Good day, and thank you for standing by. Welcome to today's IWG Q1 Trading Update conference call. At this time, all participants are in a listen-only mode. I must advise you that this conference is being recorded today on Tuesday, the 26th of April, 2022. I'll now like to turn the conference over to your speaker today, Mark Dixon. Please go ahead. Thank you, operator, and good morning, everyone, and welcome to today's call on our first quarter trading update. I'm joined on the call today by Glyn Hughes, the Group Chief Financial Officer, and we'll take questions at the end of this call. We announced just over a month ago that we ended 2021 strongly, and this has provided a great start for us in 2022, with the momentum we saw last year continuing into this year with strong revenue growth, as you can see we're printing here. System-wide revenue is up over 18% with the net revenues, that is the centers, the revenues excluding closures up 23% at actual currency and 22.5 constant. So a very good performance in the first quarter. As you know, revenue driven by three things, occupancy, price, and then service revenues. These numbers that we're printing this morning are a result of all three coming through now. Occupancy continued to improve through the first quarter with very strong positive trends in pricing. You know, for the first time in Q1, we saw the embedded price picking up every month. You know, that sort of continued to date. Embedded price is the key measure. Although pricing of sales and renewals was strong at the end of last year, it really only started to impact the revenues during 2022. We're not there yet on the embedded price. We're still only 90% of the pre-pandemic levels, but we are making progress, and that is coming back month-on-month. Now, bearing in mind that we're in an inflationary economy, we'll have to go past getting back to pre-pandemic levels, so we need to get back to 100% and then get to 110, 115% of pre-pandemic. We expect to be able to do that. It's a timing issue. It just takes time. Every month, we need to doggedly move renewal and new price levels up. That is happening. You know, the revenue increases will continue throughout the year. Really good news on both occupancy and price. Now joined, albeit with the expected lag we talked about by growth in revenue on services. This is happening across multiple service lines. Really for the first time, we can report that all the service lines are now moving in the right direction. Meeting rooms are well up. Virtual office has been good throughout, and membership, because these benefit from people working from home or working hybrid. We're seeing other F&B and parking revenues coming up. For us, that's very important. These are high-margin revenue contributors, so we're very pleased to see that they are moving in the right direction. Still not back to pre-pandemic or above, but certainly moving in the right direction. We expect that to continue as we move through the year. Costs, a few minutes here, a few lines on cost. We've made substantial progress, as we've described before, in reducing costs. We are seeing higher inflationary pressures across some of our cost categories, and this is going to present us with some headwind during 2022. It will pass through into pricing, but it's the timing difference that will give us some headwind during the course of this year. We're confident we can pass through these increased costs over time to customers in higher price. On the market itself, more and more companies globally are embracing hybrid working and the uncertain situation, let's say economically, that is, you know, the market we're in during 2022, is helping that. It's pushing companies to make earlier decisions about the move to hybrid. They already know it's what their people want, and now they're accelerating things because of the cost benefits. A lot of companies are under pressure due to inflation and possibly impacts they're getting on top line as well, and so they're looking for cost savings. Hybrid presents a really great opportunity to change the way they work and lower costs, obtain better staff and so on, better team members. You know, we're uniquely placed to capitalize on these structural tailwinds that are growing. From a demand point of view, we've never been in a better place, and this is, you know, very positive as we come into 2022. Translating that into revenue, that's happening. We've added over 1,000 new enterprise customers. Remember, enterprise customers are people using us in a systematic way, not just individual large companies making one deal. These are over multiple sites. We've added 1,000, and we've had at least 1,000 who have substantially expanded their business with us during the same period. We're getting very good traction with companies that are moving to hybrid. Remember, the inertia, the reason they're not all changing immediately is because they all have commitments and leases elsewhere, and it takes time for them to get out of those commitments, and that slows down the conversion. It is picking up. All of that, very good news. I think the second good news that we have today is around our ability to grow our network in a capital-light way. We've made excellent progress in Q1. 78% of the locations were either franchised or partnered. We've got a really strong pipeline now of new openings that will come online during the course of this year and into next year. You know, this is really unprecedented. You'll see this story grow during the course of 2022, and you know, it's quite an exciting development. Again, we continue to move to our short-term goal of getting the mix by the end of the year to 50/50. In terms of partner, franchised, and company-owned units, we've got some activity here that will help on small MFAs, where we're in discussion on those. That's a master franchise agreement, mainly for smaller countries, but everything helps. Positive news. We are saying today that we're slightly higher on cost on the investment in people, and this is basically to move the growth faster in this capital-light area. It requires a full-on sales force globally, which we've been building, and we're slightly ahead on hiring. We're not hiring more people. We're slightly ahead of the curve on bringing people on. That just will increase the cost marginally this year. The deals we're doing, the management contracts we're taking on create very attractive repeat revenues, recurring benefits for years to come. These will be, we believe, excellent investments in terms of a return on any capital we invest this year. Please remember that the interest in hybrid is not just coming from corporate customers, it's coming from the property industry as well, who can see the market changing and are very open to partnering with us in order to participate in this new way that companies want to use real estate. It is by far the most exciting area of development that I've seen in the 30 years I've been doing the business, and it's. People are coming to us in unprecedented numbers. You know, it bodes well for the future. The Instant Group management team has made great progress. I mean, still very new, but they have already integrated some of our digital assets. They've also done two mergers in the very short time since we announced the deal, merging in Davinci, which is the leading global aggregator for virtual offices, and also merging in Coworker, which is the largest co-working aggregator globally. Two very positive deals, and they have a great pipeline of additional deals that will help build up that company. As we've said before, this is a company that's being prepared for a separate IPO within two years. Again, we're very happy with the start that the team have made there and you know, well set for the future. Very briefly on new center investments. Although we are doing a lot of management deals and a lot of franchising, there are still some centers we are investing in in certain markets. A much reduced CapEx on new centers at just under GBP 25 million, and this is lower than all previous years. It's you know, there'll be a lot less CapEx than in our pre-pandemic years as we move much more towards capital-light. Financial position a good one with net debt at GBP 764 million. This includes, of course, the financing related to Instant. It's, you know, just finally here, obviously an uncertain time and a time of change in many markets. We're calling out that even though the COVID seems to have passed, there are still lockdown restrictions in particular in place in cities rather than countries. You're all aware of what's happening in China. There are also varying degrees of restriction, whether that's vaccine requirements, mask requirements, and so on. These are lingering, you know, in various cities or countries around the world. That plus geopolitical uncertainty, that's there in the background. All of this creates some headwind, but I'm very pleased with our performance in the first quarter because in spite of that, we, you know, you can see here a very strong printing in terms of the revenue. It's there in the background, and we continue to remain, you know, cautious as to, you know, how this develops during the year. You know, just to be absolutely clear, it's there, and we continue to trade well in spite of this. In conclusion, we're making great progress against our strategic initiatives that we set out in the full year. We're looking forward with cautious optimism at the coming quarters. We're very clear that we are at this crossroads. More and more companies seek to push and develop hybrid working in their companies, and more and more property owners want to provide it. Our platform in between the two, whether that's with IWG or whether that's with Instant Offices, allows that transformation to take place. You know, very exciting time. With that, I'll pass back to the operator and open up the questions. Thank you. If you wish to ask a question, please press star and one on your telephone keypad and wait for the automated message advising your line is open. Please state your first and your last name before you ask your question. If you wish to cancel your request, please press star two. Once again, if you wish to ask a question, please press star and one on your telephone keypad. We'll now move to our first question. Please ask your question. Your line is now open. Good morning. Michael Donnelly from Investec. Can you hear me? Yes. Just two quick questions, Mark. First of all, on the Davinci and Coworker mergers, should we think about them as bringing incremental clients onto the new merged platform, or is it more a case of enhanced functionality for existing and future clients? Then the second question is, could you give us just a little bit more detail perhaps about the number and the type of people you're hiring to fulfill the strong demand? I think you said that it's sales, but if you could just give us a bit more color on how many of them and where they are. Let me do the second- what they're doing. Look, what we've got is an acceleration in the amount of work that needs to happen and to deliver the centers themselves. That's because we've got more take-up of partnering happening earlier. You know, it's good news, but it does take more people. More salespeople hired earlier is leading to more deals happening earlier, which we then have to set up. There is a mitigation in that the partnering deals do have an upfront cash contribution to us. Clearly afterwards there is a management fee. The management fee, it takes time to build, so you get a sort of lag in the middle. Because we're paid as a percentage of revenue, you know, and it takes time to build up that revenue. There's just a lag in the middle. Overall, it's a small impact on cost, but it's there. We're just calling that out. This is an investment. It's an investment in the future, and it's the same investment we talked about before. It's just happening a little more quickly. It's that all the things it involves additional people more than anything else. Understood, thanks. In terms then of moving to Davinci and to Coworker, the Instant management team's plan is to. You should imagine it like a menu of all the things that companies or partners may want in a hybrid work world. One of the things they want is a virtual office company. Davinci, as an example, is the leading virtual office company in the world. Merging that in gives them a new service that they can offer their operators. They're working with the world. They're aggregating for the operator world. This gives them an important new service that they can market. It will take time to build that up. Davinci is successful but relatively small on global terms. It is growing quickly, and it just gives them a whole new skill set, as does Coworker. There are more like this. They're just filling in the menu of the thing, the services they know that their partners or their customers want, and bringing in the right partner companies to do that. Got it. Thanks, Mark. Thank you. Morning. It's Dan Cowan from HSBC. I've got two questions, please. First one is how long would you expect it to take to pass through the cost inflation that you've called out this morning, please? I know that it takes time- Okay. Look, it's an excellent question. We're at about 90% of a pre-pandemic price today, and we're moving the price forward every month. And, you know, it's going to take us into the fourth quarter before we recover completely on price. That's how long it takes. By the fourth quarter, the way things are set at the moment, we'll be above. We'll start to go above the pre-pandemic price, and then we're into, you know, sort of making up for inflation. I would say by halfway through 2023, we will have covered the inflation as well. If the inflation stays, we, you know, we expect it to. There are movements in our business both ways. We can... Just for clarity, you know, although we're seeing inflation in heat, light, power, people, there is some inflation in rents, in particular in index-linked countries. We see some inflation in very suburban and regional locations, very small. In the larger cities, rents have started to decline, and we're adjusting for that. It's not a completely inflationary field. There will be an impact this year in higher costs. It's a small impact, just to be clear, but it will just slow us down slightly. You know, we'll make that back. In the end, we are a cost-plus business, so it all has to be passed through to the customer eventually. Got ya. The second question is just on EBITDA in Q1. What it can do is sort of- Sorry, what was that? I missed that. The question's on EBIT, EBITDA in Q1. Roughly where was that? Profitable, not profitable? Well, definitely. In Q1, definitely. Back in profit. I mean, EBITDA level you know, very strong and improve. You know, the additional revenue just, you know, pretty much not all of it. You've got, again, some higher inflationary pressure, but nearly all of it just drops straight through. Okay. Thank you, Mark. Thank you. We'll now move to our next question. Please go ahead. Your line is now open. Morning, all. Steve Woolf from Numis. A couple from me. First of all, can you give us the occupancy numbers for the pre-2020 estate? I know mature tends to be a rolling forecast, but it was that estate that you flagged at the full year results as an exit occupancy of 74.5%. I just wanted to see where we are with that. Secondly, in terms of the net debt number, just trying to check the bridge, if I can, during Q1, if net debt was GBP 764 million, has all of the financing of the GBP 270 million for The Instant Group gone in, so you're left with about GBP 500 million compared to GBP 400 million at the end of last year? Any bridge you can help with that. Onto those inflationary pressures, what level of inflation have you priced in, just so we can sort of have a view roughly as to where if that rises or comes back, during the year would be helpful to know. Glyn, occupancy on- Occupancy on the mature estate is 75%-76% on average for the quarter, but growing as we exit the quarter and come into Q2. That, Glyn, just to check, that's on the pre-2020 estate? Correct. Yeah. Okay, perfect. Not the number that was- Yes. In this one. Yeah. Perfect. That's great. That's one. Yeah. On net debt, you've got basically, it's chiefly working capital. Yeah, par for the course. We have a working capital outflow in Q1, which then reverses during the years. The net debt, the number that you quoted obviously incorporates the financing element, for instance, as you referenced. Yeah. That's perfect on that one. Thank you. Those inflationary pressures, what level have you know, broadly. I appreciate that's a broad brush number, but if you've got an idea of what we should be looking at in case the world changes one way or the other. Well, it's a marginal effect. You know, we're saying it's a marginal effect. I mean, we already knew there was inflation. It's just the inflation level is slightly higher than we originally. You know, we're calling it out that it could be an issue. You know, it's not necessarily an issue right today, but we're feeling that it could be an issue as we go through the year. Okay. No probs. Just one final one. Into the capital-light model that obviously has been sort of accelerated certainly the past couple of years, have you got an EBIT number in mind for the capital-light openings versus a traditional office opening? I'm just trying to get a feel for where the shift is. We've sort of called that out in the strategic review, so let me have a go at answering that. I mean, this is. If you look at it just on average broadly, you know, what we're saying is over the next two years, we'd expect to open around 2,000 centers, and that they would be performing fully. 'Cause you make money from the revenue that those centers produce, not by opening them. You've got to actually build the revenue. But by 2024, you would expect that these would be contributing system-wide revenue of, again, around GBP 2 billion in system-wide revenue and would be producing a contribution in the 200 range. That's contribution. That's not profit, because you have some additional overhead. Yeah. You know, these are centers that have no investment, so they are purely management deals. Perfect. That's great. Thanks, Mark. That becomes a higher proportion of what you're doing. You'll see we're still investing in a very, very selected small groups of centers. We're doing a lot of variable rent deals, which it's a sort of synthetic lease, but with variable rent. It has a small amount of IFRS 16 rent. Then you've got your pure partnership deals and your pure franchise deals, which are the ones I'm discussing there. The benefits you'll see also in 2023, the ones we open this year, you'll see a benefit in 2023. The full benefit, you know, if you know, that. It's just going back to the strategic review numbers I put forward. It's, you know, the full benefit's in 2024, but that's just because you've got more openings. The openings even this year will be fairly significant with the impacts coming some this year and quite a lot in 2023 as well. That's great, Mark. Thank you. Thank you, Steve. We'll now move to our next question. Please go ahead. Your line is now open. Morning, guys. Callum Simpson from Berenberg. Thanks for calling this morning. Can I just please ask three questions? Firstly, just to follow up on some of the last questions, could you please explain how much of your own rental bill is on inflation-linked mechanisms? Or more broadly, what we should expect the cost of your own leases to move up by this year. Secondly, on the target you've talked about now a couple of times to get to a 50/50 split of franchise and partnered sites by the end of the year, would you mind giving us some more color on exactly how you expect this to be achieved? i.e., should we assume that this target implies that you think significant master franchising deals will be completed by the end of the year? Thirdly, it looks like we've seen a slight slowdown in the occupancy growth in Q1 compared to what we saw in Q3 and Q4 last year. Just wanted to check this and see if there was any kind of explanation given, and if you think that growth is gonna pick up again, through the end of the year. Thank you. Thank you. Deal with the last one first. You're quite right. There's a slight change in occupancy growth, but it's a blip. It's not. You know, that. It's because of price. You've got higher price increases and slight reduction in occupancy growth. The occupancy growth has picked up again since then. That is well-spotted, but it's more of a blip. It doesn't affect revenue because price picks up the gap. That's occupancy. In terms of inflation of rents, as I mentioned earlier. This is a moving feast, and you've got rents going down, very clearly going down, and you've got inflation-linked rents. That doesn't all come through sort of with night following day. There's all sorts of variations. It's less than a third of the estate that is inflation-linked. In fact, those tend to be in the more developed countries. The U.S. importantly is not inflation-linked, neither is the U.K., so they're set rents. So they don't go up. The inflation is already in. Those are the two biggest markets that were helped by inflation. But overall, you know, the rental, you know, we've budgeted for small rental average increases, but, you know, it. That's what we expect. It's not really from there because the rents are much more fixed and there's. It's more the on costs, heat, light, power, people, and you know, basically maintenance CapEx. These are the things that are much more in the short-term inflation zone. How do we get to 50/50, Callum? It's a combination of more partnering and franchise new deals. I laid out the full year that we expected to do about GBP 50 million. It's an estimate, but GBP 50 million of MFA sales. There's no major ones in there, but it's a combination of smaller ones. It's a combination of those. More franchise, more partnering, a few MFAs. We're already at 34%, so it just starts to close down. Just to be clear, I said the target is to get close to 50/50. We may not make the 50/50, but we will get close. Got it. Thanks much. Really helpful. Okay. We now move to our next question. Please go ahead. Your line is now open. Hi there, it's Sam Dindol from Stifel. A couple of questions from me. Firstly, I think you said embedded price is 10% below pre-pandemic levels. Could you give a similar figure for service revenue in terms of what's the percentage below pre-pandemic? And would it be fair to assume that gets back to pre-pandemic levels also in Q4, like pricing? And then secondly, on the Davinci and Coworker deals for the Instant Group, are you able to say what the consideration was for those deals? And should we expect that to change sort of the pro forma EBITDA for the Instant Group? I think you previously said GBP 50 million-GBP 60 million was achievable in 2022. Thank you. Right. First of all, service. We're missing about a third of the revenue, and the revenue pre-pandemic was 28% of the overall revenue. A little over 9% of revenue missing there. Now, the key thing, Sam, is there's revenue and revenue. What we're expecting to come back now is some of the higher margin revenue, things like coffee, and, you know, actually revenues from people, more people being in the buildings and consuming. You know, that is coming back steadily. You know, as we go through the year, that's really the last foot to drop, if you like, in terms of the revenue recovery. We're, you know, we're still about a third short on that. Sorry, what was your second question? Just around the Instant Group acquisitions, can you give any color on consideration? Oh, yes. Now, on that, there's no impact in terms of because as you know, you get a dilution effect. The management team there are growing it is by merging in rather than spending cash. You know, everyone remains incentivized, and you sort of have a group of companies that head towards an IPO exit. There's no real movement in the overall impact to our shareholders, that is IWG shareholders, in terms of our EBITDA and earnings. That make sense? Just to follow up. You had 85% of the combination initially. Yeah. As we merge more things in. Yeah. Our percentage will reduce. Of course, we have an interest. We economically benefit from anything that is merged in, but it does dilute. If we bring in 100% of something, we're not diluted by that 100%. It's 100% less something because we're providing the vehicle. Got it. That's very helpful. Yeah. You will see more of these incoming mergers, sometimes with a small amount of cash, but mostly they are mergers. So that in the same way as we did the deal originally with Instant, it's keeping management teams in these different segment businesses fully incentivized towards the IPO. You know, you're not letting people cash out early on. Brilliant. Thank you very much. Now move to our next question. Your line is now open. Hi, good morning. It's Andy Grobler from Credit Suisse. Just a couple if I may, Mark. Just following on from the previous question about merging in Davinci and Coworker. What are the plans over the next 18 months or so in terms of where do you think through these mergers you can get the Instant Group EBITDA to, and what kind of proportion of that holding will IWG shareholders have? And then secondly, again, on kind of the strategic plan, you've talked about the 2,000 franchised openings over the next couple of years. Having opened about 28 in Q1, how do you get that acceleration? 'Cause that's to go from 28 to a run rate to 250 a quarter is a big jump. Where's that going to come from? Right. Deal with the second one first. It's coming from having more people. Basically people selling. You have more people selling. Those people have only come online. There were a few at the end of last year, more in Q1. There'll be more in Q2, that we're clear that those deals are coming in. It takes time for them to open. There's quite a few deals that have already been signed that will open later on in the year. That will, you know, that pipeline is starting to convert well. We're getting multiple. This is the first deals, then you get multiple deals. Just to give you an example, on this management contract arrangement, the first centers are only opening right now. There's a time lag for them to be built and so on. It's still much quicker than franchising, even quicker than doing our own, but it takes time for it to roll in. That will build quarter on quarter, and we're very clear about that. You've got to put the infrastructure in place to do it, and that's why we're saying there's gonna be a little bit earlier cost. The pipeline is very, very strong, particularly in the United States, which is our key market. Just on that, could I ask in terms of incentive schemes for these people, is that 2000 kind of a firm fixed target where people are gonna get paid if they achieve it or is it? Yeah. Should we see it as a kind of? Absolutely. So, so the, the two thousand- It's not a pie-in-the-sky target at all. Okay. You know, it's a failure if we don't reach that because of the resources we're putting into it. You know, you want to get that outcome. As I said to you, it's a simple numbers game, as I explained before. You know, we have a certain number of deals that we expect each person to do. The early people are looking like they're gonna do that, but there's not enough of them to sort of create a you know, a solid model. I'm clear, having an understanding of sales and what these people are doing, and we've got a very strong management team around it that you know, we're in a very good position to achieve this. As I said in earlier comments, the property industry itself, that is investors, people that own buildings, are now becoming fully awake to the fact that their market's changed. They need to be providing hybrid, and they've got to be doing that on a platform. We're very clear that that's going to be, that's only gonna get stronger, and so on. We would not be investing in the people and the backup were we not super clear that we can use this method to accelerate the already. Franchising was good. It just takes a long time for the franchisees to find centers to open. The fastest ones to open were always the people that own the property, and we've just really cut the middleman, if you like, out and just said, "Let's just go direct to property owners and do it." That is proving to be the right thing to do. It's that plus a few of our own centers, and there will be some M&A as we go through this year because there's still some distress out there in the market. Okay. Thank you for that. Instant plans. And on the- I mean, look, I'm reluctant to be put on the spot here, Andy, so you know, again. Overall, if you remember what my words were on previous calls, I said, "Look, the target here is for it to be worth GBP 1-GBP 3 to IWG shareholders." Now, just park that. How do we get there? We get there by building more things onto the already strong platform that Instant Offices have. They're already market leader, but they need more attachments. You sort of create a bigger and bigger boat so that you can go to, you know, you do your IPO with more substantial revenue and more substantial EBITDA. You know, we think that the revenues need to be in excess of GBP 1 billion. The EBITDA needs to be well in excess of 100. You know, that's the sort of minimum. The 2x of both of those would be even better. It's that plus growth rates, plus being a purely digital play. You just don't have the encumbrance of leases and IFRS 16, et cetera, and there's a long runway in front of you for digital expansion. That's what will give us the right multiple or an attractive multiple. It's a combination of those things. The team, they're very focused on doing it. I know those were kind of example numbers, so excuse me if I'm a bit picky, but those numbers suggest an EBITDA margin of kind of 10%, and Instant was in the high double digits. Is it that we are assuming you were adding- No. Lower margin stuff to that? That's just because they're in development. No. Okay. All of the things they're doing essentially are, you know, the margins are in the 40%-50% range. It's just whether or not you've actually 'cause you're in growth. That assumes all the cost of growth as well. But your sort of margins are in the 40%-50% range. Some are 60%. That's the digital margin range, as you know. Okay. Brilliant. Thank you very much. Yep. We'll now move to our next question. Please go ahead. Your line is now open. Mark. Hi, it's Andy Brough at Schroders. Just on the debt. Is debt peaked for the year now? I would say, yeah. Good question. Glyn? Yeah. Sorry, the question was has debt peaked for the year? Has it peaked? It must be because. Yeah. -we're making- Yeah. You know, now solid EBITDA, so you basically unless we start to spend more money, you're absolutely. You've got the We're forecasting a gradual from here on in reduction in net debt for the remainder of the year. Yeah. Yeah. Okay. Thanks. Final reminder. To ask a question, please press star and one on your telephone keypad. We'll now move to our next- Hi. It's Steve from Numis again. Just following up on Andy's question about the opening of the 2,000 over the next two years. Mm-hmm. You mentioned there, the sales team development managers are incentivized. What are they incentivized on? Is it just purely to get to that 2,000? No. Is it a return, cash, you know, you know, margin, other bases as well, just to get some context? They are incentivized on a variety of things, Steve. If you imagine what they're getting is how we make money is on revenue, and we get a percentage of revenue. There's a lot of difference between a small center and a large center. The, you know, the incentives are based around the number of square meters, square feet you bring in and what the gross revenue will be from those. Okay. All these, even though they're management deals, they still go through the investment committee. You know, our key issue here is not to waste time on things that might not perform, have a risk of not performing for the investor, for the owner, because we know from experience that these can be very time-consuming, so it's better not to do them. They go through investment committee. The sales guys and the whole team are incentivized on the number of sq uare meters they bring in and the number of deals. Because there is an upfront payment on deals as well, which, you know, goes some way towards covering the short-term costs. It varies. You know, a center in India has a completely different profile to a center down in the U.S. We have quite a lot of openings coming in India from this, which is good. We grow India capital-light. It's a huge market, and that is the way you'd want to do it because, you know, it you know. We don't want to be putting capital into India, for example, but we do want to expand it. There are many moving parts, but essentially the guys are paid on the number of square meters and of course on the success of those units, you know, in terms of their revenue production. Okay, thanks. Have you got a rough idea of, or to disclose how many sort of people you have been putting it in throughout the year is the target? Or you mentioned you'd gone sort of earlier than expected with some of those investments. Is there an idea of how large that corporate development team is now? It's the the new people. You know, we're having to add more support people to support getting them open. That's two parts to it. Okay. You're talking about a sort of 300 people. Some of them are in our service center. The sales people are much more expensive than support people, and it's just an acceleration. It just comes earlier in the year. That's all. These are small single GBP millions of additional cost. We're just calling it out. Got you. Okay. Yeah. That's 300 people is the existing size of the team effectively? No, not now. That's- It will be that shortly. Yeah. Okay. Gotcha. That's the end game this year. Okay. Yeah. Perfect. Thank you. It just coming where we would've expected to have done that and sort of be there by Q4, we're gonna be there by the end of Q2. It just, you know, you just get more costs in this year. But it's more cost this year because we've got a lot more centers coming in, which in turn is, you know, it's good news. You know, remember the winner in this business, you know, it's not. It's the one that's got the most coverage. You need everything else of course, but coverage trumps everything. This is, you know, McDonald's, any other fast food company, they win through coverage. You've gotta have the right products, but it's coverage. It doesn't matter what you do, if you're not open in that market, you're not gonna take any money. People want to work quite literally from everywhere today. That's great. Thank you, Mark. Hello. Our next question. Please go ahead. Your line is now open. Hi, Mark. It's Andy again. Sorry to come back to this. Just so I'm clear. In these couple thousand centers you're Yeah. You're looking to open, how are they split between kind of franchise and managed? Just from a financial perspective, I know the system-wide revenues may be the same, but for the income accruing back to Okay. to IWG group, you know, how does that fee differ? 'Cause I always thought the managed were quite a lot lower than the franchise. No, opposite. Okay. The fees are higher on managed than franchise. Okay. Because we're managing. It's by definition a managed franchise. Okay? Right. Your fees would be kind of, well, 15% or so on a managed? Yeah. Managed. 15, 16. Okay. Yeah. Because we're fully managing those. We're providing sort of full service. This is to property owners who don't have any of the facilities to do it. If you look at the franchise partners, some of them do have. They've already got franchise businesses, so they'll have some of the people that they need already. You know, that and that's the difference. But you know the partnering, that is the managed franchise will far outweigh the franchising. Franchising's moving as before. It's still good, but the managed will is rapidly accelerating. The key difference is we're managing buildings that are already there. By definition, the owner already has the building, he already has the vacancy. He wants to get open as quickly as possible to convert his vacancy into revenue. It's completely much quicker to market and gives us what we need is A, the coverage, and B, the you know, the revenues and our part of that revenue. Okay. Excellent. Thank you. Okay. We have one more question. Please go ahead. Your line is now open. Oh, hello. It's Dan Cowan again from HSBC. Sorry, another follow-up on this 2000. You said, Mark, that managed centers will overtake or will outpace franchise- Yeah. in the next couple of years. How much quicker are they to generate revenue than franchise? What's the difference in Six months difference. Oh, sorry. Yeah. 18 months for a- No, it's not that. For a franchise? It doesn't take longer to fill them. Sorry. Let me just be very clear. It doesn't take any longer to fill them. A franchise center, whatever the deal, franchised, managed, our own center, doesn't. They all fill up at the same rate. If we sign up a franchisee and he doesn't have a building, it takes him time to find a building, and that's the time lag. You'll see, we've signed up a lot of franchise deals already. There's a big pipeline, but the frustration is it takes them quite a while to find the buildings. You know, by what we could see last year is by every building owner that we franchise, they open quickly. We started to focus more on doing that, and now we've moved the program to just almost purely focus on that because what counts for us is open centers, not signing the rights to centers. This accelerates the openings, therefore the revenue. Understood. That's very clear. Thank you. Yeah. Thank you. We have no further questions. Please continue. Okay. Well, thank you very much for those questions this morning. As usual, we'll be available for any follow-ups you may have. Thank you very much. Bye-bye. That concludes our conference call today. Thank you for participating. You may all disconnect.