The latest uptick means the shares are now 11.53% higher for the year.

Viva Leisure shares storm higher on results day

Here's what the Australian health club operator posted this morning:

• Revenue up 17.6% to $116.5 million
• Underlying net profit after tax (NPAT) up 46.8% to $8.1 million
• Underlying EBITDA up 20.8% to $25.4 million
• Statutory NPAT up 168% to $5.2 million
• EPS up 173.8% to 5.32 cents

What happened in H1 FY26?

Viva Leisure posted a 17.6% jump in revenue to $116.5 million from $99 million in H1 FY25, driven by continued growth across health clubs and the high-margin TPLR segment.

The company's TPLR segment was the highest-margin and most scalable growth vector over the first half of FY26. Its revenue surged 44.7% to $9.3 million, now representing 8.1% of group revenue, up from 6.5% in the prior corresponding period (pcp).

The company also revealed a 46.8% surge in underlying NPAT to $8.1 million from $5.5 million in the pcp. 

Underlying EBITDA came in at $25.4 million, up 20.8% from the $21 million posted in the pcp. 

Statutory NPAT was 168% higher at $5.2 million from $2 million in the pcp. Viva Leisure said this demonstrates the company's "focus on profit conversion".

"During the period we deliberately shifted capital allocation from physical rollouts toward technology and platform development. TPLR revenue grew 45%, now representing 8.1% of group revenue, and we see this as the best return on investment," Viva Leisure CEO and Managing Director Harry Konstantinou said.

"Without acquisitions and with just one net new site for the half, the corporate network added over 7,000 members organically – a clear signal that our network optimisation is delivering results."

What's ahead for Viva Leisure this year?

The business is optimistic about the outlook for its full-year results. Viva Leisure expects revenue of $237 million in FY26, up from $211.3 million in FY25. 

It also expects statutory EBITDA and underlying EBITDA to come in at $111 million and $53 million, respectively. This is up from $99 million and $45.9 million previously.

The company expects statutory NPAT of $11.5 million for the full year, up from $5.2 million in FY25.

The company said its strategic priorities are focused on converting scale into shareholder returns through continued network optimisation, TPLR expansion (targeting >$28m total TPLR revenue for FY 2027), and disciplined capital management. 

The Board has resolved to recommence an on-market share buyback of up to a maximum of 10% of issued ordinary shares. The buyback will be funded from existing cash reserves and operating cash flows, and will be conducted in accordance with the ASX Listing Rules and the Corporations Act.

The post Viva Leisure shares jumps 6% higher following H1 FY26 result appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is down almost 2% to $1.60. This appears to have been driven by the release of a bearish broker note this morning out of Citi. According to the note, the broker has downgraded the energy producer's shares to a neutral rating (from buy) and cut its price target to $1.60 (from $1.70). Citi appears a touch nervous ahead of the announcement of the company's strategic review later this month.

Life360 Inc (ASX: 360)

The Life360 share price is down almost 6% to $13.85. This follows the completion of its Nasdaq IPO and its debut on Wall Street overnight. The location technology company's shares had a lukewarm debut and finished the session flat. And then in after hours trade its NASDAQ listed shares dropped 1.3% to $26.65. Investors may have been hoping for an explosive start to life on Wall Street and have been left underwhelmed by day one. Management stated that it views the listing and "increased exposure to U.S. investors as a natural next-step in its growth."

Viva Leisure Ltd (ASX: VVA)

The Viva Leisure share price is down 2% to $1.53. This morning, this health club owner announced the successful completion of its fully underwritten institutional placement. Viva Leisure raised $16 million at a 7.1% discount of $1.45 per new share. Management advised that the placement had strong demand, reflecting support from both existing and new investors. Proceeds will be used to finance the strategic acquisitions of eight health club locations in Western Australia, reimbursement of recent capital expenditure, rebranding, working capital, offer costs, and other strategic initiatives.

Wildcat Resources Ltd (ASX: WC8)

The Wildcat Resources share price is up 5% to 35.5 cents. This is despite there being no news out of the lithium explorer today. However, it is worth noting that a number of ASX lithium stocks are in the red today. For example, lithium giant Pilbara Minerals Ltd (ASX: PLS) is down 1.5% this afternoon. The market appears to believe that lithium prices are not going to be going meaningfully higher any time soon due to a surplus.

The post Why Beach Energy, Life360, Viva Leisure, and Wildcat shares are dropping today appeared first on The Motley Fool Australia.

In saying that, I wouldn't pick companies to invest in purely based on government policies. There also needs to be a quality business underneath.

It's akin to surfing. A beach with great waves is a good start — these are the industry tailwinds — but if you're a hopeless surfer (company), you'll still struggle to make the most of the conditions. Good surf matched with talent, though, is a dangerously good combo.

Why this ASX stock could be a winner

AUSactive, an exercise and active health industry association, is pushing for some inclusions in the 2024-2025 Federal Budget.

In its submission, AUSactive calls for the government to:

1. Provide an exemption under the Fringe Benefits Tax (FBT) legislation
2. Make all Australian gym and active health memberships tax-deductible
3. Educate Australians on the importance of physical activity

Current legislation only allows a tax deduction if the person's profession requires high fitness. However, AUSactive argues that the country would benefit from removing this stipulation. The association justifies this by pointing out an estimated $1.7 billion of costs directly from physical inactivity.

The submission highlights that 75% of Australian adults are not meeting recommended activity levels. By making memberships tax deductible and introducing an FBT exemption for employers, AUSactive believes Australia can improve its disease incidence, reduce absenteeism, and increase productivity.

One ASX stock that could arguably benefit if the government adopts this recommendation is Viva Leisure Ltd (ASX: VVA).

Operating across 345 locations (168 owned), Viva Leisure has built a considerable presence in the Australian health club industry. The company operates through several brands, including Club Lime, HIIT Republic, Plus Fitness, and GroundUp.

Viva's half-year results show the company served 180,071, generating $79.1 million in revenue. That roughly works out to be $16.90 per member per week.

The upshot

If AUSactive's submission goes ahead, we could see an increased push for gym signups. More employers may see fitness memberships as a good way of retaining employees, helping boost nationwide gym numbers.

Furthermore, if memberships become tax deductible, people might be inclined to upgrade and pay extra for the 'next tier'.

Both situations would increase revenue and likely profits for an ASX stock such as Viva Leisure.

The post The tiny ASX stock that could surge on this pending government decision appeared first on The Motley Fool Australia.

This could happen for a variety of reasons.

The market might be overly fearful about a small part of the business. The sector might be out of favour due to the current economic conditions. The company might even have a short-term image problem.

Whatever it is, such a situation can provide a golden buying opportunity for shrewd investors.

"If a business does well, the stock eventually follows," famous US investor Warren Buffett once said.

The idea is that, over the long run, the share price will catch up with the business performance.

Keeping this in mind, the team at the Forager Australian Shares Fund reckons two of its holdings are now ready to do exactly that.

Let's check them out:

'Valuation is significantly more attractive today'

Mining technology services provider RPMGlobal Holdings Ltd (ASX: RUL) is the Forager team's largest holding.

The business has gone absolutely gangbusters since 2020.

"Annual subscription revenue was just $10 million in the 2020 financial year. By 2023 it had nearly quadrupled to $39 million," read a report to Forager clients.

"Profit before tax has become meaningfully positive and is due to climb again in 2024 as operating leverage kicks in."

However, the stock price simply does not reflect this progress, and is an even bigger bargain now than when the Forager analysts first bought in.

"RPM's market capitalisation is only 34% higher than in 2020. The valuation is significantly more attractive today, and we already thought it was a bargain three years ago."

The great perpetual attribute for RPMGlobal is the stickiness of the solutions they provide to their customers.

"Many of the products are industry standard and key to the operations of a mine site, so very few clients stop using them.

"The business is run by an aligned management team, has net cash on the balance sheet and has been continuously buying back shares."

These ASX stocks have unjustifiably halved

Viva Leisure Ltd (ASX: VVA) shares are Forager Australian Fund's fourth largest investment. 

The company owns and operates gyms around Australia and, like RPMGlobal, has made huge strides since 2020.

"Three years ago, the gym owner had just over 100k paying members. It now boasts more than 186k," read the Forager report.

"Revenue had rebounded to $6.7 million a month post the first of the COVID lockdowns. That number was last pegged at $13.6 million. Furthermore, profit margins have climbed from 15% to 21%."

Despite this, the market has treated Viva shares even more harshly than RPMGlobal.

"Viva trades at half of its share price at the end of 2020," stated the analysts.

"Viva's valuation multiple has fallen to just eight times our estimate of next year's net profit."

But the Forager team is sticking by the small cap, because it has more catalysts coming.

"A few projects, like club upgrades, technology rollouts and vending machines at clubs will benefit the business in the 2024 financial year.

"And maturity has also led to larger and more flexible bank funding, providing further organic and acquired growth opportunities."

The post 2 ASX stocks that haven't yet caught up with 4 years of booming business appeared first on The Motley Fool Australia.

The company announced the program yesterday. Since then, Viva Leisure shares have risen 6.45% to $1.32.

Viva Leisure is a high-tech health club operator. Its brands include Club Lime, Hiit Republic, and GroundUp.

Its new perks program offers investors a 25% discount on their health club membership.

You have to own a minimum of 1,000 Viva Leisure shares to be eligible for the offer. For non-individual shareholders, you need to hold a minimum of 5,000 shares to access the discount for three people.

Viva Leisure is not the only ASX-listed company to offer shareholder perks.

Here are some other examples:

The ASX shareholder discounts on offer today

AMP Ltd (ASX: AMP)

AMP runs a shareholder discount program that entitles ASX investors to home loan discounts. Dubbed AMP First, the principal and interest rate is currently 5.99% for owner occupiers and 6.19% for investors. A bunch of fees are also waived, including the $349 settlement and annual fees, and the $295 legal fee.

Cedar Woods Properties Limited (ASX: CWP)

Given Australia's housing affordability challenges, who wouldn't love a discount on their next home? Cedar Woods shareholders can receive a 5% discount on single residential blocks of land and a 2.5% discount on new houses, townhouses, and apartments in Cedar Woods' projects.

Beacon Lighting Group Ltd (ASX: BLX)

Beacon Lighting offers an 'Investor Pass' to its shareholders, providing access to tradie discounts and free delivery on all orders. Shareholders must hold a minimum of 500 Beacon Lighting shares to be eligible.

EVT Ltd (ASX: EVT)

Movie cinema and hotels operator EVT gives a Shareholders Benefit Card to investors who own more than 500 shares. The ASX shareholder discount program includes discounted movie tickets, a 15% discount on the best available hotel room rates, and a 20% discount on hotel food and beverages.

Mosaic Brands Ltd (ASX: MOZ)

Mosaic Brands is the business behind retailers Millers, Rockmans, Noni B, Rivers, Katies, Autograph, W. Lane, Crossroads, and Beme. Investors who own a minimum 2,000 Mosaic shares can apply for a Shareholders Reward Card, entitling them to a 10% discount on purchases from these stores.

Which ASX shares have canned their shareholder discounts?

Offering shareholder perks comes at a cost, which is why many companies don't do it — or have axed previous schemes.

Many years ago, Coles Group Ltd (ASX: COL) ran a shareholder discount program that reportedly cost $170 million per year before it was discontinued in 2004.

Competitor Woolworths Group Ltd (ASX: WOW) explains why it doesn't offer discounts on its website:

Woolworths'  focus is to aggressively drive down the cost of doing business, which allows the company to maximise profits and dividends to our shareholders.

Wesfarmers Ltd (ASX: WES) also explains on its website why it doesn't have a shareholder discount program for its retail stores:

We believe that the fairest and best way to reward shareholders is by providing a satisfactory return to shareholders through the payment of dividends and a strong share price.

Wesfarmers said a discount scheme would "also directly affect profitability".

Many ASX 200 bank shares used to offer perks packages, including card fee waivers and discounted interest rates.

ANZ Group Holdings Ltd (ASX: ANZ) discontinued its shareholder discount package in 2007, and National Australia Bank Ltd (ASX: NAB) did the same in 2019.

The post Viva Leisure shares surge 6% on shareholder discount program. Which other ASX companies offer ownership perks? appeared first on The Motley Fool Australia.

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Forager Funds Management portfolio manager Alex Shevelev evaluates three ASX shares going for cheap right now.

Cut or keep?

The Motley Fool: Let's take a look at three ASX shares that have plunged this year, to see if you think each of those fallen stars are now a bargain or if you'd keep away.

The first one is online marketplace Redbubble Ltd (ASX: RBL), which has fallen a horrendous 85% in 2022.

Alex Shevelev: There's a lot of fallen stars out there, but that's been one of the most significant of those fallen stars. 

It sells products to consumers with designs by independent artists. It's been a very volatile ride for long-term Redbubble shareholders — $1 pre-COVID, to 50 cents in the early stages of the COVID market panic, to $7 during the online COVID buying boom, and now back to 50 cents. 

It's really very uncertain as to whether this business is actually going to be able to earn the required margins in what is actually a very competitive space. And the recent first quarter update didn't do the business many favours. There was $17 million worth of losses at the EBIT line and lower year-on-year revenue, which is quite problematic.

MF: Some investors might see that it has annual revenue of half a billion dollars but the market cap's now down to $135 million, and consider it a very cheap valuation. But you reckon it might be a bit of a value trap?

AS: Well, I think it is very important that whatever the level of revenue is that the business can structurally achieve free cash flows from that revenue. And in Redbubble's case, that is not something that they have been able to successfully do outside of some very buoyant COVID periods.

MF: Next one is Viva Leisure Ltd (ASX: VVA), which has halved this year. What do you reckon about that one?

AS: That's right. So, this is a gym group and it's hardly had a break during its listed life, given the closures during COVID over the last couple of years. 

During that period, though, they've been opening new locations, they've been acquiring other locations. It now has 150 locations, gyms around the country. It's moving closer to 190 by financial year end as well, to make it a significant gym group. 

We've seen a lot of inflation over the last six to nine months. The business has been able to pass that inflation onto its members by increasing membership prices, which in the context of its business is actually [a] very, very good achievement. 

The company's given guidance for this current financial year, the margins in that guidance are actually holding up quite well. So, 21-odd per cent is a good outcome for the business and that margin should grow from that point. 

As it improves its margins, as it continues to get growth on locations and revenue, they will actually garner more investor attention.

MF: Fantastic. The third one is sports tech provider Catapult Group International Ltd (ASX: CAT), which has also almost halved in share price year to date. 

AS: This is a business that provides wearables and video analytics to professional sports teams. It's also very sticky, very low-churn revenue, and it's a pretty small relative cost for a very useful product for teams. 

The wearables part of the business, it's been growing 30-odd per cent for years. Last year, Catapult made an acquisition in advanced video analytics, the business was called SBG. And that's really going to help drive the video side of the business that had been lagging previously.

It's been free cash flow generative before, but spent money over the last couple of years integrating those two products together into something that combines the wearables and the video analytics and actually looks to be a first for that market, which is very exciting. 

From next year, the company has said that it's going to be free cash flow positive, if only slightly. But that will put it on good footing because from that point, we'd still be expecting their preferred metric of revenue to be growing 20%-plus over the next couple of years with some good operating leverage. 

So that's another one where a value should flow through and be more clear over the next few years.

MF: Your fund holds both Catapult and Viva at the moment?

AS: We hold both of those, yes.

The post 2 ASX shares to buy that have HALVED in price this year: fund manager appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There's also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that's before fees, expenses and taxes) of 25% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12.2%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Aussie Broadband Ltd (ASX: ABB)

WAM describes Aussie Broadband as Australia's fifth largest NBN internet provider, supplying internet, phone, network and entertainment solutions to over 300,000 residential and business customers.

One of the things that the fund manager referred to was how the telecommunications company performed in FY21. The small cap ASX share reported revenue of $350.3 million, representing growth of 84% compared to FY20. Earnings before interest, tax, depreciation and amortisation (EBITDA) was $19.1 million, which was an increase of 433%.

The fund manager also noted that the Aussie Broadband share price hit a record high after completing a $114 million institutional capital raising and finalising a 10-year deal with VicTrack to access their respective fibre networks. If readers haven't heard of VicTrack before, it's a Victorian Government owned business enterprise that operates the state's fibre assets.

WAM likes that the company has delivered customer growth in both its business and residential segments despite COVID-19 impacts. The company's outlook remains "positive".

The small cap ASX share was one of WAM Microcap's biggest 20 positions at the end of September 2021.

Viva Leisure Ltd (ASX: VVA)

The other business that WAM talked about was Viva Leisure. This company operates gyms, meaning it comes from the health and leisure industry.

Viva Leisure operates 118 health clubs within the ACT, NSW, Victoria and Queensland, with the majority operating under the Club Lime brand offering.

The fund manager noted that the small cap ASX share recently completed a $11.7 million placement which will be used to strengthen the balance sheet and fund its acquisitions that it has planned.

Viva Leisure is going to benefit from the reopening trade, according to WAM, with its NSW and ACT operations expected to be open very soon (if not already). With a "re-stocked" balance sheet, the fund manager believes that Viva Leisure is well positioned to return to strong organic growth and recommence its rollout and acquisition strategy.

The post Wilson Asset Management believes these 2 leading small cap ASX shares are a buy appeared first on The Motley Fool Australia.

So can there possibly be any "re-opening" stocks remaining that aren't already fully priced for their spectacular post-lockdown resurgence?

Forager Funds senior analyst Gaston Amoros certainly thinks so.

A large overseas business that's mispriced

"There is one that we like that we own — Unibail-Rodamco-Westfield CDI (ASX: URW). It's the owner of Westfield malls in the USA and UK, and Unibail malls in Europe," he told a Forager video. 

"It's not really performing in line with the other stocks at this time."

While other retail-related stocks have boomed, URW shares have gone sideways — up just 0.4% for the year so far.

But the Forager team believes the share performance doesn't fairly reflect the real-life operations.

"The business is actually trading very well. It's recovering," said Amoros.

"They told us in August at the time of the half-year results that both sales and [foot] traffic are actually recovering quite quickly."

In the US, shopping mall sales are already back to pre-pandemic levels, he added.

"In the case of Europe, they're like 80% or 90% of pre-COVID levels, which is a nice trajectory."

In both regions, URW is selling off assets, which is helping to decrease debt on their books.

"We think it's quite an interesting opportunity."

Please note that Westfield shopping malls in Australia are owned and operated by another company, Scentre Group (ASX: SCG).

2 ASX shares that have raised capital to survive

Understandably, coronavirus lockdowns have devastated car smash repair and gym businesses.

According to Forager Funds senior analyst Alex Shevelev, that forced both AMA Group Ltd (ASX: AMA) and Viva Leisure Ltd (ASX: VVA) to raise capital in recent times.

"The reaction from this capital raise was really interesting," he said.

"AMA Group raised $100 million plus $50 million convertible note and is now trading 33% higher than the initial raise price in the matter of a month. Viva, much the same — in a matter of a couple of months it's rallied more than 50%."

Shevelev added that this showed even if a company has to raise funds to survive, a "clear line of sight" to the end of lockdowns has meant investors are willing to back them.

NSW has already announced a staged reopening plan for 70% and 80% vaccination levels, expected this month. On December 1, much of society will resume normal operations, including for unvaccinated people.

The other state suffering from the Delta strain, Victoria, has also outlined a recovery roadmap, although not to the detail or as liberal as its northern neighbour.

The post Are there any reopening ASX shares that are still cheap? appeared first on The Motley Fool Australia.

However, less than 2 hours before the ASX closed yesterday, Viva Leisure released an update to the market.

The update outlined the Commonwealth Bank of Australia's (ASX: CBA) decision to defer its formal review of Viva Leisure's financial performance.

Additionally, some of its New South Wales health clubs will soon be able to reopen.

While the update wasn't price sensitive, the market has seemingly reacted favourably nonetheless.

Right now, the Viva Leisure share price is $1.91, 16.46% higher than its previous close.

Let's take a closer look at Viva Leisure's recent update.

Viva's market update

The Viva Leisure share price is soaring today, potentially spurred by a market update released by the company yesterday afternoon.

Then, the company announced CBA has agreed to defer its formal review of financial covenants until March 2022. The bank agreed to the deferral at the request of Viva Leisure.

In its financial year 2021 results, Viva Leisure noted it had agreed to new credit terms for a debt facility with CBA worth approximately $35 million during the financial year just been.

The facility comprises a $25 million Market Rate Loan facility – which was drawn to $10 million at the time of Viva Leisure's earnings release – a bank guarantee facility, and a direct debit facility.

Additionally, Viva Leisure announced 20% of its NSW portfolio will be allowed to reopen from 11 September.

The news followed the NSW Government's decision to lift COVID-19 lockdowns in regional parts of the state.

The reopening will see the doors of 7 of Viva Leisure's businesses unlocked. However, they will still face certain restrictions.

Viva Leisure share price snapshot

Despite today's uptick, the Viva Leisure share price is still firmly in the ASX red.

Right now, its share price is 35% lower than it was at the start of 2021. It has also fallen 21% since this time last year.

The post Why the Viva Leisure (ASX:VVA) share price is surging 16% today appeared first on The Motley Fool Australia.

At the time of writing, Viva Leisure shares are down a sizable 7.60% to $1.58.

What did Viva Leisure announce?

In a statement to the ASX, Viva Leisure announced it has successfully completed its $11.7 million (before costs) institutional placement.

Offered at a price of $1.55 per share, the placement received strong support from both new and existing institutional investors. This initially represented a discount of 9.4% to the last closing price of $1.71 on 24 August. However, after today's steep drop in the Viva Leisure share price, the offer reflects a slight discount of just under 2%.

The company advised it will use the proceeds to strengthen its balance sheet as well as pursue acquisition opportunities.

The newly created ordinary shares will be issued on or around 6 September.

How did Viva Leisure perform for FY21?

Last week, Viva released its full-year results for the 2021 financial year highlighting significant growth across the board. Here are some of the key metrics:

• Direct members soared 33.8% to 126,006;
• Locations increased by 45.5% to 115;
• Revenue jumped 104.8% to $83.72 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) surged 97% to $11.95 million; and
• Net profit after tax lifted 4.6% to $0.9 million.

What happened in FY21 for Viva Leisure?

Viva Leisure reported that membership retention and enrolment momentum exceeded historical patterns when its health clubs were open. However, stop-start lockdowns caused disruption to enrolment momentum and created additional costs to re-open and re-establish the previous momentum.

Throughout the entire financial year, the company's entire facilities were open for 2 months without trade or restriction.

Nonetheless, there were 11 months of positive net member growth for the business.

In addition to the results, Viva Leisure also increased its portfolio, acquiring 21 greenfield locations and 15 acquisitions. When combining this with Viva Leisure and the Plus Fitness network, there is a total of 309 operating locations.

Management commentary

Viva Leisure CEO and managing director Harry Konstantinou commented on the outstanding achievement:

Despite a difficult year where all our facilities across Australia had just two months of being open at the same time, I am proud of my team for managing to achieve an increase in all key metrics being Members, Locations, Revenue, EBITDA and NPAT.

Outlook for Viva Leisure in FY22?

The current COVID-19 lockdown has again significantly impacted Viva Leisure operations for the first two months of FY22.

As such, it is estimated July and August will reflect a decline in revenue of roughly $6.9 million. Furthermore, EBITDA is forecasted to be impacted by $4.2 million.

The company introduced a 'wait and see' approach to preserve cash reserves as much as possible. Future roll-outs and acquisitions have been currently frozen until further notice.

Viva Leisure share price snapshot

Over the past 12 months, Viva Leisure shares have fallen more than 40%, with year-to-date down 45%.

Viva Leisure presides a market capitalisation of roughly $131.9 million, with approximately 81 million shares on its registry.

The post Viva Leisure (ASX:VVA) share price sinks 7% on capital raising efforts appeared first on The Motley Fool Australia.

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%.

The post Viva Leisure (ASX:VVA) share price sinks 7% to 52-week low. Here's why. appeared first on The Motley Fool Australia.

At the time of writing, health club operator's shares are swapping hands for $1.94, up 0.52%.

Let's take a closer look and see what the company updated the ASX with.

Performance update

Investors are pushing Viva Leisure shares higher after the company released a positive update.

In its presentation, Viva Leisure announced an improvement across the business due to the gradual recovery from the COVID-19 pandemic.

As a result, the business noted that all comparisons made below are against its December half-year result. This is because comparing against 12 months ago is not an accurate reflection on business growth.

For the period until April 2021 (first 4 months of 2021), monthly revenue run rate (RRR) jumped to $8.1 million. This represents a 11.4% increase on its December half-year results. All of Viva Leisure's facilities were re-opened as of January 2021, highlighting a return of members.

In addition, the company managed to also grow its member base to 295,808 members, a lift of 8% on H1 FY20. Viva Leisure's continued expansion into new locations increased to 306. This figure is up from 296, which contributed to the improved result.

Revenue surged above $8 million. This is a 58% jump when comparing this month against March 2020, before COVID-19 hit. Particularly, the ACT region was the biggest contributor to the overall scorecard, accounting for roughly 45%.

FY21 outlook

Looking ahead, Viva Leisure stated that it is targeting revenue to range from $81 million to $83 million. Over H1 FY21, this is a 25.6% to 31.2% growth.

Furthermore, earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to come between $13 million to $13.5 million. This reflects a 32.1% to 41.1% increase on the December half-year result. EBITDA margin is also set to jump around 16.5% to 17.5%.

About the Viva Leisure share price

The Viva Leisure share price is down close to 20% over the past 12 months. It's worth noting that its shares plunged to a low of 1.825 due to market slump this month.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $158 million.

The post Why the Viva Leisure (ASX:VVA) share price is edging higher today appeared first on The Motley Fool Australia.

At the market close, shares in the health and leisure company were trading at $1.91 – down 9.05%.

Let's take a closer look at today's news and what it means for the Viva share price.

Why the Viva Leisure share price is sinking

According to the AFR report, 53 franchise owners representing 64 outlets have sent a letter and draft statement of claim to Viva Leisure. These documents outline many concerns between the franchise owners and the ASX-listed company. Chief among those is a deteriorating relationship between the parties.

Representing about 33% of all Plus Fitness branded gym franchises, the complainants have delivered Viva Leisure a 28-day ultimatum to resolve their grievances before legal proceedings commence. 

In a response to the AFR article, Viva Leisure said this morning it was dealing with franchise owners "appropriately and in accordance with the law".

The company revealed it has held confidential talks with some franchise owners. However, it did not disclose what those discussions related to or even if the allegations aired in the article were relevant to those discussions.

Key areas of dispute

The franchisees identified the following key areas of dispute:

• Cannibalising membership. Franchise owners allege Viva Leisure is harming their businesses with a clause in its contract that allows the company to open competing, corporate-owned outlets in close proximity to franchises. A franchise owner quoted by the AFR said franchisees were being "significantly financially impacted by the franchisor unfairly competing against them".
• A breach of good faith. A second but related claim against Viva Leisure is a breach of good faith by the corporation to its franchisees. Owners allege they did not agree to buy gyms that would then be competed against by their own franchisor. One source told the AFR that Viva Leisure's access to franchise owners' financial and business information gave it an unfair advantage.

Viva Leisure share price snapshot

The Viva share price is down 7.73% over the past 12 months, and its shares have fallen in value by 34.8% since the beginning of the year. In December, shares in the company were trading for a record $3.66.

At its current valuation, Viva Leisure has a market capitalisation of $157.4 million.

The post Viva Leisure (ASX:VVA) share price tanks 9% on impending lawsuit appeared first on The Motley Fool Australia.

Why is the Viva Leisure share price on watch?

Viva Leisure reported stronger membership numbers for the quarter ended 31 March 2021 (Q3 FY21). Direct member numbers totalled 120,300, up from 117,000 on 25 February 2021. Plus, Fitness membership increased to 177,551 compared to 172,364 members in February.

Membership suspensions have reportedly remained in line with management expectations at 4,461, down from 4,700 in February.

Today's update means Viva Leisure has grown its direct membership base by 313.1% since FY2017 when it recorded 29,124 members.

The Viva Leisure share price is on watch this morning following the update. As at yesterday's close, shares in the leisure group were trading at $2.60 with a $213.1 million market capitalisation.

Viva Leisure this morning reported an increased annual revenue run rate. That now sits above $95 million, up from $90 million in January 2021, with March bringing in $8.1 million.

The Aussie company has appointed Gordon Martin as head of franchising. He is a former general manager of Anytime Fitness Australia with success managing brands in the fitness industry. According to the release, the appointment is part of a master plan to rapidly expand the Plus Fitness network across Australia and overseas.

Viva Leisure now has 107 operating corporate locations in its portfolio, and all are open without restriction. The company has reportedly secured a further 20 locations, with the majority opening during FY2022.

Foolish takeaway

The Viva Leisure share price is in focus early this morning after a quarterly update from the gym operator. Shares in the company are up 52.1% in the last year after being smashed in the March 2020 bear market but have struggled to climb higher in 2021.

The All Ordinaries Index (ASX: XAO) has climbed 4.7% this year to 7,280.6 points, while the Viva Leisure share price is down 11.3% to start the year.

The post Why the Viva Leisure (ASX:VVA) share price is one to watch appeared first on The Motley Fool Australia.

Shares in the health club operator raced up 10.1% to an intraday high of $3.05 in mid-morning trade before retreating slightly to $3 at the time of writing.

Acquisition and membership update

The Viva Leisure share price is among the top performers on the ASX market today after the company reported two positive updates.

Firstly, the company advised it has completed the acquisition of 6 Pinnacle health clubs earlier than expected. With all conditions relating to the sale satisfactorily met, the formal takeover was brought forward from its original 10 March timeframe.

Viva Leisure said the early acquisition will enable it to focus on bringing the new clubs in line with its hub and spoke strategy. The company seeks to penetrate the Melbourne suburban-metro market with its latest offering. The group currently operates a total of 101 health clubs across Australia's eastern seaboard.

In addition, Viva Leisure reported that its membership base has grown to 115,000 members in the past 3 months. The record milestone reflects the growing trend of people leading more active and healthy lifestyles. The company's membership base stood at 96,404 members in the prior corresponding period.

Viva Leisure will release its half-year results for the 2021 financial year on 25 February.

What did management say?

Commenting on the early acquisition, Viva Leisure CEO and managing director Harry Konstantinou, said:

We are pleased to have completed the acquisition of the Pinnacle clubs, a high-quality and complementary business to the Viva Brands. The transaction will significantly expand our reach and penetration throughout the Melbourne suburban-metro market.

We look forward to welcoming our new team members, integrating the operations, and serving our new and expanded Victorian membership base.

About the Viva Leisure share price

The Viva Leisure share price is up 4% over the past 12 months. Its shares plunged in March last year to a low of 66 cents due to COVID-19 government restrictions. However, the company's shares have since rebounded.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $248 million.

The post Why the Viva Leisure (ASX:VVA) share price has stormed 10% higher appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There's also one called WAM Research Limited (ASX: WAX) which looks at smaller businesses on the ASX.

WAM says WAM Research invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that's before fees, expenses and taxes) of 15.1% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 7.8% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Viva Leisure Ltd (ASX: VVA)

Viva Leisure is a small cap ASX share with a market capitalisation of $217 million.

WAM Research explained that Viva Leisure operates 86 company owned fitness clubs throughout Australia, together with the recently acquired Plus Fitness group which is a franchise model of 200 fitness clubs.

In October, Viva Leisure announced a milestone of over 100,000 members, with clubs in the Australian Capital Territory (ACT), New South Wales (NSW) and Queensland all reporting net growth and the largest number of new member signups in history during September.

Viva Leisure also acquired the FitHQ business in Campbelltown, NSW, adding 1,500 new members.

Last week it announced a $30 million capital raising to pursue more growth opportunities. Viva Leisure new has over 103,000 members and, when including the 175,000 Plus Fitness network members, it now has around 278,000 members.

The company has an estimated revenue run rate of around $80.4 million based on October 2020.

Management said that it has a robust and deep pipeline of acquisition opportunities including small health club groups. It's in advanced discussions with multiple Plus Fitness franchisees to purchase locations.

It has a target of over 400 corporate owned locations by 2025.

Bapcor Ltd (ASX: BAP)

Bapcor is the biggest Australasian auto parts business in Australia and New Zealand with a variety of automotive businesses targeting different parts of the market.

It has its trade division, which includes Burson Auto Parts. The ASX share has a retail division which includes Autobarn. Bapcor has a service business which owns Midas and ABS. The auto parts business owns various specialist wholesale businesses and it also added a commercial truck parts group too. Finally, it has a small but growing Burson network in Thailand.

The WAM Research investment team pointed out that in the quarter for the three months to 30 September 2020 it grew revenue by 27% compared to the prior corresponding period, with retail revenue rising 47% and specialist wholesale revenue going up 45%.

WAM Research said that Bapcor has benefited from an increase in domestic travel, reduced usage of public transport and increased second-hand car sales. The fundie said that Bapcor has a strong balance sheet and believes it's well placed to make earnings accretive acquisitions.

In the recent trading update, Bapcor CEO Darryl Abotomey spoke of the company's defensive qualities: "The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus."

According to Commsec, at the current Bapcor share price, it's valued at 17x FY23's estimated earnings.

The post 2 turnaround ASX shares rated as buys by leading fund manager appeared first on The Motley Fool Australia.

At the time of writing, the health club operator's shares are up 2% to $3.10.

This leaves the Viva Leisure share price trading within sight of its record high of $3.31.

Why was the Viva Leisure share price in a trading halt?

Viva Leisure requested a trading halt late last week so it could undertake a fully underwritten $30 million institutional placement.

This morning the company announced the completion of the institutional placement, raising $30 million at a 4.3% discount of $2.90 per new share. Approximately 10.3 million new Viva Leisure shares are to be issued under the placement.

According to the release, the placement was well supported by both existing shareholders and several new institutional investors.

Why was Viva Leisure raising funds?

Management advised that the proceeds will be used to pursue future growth opportunities. This includes the acquisition of health clubs and locations, the buyback of franchisee owned Plus Fitness centres, and greenfield rollouts.

It believes this will accelerate Viva Leisure's growth and help it execute on its target of having 400+ corporate owned locations by 2025. This compares to the 79 locations it had operating at the end of FY 2020.

Management notes that it has identified a plan to add approximately 300 locations across its network. This will be through utilising its pipeline of franchisee owned Plus Fitness franchises, the continuous roll out of new greenfield locations, and other acquisitions.

Viva Leisure's CEO and Managing Director, Harry Konstantinou, commented: "We are pleased with the support that Viva Leisure has again received from both existing and new institutional investors. We will look to immediately deploying the funds raised to accelerate our growth and execute on our 2025 target of having 400+ corporate owned locations."

The post Why the Viva Leisure (ASX:VVA) share price is climbing higher today appeared first on The Motley Fool Australia.

Why is the Viva Leisure share price in a trading halt?

Viva Leisure requested a trading halt this morning while it undertakes a fully underwritten $30 million equity raising.

According to the release, the company is raising the funds via an institutional placement at a price of $2.90 per new share. This represents a 4.3% discount to its last close price of $3.03.

The proceeds will be used to pursue future growth opportunities. This includes the acquisition of health clubs and locations, the buyback of franchisee owned Plus Fitness centres, and greenfield rollouts.

In respect to acquisitions, management notes that it has a robust and deep pipeline of acquisition opportunities. These range from single club operators to large established health club groups.

These potential acquisitions will allow Viva Leisure to strengthen its presence in under-served locations and regions.

Management notes that there are strong acquisition synergies available for each opportunity and there is a preference for complementary overlap with existing locations.

The purchase price for these sites is expected to be equal to the EBITDA multiples paid for previous health club groups. This was approximately ~3 times EBITDA.

As for its franchise buybacks, management advised that it has identified buybacks within the range of $9 million to $10 million. These franchises relate to its recently completed acquisition of Australian Fitness Management, which is the master franchisor of the Plus Fitness brand.

Finally, in respect to its greenfield plans, the company expects to open 20+ locations between now and the end of FY 2021. It advised that 19 of these locations have been secured and leases executed.

Long term growth plans.

Looking ahead, Viva Leisure has a plan to add approximately 300 locations (including greenfield and acquisitions) by 2025. This results in a 2025 Target of 400+ locations.

Management also recognises the potential for additional locations nationwide, with the pipeline of franchisee owned Plus Fitness franchises representing a significant growth opportunity.

Trading update.

In addition to the equity raising, the company has provided a trading update this morning.

It revealed that since 30 June 2020, memberships have grown by 8,764. This means Viva Leisure now has 103,000 members. However, when including the 175,000 Plus Fitness network members, its total members grow to ~278,000.

As of 24 November 2020, there are 6,175 members on requested suspension, which is down from 15,000 in September.

Revenues in October 2020 were higher than pre-COVID shutdown levels, despite nearly 12,000 members still being suspended and excluding revenue from Victoria which only re-opened on 9 November 2020.

This led to its October 2020 revenue coming in at a run rate of ~$80.4 million.

The post Why the Viva Leisure (ASX:VVA) share price is in a trading halt appeared first on The Motley Fool Australia.

So that's what we're here for! Every month, WAM puts out a market update discussing the ASX shares its various LICs are buying and selling. Here are some of the shares that WAM's LICs were bullish on (as of 31 October).

WAM's latest ASX share picks

Kicking off with the flagship WAM Capital, and WAM names Nine Entertainment Co Holdings Ltd (ASX: NEC), and Bapcor Ltd (ASX: BAP) as the portfolio's biggest contributors over the month of October. WAM notes that Nine is, in its view, well positioned to "benefit from increased advertising spending in the lead up to the Christmas period" through its various television, streaming, radio and print assets.

Turning to Bapcor, WAM believes the benefits the car parts provider has enjoyed this year will continue. It notes that the company is cashed up and "well placed to make earnings accretive acquisitions".

Some more 'buys'

Bapcor also features in another Wilson LIC's picks for the month: WAM Research Limited (ASX: WAX). According to WAM, WAM Research is also bullish on Bapcor, as well as fitness club operator Viva Leisure Ltd (ASX: VVA). The managers at WAM Research believe Viva is well positioned to benefit from Victoria's easing of lockdown restrictions over the coming months.

WAM's large-cap LIC, WAM Leaders Ltd (ASX: WLE), is focusing on different areas. WAM reports that its favourite ASX shares for the month included BlueScope Steel Limited (ASX: BSL) and Challenger Ltd (ASX: CGF). For BlueScope, WAM expects that global stimulus programs will benefit this steelmaker. Turning to Challenger, WAM is confident this ASX share is undervalued on current pricing. WAM stated "we believe that there is significant value, particularly in the funds management business, that is not appreciated by the market".

My Fool colleague, Tristan Harrison, covered some of WAM Microcap Ltd (ASX: WMI)'s latest picks this morning. But WAM's only internationally-focused LIC, WAM Global Ltd (ASX: WGB), is reportedly bullish on Quanta Services Inc (NYSE: PWR) as well as Avantor Inc (NYSE: AVTR). Quanta is an infrastructure company WAM believes is well-placed to benefit from "grid modernisation, renewables growth and 5G rollout" over in the United States. Meanwhile, WAM sees undervaluation and "additional upside" for Avantor, given the company has opportunities surrounding coronavirus vaccine production.

The post Top fundie, Wilson, names ASX shares to buy appeared first on The Motley Fool Australia.

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.

The post Here's why the Viva Leisure (ASX:VVA) share price has shot up 7% today appeared first on The Motley Fool Australia.