Financial results for the 12 months to 31 December 2015
Bannatyne operates a portfolio of premium health clubs comprising 66 gyms, 37 Spas and 5 hotels nationwide. It today announces results for the year to 31 December 2015.
- A successful investment programme in 29 health clubs, affordable luxury positioning with spas and acquisitions have more than doubled pre-tax profits and delivered strong returns
- Flexible and efficient model driven by technology and service has kept attrition rates low and grown membership
- Strong senior management team led by Justin Musgrove, CEO and Ken Campling, CFO has driven growth and profit
- Low net debt and strong cash generation has funded investment
- Investment programme in health clubs to continue through the existing site portfolio and the addition of 16 new Bannatyne Spas
- Large, fragmented market ripe for consolidation
Revenue (£’000)
2015 100,907
2014 98,054
Change + 2.8%
Group EBITDA (£’000)
2015 24,260
2014 19,939
Change + 21.7%
Group Operating Profit (£’000)
2015 14,398
2014 8,654
Change + 66.4%
PBT (‘000)
2015 8,000
2014 3,353
Change +138.0%
Members
2015 186,456
2014 163,654
Change + 14%
Attrition
2015 3.9%
2014 4.7%
Change – 17%
The Company has delivered a strong performance building on the operational initiatives and investment of the past two years. The Company is positioned in the premium segment of the UK Health and Fitness market, with its clubs featuring Spas and swimming pools and catering for a wider demographic than the low cost operators. The Bannatyne Group operates in a fragmented market place and is seeking to build on its strong foundation and grow organically and through the acquisition of further clubs.
Combining quality high tech gym and swimming pool facilities with an efficient operating model and expansion, the Group has delivered 21.7% growth in EBITDA in the year ended December 2015. During 2015, 29 health clubs were refurbished at a cost of £7.5m. The invested clubs have delivered a sales uplift of 7%. The remaining 37 clubs will be refurbished by the end of 2016.
With 37 Spas, Bannatyne is one of the leading Spa operators in the UK with a broad geographic footprint nationwide. The Spas are high margin and provide the Company with significant differentiation in the marketplace. The Group is intending to expand its Spa portfolio during 2016 and 2017 with the addition of a further 16 Spas at existing health clubs.
The focus on technology and centralisation has enabled the Company to offer good value to its customers with flexible contract options and an average monthly fee of £43 per month, driven by a focus on lowering costs for the customer. The data acquired from the Group’s cloud-based membership system has reduced marketing costs and enhanced customer engagement. This has enabled Bannatyne to achieve one of the lowest monthly attrition levels in the sector, which in 2015 was 3.9% (compared to 4.7% in 2014) and comfortably below the industry average of 6.15%.
During the year “my wellness cloud” was also introduced, integrating with popular forms of wearable technology to provide members with access to 24/7 personal analysis.
Clarice House Group and Xpect Leisure, both acquired in 2015, have been integrated into the Group and are operating on the Company’s advanced systems generating the expected synergies and growth.
Bannatyne is highly cash generative and has a strong balance sheet.
Justin Musgrove, Chief Executive Officer said:
“The success of our investment programme, providing the best equipment, state of the art technology and leveraging our expertise in Spas in an ever growing health and fitness market, has driven the Group’s performance during 2015. Having seen the positive returns of our plan, we will continue to drive our growth through investment in our remaining 35 health clubs and the roll out of 16 new Bannatyne Spas.
Trading in 2016 to date shows good growth. In the first three months of the year, The Bannatyne Group added over 9,000 new members taking the total to just over 195,000.
Looking forward, we see the mid and premium segment of the wellness sector as a significant ongoing opportunity for the Bannatyne Group as consolidation continues.”