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Product innovation helps boost Virgin Active turnover
By Deven Pamben 15 Jun 2017
The gym chain will focus on investing in innovative classes
A roll-out of fitness classes and improved member experience helped revenue at Virgin Active rise by 6 per cent to £483million (US$615.5m, €548.6m) in the year to 31 December 2016, results from South African investment group Brait show.

Brait, which owns a controlling stake in the health club, also reported that earnings before interest, tax, depreciation and amortisation (EBITDA) grew 13 per cent to £104m (US$132.5m, €118.1m).

Total membership, including juniors, grew 0.3 per cent to 1.23m across its 241 clubs at the end of 2016.

Brait said Virgin Active's commitment to product innovation and member experience was evidenced in 2016 with the continued rollout of Grid classes, its Barre programme, the HEAT (a high energy athletic training class) offering, Hydro (a high intensity swim class) and Iron ZUU (group exercise combining weightlifting with movement), as well as improvements to its digital offering.

A breakdown shows that in Europe Virgin Active had 91 clubs at the end of 2016 (down one from the previous year): 46 in the UK, 33 in Italy, eight in Spain and four in Portugal. Revenue in Europe rose 3 per cent to £286m (US$364.5m, €324.8m), with membership remaining at 375,000.

Last year Virgin Active sold 36 UK clubs, 35 of which were bought by Nuffield Health in July 2016. It has also sold 14 clubs to David Lloyd Leisure, which completed on 31 May 2017.

The financial report said: "These two transactions represent the final significant step for the UK operations to focus on metropolitan and commuter hubs in key markets at the premium end, which is in accordance with Virgin Active's international strategy."

In southern Africa, revenue grew 7 per cent to £155m (US$197.5m, €176m) across its 137 clubs. Membership was down 1 per cent on the previous year to 728,000, impacted by a tougher consumer environment.

Asia Pacific showed strong growth for the company with turnover rising 28 per cent to £42m (US$53.5m, €47.7m) during the period. Virgin Active had 13 clubs at the end of the year in Australia (6), Singapore (2) and Thailand (5). Membership grew 21 per cent to 45,000 in the region.

In terms of this year, the club had 245 sites as of March.

The report said: "The South African business continues to be affected by economic and political uncertainty in common with other consumer facing business. In the near term, investment will be focussed on the existing clubs estate with a moderated roll out plan."

On Europe, it said: "The smaller, more streamlined UK estate is trading well under new leadership. With a focus on people and product, the business is positioned well to grow in the future. The company continues to monitor any Brexit impacts, with no major impact seen so far. The Italian business continues to trade well."

The Asia Pacific business "continues to trade strongly", with the medium-term outlook for Virgin Active remaining strong as the company continues to invest "in growth markets in Asia and Australia" and focuses on product innovation and the digital customer journey worldwide.


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NEWS
Product innovation helps boost Virgin Active turnover
POSTED 15 Jun 2017 . BY Deven Pamben
The gym chain will focus on investing in innovative classes
A roll-out of fitness classes and improved member experience helped revenue at Virgin Active rise by 6 per cent to £483million (US$615.5m, €548.6m) in the year to 31 December 2016, results from South African investment group Brait show.

Brait, which owns a controlling stake in the health club, also reported that earnings before interest, tax, depreciation and amortisation (EBITDA) grew 13 per cent to £104m (US$132.5m, €118.1m).

Total membership, including juniors, grew 0.3 per cent to 1.23m across its 241 clubs at the end of 2016.

Brait said Virgin Active's commitment to product innovation and member experience was evidenced in 2016 with the continued rollout of Grid classes, its Barre programme, the HEAT (a high energy athletic training class) offering, Hydro (a high intensity swim class) and Iron ZUU (group exercise combining weightlifting with movement), as well as improvements to its digital offering.

A breakdown shows that in Europe Virgin Active had 91 clubs at the end of 2016 (down one from the previous year): 46 in the UK, 33 in Italy, eight in Spain and four in Portugal. Revenue in Europe rose 3 per cent to £286m (US$364.5m, €324.8m), with membership remaining at 375,000.

Last year Virgin Active sold 36 UK clubs, 35 of which were bought by Nuffield Health in July 2016. It has also sold 14 clubs to David Lloyd Leisure, which completed on 31 May 2017.

The financial report said: "These two transactions represent the final significant step for the UK operations to focus on metropolitan and commuter hubs in key markets at the premium end, which is in accordance with Virgin Active's international strategy."

In southern Africa, revenue grew 7 per cent to £155m (US$197.5m, €176m) across its 137 clubs. Membership was down 1 per cent on the previous year to 728,000, impacted by a tougher consumer environment.

Asia Pacific showed strong growth for the company with turnover rising 28 per cent to £42m (US$53.5m, €47.7m) during the period. Virgin Active had 13 clubs at the end of the year in Australia (6), Singapore (2) and Thailand (5). Membership grew 21 per cent to 45,000 in the region.

In terms of this year, the club had 245 sites as of March.

The report said: "The South African business continues to be affected by economic and political uncertainty in common with other consumer facing business. In the near term, investment will be focussed on the existing clubs estate with a moderated roll out plan."

On Europe, it said: "The smaller, more streamlined UK estate is trading well under new leadership. With a focus on people and product, the business is positioned well to grow in the future. The company continues to monitor any Brexit impacts, with no major impact seen so far. The Italian business continues to trade well."

The Asia Pacific business "continues to trade strongly", with the medium-term outlook for Virgin Active remaining strong as the company continues to invest "in growth markets in Asia and Australia" and focuses on product innovation and the digital customer journey worldwide.
RELATED STORIES
Virgin Active to keep two clubs following competition enquiry into DLL deal


Two of the 16 health clubs which David Lloyd Leisure (DLL) intended to acquire from Virgin Active will now not be included in the deal, after concerns were raised by a competition watchdog.
Virgin Active owner Brait scraps London listing due to Brexit


South African investment group Brait, which owns a controlling stake in Virgin Active, has scrapped plans to transfer its registered offices from Malta to the UK, and list in London, due to Brexit.
David Lloyd Leisure set to buy Virgin Active sites


David Lloyd Leisure (DLL) has exchanged contracts to buy 16 Virgin Active health clubs for an undisclosed sum.  
Focus on city locations is behind the sale of Virgin Active clubs


The sale of 16 Virgin Active sites in the UK is the final step of the company's strategy to focus its operations on metropolitan and commuter hubs in its key markets, the health and fitness operator has said.
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Paul Hawco, a seasoned figure in the international wellness industry, has assumed the role of executive director – integrated wellbeing at independent, hospitality group Banyan Group.
Ritz-Carlton Reynolds, Lake Oconee, unveils new-look lakeside destination spa
The Ritz-Carlton Reynolds, Lake Oconee in the southeastern US state of Georgia is celebrating a new milestone after unveiling its newly renovated 27,000sq ft destination spa.
Art-inspired urban spa to launch at stylish new London hotel, Art’otel London Hoxton
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