Investment holding company Brait has high hopes for its biggest asset, Virgin Active, as global trends point to an increased focus on health and wellness.
The group laid out plans in its latest annual results to increase capital expenditure in the gym conglomerate over the next three years.
Brait said Virgin Active had recently pivoted to a holistic wellness model in response to global trends, including a growing focus on “personal wellbeing”, more willingness to spend on health and fitness and the rising use of wearable technology.
All of this aligned with the world’s younger and increasingly health-conscious population, said the holding company.
Virgin Active, which makes up 62% of Brait’s total assets, recorded a 13% increase in revenue for the year to end-March, while earnings before interest, tax, depreciation and amortisation (ebitda) soared 45%.
Over the next three years, the group plans to increase investment in new Virgin Active clubs and club upgrades to drive higher membership numbers and boost engagement with existing customers.
Most of the increase would come in the form of expansionary capex for Virgin Active’s international branches, while only one-third would go towards the SA business.
In the 12 months to end-April, Virgin Active SA membership numbers rose only 2%, compared with 5% in the UK and 3% in Italy.
In the Asia-Pacific region, the subsidiary recorded a 16% year-on-year increase in revenue despite membership growth lagging at less than 1%.
The company spent £134m (R3.2bn) on maintenance capex and £44m on growth capex in 2021-24, but said that expansionary capex would take precedence in the coming years.
“Growth capex is expected to increase further from 2026 onwards as new opportunities are identified to try to accelerate growth,” it said.
In Southern Africa, where it has 640,000 members, the group has been investing in refurbishments to meet brand standards, but is also exiting locations that no longer meet its targets.
Three clubs in SA were being closed between May and July, Virgin Active recently announced. The Jabulani RED gym in Soweto was the first to shut at the end of May, leaving the township without a Virgin Active presence after the earlier closure of the Maponya Mall and Southgate clubs. The Boulders club in Midrand will close at the end of June, with the Riverside club in Mbombela closing in July.
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