 |
|
|
 |
14 Mar 2024
Basic-Fit aiming to double its estate by 2030. Rene Moos is considering global franchising to drive future growth
BY
Kath Hudson
|
Basic-Fit has aggressive rollout plans for the coming years
photo: Basic-Fit
Despite high inflation and energy costs, Basic-Fit lifted 2023 revenues by almost a third, achieved a record number of club openings and is bullish about the future. Announcing its full-year results today, the low-cost operator confirmed revenues increased by 32 per cent to €1,047 million (£894 million, $1146 million) in 2023.
Underlying EBITDA less rent increased by 28 per cent to €261 million (£223 million, $244 million) and mature club return on interest capital (ROIC) was up by 35 per cent.
Underlying net profit increased by 55 per cent to €27.5 million (£23.5 million, US$30 million).
Growth has been driven by expanding the club network, increasing memberships at clubs which were in their growth phase during the pandemic and an increase in average revenue per member per month.
Premium memberships (priced at €29.99 per four weeks) increased by 10 per cent, to 44 per cent of the membership base. Costing €5 more than the Comfort membership, the Premium membership allows people to bring a friend anytime they visit. The potential cannibalising effect of this is being monitored, but it has appeared to have a positive impact on revenue in 2023, due to the higher average yield per member.
Founding memberships were offered at the majority of new clubs in 2023, which offer access to a single club at a life-time discounted price for a limited time before the club opens. This reduces the time to cashflow break even.
Memberships increased by 13 per cent and the company achieved its aim of 3.8 million members by the end of the year, as mentioned in the half-year results.
Other club revenue increased to €29.5 million (from €24.3 million) from PT, physiotherapists, day passes, vending and advertising revenue on screens.
Challenges
The strong performance did come with some challenges including weaker consumer sentiment in France, which continues to be slightly behind expectations at the start of 2024.
Benelux and Spain are the best performing markets – hence the recent deal to buy RSG's Iberian portfolio. Germany has yet to make a meaningful contribution, but the presence will be increased over the next two years, with an accelerated roll-out in 2026.
Costs were also significantly higher at the start of the year, due to inflation and energy, which nearly doubled on a per club basis. To offset this, changes were made to the membership structure – the price of the Comfort membership was increased from €19.99 to €24.99 – and a deal struck on energy prices, which stabilised this situation.
“With our new long-term energy price contracts, we expect the average energy costs per club to decline by close to 30 per cent in 2024,” says CEO, Rene Moos. “Barring any unforeseen developments, we expect revenue to increase to between €1.20 billion (£1.03 billion, US$1.4 billion) and €1.25 billion (£1.07 billion, US$1.4 billion) in 2024.”
Expansion plans
A record 202 club openings/acquisitions in 2023 expanded the network to 1,402 clubs and the company is optimistic about 2024, with plans to increase the club network to at least 1,575. The purchase of the 47 Spanish clubs from RSG will complete in the coming weeks, making Basic-Fit the market leader in Spain with 200 sites. It will lift the overall group membership to four million. The clubs will be rebranded and ready for the important post-summer sales period.
The company is setting its sights on further aggressive expansion, with plans for 3,000 to 3,500 in existing markets by 2030. Moos said franchising is being considered for expansion outside Europe.
“We have initiated a process to determine which approach to franchising would be most suitable to further enhance our company’s growth and return profile,” he says. “The franchise initiative should be extended to cover markets that are not geographically adjacent to our current operations and possibly expand into other continents.”
At the end of the year, €215 million (£184 million, £235 million) was available in liquidity, which will pay for the acquisition of RSG Spain and continue rollout plans, while maintaining sufficient financial headroom. Leases are only signed on new clubs if a ROIC of at least 30 per cent can be achieved at maturity.
Cost savings
Basic-Fit has innovated a method of smart refurbishment, which extends the life of its fitness equipment to 12 years, as opposed to four or six years.
“I truly believe this initiative is a game-changer, offering financial and operational benefits to Basic-Fit and having a positive impact on the planet due to its lower environmental impact,” says Moos.
“We maintain a positive outlook on the developments of our expanding industry, despite the continued uncertainties regarding macroeconomic and geopolitical developments,” says Moos.
“The club openings pipeline continues to be well filled. In the first ten weeks of the year, we grew our club network by 57 clubs. We expect to end the year with around 1,575 clubs, including the acquisition of the RSG Spain clubs, but excluding potential additional acquisitions.”
 |
|
|
|
|
|
|
|
|
|
Connect with
World Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
| News headlines |
|
|
 |
 |
|
27 Apr 2024
As part of its drive to become carbon neutral by 2030 and carbon positive by 2032, Dutch theme park Efteling has announced plans to convert its steam
.... more>> |
|
|
|
 |
|
26 Apr 2024
There is speculation that Basic Fit will sell the five Spanish Holmes Place clubs it has just acquired from RSG Group in a 47-club deal. In the Q1
.... more>> |
|
|
|
 |
|
25 Apr 2024
Kerzner International has signed deals to operate two new Siro recovery hotels in Mexico and Saudi Arabia, following the launch of the inaugural Siro
.... more>> |
|
|
|
 |
|
24 Apr 2024
The US spa industry is continuing its upward trajectory, achieving an unprecedented milestone with a record-breaking revenue of US$21.3 billion in
.... more>> |
|
|
|
|
|
 |
|
| Company profile |
|
ABC Trainerize
ABC Trainerize is a member engagement mobile app and software platform that allows coaches and fitness businesses to expand their reach beyond their physical space, better connect with members, and digitize the training experience.
View full profile>> |
|
| Catalogue gallery |
|
|
| Featured Supplier |
|
 |
|
|
|
in this issue
• Virgin gets right to wipe out rent arrears
• Fitness industry mourns passing of Jan Spaticchia
• STA offers mindfulness resources
|
|
|
|
|
|
|
 |
| World Leisure jobs |
 |
Leisure Centre Duty Manager
Salary: £24,687.57pa + pension + health care + benefits
Location: Uppingham, Oakham, UK
Company: Uppingham School
|
|
|
|
|
|
| Diary dates |
|
| Powered
by leisurediary.com |
 |
|
|
|
|
