Virgin Active SA’s membership sales surpass pre-Covid levels, Brait reports

JSE-listed investment company and majority owner of Virgin Active, Brait, says that despite operational challenges, the gym company in South Africa has seen membership sales recover above pre-Covid levels with significantly stronger membership engagement.

It noted in a Sens statement issued on Monday that the gym company’s membership numbers in Italy have also recovered.

“Existing residential and new clubs have performed strongly, however, a number of the inner-city clubs remain under-utilised given the shifting work-from -ome trends,” it adds.

Brait says the brand has seen a similar trend in the United Kingdom with provincial and London residential clubs operating close to 2019 levels in terms of membership while inner-city club membership remains significantly below 2019 levels.

Read: Can Virgin Active regain the quarter of members it lost during Covid?

It notes that in the Asia-Pacific (Apac) region, Virgin Active continues to show a low base recovery with most areas recently achieving their best sales month for the financial year.

Brait says its fast-moving consumer goods (FMCG) manufacturer Premier, has shown a consistently strong operating performance across all divisions while managing input costs and retaining volume growth across all key categories.

Read: Brait is ready with IPO of Premier

“Revenue and Ebitda growth remain slightly ahead of budget with double-digit percentage increases year on year for FY23,” it adds.

It noted that there have been broad-based decreases in key commodity inputs recently which it expects will reduce some inflationary pressure within the business.

Brait adds that its British retail chain company asset New Look has recovered well from its disappointing performance in the third quarter of 2022 when supply chain blockages and the emergence of the Omicron variant disrupted trading between October and December 2021.

“Since the beginning of the calendar year, the business has performed in line with expectations despite the increasing inflationary pressures, in terms of revenue, profitability and cashflow, with the strategy shift towards an omni-channel model having a positive impact on performance,” it adds.

It says New Look has recently agreed to an extension of its operating facility with financial services company HSBC to June 2024, from its current maturity date of June 2023.

As part of the extension, it notes that New Look will raise £50 million from its existing PIK (payment in kind) facility to purchase the commitments under the operating facility from HSBC.

Brait says it has agreed to follow a pro rata share, of 18.3%, of the raise under the PIK facility to invest R182 million into New Look.

It says the capital, which has a 16.5% PIK coupon, will benefit from ranking ahead of the existing PIK facility and is entitled to ordinary shares in the same proportion as the existing facility.

Nondumiso Lehutso is a Moneyweb intern.

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