Virgin Active has managed to grow its net yield per member significantly so far in 2023, with the company earning R543 per member per month in South Africa.
This was revealed in Brait’s interim results presentation for the six months to the end of September 2023. Brait owns 79% of Virgin Active, which operates in six countries.
Virgin Active performed well relative to the prior period in 2022, with revenue growing 20%, active members up 11%, and earnings up 205%.
However, compared to 2019, the company’s earnings are down 86%, membership is down 10%, and revenue has declined by 6%.
One of the brighter spots for the company was that across all of its markets, it managed to grow its yield per customer.
In South Africa, Virgin Active increased the amount it makes per customer from R509 per month to R543 per month in the first nine months of 2023, an increase of 8.4% from 2022.
The company aims to increase this to R593 per customer per month by 2025.
The South African and Australian markets are the only locations where Virgin Active has managed to grow its yield per customer to above 2019 levels.
Using British Pounds as a constant currency, the amount the company makes per customer has declined since 2019 in all of Virgin Active’s other markets, including the UK and Italy.
However, rising yields per customer have not been able to accelerate Virgin Active’s recovery to pre-COVID levels, as the company is still well below the levels seen in 2019.
Much of this poor performance relative to 2019 can be attributed to its largest market, South Africa, which makes up over a third of the company’s operations.
Virgin Active’s South African operations have experienced very high termination rates from customers and a high turnover of memberships.
In the first nine months of 2023, the company sold 170,000 memberships but only registered membership growth of 31,000 at the end of the period. Active members rose to 606,000.
This indicates a high turnover rate of memberships, with new customers signing up but then a large proportion of them terminate the membership or existing members fail to renew.
The company said this was primarily driven by the poor quality of sales in the earlier part of the year due to a challenging economic environment.
Compared to 2019, active memberships in South Africa are down 15% – the highest of all Virgin Active’s markets. Italy is the only market where memberships are higher than pre-COVID.