Virgin Active seeking cash injection to ride out the pandemic
Leisure Opportunities
Job search
Job Search
see all jobs
Latest job opportunities
Leicester City Council
£8,264 - £8,997 for 12 hours per week
Aylestone Leisure Centre, Leicester
Futura Learning Partnership
£27,000 - £32,000pa plus 10% bonus potential
West of England
LeisureForce
IRO UK£ 2,600 per month tax free
East Coast of Saudi Arabia
Coach Gyms
£15k basic + commission + Bonus
Leeds / Harrogate, UK
énergie Fitness
Competitive
Streatham, London, UK

Virgin Active seeking cash injection to ride out the pandemic

Job opportunities
LeisureForce
IRO UK£ 2,600 per month tax free
location: East Coast of Saudi Arabia
more jobs

Virgin Active has become the latest big-box operator to signal its intention to raise cash to buffer it from the impact of the pandemic.

The operator, which has 42 clubs in the UK, is 80 per cent owned by Brait – the investment group of former billionaire, Christo Wiese.

Brait bought its stake from Richard Branson's Virgin Group and investor CVC in April 2015, leaving Branson with 20 per cent and valuing the business at £1.3bn.

Virgin Active filed its 2019 accounts on 24 December 2020, revealing how it has been coping with the pandemic so far.

In spite of mitigating actions taken to reduce the impact of the pandemic on the business – which included senior staff taking a 20 per cent pay cut during closures – the company was forced to take an additional loan of £25m in June 2020, which was matched by a £20m capital contribution from shareholders and a £5m deferral of licence fees.

The directors reported that all interest covenants up to 2021 were waived by lenders and that the company arranged a new liquidity covenant for the period from June 2020 to December 2021.

The accounts show the Virgin Active’s balance sheet is under pressure. Borrowings leapt between 2018 and 2019, increasing interest payments from £1.18m in 2018 to £13.61m in 2019 and driving the business from a £4.67m profit in 2018 to a loss of £1.18m in 2019.

The company is now understood to be looking to raise around £50m in cash, according to industry insiders, but it’s thought this will be done through the sale of equity, rather than from loan notes, to avoid gearing the business any further.

In the financial statement accompanying its 2019 accounts, Virgin Active said it aims to be able to continue to trade with the support of its ultimate backer – Virgin Active Investment Holdings – which has indicated it will stand behind the business, however, the directors say they accept that although this is the current position, this reliance on the financial support of the holding company must be seen as representing a “material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”

In spite of this warning note, it’s thought unlikely Wiese, Branson or the company’s banks would see any harm come to the business and that the current owners are likely to hold their nerve unless challenges escalate and lead to a fire sale.

If Brait ultimately has to sell its stake, then Virgin Active could be snapped up by one of the many private equity houses eyeing the sector for a deal.

Brait was thought to have been considering selling a slice of Virgin Active in 2019, with Morgan Stanley rumoured to be casting around for buyers, however, the pandemic has put a halt to these plans.

Virgin Active had 243 health clubs globally at the end of 2019, with more than half in southern Africa and others in Italy, Australia, UK, Singapore and Thailand.

The company has one of the most colourful backgrounds of any fitness operator, having – over the years – bought Holmes Place (2006) and Esporta (2011) as well as the bankrupt Health and Racquet Club chain (2003) and also having sold clubs to both Nuffield Health (2016) and David Lloyd Leisure (2017).

Sign up for FREE ezines & magazines
Virgin Active has become the latest big-box operator to signal its intention to raise cash to buffer it from the impact of the pandemic.
PTS,HAF,FIT,IND
2020/THUMB346900_205783_581089.jpg

More News

1 - 15 of 43,439
20 Sep 2021
Peloton has completed the merging of its commercial operations with Precor, the equipment brand it acquired earlier this year. The new, expanded Peloton Commercial division ... More
20 Sep 2021
Half of UK adults aren't happy with their physical fitness levels, according to a study by Savanta ComRes. A poll of more than 2,000 adults ... More
17 Sep 2021
Temporary measures brought in to support businesses in the UK from insolvency during the pandemic will be phased out from 1 October, the government has ... More
17 Sep 2021
Nadine Dorries has replaced Oliver Dowden as the Secretary of State for Digital, Media, Culture and Sport in the UK – becoming the 10th person ... More
16 Sep 2021
In a major move against the gym market, Apple has revealed a number of upgrades to its Fitness+ platform, coinciding with the launch of its ... More
16 Sep 2021
Patients treated for stress in the Belgian capital Brussels will be offered free visits to museums, as part of a three-month trial designed to rebuild ... More
FreeMotion Fitness
FreeMotion Fitness
15 Sep 2021
Physical activity professionals in England will soon be able to access free, one-to-one learning with Google to get their digital marketing strategies in line with ... More
14 Sep 2021
Fitness equipment giant Nautilus has acquired VAY, a firm specialising in AI and motion technology. Based in Switzerland, VAY’s proprietary technology enables computers to understand ... More
14 Sep 2021
An award celebrating outstanding individuals in the fitness sector is to be named in honour of Jan Spaticchia, who passed away suddenly earlier this year. ... More
09 Sep 2021
David Lloyd Leisure (DLL) has reorganised its top team in order to expand its estate through acquisition, after seeing a "remarkable" bounceback in membership levels ... More
09 Sep 2021
Downtown Miami’s upcoming mixed-use development Legacy Hotel & Residences has signed a joint venture deal called Blue Legacy Ventures (JV) with faith-based nonprofit integrated health ... More
08 Sep 2021
Colin Waggett has revealed that the recent deal, which saw KSL Capital Partners acquire a majority interest in luxury health club operator Third Space, had ... More
Les Mills
Les Mills
08 Sep 2021
3d Leisure has acquired franchised studio operator Yourzone45 from Elms Fitness Group for an undisclosed sum. Elms Fitness is led by industry veterans Andy Kay, ... More
08 Sep 2021
Educational organisation The Power of Touch (TPOT) will host a virtual conference this October designed to educate and empower health and wellness professionals treating clients ... More
07 Sep 2021
A new, one-day conference will create a platform for a debate on how the global health and fitness industry can help tackle climate change. Organised ... More
Miha Bodytec GmbH
Miha Bodytec GmbH
1 - 15 of 43,439
Technogym
Technogym