Viva Leisure (ASX:VVA) share price sinks 7% to 52-week low. Here’s why.

The health club operator’s shares have taken a beating today…

| More on:
Falling ASX share price represented by man falling through the air

Image source: Getty Images

The Viva Leisure Ltd (ASX: VVA) share price is deep in the red during late afternoon trade. This comes after the health club operator provided investors with an outlook for FY21.

At the time of writing, Viva Leisure shares are down 7.37% to $1.57 – just shy of its 52-week low of $1.55 recorded earlier today.

What’s happening with the Viva Leisure share price?

Investors are selling off Viva Leisure shares following an unchanged FY21 outlook from its last trading update in May.

According to its release, the company announced that FY21 revenue is projected to be between 81 million to $83 million. This is a 25.6% to 31.2% increase when compared to the first-half of the 2021 financial year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to stand at around $13 million to $13.5 million. The forecasted result reflects a 32.1% to 41.1% jump on the prior 6 months. The EBITDA margin is also set to grow from roughly 16.5% to 17.5%.

While the numbers may appear to be positive, Viva Leisure noted that increased costs will impact the final result. This is due to accelerated roll-outs and slower than expected trading conditions caused by COVID-19. In addition, legal fees on completed acquisitions, capital raising costs as well as restructure expenses, are also expected to weigh down the company’s bottom line.

Looking at the company’s share price over the last 12 months, the Viva share price is down more than 30%. Year-to-date the company has also not fared well, with its shares down almost 50%.

Should you invest $1,000 in Viva Leisure right now?

Before you consider Viva Leisure, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Viva Leisure wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

Two women in a 4WD vehicle with Carbon Revolution wheels drive along laughing with one throwing her arms in the air
Consumer Staples & Discretionary Shares

Carbon Revolution (ASX:CBR) share price leaps 17% as sales surge

Key points Carbon Revolution share price exploding, up 17.26% Revenue up by 92.6%, according to quarterly update Wheel sales soared …

Read more »

an arrow with sparks shoots up
Consumer Staples & Discretionary Shares

Why is the Dusk (ASX:DSK) share price firing 15% higher today?

Key points Dusk shares are bouncing off a 3-month low today. Shares are soaring 15% into the green at the …

Read more »

Young girl drinking glass of milk
Consumer Staples & Discretionary Shares

Can the beaten down A2 Milk (ASX:A2M) share price get back to $10?

Key points A2 Milk shares are in a 51% drawdown from January 2020 highs of circa $10 per share. The …

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their ASX shares on the laptop in front of them
Consumer Staples & Discretionary Shares

Could this signal the next big acquisition for Wesfarmers (ASX:WES)?

Key points The Wesfarmers share price is down 5% today There are talks of Wesfarmers setting up a healthcare fund …

Read more »

Jumbo Interactive staffers shaking hands around table agreeing to an acquisition
Consumer Staples & Discretionary Shares

Jumbo Interactive (ASX:JIN) share price leaps 6% on acquisition announcement

Key points Jumbo shares on the move following UK-based acquisition of StarVale Initial consideration of $32.1 million funded by Jumbo’s …

Read more »

A group of people cheer at a blackjack table in a casino
Share Gainers

Why the PointsBet (ASX:PBH) share price is rocketing 9% today

Key points The online gambling market continues to grow West Virginia becomes the third US state to host PointsBet’s online …

Read more »

Woman in office sinking in quicksand into the floor
Consumer Staples & Discretionary Shares

Here’s why the Kogan (ASX:KGN) share price just sank 15%

Key points The Kogan share price fell 15% at market open today to a new 52-week low The drop follows …

Read more »

a happy child dressed in full business suit gives the thumbs up sign while sitting at a desk featuring a piggy bank and a sack of money with a dollar sign on it.
Consumer Staples & Discretionary Shares

Here’s a deep dive into the historical returns of Wesfarmers (ASX:WES) shares

When it comes to ASX blue-chip shares, it doesn’t get too much bluer than Wesfarmers Ltd (ASX: WES). Wesfarmers has been …

Read more »