GET HCM
magazine
Sign up for the FREE digital edition of HCM magazine and also get the HCM ezine and breaking news email alerts.
Not right now, thanksclose this window
Active IQ
Active IQ
Active IQ
Follow Health Club Management on Twitter Like Health Club Management on Facebook Join the discussion with Health Club Management on LinkedIn Follow Health Club Management on Instagram
UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

News

Virgin Active seeking cash injection to ride out the pandemic

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 here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
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
Latest News
A report commissioned by Parkrun has estimated that allowing mass-participation outdoor events carries an "exceptionally ...
Latest News
Jan Spaticchia, founder and chair of énergie Fitness has died aged 51 following a short ...
Latest News
A new pioneering approach looks to help cancer patients prepare for and respond to treatment ...
Latest News
Peloton is recalling all of its Tread and Tread+ machines in the US, after striking ...
Latest News
Health club operator Bannatyne is repositioning itself as a wellness provider, as it looks to ...
Latest News
Health clubs and leisure centres in Northern Ireland reopened their doors on Friday 30 April, ...
Latest News
It's time to refocus on the changing needs of older adults, according to a new ...
Latest News
In breaking news, HCM understands that David Lloyd Leisure's Glenn Earlam will move from his ...
HCM Magazine
Sponsored
Our product development team continued to work on innovations throughout 2020 and as a result we were able to launch two major product lines last year
HCM Magazine
Hospitality
Fitness, wellness and recovery are driving new investments in the hotel and resorts market, with Kerzner the latest to enter this space, as Megan Whitby reports
HCM Magazine
Interview
Amid reports of a bid to buy the business, HCM was keen to get an update on the state of play at the Bannatyne Group. We sent Kate Cracknell to (virtually) speak to the FD
HCM Magazine
Policy
The health and fitness industry felt as though it wasn’t invited to its own party when news of the government’s Fit Miles programme broke. But what does it actually mean and is it good or bad news for the sector? Kath Hudson investigates
HCM Magazine
Research
Lack of exercise is a major cause of death from COVID-19, according to new research, with only advanced age and organ transplant leading to greater risk
HCM Magazine
Sponsored
More than 30,000 Hussle users have been turned into direct members in the last 18 months. Find out how Hussle can help your business bounce back
HCM Magazine
Sponsored
Matrix Fitness is launching a new three-tiered cardio range to provide total versatility, explains Matt Pengelly
HCM Magazine
HCM magazine
A new report, conducted by Deloitte, analyses the growth of the Chinese fitness industry and the outlook ahead, as Kristen Walsh reports
HCM magazine
HCM People

Helena Field

Wellbeing by Rangeford Villages
The idea was to weave a wellness culture into the fabric of village life by incorporating movement, rest and relaxation, nutrition, connectedness, purpose and environment
HCM magazine
We’re going after health club and spa management contracts for hotels and independent gyms and also planning to launch a You Fit franchise
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: Bounce back faster with a new risk-free joiner channel
The industry is eagerly awaiting the reopening of health clubs and leisure centres in another year affected by COVID-19, where the only thing that’s been certain is uncertainty.
Featured supplier news
Featured supplier news: iFit: your readymade omnichannel fitness solution
With gyms and leisure centres in England reopened, and the rest of the UK due to shortly follow suit, the time for being theoretical is over.
Company profiles
Company profile: Physical Company
Physical Company’s mission statement is ‘First for Fitness Solutions’ – a statement that reflects the ...
Company profiles
Company profile: Core Health & Fitness
Core Health & Fitness offers the commercial health and fitness club marketplace an unmatched portfolio ...
Supplier Showcases
Supplier showcase - Funxtion
Catalogue Gallery
Click on a catalogue to view it online
Directory
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Wearable technology solutions
MyZone: Wearable technology solutions
Trade associations
International SPA Association - iSPA: Trade associations
Exercise equipment
Matrix Fitness: Exercise equipment
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Lockers/interior design
Fitlockers: Lockers/interior design
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Salt therapy products
Himalayan Source: Salt therapy products
Spa software
SpaBooker: Spa software
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

News

Virgin Active seeking cash injection to ride out the pandemic

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 here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
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

News

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
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,
fibodo Limited
fibodo Limited
With gyms and leisure centres in England reopened, and the rest of the UK due
It's time to refocus on the changing needs of older adults, according to a new
In breaking news, HCM understands that David Lloyd Leisure's Glenn Earlam will move from his
Sport England has reported a drop of 710,000 in the number of people classed as
Independent gyms in the UK have fared better during the pandemic than larger corporate operators
Actor Mark Wahlberg has officially joined Power Plate as an investor in parent company, Performance
Fitness and health are priority areas of expenditure for consumers in six key nations around
Global Wellness Summit
Global Wellness Summit
Safety, quality of service, and member engagement are key in order to offer a unique
Taking antihistamines prior to exercise can prevent the body from getting the full benefit of
Sport England has teamed up with Youth Sport Trust to develop a new online resource
Rowbots, the boutique fitness brand co-founded by star footballer Gareth Bale, has revealed plans to
Steven Schwartz, CEO of Midtown Athletic Clubs, has announced the sale of the company's Midtown
United Fitness Brands (UFB), the recently launched ‘supergroup’ of boutique fitness brands, has acquired Barrecore,
Global boutique fitness giant, Xponential Fitness, has refused to comment on rumours it's considering an
Miha Bodytec GmbH
Miha Bodytec GmbH
Offering red light therapy to your members can create a valuable source of secondary spend,
A study by virologists at Imperial College London, which is awaiting peer-review, suggests the risk
International luxury hotel group Kempinski has launched a new room category, which it will market
FIBO Exhibition
FIBO Exhibition
1 - 20 of 11,880
HCM Magazine
Sponsored
Our product development team continued to work on innovations throughout 2020 and as a result we were able to launch two major product lines last year
HCM Magazine
Hospitality
Fitness, wellness and recovery are driving new investments in the hotel and resorts market, with Kerzner the latest to enter this space, as Megan Whitby reports
HCM Magazine
Interview
Amid reports of a bid to buy the business, HCM was keen to get an update on the state of play at the Bannatyne Group. We sent Kate Cracknell to (virtually) speak to the FD
HCM Magazine
Policy
The health and fitness industry felt as though it wasn’t invited to its own party when news of the government’s Fit Miles programme broke. But what does it actually mean and is it good or bad news for the sector? Kath Hudson investigates
HCM Magazine
Research
Lack of exercise is a major cause of death from COVID-19, according to new research, with only advanced age and organ transplant leading to greater risk
HCM Magazine
Sponsored
More than 30,000 Hussle users have been turned into direct members in the last 18 months. Find out how Hussle can help your business bounce back
HCM Magazine
Sponsored
Matrix Fitness is launching a new three-tiered cardio range to provide total versatility, explains Matt Pengelly
HCM Magazine
HCM magazine
A new report, conducted by Deloitte, analyses the growth of the Chinese fitness industry and the outlook ahead, as Kristen Walsh reports
HCM magazine
HCM People

Helena Field

Wellbeing by Rangeford Villages
The idea was to weave a wellness culture into the fabric of village life by incorporating movement, rest and relaxation, nutrition, connectedness, purpose and environment
HCM magazine
We’re going after health club and spa management contracts for hotels and independent gyms and also planning to launch a You Fit franchise
HCM magazine
For years the health and fitness sector has aspired to be taken seriously by the health sector. Is now the time? asks Kath Hudson
HCM magazine
Groundbreaking research from around the world is proving the many ways exercise can support health and creating opportunities for the sector to be more valued and useful
HCM magazine
Switzerland’s no frills chain, NonStop Gym, has appointed Funxtion to create its member training app, as CEO Ernst De Neef explains
HCM magazine
Over time, town planning has led to the creation of obesogenic environments, but Hamilton in New Zealand is taking a fresh approach to mobilising its population, by turning the city into a playground, as Kath Hudson reports
HCM magazine
When women train on half-truths and crap science it’s painfully limiting
HCM magazine
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: Bounce back faster with a new risk-free joiner channel
The industry is eagerly awaiting the reopening of health clubs and leisure centres in another year affected by COVID-19, where the only thing that’s been certain is uncertainty.
Featured supplier news
Featured supplier news: iFit: your readymade omnichannel fitness solution
With gyms and leisure centres in England reopened, and the rest of the UK due to shortly follow suit, the time for being theoretical is over.
Company profiles
Company profile: Physical Company
Physical Company’s mission statement is ‘First for Fitness Solutions’ – a statement that reflects the ...
Company profiles
Company profile: Core Health & Fitness
Core Health & Fitness offers the commercial health and fitness club marketplace an unmatched portfolio ...
Supplier Showcases
Supplier showcase - Funxtion
Catalogue Gallery
Click on a catalogue to view it online
Directory
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Wearable technology solutions
MyZone: Wearable technology solutions
Trade associations
International SPA Association - iSPA: Trade associations
Exercise equipment
Matrix Fitness: Exercise equipment
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Lockers/interior design
Fitlockers: Lockers/interior design
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Salt therapy products
Himalayan Source: Salt therapy products
Spa software
SpaBooker: Spa software
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
Search news, features & products:
Find a supplier:
Active IQ
Active IQ