Viva Leisure Expands with $17M Stake in World Gym Australia; Targets Queensland Growth

2 min read | December 10, 2024 11:31 AM AEDT | By Team Kalkine Media

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Viva Leisure Expands with $17M Stake in World Gym Australia; Targets Queensland Growth — Image source: shutterstock

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Highlights:

Strategic Acquisition of World Gym: Viva Leisure (ASX:VVA) has acquired a 25% stake in World Gym Australia and three Queensland locations for a total of $16.7 million, marking its second-largest acquisition. The deal was financed through cash, bank facilities, and $1 million in Viva shares.

Growth Opportunities in Queensland: The acquisition includes World Gym sites in Stafford, Coomera, and Underwood, which will enhance Viva’s presence in Queensland. This move also allows Viva to tap into World Gym’s brand and establish recurring subscription models among existing users.

Revenue and Expansion Plans: Viva has issued revenue guidance of over $56 million for Q4 FY25 and full FY24 revenue of $163.6 million. With over 100 additional corporate and franchise locations secured, the company expects its network to grow to over 583 locations and 587,000 members.

Viva Leisure (ASX:VVA) has successfully acquired a 25% stake in World Gym Australia (WGA) and taken control of three key Queensland locations for $16.7 million. This acquisition, which is Viva’s second-largest, was fully funded through a combination of cash, bank facilities, and $1 million worth of Viva shares.

The deal represents a strategic move to enhance Viva’s presence in the growing Queensland market and capitalize on World Gym’s established brand. The three World Gym locations acquired—Stafford, Coomera, and Underwood—will serve as a strong foundation for Viva’s future expansion in the region.

In addition to increasing its footprint, Viva plans to introduce its proprietary member management platform, including Viva Pay and Viva Pass, to World Gym's existing user base. This initiative aims to generate recurring subscription revenue and integrate Viva’s offerings more deeply into the fitness community.

Viva’s long-term growth prospects are also bolstered by a robust pipeline, with over 100 additional corporate and franchise locations already secured. The company anticipates its total network will grow to 583 locations, with a combined membership base exceeding 587,000 individuals.

Viva has issued strong revenue forecasts, expecting Q4 FY25 revenue to exceed $56 million and FY24 revenue to reach $163.6 million, underpinned by its growing fitness network. At 10:40 AM on Tuesday, Viva’s stock had increased by 2.63%, trading at $1.36 per share, with a market capitalization of $137.8 million.

This strategic move positions Viva Leisure for further expansion and solidifies its ambitions of becoming Australia’s largest fitness network.

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