Fast-rising health and leisure club operator Viva Leisure has limbered up for another well-measured growth spurt and facilities revamp.
The Canberra-based, ASX-listed fitness leader has announced a $30 million equity raising to support growth initiatives.
About 10.3 million new shares will be issued at $2.90, representing a 4.3 per cent discount on the last traded price on Thursday, 26 November, before the company entered a trading halt on Friday, 27 November.
Viva Leisure entered the trading halt with shares last trading at $3.03. They closed at $3.23 on the first day of trade after the halt was lifted, on Monday 30 November.
The placement was fully subscribed on Friday, 27 November, 2020, and new shares are expected to settle on Thursday, 3 December, to begin trading the following day.
Viva Leisure’s latest institutional placement begins another step forward in an event-packed year, which has underlined the company’s resilience in unprecedented times and sets the stage for more acquisition opportunities. The latest initiative will also give Viva Leisure’s recently acquired facilities a distinctive edge with refurbishments.
Overall, the company’s five-year plan is to have 400 locations across Australia by 2025.
Viva Leisure operates a vast portfolio of more than 90 fitness and leisure clubs around Australia. With all clubs now reopened for business following COVID-19 shutdowns, member visitations have returned to pre-COVID-19 levels.
The company has reported memberships were suspended due to COVID-19, but have resumed in stages. There were 6175 members on requested suspension in October, down from 15,000 in September.
Revenue in October was also higher than pre-COVID-19 shutdown levels.
Viva Leisure has also achieved record memberships totalling 103,000 in its company-owned centres, along with 175,000 Plus Fitness network members.
The company also expects to open more than 20 locations between now and the end of the 2020-2021 financial year – 19 of which have been secured and leases executed. This forms part of Viva Leisure’s goal of achieving 400 nationwide locations by 2025.
During the previous financial year, Viva Leisure agreed to terms for the acquisition of Australian Fitness Management, the master franchisor of Plus Fitness. The agreement is significant in the company’s story of growth because it marked its development beyond Australia to New Zealand for three locations, and another four in India. This transaction settled on 21 August, 2020.
In July 2020, Viva Leisure’s chief executive and managing director, Harry Konstantinou, noted the significance of broadening its horizons: “The acquisition of the Plus Fitness brand, systems and master franchisor, including the master franchise licence for New Zealand, and a first right of refusal on the existing 197 locations, makes this the most exciting and largest opportunity in our history,” he said.
Cutting-edge technology helped deliver a solid result for the 2019-2020 financial year for the listed pacesetter, while multiple acquisitions have created a foundation for further international expansion.