Improved sales show Fitness and Lifestyle Group emerging from pandemic impacts

Rising numbers of people exercising in gyms has seen the Fitness and Lifestyle Group (FLG) reduce its losses and improve its sales in the past year.

The latest accounts from FLG owner Quadrant Private Equity have shown a 5% rise in FLG’s sales to $685.6 million from $651.8 million in the previous financial year, while its losses narrowed to $222 million from $290.7 million in the previous year.

As revealed in Quadrant’s accounts lodged with the Australian Securities and Investments Commission, FLG - which Fitness First Australia, Zap Fitness and Goodlife Health Clubs, Jetts Fitness in New Zealand and Thailand, the local Barry’s master franchise and Emily Skye FIT - reveal that strong membership sales and increased yield during the year were achieved against weaker consumer spending with higher interest rates and a slower economy.

The Southeast Asia unit recognised a $33.1 million impairment due to prolonged challenging economic conditions in Vietnam, operations that were subsequently sold after the financial year ending 30th June.

By contrast, better economic conditions, in conjunction with a strong brand presence in Thailand, delivered strong income growth and profitability. Seven new Jetts sites were opened during the current financial year, with a further seven planned for the 2025 financial year.

Subsequently, Jetts has opened its 50th site in Thailand.

The accounts said that while the group has incurred losses before tax, which have contributed to its net liability position, it continues to generate significant cash earnings.

It advised “due to the tenure and structure of the group’s recently refinanced borrowings and its ability to recapitalise if required, the directors have reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.”

Operating in four countries, FLG has 319 locations, more than 585,000 members and 6000 employees.

Describing itself as Asia Pacific’s largest group of corporately owned health and wellness clubs.

Putting aside the group’s financing costs of $280 million, it generated a $280.3 million operating profit, lower than in the previous financial year after property-related expenses and other costs increased.

As reported by the Australian Business Network, the company’s borrowings are almost $2 billion, increasing from almost $583 million in the previous corresponding year amid a high interest rate environment, while total equity is $1.5 billion.

FLG Group Chief Executive Greg Oliver and FLG Thailand Chief Executive Mike Lamb and the group’s growth in Thailand are the subject of an interviewed in the latest issue of Australasian Leisure Management.

Images: Jetts Thailand (top) and the recently opened Fitness First Platinum Richmond (below).