Sure, the best perk for a shareholder would be getting a big bang for their buck. Little feels better than a major ROI, but it doesn’t hurt to give your shareholders that extra incentive to stay on board—especially if times get rough.
In that spirit, gym and health club operator Viva Leisure (ASX: VVA) has introduced a Shareholder Discount Program. This program will give eligible members access to Club Lime (Viva’s central brand), HIIT Republic (a premium boutique fitness studio) and GroundUp brands (for pilates, yoga and barre).
The Shareholders Discount Program provides qualified shareholders with a 25% discount on their health club membership. But to be eligible, shareholders must consistently maintain a minimum of 1,000 VVA shares.
To use these perks, a virtual system has been created by the Viva Labs team. Shareholders can access it by logging into their member portal or via a link. Once there, they need to enter their Holder Identification Number (HIN). The system will automatically validate the HIN number and the minimum number of shares held. Once verified, the discount will be instantly applied and will remain active as long as the minimum shareholding requirement is maintained.
Individual shareholders are eligible for one membership discount per shareholder. However, non-individual shareholders with a minimum of 5,000 shares can avail the Shareholders Discount Program for up to three members, thereby enhancing the advantages for Viva’s corporate members.
In FY23, the corporate network helped elevate Viva’s financials. The Company reported unaudited revenue of $141.2 million, surpassing the earlier projected range of $137-140 million. As a result, the forecasted EBITDA for the year is now expected to be at the higher end of the previously guided range of $28-30 million. The significant increase in memberships contributed to this, with corporate memberships reaching 181,950 by the end of FY23, surpassing the earlier guidance of 173-178k members.
The Company pointed to how corporate members were driving business growth, increasing by 14% on pcp. Corporate members make up the majority, comprising over 180k, while network members make up 160k. It also increased its corporate locations by 20, up from 151. By offering this incentive, not only is the Company incentivising shareholders to hold more but is also paving the way for a greater membership network.
Viva is not the only company trying to appease shareholders through discount programs. Up till September 2019, the National Australian Bank (NAB) used to waive the annual credit card fee for Australian resident shareholders who held 500 or more shares. And even though the scheme has been discontinued, it remains in place for old shareholders (pre-September 2019) who maintain the required number of shares.
Event Hospitality and Entertainment company (ASX: EVT) is another company currently offering a Shareholders Benefit Card, which gives shareholders holding 500 or more shares discounts on hotels, EVENT cinemas and more.
Viva has not disclosed the cost to the Company for undertaking such a move, but it hopes that fitness-forward shareholders see the value in it and hop on.
Alinda is a Business Reporter for The Sentiment
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