Virgin Active buys Esporta clubs

The operator of 71 fitness clubs in the UK is stepping up its pace of growth with the first major acquisition since it bought Holmes Place almost five years ago.

The Milton Keynes-based company also reported that it was in good shape after underlying profits increased 13% to £114.6 million in 2010, helped by the opening of new clubs overseas.

Virgin, which is majority-owned by Sir Richard Branson, described trading in 2011 as strong after it powered through the one million membership barrier for the first time.

1If the deal is approved by the Office of Fair Trading it is expected that the Esporta gyms will be rebranded under the Virgin banner within two years.

Virgin, which currently has 194 clubs worldwide, said its UK business will have around 430,000 members and revenues of more than £325 million. Virgin previously bought 10 clubs from Esporta in the UK in 2004 and 2005 and another six in Spain.

Esporta, whose 35 health clubs and 20 racquet clubs are used by 159,000 members, was bought out of administration by Societe General in June 2009.

The chain claims to have improved its performance since then under new management, which has turned around a decline in membership.

Virgin said its results for 2010 showed its resilience to the tough economic environment.

Revenues increased 14% to £445.2 million after the group opened seven new sites in South Africa, the Iberian Peninsula and Italy.

Although it opened no new clubs in the UK, its earnings increased for the third year in a row, it added.

The group said trading so far in 2011 had been positive, with further like-for-like growth in revenues.

It plans to open another 17 clubs across its global operations over the next year in addition to the Esporta deal.

Matthew Bucknall, chief executive of Virgin Active, said: “The location of Esporta’s clubs is an excellent fit with our estate and significantly strengthens our business.

“We have been able to sustain this growth over the last three years when economic conditions have been difficult and we continue to see excellent prospects for future growth in all our territories.”