Cash conversion cycle

Debtor days plus inventory days less creditor days, adjusted for deferred revenue and deposits. A negative figure means the business is funded in part by its customers.

Cash-on-cash return

Annual contribution at stabilisation divided by net capital invested in a centre, before central overhead, depreciation, finance costs and tax.

Contribution

Revenue less all costs directly attributable to a centre, before central overhead, depreciation, finance costs and tax.

Discounted cash flow

A valuation method that discounts projected unlevered free cash flows and a terminal value at the weighted average cost of capital.

DSCR (debt service cover ratio)

EBITDA less taxation paid, divided by scheduled capital and interest payments in the period.

EBITDA

Earnings before interest, taxation, depreciation and amortisation.

Enterprise value

The value of the business irrespective of capital structure, calculated here as the exit multiple applied to FY2031 EBITDA.

Equity value

Enterprise value plus net cash, or less net debt.

ICR (interest cover ratio)

EBIT divided by net finance costs.

IRR (internal rate of return)

The discount rate at which the net present value of the investor cash flows equals zero, calculated on the actual timing of both equity tranches.

Margin of safety

The proportion by which revenue may fall from the projected level before EBITDA turns negative.

MOIC (multiple on invested capital)

Investor proceeds at exit divided by capital subscribed. Also referred to as the money multiple.

Net debt

Total interest-bearing debt less cash and cash equivalents. A negative figure denotes a net cash position.

NOPAT

Net operating profit after tax: EBIT less notional tax at the statutory rate.

ROIC (return on invested capital)

NOPAT divided by the sum of net property, plant and equipment and net trade working capital.

Terminal value

The value attributed to cash flows beyond the explicit projection period, calculated on a perpetuity growth basis.

Unlevered free cash flow

EBITDA less notional tax, working capital movement and capital expenditure, before financing cash flows.

WACC

Weighted average cost of capital: the blended after-tax cost of equity and debt at target gearing.

A-grade and P-grade office

South African office quality classifications. P-grade denotes the highest specification stock; A-grade the tier below.

Blended occupancy

Occupied desks as a proportion of total desk capacity across all products and centres.

Churn

The proportion of contracted desks lost in a twelve-month period through non-renewal or early termination.

Dedicated desk

An assigned workstation in a shared open area, contracted to a named individual.

Desk density

Net lettable area divided by desk capacity, inclusive of meeting rooms, breakout and circulation space.

Flexible membership

Non-assigned access to shared workspace, sold above nominal capacity on the expectation of partial attendance.

Lease arbitrage

The operating model in which a long lease is taken at a wholesale rate and resold in smaller units on shorter terms at a retail rate.

Net lettable area

The area on which rental is charged, excluding building common areas.

Node

A distinct commercial precinct within a metropolitan area, such as Rosebank, Sandton CBD or Waterfall City.

Oversell factor

The ratio of flexible memberships sold to nominal desk capacity allocated to flexible use.

Private suite

An enclosed, lockable office allocated exclusively to one member organisation.

Ramp

The period from opening to stabilised occupancy, assumed at thirteen months in this plan.

Rent cover

Centre revenue divided by centre rental cost; the clearest single test of whether a lease was well negotiated.

Rent-free period

A period at lease commencement during which no rental is payable, typically granted against tenant installation.

SAM

Serviceable available market: the portion of the total addressable market the Company could serve with its chosen product in its chosen geography.

SOM

Serviceable obtainable market: the portion of the serviceable available market the Company can realistically capture.

Stabilisation

The point at which a centre reaches its planned steady-state occupancy.

TAM

Total addressable market: total annual revenue available in the defined market.

Tenant installation allowance

A landlord contribution toward the cost of fitting out leased premises.

Virtual office

A registered business address and mail handling service, with optional meeting-room access, sold without dedicated workspace.

B-BBEE

Broad-Based Black Economic Empowerment

bp

Basis point; one hundredth of one percentage point

CAC

Customer acquisition cost

CAPEX

Capital expenditure

DFI

Development finance institution

FF&E

Furniture, fittings and equipment

FTE

Full-time equivalent

HVAC

Heating, ventilation and air conditioning

LTV

Lifetime value

POPIA

Protection of Personal Information Act 4 of 2013

Pty Ltd

Proprietary Limited

RCF

Revolving credit facility

SANS

South African National Standard

SAPOA

South African Property Owners Association

SME

Small and medium enterprise

UPS

Uninterruptible power supply

VLAN

Virtual local area network

VRV

Variable refrigerant volume air conditioning