Viva Leisure Accelerates Growth with 25% Revenue Surge in 1H FY25
Viva Leisure has delivered a robust first half of FY25, reporting a 25.2% increase in revenue and a 26.2% rise in EBITDA, driven by strong execution across its health clubs, franchise network, and technology divisions.
- Revenue up 25.2% to $99 million in 1H FY25
- EBITDA increased 26.2% to $21 million with margin expansion
- Membership growth of 32.5%, corporate and franchise members up 71.9%
- Technology and payments segment revenue more than doubled
- Strategic focus shifting to optimizing existing network and cash flow
Strong Financial Momentum
Viva Leisure has reported a standout first half for FY25, with revenue climbing 25.2% to $99 million and EBITDA rising 26.2% to $21 million. This growth reflects the company’s successful execution of its multi-pronged strategy encompassing health clubs, franchising, and technology services. The EBITDA margin expanded slightly to 21.2%, signaling improved operational efficiency despite rising costs.
Net profit after tax also increased by 15.2% to $5.5 million, underscoring Viva Leisure’s focus on delivering shareholder value alongside top-line expansion. CEO Harry Konstantinou highlighted the company’s resilience and innovation as key drivers behind these record-breaking results.
Expanding Membership and Network Footprint
Membership growth remains a core pillar of Viva Leisure’s success. Corporate-owned health clubs saw members increase by 32.5%, while combined corporate and franchise memberships surged 71.9% to nearly 600,000. The network now comprises 476 open locations worldwide, with 118 additional sites secured for future development.
The company’s diversified portfolio, including boutique studios and multiple fitness brands, has helped maintain strong consumer engagement and retention. New greenfield sites and acquisitions contributed significantly to revenue growth, adding over 50,000 members and $12.9 million in revenue compared to the prior corresponding period.
Technology and Franchise Growth Drive Margin Expansion
Viva Leisure’s technology and payments segment more than doubled revenue to $6.4 million, fueled by the full-period contribution from Viva Pay and licensing fees. This high-margin division is becoming an increasingly important contributor, supported by expanding digital signage, vending machine sales, and personal training license fees.
The franchise network, including Plus Fitness, Boutique Fitness Studios, and World Gym Australia, continues to expand internationally with new territories in Singapore, Hong Kong, the Philippines, and the UK. While franchise revenue showed a slight dip due to rebate changes, the underlying network growth and technology integration promise strong future upside.
Strategic Shift Towards Optimization and Cash Flow
Looking ahead, Viva Leisure plans to moderate the pace of new greenfield openings and focus on optimizing the value of its existing network. This pivot aims to enhance free cash flow generation and maximize returns from the company’s extensive portfolio of established locations.
Significant investments in technology, including the rollout of unified access apps, Viva Pay integration, and proprietary access control systems, are expected to unlock further operational efficiencies and revenue streams. The company also commenced a $1.9 million share buyback, signaling confidence in its capital management strategy.
Balance Sheet and Cash Flow Strength
Viva Leisure’s balance sheet reflects ongoing investment in growth, with $29.7 million spent on acquisitions and $10.1 million on new greenfield sites during the half. The company refinanced equipment leases to lower-cost senior debt, maintaining significant headroom within its $130 million senior debt facility.
Operating cash flow increased to $31.6 million, supporting expansionary capital expenditure while closing cash remained healthy at $18.1 million. This financial discipline underpins Viva Leisure’s ability to sustain its growth trajectory amid economic headwinds.
Bottom Line?
As Viva Leisure shifts focus to optimizing its vast network and technology rollout, investors will watch closely for sustained cash flow growth and franchise expansion execution.
Questions in the middle?
- How will the integration of Viva Pay and The Hub impact franchise profitability in the next 12 months?
- What is the timeline and expected financial impact of World Gym Australia’s full technology implementation?
- How will Viva Leisure balance growth investments with free cash flow priorities amid rising operating costs?
