Fitness First to head east for float

Published on Sunday 27 June 2010 21:37

GYM giant Fitness First is to snub London for Asia with a flotation believed to be worth up to £2 billion early next year.

The company, owned by private equity firm BC Partners, favours Hong Kong, Shanghai, Singapore or Sydney – or possibly two combined – for the float.

Fitness First runs about 550 gyms worldwide, with 160 in Britain. Its Asia-Pacific business, which includes a big operation in Australia, accounts for more than 50 per cent of group earnings, 40 per cent of its revenues and 35 per cent of its clubs.

It is believed to have decided a London listing would put Fitness First's investor base out of kilter with the main geographical thrust of its business.

The leisure industry estimates that the UK gym market is a relatively mature sector, with between 12 to 14 per cent of the population members of a gym. By contrast, in Asia, health clubs are a nascent market, mainly centred on hotels, and only between 2 to 4 per cent of the population are gym members.

Colin Waggett, Fitness First's chief executive, said: "Asia is the fastest-growing market in the world, growing at 10 per cent a year, while in Australia growth is 8 per cent. That compares with only low single-digit growth in the UK."

Some, however, believe the mooted 2bn flotation may be ambitious, predicting an eventual listing value of 1.2bn.

The move would be a return to the stock market for Fitness First. Launched by Mike Balfour and Christopher Pearce, Fitness First was floated on Aim in London in 1996 before being bought by private equity group Cinven for 400m in 2003. It was sold to BC Partners for 813m in 2005.