Branson prepares to sell Virgin Active to Brait

VIRGIN Active, the gyms business being sold by Sir Richard Branson to the Brait private equity group in South Africa, yesterday posted strong earnings for 2014 that underlined the strength of the business.

Sir Richard Branson will retain a 20% holding in Virgin Active. Picture: Getty

The group, where Branson will retain a 20 per cent stake after he and private equity group CVC agreed to sell a controlling holding to Brait in April, saw underlying earnings rise 13 per cent to £124 million last year. Revenues lifted 4 per cent to £638.6m.

Virgin Active, which has about 100 gyms in the UK and 114 in South Africa, said that, stripping out the impact of divested clubs, total membership grew 2 per cent to 1.31 million.

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In Europe revenue remained steady even after divesting 12 sites, while underlying earnings rose 17 per cent. In Africa, revenue and underlying earnings both lifted 12 per cent. Paul Woolf, chief executive of Virgin Active, said last year had been a continuation of the growth trend “since we opened our first club in 1999”.

Sir Richard Branson will retain a 20% holding in Virgin Active. Picture: Getty

He added that he expected this trend to continue in 2015 “as consumers the world over seek our ways to improve and maintain their health and wellness levels”. During the year the company spent £82.2m on new and existing gyms, including opening its first club in Thailand.

Woolf said Virgin Active had a solid new pipeline of clubs, and two long-term supportive shareholders in Brait and Virgin Group.

Brait is backed by one of South Africa’s wealthiest men, Christo Wiese.

Virgin Active said the launch its first “fully tech-enabled club” in London was “imminent” as part of a £100m three-year investment programme.

Further international expansion is also on the cards, in Africa and Asia, with the company moving into Kenya and Botswana over the next two years, and a second club planned for Namibia in the second half of 2015.

Further clubs are to open in Bangkok and Singapore in the next 12 months, Virgin Active said yesterday. The company also has 30 gyms in Italy and 11 in Spain.