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Canberra-headquartered Viva Leisure (ASX: VVA) has reported a 55.4 per cent bulking of its revenue for FY23 to $141.2 million across its gym businesses, alongside similar percentage gains for member visits which averaged at 68,397 per day.
The company is the master franchisor for the chain Plus Fitness, and also has brands such as the health club offering Club Lime, functional fitness studios Hiit Republic, and Groundup, focused on pilates, yoga and barre.
Viva's unaudited revenue result is slightly above previous guidance of $137-140 million, and EBITDA is expected to be at the upper end of previous guidance of $28-30 million for FY23.
"We are extremely pleased with the results delivered. They demonstrate the resilience of the business in an economic environment where discretionary spend has been impacted by higher interest rates and rising inflation. Despite these headwinds, the company has achieved record levels of memberships, revenue and locations," says Viva Leisure CEO and managing director Harry Konstantinou.
"Our core Club Lime brand remains very strong, as does the GroundUp Boutiques. The pricing approachability of both brands has resulted in the resilience of the customer that sees strong value in maintaining health and wellness, not at the expense of cuts in discretionary spend."
He says Viva Leisure’s more premium brand, Hiit Republic, is performing well considering the economic backdrop and curtailing of some discretionary spend.
"Hiit Republic is the smallest membership base of Viva, encompassing approximately 3 per cent of the membership base," he explains.
"We anticipate its higher pricing point to limit growth in FY24 compared to our core business."
Konstantinou highlights consumers continue to be "highly amenable" to their health and wellness, even despite the economic backdrop.
"We pride ourselves on encouraging our membership to live healthy lifestyles in a social and welcoming environment, which has been well demonstrated in the 25 million visits to our clubs in FY23," he says.
"Investment in the industry is exemplified by Viva Leisure's remarkable achievement of selling four Plus Fitness Franchise Territories in the month of June alone."
Viva also notched a revenue record for the month of June at $12.9 million, also representing a 26.4 per cent jump on the prior month.
VVA shares are up 6.48 per cent at $1.315 at the time of publication.
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