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Les Mills International
Les Mills International
Les Mills International
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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

News

Virgin Active investors preparing rescue deal for fitness chain

Virgin Active investors are understood to be preparing a £60m+ funding injection into the fitness operator, in a bid to secure its future.

As reported by HCM in December, Virgin Active has been actively looking to raise cash to buffer it from the impact of the latest lockdowns in Italy and the UK.

Investors are believed to be considering providing the business with new capital, while also negotiating a deal with lenders and landlords, asking them to make a "meaningful financial contribution" to enable the company to continue trading.

Lloyds Bank had been seeking to offload its exposure to Virgin, but it's understood that it has not found any takers.

Virgin Active is 80 per cent owned by Brait – the investment group of former billionaire, Christo Wiese – which 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.

Filing its 2019 accounts on 24 December 2020, Virgin Active revealed 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.

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.”

Virgin Active had 243 health clubs globally at the end of 2019, with 42 in the UK.

Financial arrangements for the South African business are separate from those of the remainder of the portfolio.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Virgin Active investors are understood to be preparing a £60m+ funding injection into the fitness operator, in a bid to secure its future.
HAF,FIT,IND,PTS
2021/THUMB347136_385793_841873.jpg
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Featured supplier news
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Catalogue Gallery
Click on a catalogue to view it online
Directory
trade associations
International SPA Association - iSPA: trade associations
Uniforms
Service Sport: Uniforms
Exercise equipment
Power Plate: Exercise equipment
Red Light Therapy
 Red Light Rising: Red Light Therapy
Spa software
SpaBooker: Spa software
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Total Vibration Solutions / TVS Sports Surfaces: Flooring
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Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

News

Virgin Active investors preparing rescue deal for fitness chain

Virgin Active investors are understood to be preparing a £60m+ funding injection into the fitness operator, in a bid to secure its future.

As reported by HCM in December, Virgin Active has been actively looking to raise cash to buffer it from the impact of the latest lockdowns in Italy and the UK.

Investors are believed to be considering providing the business with new capital, while also negotiating a deal with lenders and landlords, asking them to make a "meaningful financial contribution" to enable the company to continue trading.

Lloyds Bank had been seeking to offload its exposure to Virgin, but it's understood that it has not found any takers.

Virgin Active is 80 per cent owned by Brait – the investment group of former billionaire, Christo Wiese – which 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.

Filing its 2019 accounts on 24 December 2020, Virgin Active revealed 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.

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.”

Virgin Active had 243 health clubs globally at the end of 2019, with 42 in the UK.

Financial arrangements for the South African business are separate from those of the remainder of the portfolio.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Virgin Active investors are understood to be preparing a £60m+ funding injection into the fitness operator, in a bid to secure its future.
HAF,FIT,IND,PTS
2021/THUMB347136_385793_841873.jpg

News

Exercise has been highlighted as a crucial weapon in cancer patients’ battle against the disease.
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Mindbody has announced it's buying ClassPass, the consumer wellness subscription service that enables people to
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Innovatise UK Ltd
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The Global Health & Fitness Alliance (GHFA) has revealed the makeup of its inaugural nine-member
The 40th Annual IHRSA International Convention & Trade Show (IHRSA 2021) begins today in Dallas,
A new study has suggested that strength training can result in people losing around a
Basic-Fit has officially opened its 1,000th club, with the launch of a new site in
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Les Mills
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HCM Magazine
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Fiit Pods have been designed for members who prefer individual training to group exercise classes
HCM Magazine
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HCM Magazine
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Life Fitness introduces Integrity SL, the next-generation LED console with intuitive functionality and digital connectivity
HCM Magazine
Sponsored
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HCM Magazine
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Billed as the ‘2021 Experience Tour’, Egym has taken its connected gym floor experience on the road around the UK
HCM Magazine
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Running booms when health clubs and gyms are closed. Could this enthusiasm result in treadmill training becoming the new spinning? Kath Hudson reports
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At TGOGC, we believe our own wellbeing is wrapped up in nature and the positive impact we can each have on the health of the planet
HCM magazine
Fuel the debate about issues and opportunities across the industry. We’d love to hear from you – [email protected]
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Colin Waggett

CEO, Third Space
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Featured supplier news
Featured supplier news: FitnessOnDemand launches new live-streaming feature for all fitness clubs and their members
FitnessOnDemand (FOD) [IHRSA BOOTH 1509] the leader in on-demand content from the world’s most innovative fitness brands and celebrity trainers, this month introduces a new platform evolution for all club operators and their customers.
Featured supplier news
Featured supplier news: Founder of dynamic yoga platform launches cinematic wellbeing classes for luxury spas and hotels
Matt Miller, founder of leading yoga training platform Broga has announced the launch of Earth+Sky – a collection of cinematic virtual wellbeing classes filmed in breath-taking locations around the world.
Featured operator news
Featured operator news: Everyone Active bolsters Everyone on Demand and enters second year with five new partnerships
Everyone Active has signed a number of new deals which will see the operator strengthen its digital product offering, Everyone on Demand.
Featured operator news
Featured operator news: Everyone Active generates £342m in social value
Award-winning leisure operator Everyone Active generated £342million in social value at its sites across the country in 2019/20.
Company profiles
Company profile: REGUPOL BSW GmbH
REGUPOL is one of the leading suppliers of sports and safety flooring, anti-slip mats for ...
Company profiles
Company profile: fibodo Limited
fibodo is the digital solution helping people lead healthier and happier lives. From grassroots individual ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
trade associations
International SPA Association - iSPA: trade associations
Uniforms
Service Sport: Uniforms
Exercise equipment
Power Plate: Exercise equipment
Red Light Therapy
 Red Light Rising: Red Light Therapy
Spa software
SpaBooker: Spa software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Management software
Premier Software Solutions: Management software
Whole body cryotherapy
Zimmer MedizinSysteme GmbH / icelab: Whole body cryotherapy
Fitness equipment
Octane Fitness: Fitness equipment
Wearable technology solutions
MyZone: Wearable technology solutions
Property & Tenders
Welwyn Garden City
Welwyn Hatfield Borough Council
Property & Tenders
Newport, Shropshire
Lilleshall Sports Academy
Property & Tenders
Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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Les Mills International
Les Mills International