have added, but we're still short of corporate account, senior level people that can convert these deals. Plenty of demand. It's all about conversion. Any more questions?
Morning, guys. Calum Batten from Berenberg. Just trying to understand in terms of the, say, H1 to H2 profit bridge for this year. If we say did GBP 60 million of operating profit in the first half, guidance is around GBP 160 million for the full year, what would be the main determinants of the improvement from H1 to H2 and kind of what should be seen as the biggest reasons it's going to step up from H1 to H2?
If you look to it historically, not the last two years, but if you looked historically to the profit split, it's very common that you have roughly 40%, or a little bit less of the profit in H1 and 60% or a bit more in H2. The last two years was different because last year we had this profit warning in the U.K. in the second half, which dragged earnings down. We had quite a good first half and slowed down. In the year before, it was in general a bit more equal because the year before, if you recall 2016, we kind of decelerated throughout the year, the mature business, and ended pretty weak at the end. Now what is driving this? If you look H1, H2. The main driver is revenues. There's no question.
This is basically the mature revenues, but also the new 2017, 2018, which kicking in. This is supported by the fact that we see good revenue trends that, as Mark just said, see good pricing trends. The most important things is that on the one hand, we have seen since late autumn last year, longer contract terms. The average duration of a contract in general is increasing. The benefit of a longer term you get at the end, right? If you sold something for seven months, and now for nine months, there's two months benefit coming at the end in. Since we started to see longer contract terms end of autumn last year, it's now into Q2, the time where we see the benefits. It's not only that end of autumn we sold longer terms, we selling since then in general longer terms.
We see, in the forward order book, actually the benefits of longer terms for the next, let's call it nine months. This is the important driver of revenue acceleration in the second half. Besides this, our sales activity levels, they were kind of solid in the first quarter, but they clearly picked up in the second quarter and into July. We have strong sales momentum, and this is not only related to new centers, which are obviously empty and with this maybe also easier to sell. We see this also in our mature business. This drives the revenues in that respect. These are the key components. Then on top of it, in general, if you want to have switch H1, H2, overhead costs in the second half in general, always lower than the first half for various reasons.
One is, for example, we have now the summer months, marketing spend in the summer months is materially lower than usually, given vacation times. There are also other reasons why overhead costs are in the second half lower. This combination comes to this kind of market expectations.
Great. Thanks.
Hi, Sam Dindol from Stifel . Just a couple from me. On net growth CapEx, you said the 230 may be higher or lower. Could you just sort of say whether you think one way or the other? Then looking forward, are you growing as quickly as you would like? Is the limitation capital or access to property in the right locations? Thanks.
Okay. First, the reason I was saying this is that we update with what we know. The 6.7 million sq ft, 200 and whatever it is, 34 million- that is what we can see at this time. We're getting closer to the end of the year. There may be more, and there could be a few of even the ones we know could drop out at some point. There may be a few more, so it's not a finished, it's not an end number yet. Second question, are we growing quickly enough, and what's stopping us? I'll answer the second part of that. It's all about finding suitable investments. Yes, our plan is to build the platforms in each country because that's where the value is. You've got to retain a very disciplined approach to investment.
Otherwise, if you set out that goal and then you go and try and do it, our business is all about timing. If you get the timing wrong, you have a high probability of losing money. If you look at somewhere like Brazil, which is a basket case, and it's one of our top recession countries. It's turning around, thankfully, now. At the same time, we've grown that by about 50%, all with low-risk partnering deals, blah, di, blah. Yet, that hopefully will end up being good timing. In our business, it's the cheaper you can buy, the more money you're likely to make. If you look at our high-performing centers, you need good execution, you also need a very good deal on your property. You get a good deal on your property, the likelihood of success will be much higher.
If you look at what we're doing, we've become a lot more disciplined. We've greatly added to the resource in that area, in investment management. More disciplined than we ever were before. I think you will see that the growth we've added in the last couple of years will be the best growth we've ever done because we're getting better deals, many with less capital, which will give us better returns. If you're measuring things not on a margin basis, but return on capital, these should be good, all things being equal. If we can find more of these very compelling things to do, we will do them. We like the market as we see it in the future.
Basically, economy starts to come off hard, any country, slow down, wait, go to the bottom, grow on the bottom and on the way out the other side. You must get the timing right. You get it wrong, it's bad. Okay? There's all sorts of things in this, making sure you've got a variety of termination dates, you don't want anything lumpy. You don't want customers that are lumpy. You don't want your obligations that are lumpy. It's all about making sure that you've got a very good blend on the average so that you can flex. That's what we're using at the moment in the U.K. There's lots going on in the U.K., the pieces are pretty much aligned well for us to do what we have to do. Okay. Same was the case in Brazil, by the way.
We had to restructure it, and we come back, we grow it, and you end up with a much better business.
Thanks.
Thank you. That seems to be all the questions. Thank you all very much for coming, and we appreciate your attention this morning. Thank you.
Thank you very much.