Virgin Active is rocking

Virgin Active has over one million members around the world, with over 46,000 new members joining the gym chain in the six months to the end of March 2024. 

This was revealed in Virgin Active’s parent company, Brait’s portfolio performance update, which outlined how its businesses were doing and its plans to raise more capital. 

Brait said Virgin Active was hit hard by Covid lockdowns across the globe, especially in its key market of South Africa. 

This has resulted in the company extending the timeline needed for it to realise the value of Virgin Active, with the gym chain’s membership still below pre-Covid levels. 

After the end of the pandemic-era lockdowns, Virgin Active has undergone a turnaround strategy that focused on the sales of its memberships. 

The company has not only tried to expand its membership base. It has also specifically focused on limiting the turnover of new members by enticing them to stay on for longer. 

Brait said this strategy has been successful, with membership numbers growing and turnover rates, particularly in South Africa, declining. 

The international business has also benefitted from strong membership growth and higher yields due to price increases and the outperformance of higher-yielding clubs during the period. 

Virgin Active South Africa increased its active membership base from 606,000 as of 30 September 2023 to 627,000 as of 31 March 2024. 

The company said sales remain relatively robust despite the impact of inflation on consumer spend and management’s continued focus on membership engagement. 

Italy also had a strong performance in the past six months, with active membership increasing from 175,000 to 189,000 due to a combination of like-for-like club growth and new club openings. 

The UK also benefitted from an increase in its active membership base from 132,000 to 140,000, with robust growth across its Provincial clubs, the London Residential clubs and the London Corporate clubs. 

The Asia Pacific territories showed positive momentum and yield improvements. Significant operational changes in the Australian business have resulted in cost savings, which will expedite the territory’s return to profitability ahead of forecast. 

The overall performance resulted in an increase in active members from 972,000 in September 2023 to over 1 million as of 31 March 2024. 

Average yield on the portfolio has increased over the period as Virgin Active continues to invest in its clubs and enhance the overall member proposition and offering. 

The increased membership levels and higher yields have positively impacted the “run rate EBITDA” which as at 31 March 2024 was around £80 million (R1.9 billion), up from £33 million (R791 million) as of 30 September 2023.