If you’re like me you’re probably a bit over using your lounge room as an office, cinema, dining room and gym. The multidisciplinary heart of my home is often littered with dumbbells, yoga mats, wine glasses and whatever book I’m currently reading. It’s an odd picture.
The thought of getting back into a real gym, with proper equipment, and those squishy rubber floors I didn’t know I took for granted has me giddy. Throw in a reformer or two and I might pass out from excitement.
Health club operator Viva Leisure (ASX: VVA) has secured new locations by acquisition, expanding their reach to gym junkies seeking to scratch a similar itch or those looking to shed the COVID kilos pre beach season.
Despite lockdowns forcing the closure of many Viva clubs, the Company has been productive completing the acquisition of two Plus Fitness sites in Beerwah, QLD and Rydalmere, NSW plus an independent club in South Morang, Victoria. Viva have also opened a new site in Castle Hill, NSW. These new additions bring the total number of locations owned to 122.
However, Viva doesn’t plan to hover around that number for long, with solid plans to acquire yoga and pilates studios across QLD, VIC and NSW, diversifying their customer offering over 133 sites, a long way from the 29 locations they held upon listing in June, 2019.
Once settled, the acquisition plans will cumulatively add $3.5-$4 million to the Company’s annual EBITDA once completed, having been purchased at an average EBITDA multiple of approximately 3.1x (approx $12m), funded 50% with debt and 50% existing cash reserves.
Spurred by that desire to escape the lounge room gym, Viva estimates that current memberships are expected to exceed 130,000. The Company now has 50% of their locations operating following Freedom Day for NSW yesterday. Easing of lockdowns in the ACT on Friday 15th October will see 89% of Viva clubs open. Remaining Victoria based locations (11% of Viva clubs) will hopefully open around November 5… but that remains to be seen.
With NSW residents climbing out of lockdown and jumping back into normalcy yesterday, over 400 memberships were sold. The demand for memberships is expected to continue over the week.
Viva Leisure’s CEO and Managing Director, Harry Konstantinou said: “It is encouraging to see fifty percent of our portfolio now operating, and increasing to 89% of the portfolio at the end of this week with the ACT reopening. The expected pent-up demand for access to facilities and membership experiences on our first day of trade yesterday in NSW was positive and in line with the speed the business re-opened for trade during the previous extended lockdowns. We look forward to having our team and our members back using the facilities and rebuilding their health and fitness levels.”
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