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Here’s why the Viva Leisure (ASX:VVA) share price has shot up 7% today

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The Viva Leisure Ltd (ASX: VVA) share price is going gangbusters today following a number of positive announcements out of the company.

At the time of writing, the health club operator’s shares are at $2.96, up 7.64%. 

Milestone achievement

According to the release, Viva has reached a significant membership milestone of 100,000 members. The company said the new record excludes the Plus Fitness network of members, which remains at roughly 175,000 members. This brings the total group membership (direct and network) to 275,000 members.

Group performance

In Victoria, the health clubs have remained closed as per government direction, but hope to open up when third step restrictions are attained. Viva’s Victorian business represents 9% of the total clubs owned and 6% of its membership base.

Across the border, Viva’s New South Wales locations have been operating with gym marshals, which have meant the company has incurred additional expenses. The reduced operating hours have halted the return of some members seeking all-hours access to the health club, however the company is expecting a large portion of these members to return this month.

In ACT and Queensland, Viva noted it is seeing net growth each month as restrictions are being lifted.

Of Viva’s 86 health clubs, the company said 10 are currently undergoing development. A further 5 clubs are scheduled to commence fit-out before the end of the year.

Viva also reported that its membership visits have rebounded strongly, with 552,871 visits in the month of September. This eclipsed January and February levels, which saw approximately 450,000 member visits.

In addition, Viva advised its Plus Fitness business is performing well with two new locations open in Sydney, and another 16 facilities scheduled to open in FY21.

Acquisitions update

Early this month, Viva acquired FitHQ in Campbelltown, Sydney, which added 1,500 new members to its client base. The company will look to rebrand the club and refit with new equipment.

Three additional locations are being pursued, and if completed, will count another 2,200 members.

In today’s release, Viva highlighted that the COVID-19 pandemic has created an opportunity to acquire more smaller single and multi-club operators.

Management commentary

Viva CEO and managing director Mr Harry Konstantinou commented on the robust result achieved during the tough economic climate:

As we eagerly wait to re-open our doors in Victoria, the rest of our locations around the country are currently performing positively. September saw the largest amount of new member signups in our history, and October is currently trending to beat that figure.

In February 2020, prior to the pandemic, each of our clubs averaged 6,015 member visits per month, and this has increased to 6,428 visits per month per club in September, a significant increase which is building a strong platform for continued growth as members and the general community understand the benefits of a healthy body and mind.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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