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Les Mills
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Les Mills
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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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Click on a catalogue to view it online
Directory
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Salt therapy products
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Whole body cryotherapy
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Spa software
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Property & Tenders
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Diary dates
07-09 Jun 2021
Virtual summit,
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12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
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18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
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28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
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

A court has given Virgin Active the green light to erase the rent arrears it
The Swimming Teachers' Association (STA) has partnered with a psychologist to provide new mindfulness and
A report commissioned by Parkrun has estimated that allowing mass-participation outdoor events carries an "exceptionally
Jan Spaticchia, founder and chair of énergie Fitness has died aged 51 following a short
A new pioneering approach looks to help cancer patients prepare for and respond to treatment
Peloton is recalling all of its Tread and Tread+ machines in the US, after striking
Advance Gym
Advance Gym
With gyms and leisure centres in England reopened, and the rest of the UK due
Health club operator Bannatyne is repositioning itself as a wellness provider, as it looks to
Health clubs and leisure centres in Northern Ireland reopened their doors on Friday 30 April,
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In breaking news, HCM understands that David Lloyd Leisure's Glenn Earlam will move from his
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Prescribe exercise, not painkillers, to chronic pain sufferers, says the UK’s National Institute for Health and Care Excellence, as Tom Walker reports
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Opinion
promotion
The UK’s first dedicated leisure development framework has completed its first four-year term with £144m committed investment in public leisure projects.
Opinion: UK’s first leisure framework celebrates £144m investment in public leisure
Featured supplier news
Featured supplier news: Connect for success with Precor
Members are returning post-lockdown expecting a fully integrated service, meaning digital connectivity has never been more important.
Featured supplier news
Featured supplier news: Engaging smart technology helps gyms and fitness professionals get their leading role back
Safety, quality of service, and member engagement are key in order to offer a unique fitness experience that will boost the re-start.
Company profiles
Company profile: Legend Club Management Systems (UK) Ltd
Legend provides the leading software solution for driving improvements in leisure operations. We deliver savings ...
Company profiles
Company profile: Les Mills UK
For over 50 years Les Mills has been leading the way in fitness to inspire ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Salt therapy products
Saltability: Salt therapy products
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Spa software
SpaBooker: Spa software
Management software
fibodo Limited: Management software
Fitness equipment
Precor: Fitness equipment
Red Light Therapy
 Red Light Rising: Red Light Therapy
Trade associations
International SPA Association - iSPA: Trade associations
Lockers/interior design
Crown Sports Lockers: Lockers/interior design
Wearable technology solutions
MyZone: Wearable technology solutions
Property & Tenders
Pendine Sands, Carmarthenshire
Carmarthenshire County Council
Property & Tenders
Diary dates
07-09 Jun 2021
Virtual summit,
Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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Les Mills
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