Thank you for standing by, and welcome to the Viva Leisure Limited FY 2024 full year results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I'd now like to hand the conference over to Mr. Harry Konstantinou, CEO. Please go ahead. Thank you. Good morning, ladies and gentlemen, and thank you for joining us on the conference call today for Viva Leisure's FY 2024 full year results presentation. I'm joined today by our CFO, Mr. Kym Gallagher. This morning, various documents, including an investor presentation, which we'll be referring to today, were uploaded to the ASX. This presentation is being webcast on OpenBriefing.com and will be available for replay on the Viva Leisure investor website later today. The agenda for today's presentation will commence with some highlights and general commentary on the full year results, followed by Kym providing more detailed information on the actual financial results and details on our capital allocation strategy and guidance as previously provided. Following which, I will provide the latest developments in our strategic refurbishment program. We'll also explain our newly secured banking facilities and discuss the business strategy driving our future. As we look ahead to FY 2025, we're setting ambitious new goals, including the launch of innovative products, the introduction of cutting-edge gym concept tailored for a younger audience, and the exciting debut of our upcoming online supplements business. I appreciate your patience with the length of this deck, but we had an abundance of great news to cover from FY 2024, and there are many exciting developments on the horizon for FY 2025. On the back of the investor presentation from page 47 is an appendix with additional information which we'll not be going through during this call. Included in the appendix is a reconciliation of the statutory profit and loss to the traditional ex-AASB 16 numbers. Following the completion of the presentations, there will be an opportunity for questions. A reminder that if you wish to ask a question, you will need to dial in, as questions cannot be asked via the webcast. I'm excited to take you on the journey through Viva's achievements in FY 2024 and share the thrilling developments we have in store for 2025. So let's get started. Today, we proudly present to our shareholders and investors the results of our journey. But as I've said in previous results presentation, our story truly began some 20 years ago, in 2004, with the opening of our first location. The successes we've achieved, built on hard work and unwavering belief in our strategy, are a testament to our commitment to innovation, collaboration, and pioneering advancements in our industry. The future is brighter than ever, and we're ready to reach even greater heights. While our primary source of revenue remains membership fees, the launch of The Hub and Viva Pay in 2024 has allowed us to diversify and strengthen our income streams. We're now generating over AUD 4 million annually in payment gateway and technology fees, supplementing our existing third-party income. To be different, you have to do things differently, and that's exactly what Viva does. By embracing innovative and thinking outside the box, we've positioned ourselves for sustained growth and success. In addition to this, we've built a robust network comprising 185 corporate-owned locations and an additional 178 franchise locations. Our corporate network is now the second largest in Australia, a significant asset that I believe goes unrecognized. As the founder and CEO of Viva, I'm thrilled to be here today, sharing with our investors another period of strong performance. This success once again demonstrates the incredible potential of our business, even in the face of external challenges like significant inflationary pressures and economic headwinds. In fact, one of our highlights in our presentation shows, despite rising interest rates and inflation, our average revenue per member, fees has increased along with our overall membership number. It's important to emphasize that we are a recurring revenue business, billing nearly 400,000 members every fortnight. As I've said before and will continue to say, we are part of the lifestyle and experience industry, an industry where our members consistently prioritize their health and fitness. This commitment is what drives our continued success and growth. I've said this in the past, and I'll say it again: These results I've presented to our shareholders and investors today will highlight to those who believe this industry is discretionary, how wrong they are. We now turn to the results we are here to present, a year that has presented some remarkable results, laying the foundation for even more growth. I'll start the presentation on slide 4, which is a summary of our performance. Revenue for the year increased 15.9% to AUD 163.6 million, driven primarily by strong organic growth. Record EBITDA of AUD 35.4 million increased 21% over the previous corresponding period, reflecting improved margins and operational efficiency. This is evidenced in our increasing EBITDA margin, which was 21.6% for the year, up from 20.7%, with the Quarter four margin extending to 22.7%. Our net profit after tax, pre-AASB 16, increased by 19.7% to AUD 10.6 million, and utilization remained strong at 72.6 across the corporate network, even after 15,000 members were removed during the year from the exit of the Fitness Passport Program. Corporate memberships ended the year at over 200,000, up 10%, with network memberships at up 6.5% to 372,000 members. Since the end of the financial year, we have completed the acquisitions in Western Australia and continued our strong organic growth, and corporate membership today sits above 223,000, and network membership above 395,000 members. In terms of locations, the FY 2024 was focused on our strategic refurbishment program, which we will go through later in this presentation. This resulted in seven locations closing or merging. This meant that on a net basis, locations increased from 171 to 176 for the year. Total locations, as mentioned previously, are currently at 185. One of the key focus points for our investors over the past year has been free cash flow. This has led us to work with our bank and achieve new finance facilities better suited to our growth profile and cash requirements. Free cash flow before growth, CapEx and tax was AUD 15.5 million in FY 2024, compared to AUD 13.4 million in the previous year, demonstrating stronger operating cash flows. This will significantly improve in FY 2025 under the new banking facilities, which we will explain later in this presentation. We continue to reinvest for growth, with FY 2024 amounted to AUD 18.2 million, which covered greenfield sites, acquisitions, technology, and site upgrades, some of which was funded by the existing bank facilities. The return on investment of our growth CapEx is very positive, and we will discuss the results of our strategic refurbishment program a little later. But essentially, less than six months after the last location was completed, we are already run rating at 75% return on invested capital. Moving to slide 5. Operationally, in FY 2024, we had some significant achievements that needed to be called out. Firstly, we finally launched the Hub and Viva Pay across the franchise network in Australia and New Zealand. This project was first envisaged when we purchased the Plus Fitness business in August 2020 as a synergy. Interestingly, that synergy now generates nearly twice the EBITDA that the original acquisition did. We highlighted this and the other benefits of acquiring the Plus Fitness network at the time, and together with a pipeline of priority acquisitions we received, the investment has been very sound and is continuing to provide further upside. In addition to this, Plus Fitness new territory sales reached 21 locations during the year, a record for the company and testament to the hard work the team has put in to grow the profile of the brand in the industry, and the profitability of each franchisees, who continue to reinvest also for growth. We expect a significant amount of these 21 locations to open in FY 2025. Secondly, another achievement is growing corporate memberships to over 200,000 for the first time. We must remember, five years ago, when we listed on the ASX, Viva had 54,000 members in 40 locations. The network now spans 400,000 members and over 360 locations. And finally, we successfully completed a AUD 16 million cap raise to fund strategic acquisitions in Western Australia. This was our first cap raise in quite some time, as our business model is largely self-sustaining, except for significant out-of-the-ordinary acquisitions like these. Moving to slide 6. This slide represents a dashboard view of the highlights for FY 2024. I've talked most of these already, so I'll quickly skip to slide 7. Slide 7 shows our revenue and EBITDA since our first year as a listed entity, which was FY 2020. Impressively, CAGR on revenue is 41.4% over that period, FY 2020 to FY 2024, and this is an exceptional result. In comparison, EBITDA has a CAGR over the same period of 55.2%. What is interesting to highlight here is the movement from FY 2023 to FY 2024 in both revenue and EBITDA. While revenue increased 15.9% over the period, as it should, EBITDA increased at a higher rate of 21%, reflecting the improved margin and leverage the business is generating year-on-year. The half-on-half growth in both revenue and EBITDA is impressive to follow also on this chart. I'd now like to pass on to our CFO, Mr. Kym Gallagher, to run you through the financial results starting at Slide 9. Thank you, Harry, and good morning, all. As Harry said, I'm on slide 9. Looking at the revenue growth, this chart shows the bridge between the revenue in FY 2023 and the drivers of growth to FY 2024, which is, again, an impressive double-digit growth number at 15.9% year-over-year. Most important statistic here is the growth in revenues derived from our, our organic club member base, i.e., those clubs that were on foot as at 30 June 2023. When comparing the revenue numbers at 30 June 2023 versus 30 June 2024, these clubs exhibited growth of around three quarters of the 15.9% total growth. This growth can in part be attributed to the completion of the refurb program, which occurred across FY 2024, and which has led to strong member growth across the current period. We have a slide on this further in the presentation. We're pleased to note also that Viva Pay is finally contributing to overall revenue, with approximately AUD 700,000 added from when it went live in May 2024. Plus Fitness franchise operations also improved their revenue base as new sites were sold and rolled out across the existing franchise network. I'm on slide 10. During the period, we removed approximately 15,000 members relating to the Fitness Passport corporate program. While this seems a significant portion of the member base, these were very low-yielding members. Note that despite this adjustment, we've grown the membership base by 7.5% across the financial year on a combined group basis. This growth has continued into the new year, with further growth of 6.2%, or approximately 23,000 members across July and the first part of August, as we completed the acquisition of 8 new clubs in WA and had strong organic growth through our July sales.... I'm on slide 11. This chart shows the bridge of Viva owned club members between FY 2023 and FY 2024. After adjusting the opening number of members at June 2023 for the Fitness Passport members, we had impressive growth in members of 20% for the period to June 2024, which included a large portion of that being organic growth. The period from 30 June to 12th of August shows a further growth of 23,000 members, as we mentioned, and as we completed the WA acquisitions, culminating in an impressive total of over 223,000 corporate members. Member growth typically improves from here until early in the new calendar year, as the population looks to improve their lifestyles heading into summer, so we expect this growth to continue. I'm on slide 12. For those unfamiliar with our business, one of our key metrics is utilization. This is a measure of members per square meter of floor space at a facility to monitor capacity. We assume that 2 members per square meter of health club floor space is at capacity, and 1 member per square meter at our boutique facilities. The realistic long-term target of the group is an average of 75% to 80% utilization, and we're currently sitting at 72.6% at June 2024, which is up from 68.4% in June 2023 on a like-to-like basis. That is, after adjusting for the removal of the Fitness Passport members. This is one of our key drivers of the business, particularly for our EBITDA margin. Each new member improves utilization, creates revenue, and most of this falls to the EBITDA line. I'm on slide 13. Firstly, the results shown throughout this section have been normalized for adjustments and are predominantly based on AASB 16 basis, which is also consistent with prior periods. As we've already mentioned, but worth mentioning again, the full year ended with revenues up AUD 22.4 million to AUD 163.6 million, or up 15.9%. Net EBITDA has improved to AUD 35.4 million, or up 21%. In addition, we've managed our cost base effectively, such that we've improved our margin from 20.7% in FY 2023 to 21.6% in FY 2024. Our Q4 margin landed at 22.7% at the upper end of our estimated guidance range. And finally, NPAT also finished up 19.7% on an AASB 16 basis. I'm on slide 14. The balance sheet was strengthened by a cap raise completed in June, with cash improving to AUD 22.3 million at financial year close. The capital raise was undertaken to assist with the 2 WA acquisitions, and we're pleased to report that these were completed in late July and early August. It was, again, a significant investment in our strategic refurbishment plan, which is now completed, together with the continued investment in our technology. With the new banking facilities recently announced, we'll have significant firepower to continue our growth across FY 25. We'll discuss this in more detail a bit later, but for reference, AUD 130 million Facility A, which is to be used for acquisitions, equipment finance, and greenfield sites, has approximately AUD 70 million of headroom as at 30 June. I'm on slide 15. Cash flows from operations improved by 12% over the prior corresponding period. To gain a better understanding of how operating and free cash flows work, the next slide better demonstrates this. But, as per our strategy, operating cash flows were deployed into growth projects such as the refurb plan, tech rollout, new greenfield sites, and acquisitions. These projects were funded in part by drawing on our debt facilities, and as previously noted, we also successfully completed the cap raise in June to fund our WA acquisitions. This left us with a closing cash balance of AUD 22.3 million at June. I'm on slide 17. This slide has been slightly restated from previous periods, now clearly identifying rent payments and showing free cash flows prior to growth CapEx and tax. Using this metric, free cash flows improved by 15.7% over the prior corresponding period. As in previous periods, and as mentioned, we invested the bulk of our free cash into the expansionary projects, such as the completion of the refurb program and of course, our tech. The next slide goes through this in more detail. As mentioned on the balance sheet slide, the new bank facility should free up significant additional cash as our core loans become interest-only, as opposed to the current principal and interest repayment structure. For perspective, the debt repayment shown at AUD 14.4 million for FY 2024, which included principal repayments on our senior debt, as well as equipment lease payments, will no longer be required. These repayments will be replaced by a cash sweep mechanism when certain leverage triggers are hit. I'm on slide 18. This shows some further analysis of how our CapEx has been spent for the year. The new site CapEx is CapEx spent on greenfield sites over the period, and site upgrade CapEx is the major works performed in existing sites under the refurb program. On these projects, we spent AUD 7.3 million, of which was subsequently funded at AUD 3.4 million, and had a target return on the initial cash investment was around 80% within 12 months. To date, we've nearly reached this target, despite the last of the refurbs only being completed in late May and early June, with approximately AUD 5.5 million annualized EBITDA already achieved. Harry will talk about this in more detail on a later slide. The technology CapEx was predominantly for the finalization of Hub and Viva Pay for the franchise network, as well as the commencement of other tech initiatives, which again, Harry will discuss. Maintenance CapEx is CapEx spent on existing sites, but does not include equipment replacement, which is lease finance and therefore not a cash outflow. The goal is to keep this below 3% of revenue, which we achieved. I'm on slide 20. At the half year results, we announced the following full year guidance metrics: FY 2024 revenue range of AUD 162 million - AUD 164 million, and we achieved AUD 163.6 million. FY 2024 EBITDA range of AUD 35 million-AUD 35.5 million, and we achieved AUD 35.4 million. This is despite continuing difficult economic conditions. This result depicts not only the resilience, but also the predictability of our business. I'm on slide 21. We also announced some quarter four guidance metrics. Q4 revenue range of AUD 42.5 million-AUD 43.5 million, and we achieved AUD 43.2 million, for an annualized rate of AUD 172.8 million in revenue. Q4 EBITDA range of AUD 9.5 million-AUD 10 million, and we achieved AUD 9.8 million or AUD 39.2 million annualized. In addition, we had a strong margin in Q4 of 22.7%, as previously mentioned. Thank you. I'll now hand back to Harry. Thanks, Kym. While Kym has provided you with performance against the previous issued guidance for FY 2024 and Q4 run rate, it is not our intention to provide FY 2025 guidance at this point. Instead, we've highlighted the potential upside opportunities by projecting the replication of the Q4 FY 2024 run rate into FY 2025. We see upside in these key pillars. Membership growth. From any of our charts, you can see that we grow membership between 10%-20% per annum on average. We see further upside in this during FY 2025. Synergies. With the recently completed West Australian acquisitions, we have not yet achieved any synergies. We see further upside in this. We have set an increased focus on cost management and deduplication where possible in FY 2025. As we've grown, from, as I say, humble beginnings, we now have a team of 2,000 members spread all across Australia with multiple brands, multiple strategies, and multiple industries. We plan to focus on deduplication where possible, and this is starting with the HIIT Republic brand. We believe this will provide further upside. Our successful FY 2023 and FY 2024 strategic refurbishment programs will continue. However, we expect it to be smaller in FY 2025, both in terms of cash cost and number of locations. This goes hand in hand with the previous point of deduplication and cost management. As you will recall, as part of our strategic refurbishment program, we often remove group fitness studios, creches, and make more gym floor space to attract more members. A classic example of this success will be discussed shortly. Our Plus Fitness division upgrades and rollouts continue, with approximately half the network now operating under the new design. Together with a pipeline of new locations sold in FY 2024, we see further upside in this part of the business. Viva Pay technology fees are transactional, so as the membership grows, so do the fees. We expect to see upside in this division of the business during the year also. Our expanding digital signage and vending machines division is continuing to show improved and impressive returns. This will now be supplemented by a new online supplements business known as Supps Society, which is launching next week. Further details later in the presentation, however, we do see further upside in this to the result. And finally, we have plans now that The Hub is operational, to roll out the next new feature sets. That will also generate additional returns from fees, memberships to franchisees, and corporate networks, we believe. Overall, we see numerous opportunities for significant growth in FY 2025, building on the Q4 2024 run rate, and we're excited about what the future holds. Now, we get to the exciting part of the presentation, discussing business strategy and outlook for FY 2025 and beyond. Moving to slide 24. As part of the FY 2024 results release, we announced a strategic refurbishment program comprising 27 locations at a cash cost at the time, as we did not have banking facilities to fund it, of AUD 7.5 million. We expected a return on invested capital of 80% after 12 months or annually moving forward. To remind investors, this strategic refurbishment program was not simply bringing clubs up to a desired level, this was a strategic review of the portfolio, which included closing clubs, merging clubs, removing sections of clubs, and repurposing them, with the sole purpose of servicing more members. The target was 5,200 members, and notwithstanding the last few sites only completed in May 2024, we are now at 4,887 additional members from the 27 refurbished clubs, with an annualized EBITDA run rate of AUD 5.5 million so far. This is extremely encouraging and supported our decision. Moving to slide 25.... We have here provided for four locations as an example of the program. While we have de-identified the sites for confidentiality, the metrics are the important part to focus on. Also, for the sake of clarity, we simply haven't picked the best sites. These four sites amounted to nearly 30% of the cash cost of the entire project and have generated about 50% of the membership growth. Noting that some of these sites were simply closures, this is significant. Moving to slide 26. Here, we have provided before and after photos of one of the locations, Club Lime, Noosaville. This strategic refurbishment involved removing group fitness and generally opening up the gym. The result was remarkable, with an additional 900 members added to this location within 3 months of the refurbishment completing. Looking at the photos, you can understand how more attractive this club is. Noosaville was a club that Viva had acquired. Moving to slide 28. Earlier this week, we announced our new banking facilities with the CBA. From the outset, I want to say a huge thank you to the CBA and the team we previously dealt with in Canberra, and now the major client group team we deal with in Sydney. The CBA has a deep understanding of our business. They have access to our billing data, manage our banking relationship, and see the full picture. Being offered increased facilities on a scale they have provided is a clear demonstration of their strong support for our business. In summary, we are merging all our facilities into a new facility. Previously, where we had equipment finance limits, acquisition limits, and facilities, we now have one large facility. Accumulated, these facilities are growing from AUD 118 million combined to AUD 165 million combined. More importantly, the Facility A, which is AUD 130 million dollar revolving interest-only cash advance facility, has a broad usage purpose in line with our requirements. That facility can be used for funding permitted acquisitions, greenfield fit-outs, and capital expenditure, such as equipment. The facility replaces the existing facilities, but provides further upside of approximately AUD 7 million, based on the 20 June 2024 balances. I should mention here also that we have a AUD 50 million accordion facility that the Facility A can increase by. In addition, our banking facility has increased from AUD 26 million to AUD 35 million, meaning we do not need to use cash to support bank guarantees on new property leases. The most important aspect of the facility is the removal of the principal repayments. That repayment mechanism has been replaced, as Kym mentioned, by a cash sweep mechanism when leverage exceeds a certain target. If the leverage does not reach that target, no cash sweep takes place. In summary, we expect this approach to provide the company significant free cash flow per annum. However, this will change depending on using cash for acquisitions from time to time, over debt and other factors. The facility is also available for use in New Zealand, which was a requirement requested by Viva, as we see the market as a natural progression for Viva in the future. The CBA has advised that the facilities will be syndicated as at a future date, which is, again, encouraging to have further lenders on board. In terms of margin, we are also receiving a 74 basis point reduction on the AUD 130 million facility, with a slight increase of 44 basis points for the bank guarantee facility. Management sees the new facility as a game changer for the business. Providing new facilities with significant headroom, better pricing, and additional permitted uses, will allow us to continue to execute our strategic vision. We thank the CBA for the support of the business. Moving to Slide 30: Business Strategy and Outlook. I want to start this section by highlighting the achievements of the business to date before talking about what's planned. Viva is building a national platform now in six states and territories with 185 corporate locations. Locations are what drive revenue, drive the payments business and transactions business, create synergies if there are, as part of any acquisition. Our corporate club network has grown from 40 locations in FY 2019 to 185 today, and we expect it to continue to grow and be the foundation of the business that allows us, allows all the other divisions, such as our technology and payments, to benefit and grow. As the saying goes, "One hand washes the other, and both wash the face." The core business will grow and the others will follow, and potentially at an even faster pace. Moving to Slide 31. This is a slide we have presented previously, however, now with updated data. I am pleased to say that Viva now has the second-largest network of locations in Australia, with 353 corporate and network locations. When last reported, Viva was ranked number 3. This table represents approximately 50% of the fitness businesses in Australia, approximately 2,500 locations listed here, so it's a great sample size. You can see from the table the difference between franchised and non-franchised groups, and the large disparity in locations between brands. The network that Viva has built is one we believe cannot be duplicated again. Our balanced approach to strategic acquisitions in greenfield locations, normally averaging 50% each per year, allows us to grow at a phenomenal rate. In addition, our control of the three risks in acquisitions, being membership data, access control, and billing data migration, remove the integration risk. As highlighted in one of our previous ASX announcements, Viva now has completed 105 location acquisition, acquisitions, comprising approximately 90 separate acquisitions. This is significant achievement, and shows the success of our integration and support system.... We believe this figure is unmatched in most industries in the world. To complete that amount of acquisition successfully, the majority in the past five years, is something I'm very proud of. Moving to Slide 32. This is an interesting table, and I won't spend much time on it, but I wanted to highlight the position of Viva in the global fitness market. This data is from IHRSA, this is the most recognized U.S.-based fitness industry body. The table on the left shows the number of members, and the table, and the data is from 2023 global report. Viva did not rank in this table, but under its current membership, and taking into account other operators may also have increased their membership since the report was published, we would now rank with our 395,000 members. This is globally across brands, both franchise and non-franchise. When it comes to locations, the table on the right, Viva did rank 20th largest network of clubs in the world. Viva is no longer a Canberra-based gym group. We are the largest, most active, and most significant player in the market in Australia, and globally are now recognized. Moving to Slide 33. This is a slide that we put together to show the robustness of the industry. This slide graphs average revenue per member, utilization, inflation rates, and interest rates. As you can see, notwithstanding the inflation and interest rate changes over the period, the average revenue per member and utilization has continued to increase. In fact, average revenue per member is up 19.4% from March 2022 to June 2024. Again, showing the robustness of the industry. Moving to Slide 34. We've provided this slide, and I will go through it really quickly, to show what bucket our members come to us from. For example, are they acquired? Are they maturing from existing sites, or are they new greenfield sites? As you can see, approximately 50% of our members are organic and 50% are acquired. We believe we are experts in both these approaches and will continue to do this moving forward. Looking at the annual growth profile on the right-hand side, this shows the year-on-year growth in memberships. FY 2024 actually grew 18.3% in membership. However, with the reduction of the Fitness Passport members of 15,000, the net growth was 10% for the year. The 18.3% growth, however, is very encouraging, especially in a year where we did not open many locations and instead focused on our strategic refurbishment program. Moving to Slide 35. Our Plus Fitness investment in August 2020 has been an outstanding one. Growing our network, providing us with an opportunity to strategically acquire franchisees who wish to exit the network via our first right of refusal, filtering our extensive buying power down to the network so they can also benefit, and using our expertise in club design and fit-out to better improve the spaces for Plus Fitness members, has worked out well. Introducing The Hub and Viva Pay, saving franchisees money while creating a return on investment for Viva, has been an excellent achievement. As mentioned, the synergies achieved from this business now surpass the original EBITDA that Viva acquired on an annual basis. In terms of performance for FY 2024, Plus Fitness sold 21 new territories, up from the previous record of 18, which was pre-COVID. There was a combination of new franchisees to the network, existing franchisees becoming multi-franchisees, and existing multi-site franchisees opening more locations, which shows the strength of the network. With over 50% of locations now under the new design, we are seeing improved returns for our franchisees, which is encouraging. We expect 5-7 more locations to open in the first half of FY 2025 in Australia, from the 30 locations currently secured and in different stages of opening. The Plus Fitness brand has cemented itself as a true quality product in the fitness space at an appropriate and attractive price point. Well done to our franchisees and our franchise operations team at Plus. Moving to Slide 36. This slide is one we have presented previously, so I won't go into the details, other than to say we have five pillars in our strategy. They are: capitalizing on our tech, delivering exceptional service and products, our team, diversifying our income streams, and our portfolio of brands. I'll talk about each of these now and what we are doing as part of that for FY 25. Moving to Slide 37. Capitalizing on our technology is all about The Hub and Viva Pay. The Hub is called The Hub because it forms the core of the system we are building around. We will continue in FY 25, delivering new features, new products based off The Hub, and improve returns as the membership and usage grows. Moving to Slide 38. We have some new modules we are working on that initially will replace third-party products used by Viva and our franchisees to manage their businesses. The idea being, by providing a more integrated, better solution, there will be cost savings for franchisees and additional technology fee upside for Viva. In the second half of FY 25, we plan to launch Viva Pass, a unique membership option that will allow access across all brands in their portfolio, including franchise brands, while ensuring an appropriate revenue-sharing agreement exists. This technology is already built in our apps, our door access, and our membership systems. The upside on this opportunity is significant, but for now, we will focus on its launch. Our second pillar is delivering exceptional service. In FY 25, we have some new products coming built around family memberships, affiliate memberships, and even corporate memberships. While these may sound simple, and other brands may have a program, there is no integrated solution that self-manages itself, debits individually or centrally, and can be set up by a franchisee or the business directly.... We are excited about what we can have on the roadmap for this and see further upside. With the launch of Viva Pass, we also see an option for Viva Pass Corporate, essentially permitting access to 350 locations for any corporate partner who wishes to join the program. And finally, next week, we launch Supps Society, our online supplements business. Supplements business is a high margin, with the majority of costs used to market to members. We have the members. They are our members, all 400,000 of them. Supps Society will market directly at low cost to no-cost marketing. We have agreed a drop ship arrangement with one of the largest wholesalers in Australia, so we do not have to set up a warehouse, and there is no stock risk to us. Our store will launch initially with approximately 500 products, and we are excited about the possibilities this will bring. We will, of course, capitalize on our digital signage network to promote. Moving to slide 40. When we listed in 2019, we have always explained that Viva operated in four segments of the market, being boutiques, express, standard, and big box. What we are seeing in the market is a new segment called HVLP, High Value, Low Price. This is essentially the Planet Fitness model from the U.S. entering the market in Australia. So today, we are announcing the launch of another segment we are entering, the HVLP space, and as also mentioned earlier, the online supplements business. This is truly a diverse business with multiple income streams. Moving to slide 41. HVLP is still in its infancy in Australia. There are only limited opportunities, as the clubs are predominantly big box, low cost, low service, low touch point. Viva has secured its first location in Western Australia, and works have commenced on the fit-out. We expect to open in early 2025 calendar year. Our HVLP offering will operate under a different brand, known as Zoo Fitness. The likely price point will be between AUD 8 and AUD 9 per week. We'll utilize existing Hub, Viva Pay, and bespoke access control systems, and most importantly, we'll target members 25 years of age and under, based on our research. Noting that our current Club Lime membership base averages 31 years of age, we are introducing and making more affordable to a new category of member. Viva believes it has some strengths in this market, as listed on the right-hand side, and sees the opportunity for approximately 40-50 sites in Australia. We are also reviewing our portfolio to see if any Club Lime locations will be better suited to the Zoo Fitness model moving forward. Moving to slide 42. An example of the external branding for Zoo Fitness clubs. You can see the price point at the top and how it differentiates itself from other brands. Do we think it will cannibalize Club Lime? Not really, as they will offer different markets in different locations, and if people want to save money, they will likely have to travel to one, as this model does not suit a small footprint. It's the difference between a yield play and a volume play. Moving to slide 43. Again, an example of the signage and advertising we have designed. Slide 44 and 45 contain a bit more images. This now concludes the presentation part, and we can enter the Q&A shortly. I want to thank everyone for their time today, to listen to what we had to say, to, for your support in our business and for the belief in what we are building. The results speak for themselves, and we expect them to continue to grow and improve. At Viva Leisure, we are committed to the lifestyle industry, delivering authentic healthcare through a distinctive and diversified recurring revenue model. Our mission is to empower individuals with the resources to achieve and sustain good health, because we believe everyone aspires to be healthy. What distinguishes us is our agility, our ability to adapt swiftly, and our comprehensive control over the entire ecosystem and experience. This is who we are. I would now like to open up for any questions. Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star and two. If you are on a speakerphone, please pick up your handset before asking your question. Your first question today comes from Max Moser-Finch at Barrenjoey. Please go ahead. Hey, guys. Great result. Lots of exciting stuff with Zoo Fitness. Sorry to ask a boring question to start off, but can I just have some color on FY 25 CapEx, specifically tech CapEx, with Viva Pay completed, and also site upgrade CapEx, given the step down in refurbishments? Hi, Max, it's Kym here. Yeah, so moving forward, we, we still anticipate that the tech spend will be in line with about 3% of revenue. That's consistent with what we've done for the last couple of years. Harry will be able to talk through the hundreds of products that he continues to want to develop through the tech space, but the aim is still to do about 3% of revenue in tech spend. As far as the refurb sites are concerned, as we mentioned, we spent AUD 7.3 million this year, and that was across 27 sites. Part of that was debt-funded, so the cash outflows wasn't that significant. But, you know, moving forward for FY 25, as Harry mentioned, we look, we've identified a few more, but it is literally only a handful of, like, five or six different sites which we think we can benefit from. That includes, you know, potentially merging some of the HIIT Republic sites, as we did this year, so they're, they're not significant upgrades. There are a couple of significant ones, but it's not gonna be anything like the spend in FY 24. ... Thanks for that. That provides a lot of color. Can I also ask about sort of the Viva Pass and the pricing point on that, and also the timing within 2H 2025? Yeah, so the pricing model, there's a couple of different pricing models. We're looking at that. We don't really want to talk about that too much at the moment and let that leak out into the market, but it'll either be a recurring revenue model or a token-type model. So you secure tokens because the clubs that join that network will all be different price points. So we're trying to build a flexible model so that, you know, you go to a premium club, it might be five tokens versus a basic club, which might be two tokens type approach. So that's what the Viva Pass model is looking for. As mentioned in my presentation, we have all the tech, it's all built. It's basically just putting it together in another fashion. So we have the access control, we have the apps, you know, we have the Hub, which controls the memberships. We have the billing part of it, so we're just putting all that together. I would expect it would be an early start, so 2-3 for FY 2025 launch. Initially, we'll launch with just corporate clubs, so not bringing any franchisees on board and then extend it from there. Okay, thanks for that. I'll open up to someone else to answer, ask some questions. Thanks. Thank you. Once again, if you would like to ask a question, please register by pressing star, then one on your phone. Your next question comes from Nick McGarrigle at Barrenjoey. Please go ahead. Good day, guys. Barrenjoey is just dominating question time. I just wanted to ask about the... So the fourth quarter EBITDA of AUD 9.8 million, obviously that annualizes to close to AUD 40 million. Can you talk about anything, initiatives, maybe some of the acquisitions that kicked off during the quarter and you didn't get it all post the quarter, that you, you kind of- we should add to that annualized rate when we think about what the business is just naturally running at, in terms of kind of spot rates? So the acquisitions recently and Viva Pay, if that was a full quarter's benefit in the fourth quarter. Just wanted some color on that. Yeah. Hi, Nick, it's Kym here. So, so in relation to Viva Pay, as we mentioned in, I think it's one of the bridge slides for revenue, it contributed about AUD 700,000 for the quarter, and well, for the full financial year, but it only launched in May, so it's effectively for the quarter. What we're anticipating from that is about AUD 4 million for the year, so AUD 350,000 a month. So it's about, you know, two-thirds of that was accounted for in that quarter. So I guess you could extrapolate that onto a full year basis on, you know, the fact it being 66%. As far as acquisitions are concerned, we had a couple of acquisitions already mapped out into the forecast that when we put the guidance out, but one of those was delayed into July, so it wasn't fully included in the June result. As far as the WA acquisitions, which we recently completed, none of those were contemplated in that June result, so they're all just straight add-ons for FY 25. Can you... I mean, if you add all those things up, is it kind of in the order of AUD 4 million-AUD 5 million of additional benefit with the acquisitions and the Viva Pay run rate? Yeah, sure. I guess, but you, you also need to take into consideration July 1. You know, we've got all of our employees across awards that get wage increases. We've got, you know, obviously costs in positions coming through with inflation pretty much starting on July 1. So, you know, while the margin for Q4 is significant and certainly the run rating EBITDA, we always experience kind of that seasonal dip across July and August until we kick in into December. But yes, as far as getting a pro forma result, those ones can be added straight on. Okay, cool. In terms of price rises across the network, where are you sitting at the moment or what's the intention? Usually, there's something to help offset that kind of natural wage pressure. Is that still on the cards for, you know, this financial year earlier? Yeah, so the national wage case came down, and I think we implemented, I think it was 3.75, or four, sorry, 4% across the entire base, plus there's an extra 0.5% in super, which is now available to all employees. So that all occurred from 1 July, and that's across, you know, 1,200 out of the 1,700 or 1,800 member employees that we've got. So it's fairly significant in number of employees, but in dollar terms, it's not as significant as the whole member base because those non-award employees didn't get impacted by the same increases. As far as general price increases, we still see those running, you know, on our leases in particular, which is, you know, a AUD 43 million expense for the year in rent payments. We still see that sitting at around 4%. As far as mitigating that through fee increases, but, you know, as we've mentioned previously, we typically look at groups of members that we could apply fee increases to, and those in particular are ones that are well below retail rates that we've got advertised for each of the clubs, or alternatively, we've just done a refurb of those particular sites. So, you know, it's therefore worth more to the member, and therefore we impose a fee increase. But we haven't identified any at this point, apart from kind of penciled into a spreadsheet as to where we might look at going next. But we just want to see how, you know, members continue to increase into Christmas before imposing any further fee increases to cover that off.... So with the member growth that we're experiencing, we had very good success across July and August, as you've seen. Part of that, most of that was acquisitions, but we also had good organic growth. So at the moment, we think the improvements in utilization will cover off the costs, increases through inflation without having to increase fees. Okay, great. That's helpful to understand. Then you obviously raised a, a decent chunk of money. You've done some initial acquisitions, and you've upsized the debt facility. Can you just talk about the, the acquisition pipeline and kind of what some of those opportunities might look like in terms of potential, and size, and, and format? Yeah, that's why, hey, Nick, it's Harry. That's why we provided the competitive landscape slide. So you can see the opportunities are becoming less and less as we've, you know, made 95 or so acquisitions over the last 5 years. So there are some other players out in the market. They're not necessarily putting their hand up that they are an acquisition, but, you know, they know we are a willing buyer. In terms of Plus Fitness locations, these come to us all the time. You know, we've generally got one or two going on each month. So we'll continue to do those. We get first right of refusal if they meet our requirements. So we'll likely secure somewhere between 8 and 15 of those probably during the year, additional to grow on the 27 portfolio that we have already. But yeah, we wanted to complete the WA acquisitions, and now we're looking for more acquisitions in WA, but also in other states. But most likely they're gonna be single clubs or very small chains, two or three clubs. Okay. And then in terms of the Zoo concept, there's obviously a lot of big box operators out there already. Is the strategy on the getting to 50 of those? Can you give us, I guess, a sense on timeframe to get to 50, and what, how many... You know, is that more of a greenfield-led strategy, or do you think you can acquire some of those sites? Yeah, look, I think it's a greenfield strategy. It's like, when we launched HIIT Republic, we couldn't acquire sites and convert them to HIIT Republic. These are very custom, the way that they're designed is different to a Club Lime layout. You know, they're large format. They sometimes have separate rooms for premium access. They're very busy clubs. They're, you know, filled by younger people, and they've got to have appropriate rent, you know, for that size. You can't pay large rental on these, so they're generally a bit further out. The WA market makes a lot of sense. There's a lot of bulky goods sites over there, big sites, and that's where we're opening the first one. But we may see an acquisition and look to convert. We're actually analyzing now some of the acquisitions we did in WA recently. The three sites, some of those sites may be suitable for a Zoo, but we would just want to get the first concept one opened and performing well, and then we'll provide more guidance on that. In instances where you convert a Club Lime to a Zoo, is that with a view that you can grow the membership base materially, and it kind of offsets the yield reduction? Or is the view that you don't change the yield on those retrofitted sites? No, you'd have to change the yield. So it'll be changing from a yield to a volume play in that market, if we look to convert. So we would just be looking at individual sites. We haven't identified any at the moment that would convert, but that is something that we constantly monitor and decide from there. All right, great. Thanks for taking those questions. I'll jump back in the queue. Thanks, Nick. Thank you. Your next question comes from Dan Stein at OC Funds. Please go ahead. Hi, guys. Can I just ask about that fourth quarter run rate? So the 39, we should also add roughly AUD 3 million for Viva Pay, plus also AUD 3 million for the WA acquisitions. Is that fair? Yeah. So on the, I mean, the WA acquisitions, yes, but, you know, as I said, they only completed in, you know, July and first week of August, so it's not a full 12-month run rate in FY 2025. As far as Viva Pay, you know, in that bridge slide, Dan, we had AUD 700 thousand was already contributed for Viva Pay in the back quarter, and we're expecting about AUD 1 million for the quarter. So it's only AUD 300 thousand shy of the full quarterly run rate. So, you know, don't necessarily add AUD 3 million or AUD 4 million moving forward on that basis. It's more a pro rata of, you know, seven on 10. Yep. Okay, thanks. And, can you also give us a steer just on maintenance CapEx, and furthermore, the kind of greenfield sort of sites that you're looking at and potential... And, and CapEx for those as well, please? Yeah, I'll go on the maintenance CapEx, Dan, and then I'll let Harry do the greenfield sites. So as far as maintenance CapEx, as you know, and we've published for the last few halves, that we're aiming for about 3% of total revenue to go into maintenance CapEx, and that seems to be the fair measure. Although we did under, sorry, outperform that in FY 2024, coming in slightly under that. You know, and that's on the basis that, you know, we're continually expanding, and that seems to be working out as to roughly what we're required to maintain our clubs across the network. So, I would expect that we're talking about the same sort of numbers moving forward. As far as greenfield site rollouts, I'll hand to Harry. Hey, Dan. Yeah, greenfield site rollout. So we've secured somewhere around 17 new sites at the moment, including that one that we mentioned before for Zoo Fitness. They're all at different stages. Some of them are not yet constructed, and some of them are in DA, and some of them are in design. I expect probably four or five of those to open this year. Some of them are replacement sites, so sites we're moving at the end of the lease to a new premises. So a larger premise, for example. So there won't necessarily be additional club numbers, but they're new sites. In terms of the dollars, is that the question you're asking? Yes, please. Yep, I know there's... you know, timing's probably a bit uncertain given I imagine council is very difficult to get the DA's across the line, but should we broadly expect to be similar to 24? I missed that bit. What was that? Oh, I'm just trying to get a sense. I understand it's a bit uncertain, but do you think it'll be materially different to FY 2024? No, I don't think so. I don't think so. We'll be materially different to FY 2024 in regards to that. Except, sorry, Dan, just on, on that, obviously, we, we did a lot towards the refurb program in FY 2024 and slowed down the greenfield sites, and as Harry mentioned, there's a, a lot more in the pipeline than we probably had 12 months ago. So from that perspective, it's probably more a diversion away from, you know, the refurb program into greenfield sites. You know, so on, on average, we would look at probably across this year doing at least one a month. They may come in bunches and not necessarily straight line like that, but, you know, we, we would expect to do probably somewhere around 12-14 sites across the, the 12-month period. Yep. Okay, no, I understand. And then kind of putting it all together in terms of the maintenance CapEx, the growth CapEx, tech spend, like you guys should be looking at, I would have thought, a reasonable uplift in free cash flow this year, as you get payoff from these WA acquisitions, and these, you know, perhaps a little bit less investment in CapEx. Like, is that fair? Yeah, fair to say, and in particular, with the new facilities and the way that the repayment structure works within those new facilities by removing, you know, the, I guess, the guaranteed quarterly principal repayments on the senior debt, that's now removed and replaced by a cash sweep facility. So we would also expect to get more generous free cash flow out of those facilities. And then so given that, like, how do you guys think about capital allocation? And, you know, sounds like there's potentially still some acquisitions around, but, you know, broadly speaking, in terms of this additional free cash flow that should be coming through the business, how's the board kind of framing the uses for this cash? Yeah, that's the one that we have all the time. We haven't obviously put a number on it other than call it significant because it is a variable in terms of, you know, we might do an acquisition for, you know, AUD 2 million, which is our sweet spot, and we might use cash if we've got at bank rather than use debt for that, and keep debt for larger acquisitions, for example. So we just want to see how the year progresses rather than us putting a number on it. Other than to say, you know, we spent nearly AUD 15 million on principal repayments last year, we don't expect it to be anywhere near that this year, so there will be additional cash. The board is obviously starting to think about dividends. You know, we did release that dividend, DRP plan recently, to put on the radar. It was a little bit premature to issue a dividend this year, but, you know, all those things are going through our head because we're at a scale now that, you know, we are essentially self-funding, other than large acquisitions, and the new facilities will provide us with appropriate, you know, additional free cash. Thanks. Ta. Thank you. Once again, if you would like to ask a question, please register by pressing star then one on your phone. Your next question comes from James Bissonnette at Unified Capital Partners. Please go ahead. Hi, Harry. Hi, Kym. Congrats on the results. Just one from me. Just on the 3,000 member adds at own locations in the first quarter of 2025, that excludes the WA acquisitions. I guess, how much of this was organic versus acquired is the first part of my question, and then also just getting a read on the broader overall environment, what are you seeing in terms of churn on member adds as well? Thank you. Thanks, James. That's two questions, but that's fine. Kym mentioned there was one delayed acquisition. It was just over 1,000 members for that acquisition, so the rest were organic. There was an acquisition in Victoria of an independent. In terms of churn, we're not seeing any real change in churn. What we've said previously still stands in that it's more marketing dollars to secure, so cost of acquisition is higher than it was, say, you know, two years ago. You know, the cost of Google Ads and Facebook ads, there's more people competing, so the price per ad goes up. So that's what we're seeing there. We think some of our tech initiatives, especially our family memberships, and the way we're designing those, are gonna assist with churn. Sounds very weird, but if you think about it, if I've got a membership, and I've got, you know, two of my children or my partner on that membership, and I don't use it, I'm not gonna cancel that family membership because my kids are using it. So we think that will assist. And obviously, they'll come on board at a slightly discounted rate, but you're re-achieving a higher, higher yield across those, those members. So we're pretty excited about that, and how we operate is a very streamlined operation, and we've got some other tech initiatives that we will launch probably in the next fortnight that make that even simpler for existing members to convert their membership and add members on. So yeah, that's where we see churn. Great, that makes sense. I did say I'd ask one, and I asked two. I might, I might just ask one more. Just on Supps Society as well, can you just give us some more detail around, I guess, potential margin, firstly, and I guess any expectations? It's obviously early days in pre-launch, but I guess what can we expect out of that? How material could it be? Thank you. Yeah, it's an interesting business 'cause we spent a lot of time looking at it. We also looked at potential any acquisitions, you know, to start that off, but we decided to go ourselves, but not in, you know, by setting up warehouses and having AUD millions worth of stock. We got a relationship with a large wholesaler. Average product margin is, sits somewhere between 40%-45%. That's the average on that whole product line that we've put in there. The largest expense these businesses have, as I mentioned, is marketing. I mean, you know, you look at them, they're, they've got to market on social media. They've got to, you know, digital advertising. They've got to reach the member, or they've got to have physical stores like some of them do. We have all that, so we have 400,000 members we can market to for near nothing. So when we remove that expense out of it, we think it's significant. So it will take some time for people to change their buying habits, but you know, the products, they're brand name products, so people will see our price point, you know, get the discount applies. And then we've got other initiatives in the future, things like loyalty rewards for being members, you know, where you might get credits. You'll be able to use those against, you know, the supplement store and things like your direct debit membership will give you other benefits along with that store. And then we can also do cross promotions. You know, you buy this promotion, you get, you know, a seven day flex pass for access to Club Lime or one of the Plus Fitnesses or something. So we've got that flexibility, so we're pretty excited about that. Thank you. We do have another question from James Wang at Citi. Please go ahead. Hey, morning, guys. Harry, Tim. Just to follow up on James' question on Supps Society, is that something that competitors have done, or is that something completely new, and you guys are the first ones to do this? Look, there are competitors out there that sell supplements in their health clubs. Our plan—We have some health clubs that we've acquired over time that we do actually sell supplements in. We're not looking at this stage to put supplements and hold significant amounts of stock in clubs and do things like that, you know, and reconfigure clubs to be retail Hubs. We're looking just to do it online and promote, you know, with the technology that we've got, i.e., the member app that people access every single time to get access to the club, you know, and pop up an offer in there and see things like that. So, I don't think it's unique in that we're the only gym business that's got supplements. We do know a lot of the brands that are focused on what we would call, say, bodybuilding and stuff, they sell significant amount of supplements. You know, there's clubs that we've seen data on that are doing, you know, AUD 50,000 a month in in-store supplements. You know, at a 40%-50% margin, that's not too bad. So, again, we're not providing any numbers. We're launching this. It's low cost. It's ready to go. And it's... We think it's low risk with significant upside. Great, thank you. Thank you. That concludes our question and answer session. I'd like to hand back now for some closing remarks. All right. Thanks, everyone, for being on the call and listening to our presentation today. Again, Tim and I are available whenever required, if anyone wants a one-on-one, and then we've got some group calls organized with some of our friendly brokers throughout the next few days as well. But please reach out if you have any other questions, and thanks for your time today. Thank you. That concludes our conference for today. Thank you for participating. You may now disconnect.