Welcome to our full-year results for 2023. I'm going to present first, and then Charlie will tie up, and we'll go for questions. So I think it's a truly fascinating time for the hybrid working industry, and for us as the global leader in this industry, which is moving very quickly, and we'll talk to that today. We're fantastically well-positioned to drive both future growth as more and more companies adopt this way of working, to keep growing, keep maintaining our market leadership position, and improving both our revenues and our profitability over time with the new capital- light model. Last few months, really busy period for us as we ended the year.
It was a continuation of what was a great year for the company: strong cash production, really good growth, and lots of strategies developed during the year being put into action that are improving overall operations, and that's continuing into 2024. What you're going to hear from Charlie and I today, though, is quite pretty much the same as you would have heard at the Investor Day, last year in December. You know, one of the things we're trying to do is to lock down the reporting, make it simpler, and consistently report so that people can follow it. There's a lot going on. We don't really have any peers at all. The only one out there is our friends at WeWork, and they're not really a peer. They're not really in the same industry. So it's really important that we report in a consistent way.
So that you know who we are, I'll repeat, market leader in what we believe and others believe will be a mega industry. This is not a small thing. This is not about managed space. This is not about flexible working. This is about a fundamental change in the way companies are going to work and the way people are going to work. So it's a really big thing. It's not small. And it's emerging from two things. One, it's basically companies working much more quickly, needing to be more flexible, and technology facilitating a completely different geography of work than was the case 10 or 20 years ago and before. We're the market leader. We're going to continue that. We are growing quickly. We're going to continue to grow quickly. The winner in this industry is the one with the biggest coverage. You need everything else: product development.
You need to manage the business well. But more than anything else, you need coverage. That's what companies ask for. Are you here? Are you there? They're not saying, "Are you just in one place?" Ever. So that's the second thing. Thirdly, and we think this is quite unusual, you've got a company with a huge runway ahead, that is generating more and more cash as it grows. And you can see that coming through in 2023. So we think that will be attractive to investors. Once they believe it will continue, that, that that will be a very attractive thing for more and new investors to come in. We've got great exposure to the U.S. Now, so we've got this fantastic network, 120 countries, but the powerhouse is the U.S. It's about 50% of the business. It's got the highest growth.
It's got, it hasn't got the best margins because you know are averaging out across many, many sites, but it's got high margins. It's got the U.S. companies that are the greatest adopters of hybrid because it just makes sense. They say, "Well, it's cheaper. It's what my people want. I can hire people wherever I want to in the U.S. We like this. Why aren't we doing it?" We signed last night. The last state, by the way, is a small detail: Anchorage, Alaska. We're in Alaska now. So if you do require an outpost there, we are now placed there. We've got a fantastic cost advantage. And I must emphasize this. So this is a business that has got a lot of scale, is going to have enormous scale.
So we spend a lot of time not just on growing revenue, but on managing costs, every single cost, down to fractions of a cent or a penny. How can we lower cost? How can we make our business simpler and easier to run? And how, how can we manage every aspect? And we're getting better and better at it. So there's still more upside in here, in particular now with the way that we're opening centers. So we're bringing the cost down quite dramatically in how we open new centers. Now, we're actually saving money for our partners here, not necessarily for ourselves, but it does allow us to open more centers. We've brought the sort of the cash requirement down significantly, and we expect it to come down further in the future.
And that is working supply chain, warehousing systems, and many things really all lined up to make the opening and operating of centers flow. We think there's a lot more to come there. You know, finally, we, apart from my good self having been doing this for 35 years, we've also got a very good and experienced team around the world. It's not just in one place. We continue to add to it. So in 2023, we added quite a few senior execs, again, with a view to succession planning, with a view to strengthening up what we've got a huge job to do. We must make sure we have the right people doing it. We've continued to invest in that. This was a slide from the Investor Day.
Just to remind you, hybrid is about turning real estate into products that people can buy, companies can buy. That's what it is. So it's fully financed. It's the same way that, companies would basically rent a fleet of vans to deliver their goods. They don't buy them anymore. They rent them, fully done, fully maintained. That's the way it works. This is a completely outsourced platform. It works. You buy the product you want. You use it for the time you want. And you, you know, that's it. And it's sort of moving an XRB across the page here to what was a very difficult thing for companies to do: sign a lease, build it, operate it, and then get rid of it, inflexible, to, "I buy products to support my workforce.
And I buy what I want, where I want it, for the time I want it." And that, you know, that theme, it's an obvious one, gets picked up by more and more companies, which drives the demand. And demand is strong. And, you know, over the past three months, I've been spending a lot of time analyzing personally with a team of people where are the customers. And the customers have become sophisticated. So it's no longer they're not looking no one's looking for offices. They're looking for support for their people. They're looking for products. And so our product development is about providing them exactly what they're looking for. It is never offices. That's just part of the equation. So you'll see and, you know, again, the narrative is important here. And we get questions, Charlie and I, from people, and they because they've read the latest headline.
And they say, "Yeah, aren't people somehow going back to the office?" And all this stuff. I mean, it but the answer is, yes, they are, they're going to an office. It's just not in the same place. You cannot very hard to find in any country anyone that likes commuting. It's the most unpopular thing. You know, basically taking away two hours of a person's life and getting them to pay for the privilege really is not good business. That's not what people want. So what companies are saying is they want to have a more distributed workforce. They want to provide support for their people wherever they are. And they want people to be able to use a network of things so that they're productive when they're on the road. And you'll see in the U.S., lots of locations opening up within the airports, airside.
We've got some European ones coming now. This means that so when you're traveling or when you're away from wherever you work from normally, you can be productive. No one's wasting time by sort of sitting down in a Starbucks and trying to get the Wi-Fi. It's a setup system of places that help people do their work. So it's the rhetoric will continue about this sort of they have Boots here in the UK, yesterday saying they're going to bring their population, which is 8,000 people, come back to the office in Beeston, in Nottingham, five days a week. But the reality is that that's not convenient for the people. Most people don't need to do that.
Modern companies are investing a lot more money into technology that allows them to hire, train, mentor, and manage people without having to sort of have them all in one building where they somehow feel that they are working. Because the answer to that is, of course, many of them aren't. They're just there. AI, you look for the new Microsoft developments are going to completely change this because it combines everything you do into product and converts AI converts it into how productive people are. And that's what if you're running a business, that is what you're looking for. I've got the people. Are they productive? Not where are they? And can I see them sort of sitting here? That's, that's quite old-fashioned. So a lot coming. It's not it's a very nuanced, setup here because all companies aren't the same, and what they're doing aren't the same.
Right underneath this, there's a lot of people where this is a real advantage to both the workers and the company. That is a huge market. So I won't go into all the drivers. If you've got the pack, you can see this. It's all about the productivity and how happy are the people. Generally, people that haven't wasted a couple of hours a day, that can go to an office and meet other people socially, whether it's from their company or any company, and can get sort of looked after, have great internet, good connectivity, access to a lot of processing power, things like that, that's what they're looking for. We're investing more in health programs to support workers and food programs supporting workers as we go into 2024. We've been testing it for a while. It works.
that starts to move the narrative further away from, "Do you need an office, sir?" to, "How can we make your people happier and more productive?" It's a, a very different conversation. Again, coverage, coverage, coverage. And, really good year for signings last year. They're now converting into openings, which are converting into revenue, which is converting into fees. And fees will become a bigger and bigger proportion of our profits in the future as these open and, and, and sort of come through. And the what's interesting is the numbers we talked about previously are starting to come through. You can see those in the numbers. So as we look forward, the conversion of centers into revenue and into profit is very similar to the numbers we put forward at the beginning as we were starting on this program. So we're quite happy about that.
Market leader buys an enormous amount. The white line is the signings that haven't opened. But you'll just, I mean, WeWork is contracting. And our growth, just the growth alone, is the same size as the three following operators. So you can see that we're just moving ahead. Remember, coverage wins the day. This is not about how big the centers are. It's not. It's about coverage. Where's it going? Well, we'd like to be up with the multiples of our fellow platform operators. There's many of them. We picked out Uber and Airbnb. Uber, we're using it. And to explain what we do, you know, we're linking up the property industry with the users on the other side, whether they're individuals or corporates.
You know, clearly, they've got very different multiples to where we are today, our lowly multiple, right in the middle there, the market cap, the result of that. We hope will change over time. If we can report consistently, if we can deliver cash with growth and continue to grow our share of the market in what will become understood as a real thing, as opposed to, you know, something that's the profile feels like the property industry, it's moving away from, you know, Uber have done this and saying, you know, we're in the taxi business. We're in the food delivery business. We are a platform. We are similar as we move more and more into capital- light. So key thing here really is sort of consistent delivery. And, and we're doing that on all of these counts, on growth, on revenue.
And importantly, you can see coming through in 2023, very, very pleased with the cash production. And then we're adding a dividend on this year. Charlie's going to talk more about the divisions. But I think everything we said we would do last year, we've done that or better than that. And I think that consistency of delivery now is what we need to keep doing. And again, I've talked about cost. But that, you know, it's not just about revenue. It's about the management of cost, both for our company-owned and for our partners. Making sure that our partners are making great margins really leads them to do more and more buildings with us. And that's certainly happening. Yeah. I mean, Charlie, I'll let you talk about these wonderful statistics and how we're going to make them better. One per share, get the dividend started.
I'm certainly pleased with that as a major shareholder. Pay some bills. I think, look, this is, we set this out at the Investor Day in the U.S. This is about getting to this medium-term target of $1 billion in EBITDA. You know, we're making a good start here with a 30% increase, 34% increase in last year. We're not saying we're going to do that every year. Don't adjust your numbers just yet. You know, that's what is that, Charlie, about a 10% compound? Just over. Just over. That's what that line is. It's about consistent delivery, driving it up. It's very possible that we can get there in a reasonable amount of time and beyond it, as Charlie said, when we put this number up. We've just got to keep on doing what we're doing.
And, by the way, the cash production in here becomes better and better as you start to drive the EBITDA, the cash flow and the earnings really start to become quite attractive. And you get more the depreciation coming off will get you more conversion into earnings, going forward. And with that, I'll hand over to you, Charlie.
Thanks, Mark. So, overall, I think 2023 has been a good year for IWG. And we've set out to deliver what we say we're delivering. As Mark said, I think we've done that very well, if not better, in places. We've also sort of tried to make things clearer for investors. I think we've done a good job in that. We've still got some way to go with that as well. For example, how the board is considering changing to U.S. GAAP reporting, for example.
We've also changed to US dollar reporting, which will reduce the FX volatility. But I can talk about that in a little bit. As I mentioned, sort of like really, we're delivering the plan. We set out the plan at the beginning of the year. We are delivering on that. Cash flow is building. That's across all three divisions. CapEx has fallen, and will continue to decline. That's sort of one of the drivers of that increase in cash flow. Net financial debt has come down. We expect that to continue to fall during 2024. We've committed to build a strong balance sheet.
As part of that, we're looking to target 1x net debt to EBITDA and continue to pay down the debt until we reach that level, after which we said we'll share the proceeds of that growth. Then, as Mark mentioned at the end, we're also underpinning all of that by resuming the dividend with a 1p final dividend, as a sort of show of confidence in our ability to continue to deliver and where we see the balance sheet today. 9% revenue growth across the group, with strong performance from all three divisions. You'll see that the management franchise, I think, unsurprisingly, is the largest one. I think sort of overall, importantly, the gross margin is also very good across all three divisions as well. In particular, company-owned gross margin has gone up just over 40%, to a 20% gross margin.
Big, big improvement there. And then also Worka and also the, the management franchise division, continuing to deliver on that, as well. At the Investor Day, we introduced the new KPI RevPAR. I won't go through this in detail because I think sort of, people who have already seen this, sort of understand it well. But I think just suffice to say, this is a very well-understood KPI, particularly in sort of sectors such as hotels. And the reason why we like it as well is because it en it encapsulates all the ancillary revenue that we also get, from people being, in our buildings, such as sort of from coffee and meeting room space and, and the like. So we'll continue to report on, on RevPAR going forwards. Growth across the IWG network has also has also been good, on a RevPAR basis.
So, the new management franchise rooms coming online. Company-owned continues to improve. And obviously, we don't report RevPAR for Worka because that's a separate business that doesn't have the rooms. Signings now evolving into openings. So I think sort of the way we articulated this at the Investor Day was, 2023 was the year of signings. 2024 was the year of openings. And then 2025 will be the year of maturity. So you'll start to see the fee revenue coming through in 2024. We expect sort of just north of GBP 25 million of additional fee revenue in 2024. And that will continue to compound as that grows. We're again expecting to sign more and more rooms over the course of 2024, and into 2025, of course. So that will just continue to stack up and continue to grow.
I think kind of, the one thing I would also say is that, total number of deals signed, has picked up hugely. Capital- light deals, moving to nearly all of the deals that we're doing at the moment. And that's also then being reflected in the cash CapEx cost, that's also falling. As Mark said, though, we're passing, a lot of our knowledge and expertise on, on costs, to, to our partners as well. And that's one of the big drivers for partners to, to partner with, with IWG. And we are becoming more capital- light, that, that goes with that. So I think, as you'll see, becoming much more capital- light in line with our strategy, a few more, conventional rooms opened, as well. And so these are things that, specific centers that we've looked at, very, very high quality in general.
So good example of that is Battersea Power Station. I don't know if for those of you who haven't been there, superb new center that's opened on the south bank of the Thames. Very high quality. And that sort of is quite a large center as well, which is the reason why you sort of see a fairly large number of rooms open. But it's a fairly low number of centers that have opened at the same time. But we're really pleased with that new investment. Revenue growth driven by all segments. So sort of show how this has gone up by segments. So we've had a bit of an impact on FX that we called out at the half year. So going through into the second half of the year, the negative FX impact.
But though what you'll see is the company-owned and leased up by $185 million on the revenue side. The management franchise fee is doing incredibly well as well. Obviously, that's the net result. So the system-wide revenue is much higher than that. That's contributing to that increase. And then Worka as well, increasing as expected. I'm now just going to run through the three divisions in turn and sort of show how we've delivered what we promised and, in some cases, more on those. So, management franchise fee income up $50 million on the $427 million total of system revenue, a record of just over 100,000 new rooms signed during 2023, up 129% from 2022. Really sort of accelerated that signing rate during 2023. But now, crucially, though, as I mentioned earlier, those signings are evolving into opening.
So we've increased the rate at which we are opening rooms by 2.5x in 2023 versus 2022. And again, you'll see that happen more again in 2024. RevPAR of GBP 381 in 2023. So that's a per-month figure, with an estimated RevPAR of GBP 250 once all those pipeline rooms in the pipeline have matured. On company-owned and leased, I mentioned, I think sort of the big focus here is on margin and also the RevPAR that we get from that. But margin is the big outcome of that. At the end of the day, it's margin that pays the bills, as Mark mentioned earlier. Huge improvement in the margins, just over 20%. And the RevPAR has also increased. So we're nudging that upwards, GBP 280, and giving total revenue of GBP 2.59 billion in that division.
The costs, including the center maintenance CapEx, very crucial here, has been held below inflation, driven by higher efficiencies. And that sort of is despite that high inflationary backdrop. So the key thing here is our ability to increase revenue at a higher rate than the level at which we're increasing costs. And the center maintenance CapEx of $41 million during 2023 as well, which is a fraction of previous CapEx. And I'll come on to that very shortly. Worka investment continues in this business. Like, very, very pleased with the continued progress here. We've also made multiple, very small but important bolt-on acquisitions, and continue to expand that platform in line with strategy. You'll see that we spent just over GBP 20 million on investments into Worka.
Very pleased with how that's performing with revenues up 18% to $319 million. But also importantly, very high gross profit margins, so just over 50% for that business. The one thing we have flagged is we've got some headwinds coming as some legacy contracts roll off. So basically, some things are coming off. And then we've got the other stuff coming through, much higher quality contracts, recurring revenue. And we're very, very pleased with how that is progressing at the moment. So, we'll see that sort of being flattish during 2024 but really sort of seeing that expansion coming through in 2025, both on revenue and also EBITDA. So coming on to investments. And, as I mentioned, we are controlling center CapEx as we continue to drive efficiencies. And this is the first time we've sort of really broken out the three types of CapEx.
So very much the center growth and maintenance but then also the intangible and sort of M&A side of the CapEx, which has increased over the last year to a total of $82 million. So that includes some the bolt-on M&A that I talked about before. But really also seeing that center fit-out CapEx go down as we're being highly selective on the new centers that we're looking to build out. So bringing all the divisions together, I think sort of overall, what I say here is, we said we'd move up fees in management franchise. And we delivered that. We said we'd improve the margin in company-owned. And we delivered that. And we said we'd improve the revenue and the margin coming out of Worka. And we delivered that. So a really good delivery across the board, all three divisions.
With this, we expect to continue to see to improve over the course of 2024, and very pleased with the result. And that sort of leads to an adjusted EBITDA of just over GBP 403 million for the year. And I'll come through to sort of the movements in that. In summary P&L, we've, we show this on an IFRS basis at large because that's the face of the income statement. But sort of appreciate there's quite a few moving parts. And it's, I think, the one bit that I would call out here is that the P&L is quite heavily impacted by two particular non-cash costs. So the first one is rationalizations of $145 million. So basically, this is sort of where we've made some provisions for center closures and written off some sort of small assets.
And then also financing costs from an IFRS 16 basis. So these again are non-cash costs, GBP 53 million of total cash costs, which you can see in the RNS and the cash flow statement, out of that total of $334 million. So, very little of that financing cost is actually a sort of true cash cost. A lot of that is as a result of IFRS 16 liabilities and interest rates rising. So going through the EBITDA. So 34% increase in EBITDA on the year. A great result sort of moving towards that $1 billion that Mark talked about earlier. And we're very pleased with this result overall. And I think really, this is just an output of the three things I talked about earlier, the margin improvement from company-owned. So you see that going up $98 million.
Management franchise, we made more investment here in the partnership sales team. So that's basically getting the buildings and enabling those signings and enabling those openings. Obviously, it needs some people behind that to do that. And that's the reason why you sort of see some of that cost being front-loaded with a small change in the EBITDA over the year and then Worka performing well. FX impact sadly impacted us at GBP 12 million, mainly in the second half of the year. So you'll see if you look at the first half results, where we did GBP 197 million of EBITDA, very little impact from FX. Second half of the year, that GBP 12 million was pretty much all in the second half of the year.
So actually, the half-and-half growth of EBITDA during the course of 2024 was actually better than the face of the numbers would show. But on a constant currency basis, it's very good. However, though, I think sort of as Mark mentioned, focus is cash. And cash at the end of the day pays the bills. So cash flow from business activities almost doubled year-on-year, just below GBP 300 million. We had a little bit of working capital inflow due to high customer deposits, and some higher levels of anticipated accruals on electricity and utilities, being very conservative in that area. And then net growth CapEx down nearly 50% year-on-year. And that basically that's helping reduce the net financial debt, which is also enabling the resumption of dividends. So very pleased with that.
I think sort of the other number I'd call out is that the cash flow after everything, with the exception of M&A and discretionary growth CapEx, is just over $200 million. That's sort of really, I'd say, the key numbers focusing on. That's after interest, after tax, after all the center maintenance, $200 million, a great result year-on-year. And that's sort of over double what we did last year on the same basis. Going to the falling CapEx. And then, I mentioned this already. But I think really that the thing I'd note here is that the mix is slightly changing as well. So less money spent on the centers, particularly on new center fit-out, more money being spent on intangibles. We've upgraded a lot of our systems, investments in Worka. Very pleased with how that investment is turning out.
And you'll see more of that coming during the course of 2024. Net debt fallen dramatically. So I think that there are two ways we can look at this. First of all is, just on an absolute basis, fallen from $712 million to $608 million, over the course of the year. It would have been $522 million had it not been for the two discretionary bits. So that's the growth CapEx and the acquisitions. So it would have been more around kind of like 1.25x net debt to EBITDA. But with that EBITDA growth and the net debt falling, huge decrease in the net financial debt leverage from 2.3x net debt to EBITDA to 1.5x .
So we're well on our way towards that 1x net debt to EBITDA target, which we expect to sort of make at some time during 2025. ESG very important to us. And as Mark mentioned earlier, people don't like the commute. That has a huge benefit to the environment. They go to somewhere closer to home. Added bonus that IWG's all of IWG's workspaces are carbon neutral. We have maintained our AA MSCI rating for the year. The team was telling me about a third of companies have dropped down on that rating this year. So we're very pleased to have maintained that. Still a lot to do. And we're continuing to sort of strive forward on increasing the amount of ESG reporting that we're doing. Very pleased with where we are for the year.
So I think just talking about outlook for 2024 and beyond, I think what I'd say is the base message is no change to expectations. We are delivering what we said we're going to deliver. We expect to continue to deliver what we have said we would deliver. So no change in those expectations. Medium-term EBITDA target of $1 billion, including strong cash production. So it requires just over 10% CAGR, as Mark mentioned, from today. It's also farewell sterling in the reporting. So please update all your numbers to reflect that. And this will be the last time that you'll see sterling numbers come through our financial reporting. From now on, it will be dollars.
And we hope, because we're sort of much more naturally hedged operationally with US dollars, that we'll see less FX volatility than we've seen. And then all of this is underpinned by the board recommending a 1p dividend per share with a progressive dividend policy going forward. So excited that that has been resumed. And, as Mark said, he's also very happy as our major shareholder. And with that, we're happy to take any questions. Have we got a mic anywhere? Yeah.
Thanks for that. It's Michael Sherlock at Investec. Just a couple from me. One on the time frames from signing to opening. Could you just update us on what you're seeing at the moment, any change from the sort of guidance you gave us last year at the Capital Markets Day? And then on the second one, those legacy contracts in Worka, Charlie, can you just talk us through maybe the quantum, how much they are, and how they come about in a transactional business like that one? Thanks.
Openings, we've looked at them. It's still on track with what we said, so 10 months and 18 months. When you look at these numbers, it's you have the, the numbers don't add up. So that's because the average is 10 months. Some are longer. Some are shorter. But we looked at this in preparation. We thought they're still broadly right. That's the first thing. On Worka, it's basically they had some legacy. These are sort of managed contracts that rolled off. And we knew they were going to roll off. And the key thing is that the new business, which is better margin, and as Charlie said, is recurring revenues. So those sort of one-off transactions become a smaller and smaller part of the book. And in fact, they're a very small part of the book post 2024.
You've got the new platform that emerges from where they are. The bolt-on acquisition is also a mostly geographic bolt-ons. So they sort of enlarge your target market, so that you can sell more of the sort of repeater business, the subscription-type businesses, which is what, you know, where the real sort of margin is. Otherwise, it, you know, this is the old transactional stuff. But it's out now. So it comes out. And then it's out. And then you're on to, you know, the new platform. And the actual effect is a higher effect. But it's replaced by new business already. So it's a flat year, not a down year. That makes sense. And we knew this was going to come. It just, you know, it's come in 2024.
Morning. It's Sam Sherlock from Stifel. Three questions from me, please. Firstly, on the franchise and managed centers, I think the mature RevPAR is lower than the, the current RevPAR. Can you just explain how that works? Secondly, on, on the franchise and managed, you know, EBITDA was flat year on year. When do you expect that to get to break even? And is there more investment to go in this year for, for the managed and franchise? When do you expect that to get to EBITDA break even? And then finally, on WeWork, given their need to generate free cash flow, are they pricing more sensibly in the last few months? Or is there any commentary about that? That would be great. Thank you.
Right. First, RevPAR. I mean, that's the reason we're giving RevPAR. If you've heard me say that a lot of times. But it's because all centers are not alike. So the reason we're giving what we expect the mature RevPAR will be is so that you should be able to calculate the number of rooms multiplied by the RevPAR, multiplied by the average time it takes to get them open. We'll give you the revenue. From the revenue, you can work out what the fee drops through is. And that gives you a number. But they're just different. It's different mix. That's all. And some of it's because you've got IWG Japan in there and things like that in that group. So those franchise businesses that we did way back are in there. They make that. That makes that RevPAR higher.
But what we don't want to do is anyone to sort of make any errors in terms of what the future profitability drop through will be. And you should be able to add it up. As more, the more we give, the more accurate you should be. But as I said earlier, the sort of estimated profitability is you can see it in the already, we can see it because we have more numbers than you do, that it's sort of going to come through roughly in the way we said. And, so yeah, we're, we were happy about that. We've checked that one. Happy about that. And it's all then about how many we do. And the mix will change depending on where they are all the time. So much lower values in Egypt compared to ones done in America.
We're doing quite a lot in Japan, for example. But in the mix, they get outweighed by what, you know, by the lower-cost places. And we've been quite conservative with the expected RevPARs and so on. So we've got room in there. Managed franchise profitability, it becomes profitable this year. In fact, it already is. So, it just you know, we have put in a lot of investment. And, the investment's actually broader than the this is the investment we see here is the investment in the actual managed and franchise team that are doing it. We're actually put what you can't see is other investments that are in the general overhead on the supply chain, which I talked about, which is, you know, sort of pushing, really creating a supply chain in order to build very large quantities of centers at low prices. That also have an investment.
It's not in there. WeWork pricing, is it more? It's a difficult question to answer. It's a smaller problem. Put it that way. I hear it less. They are still discounting heavily. So I, I don't think there's any price rationalization yet. But once they come through the other side, I think then you'll see it more stabilized. But it's a handful of markets, really, mainly in the U.S. It's not a, it's not an important, important part of our business today. Steve?
Hi. Hi. It's Steve Woolf from Deutsche Numis at the moment. Just a couple following up, really, on—is it possible to have a sort of an EBITDA run rate as we've exited the year? And then attached to that, I guess the level of discretionary spend you have in the business and whether that probably attaches to, you know, the front-ended, front-loaded investment you're putting in for, you know, the sales teams to grow the business. Is there any sense you can give us of sort of how much that is? I'm, you know, trying to get out where you might be on underlying, you know, EBITDA if when that sort of discretionary cost, as it were, you know, some of it falls away.
Yeah. So in terms of EBITDA run rate, it we exited the year at a level that is sort of commensurate with edging up the numbers to get to sort of where management expectations are for the full year. So sort of mid-30s, basically, on that, per month. I think sort of when it comes to discretionary spend, we do have a lot of discretionary spend in the business. So a lot of marketing, for example, is a good example of a discretionary spend, which you can turn on and off. Now, obviously, you would never want to be turning that to zero. But theoretically, you can do. I think probably what you're getting to a little bit more is around the partnership sales team, for example. And look, like, we want to keep that at like at that level.
We're very pleased with how they're doing. And we're seeing those signings coming through. And also, as I mentioned there, you need to have that support, as well in openings. And so we've made some investment over the course of 2023 to have a team supporting openings. And that's been very valued by landlords as well. We want to keep this pace of signings and therefore openings up, though. So, we've got no reason to drop that right now. But at the same time, it's not as though we're seeing that go up with the revenues going up.
I think just to add to that, so we've made in 2023 and 2022 significant investments, for example, in finance systems because we've got this all of this growth means that you have to you've got to have a very robust ERP going from end to end. We've got a lot of partners now, more and more partners, that require excellent reporting. And that's got to come from that accounting system. So the overall accounting system investment discretionary, I mean, it's needed, but discretionary, about $15 million-$20 million total?
15.
So that's GBP 15 million, for example. Now, that is coming to an end. So that sort of cycle of investment's actually finished.
Just to be clear, that's in CapEx, not in its CapEx.
CapEx. Yeah.
There are other pieces that we're working on that sort of manage the, you know, the new scale. So it's really important we continue to invest in the platform. And these are more pieces of software that are integrated into the platform to make it work smoother and more efficiently for both us and partners. But, you know, so we're not saying it's going to go up, Charlie, are we?
No.
We're budgeting for it to remain the same. The growth team, we may invest more. And that's just that the growth team is about, you know, that's just a performance outcome. So you invest more to get more. And so we, you know, retain the right to do that. And, you know, we have ambitions to get the growth rate at some point higher. And that will come that will need to have a bit more investment to it. But the core is done. It's just incrementally, you're adding to it. Yeah.
I've had a couple of questions come in from the audience about the commentary about refinancing in the year. Could you expand on that, please, Charlie?
Yeah. So, as people see from our accounts, our financials, that is the non-lease debt, is all due in at the end, right at the end, of 2025. We're sort of very conscious of that. And we want to increase the tenor of it. And we're looking at getting that done during the financial year of 2024. And we'll make a further announcement about it when, when that is in place to make a further announcement about it. But it's, it's very top of mind.
And a second one that I've had from three, four people is, could you comment on the underlying growth rate in Worka ex the legacy contracts rolling off, please?
So, look, I think sort of overall, we're seeing that division continue to increase as Mark said earlier. It is actually double-digit growth that goes alongside that, on an underlying basis excluding those legacy contracts. But overall, we're pleased with how that's performing. And it's performing alongside the expectations, as Mark outlined earlier.
Any other questions from the room? Andrew?
Thank you. Thank you very much. Just two from me, Andrew Shepherd-Barron, Peel Hunt. Firstly, on U.S. GAAP, do we know a little bit more about how that might affect the accounts going forward? Obviously, a debt situation. But might it have any impact on EBITDA? And when and if you can't tell us, when might you be able to tell us? And secondly, on Worka, M&A, you've talked about needing to do more M&A in the past to round out the business. I presume, therefore, your 10% growth was an underlying ex-acquisition growth rate. Can you talk more? You talked, I think, also about just sort of doing geographical M&A to round things out. Is that incremental and minor? Or does Worka still need some sort of fundamental bits to put it all together into what you think is the future end product?
Thanks.
Shall I? I'll do the first one. So, U.S. GAAP, we'll make an announcement about sort of our intentions on that, during the first half, by which it's sort of by the end of June. When we do, we will also do a sort of teach-in the differences. But by and large, it's the same as IAS 17. So as in, the pre-IFRS reporting that we've done. There are a few differences that do come through on that. Let's give one. For example, you depreciate by the shorter of your depreciation period and the lease period. Whereas under IAS 17, you just do it over the depreciation period, which is 10 years in our case. But we'll outline all of those differences. Clearly, though, most importantly, there's no difference in cash flow.
As a business, we're very, very focused on cash flow, as I mentioned, to $200 million so £200 million, so almost $250 million, of cash flow after everything and before growth CapEx.
On Worka, I think, and overall, it's U.S. GAAP looking at it. It's sort of harsher but clearer. And that's the key thing. It takes away the IFRS 16 anomalies, which mean, you know, we, we're doing two sets of numbers all the time. Those two sets of numbers sort of confuse potential investors, you know, because it is complex, whereas U.S. GAAP is very simple. Now, so when we come to Worka, these are small geographic additions, and they add people in the countries and language capabilities. And, you know, so you're knitting together a network of these micro very small businesses that, you can put together and create into something important. So, they are small, though, but very helpful. That would be probably two-thirds of the acquisition group.
One-third is products wherein, you know, basically, what we are doing is distributing product for, because you get this is a, a world of minnow companies, sometimes with very good products, but they can't distribute it to the global market because they just don't have enough size. And they've only got a single thing that they're doing. So you're bringing together useful things that you can distribute to the whole market. And that would be about a third of it. But most of the growth is organic. So it's not this, the organic growth is really converting what they used to do into products that people can buy. There is also, not significant, but, you know, in the context of our numbers, relatively significant investment also in the platform itself, the Worka platform, which will come through this year. About $3 million, I think, isn't it?
$3.4 million? And that's more than that? It's more than that. It's about 10. It's about 10 total?
This year.
No, that was last year, wasn't it?
Last year was 10?
Last year was 10. This year, it's finishing off. It's less than 10.
No, it's a bit less than that.
Yeah.
For this year.
So you've got an overall that's the more significant investment, Andrew, which is in the, the tech, really, that brings everything together and creates a shop to sell it in, in simple terms. It sort of becomes an Amazon of everything you need. If you're in this flex work industry, hybrid industry, you've got everything you need in there on both sides of the market. That's what the final part is. So it's, you know, it's, following the plan that we had in the beginning. Good management team, very focused. You've got a, a change of the guard. It's well set up, really good underlying growth. And, you know, there's really no change to our investment thesis on this. Valuable thing to do. It's going to produce very healthy EBITDA platform, like EBITDA, with very little CapEx in the future.
You know, has in this huge marketplace that's emerging, it can keep growing its revenues and its margins.