Virgin Active posts strong earnings as expansion kicks in

HEALTH club operator Virgin Active is poised to go into the black after reporting record underlying earnings of more than £100m yesterday.

The group also saw a 15 per cent rise in revenues to £391m after membership at its fitness centres grew by four per cent to 919,000, in the year to December 2009.

Net debt has fallen to about £170m while the group has pinned its hopes for the future in expansion, with a focus on Italy and South Africa.

The firm had been hemorrhaging cash but its pre-tax losses have been narrowing despite the recession. Its last published set of accounts showed a pre-tax loss of £5m in 2008, on revenues of £341m.

That compared with a pre-tax loss of £26.6m in 2007.

Virgin Active chief executive Matthew Bucknall said: “The trend that we have seen throughout the recession confirms our opinion that health and fitness has become a core aspect to people’s lives.”

The group, which has 71 clubs in the UK and 187 sites in total, is majority-owned by Sir Richard Branson’s Virgin Group.

The business opened eight new venues last year and charges around £47-a-month to UK customers.

Meanwhile, Bucknall said he would not rule out an IPO for the company in which private equity companies Bridegpoint and Permira have minority stakes.