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Highlights
- $16.7M acquisition: Vision Leisure secures 25% stake in World Gym Australia (WGA) and three Queensland locations.
- Revenue growth expected: Full-year FY24 revenue forecast at $163.6M, with earnings before costs projected at $35.4M.
- Market expansion: Viva plans to integrate subscription models and branding opportunities to penetrate new demographics.
Vision Leisure (ASX:VVA) has announced the acquisition of a 25% stake in World Gym Australia (WGA) and three of its Queensland locations for $16.7 million, marking its second-largest acquisition to date. The deal is fully funded through a mix of cash, banking facilities, and $1 million worth of Viva shares.
The company anticipates the acquisition will bring “substantial financial and strategic benefits,” positioning Viva to expand its reach in the fitness industry.
Revenue Projections and Strategic Benefits
Viva has issued robust revenue guidance, forecasting $56 million for Q4 FY25 and $163.6 million for full-year FY24. Earnings before costs are projected at $35.4 million, signaling solid growth potential from the WGA acquisition.
One of the key benefits highlighted by Viva is access to new demographics via WGA’s “big box gym” concept. The acquisition also strengthens Viva’s footprint in the Queensland market and provides significant branding opportunities.
A major focus of the deal is the implementation of Viva’s recurring payment subscription models for WGA’s existing users. Viva aims to integrate its proprietary member management platform, The Hub, along with Viva Pay and Viva Pass products. The company claims these tools will streamline member payments and management, enhancing customer experience and increasing revenue reliability.
Once fully implemented, Viva projects that it will become Australia’s largest fitness network, leveraging both physical locations and digital innovations.
Market Performance and Outlook
On 10 December 2024, Viva’s shares rose by 2.63% to $1.36, reflecting investor optimism around the acquisition. The company’s market cap stood at $137.8 million, with 100 million shares on issue. While the stock’s average four-week turnover sits at 135,835 shares, only $3,250 worth of trades were recorded in the first hour of Tuesday morning.
As Viva continues to build on its acquisition-driven strategy, the deal with WGA marks a significant step toward expanding its fitness network and revenue streams.
