Acquisition payback

Cost to acquire a member divided by the monthly gross-margin contribution that member generates. 5.8 months in Year 1 and 2.0 months by Year 5, on the margin actually earned.

Average tenure

The inverse of monthly churn, expressed in months. 22.2 months at the planned 4.5 per cent churn; 16.7 months at 6.0 per cent.

Class occupancy

Places taken divided by places offered, measured by time slot. 70 per cent on average, with demand concentrating into early morning and the six o’clock evening slot.

Cohort churn

Monthly churn split by the month a member joined. It separates a programming problem from an onboarding problem, which a blended churn figure conceals.

Consumer Protection Act

Under which fixed-term membership agreements are capped at 24 months and a member may cancel on 20 business days’ written notice, subject to a reasonable cancellation penalty.

Debit order failure

Collections presented and not recovered, provided at 3.8 per cent. Frequently a bank event rather than a cancellation, and recoverable if contacted quickly.

Lifetime value

Average revenue per member multiplied by the gross margin actually earned, divided by monthly churn. R3 552 in Year 1 rising to R19 933 by Year 5.

Monthly churn

The share of members leaving each month. The single number that decides this business: break-even sits at 5.07 per cent and one point is worth R1 764 194 of Year 5 EBITDA.

Net member movement

New members signed less members lost. By Year 5 the studio signs 27 a month and loses 27, so every new member replaces a departure.

Scheme rewards

Medical scheme wellness programmes — Discovery Vitality, Momentum Multiply, Sanlam Reality — offering qualifying members up to 75 per cent off national chain membership, taking an effective price to roughly R160 a month.

Section 20 limitation

The South African rule capping the set-off of assessed losses at the higher of R1 million or 80 per cent of taxable income in any year.

Timetable capacity

Weekly places offered multiplied by occupancy and divided by visits per member per week. 613 members at three studios, 70 per cent occupancy and 2.3 visits.