Virgin Active to ‘refocus on growth’ after losses of nearly £150m revealed
Virgin Active is to “refocus on growth” after seeing its losses widen to nearly £150m despite its revenue jumping by almost 50 per cent.
The Richard Branson-backed company has finally published its accounts for 2022 with Companies House, having been due to do so by the end of September 2023.
Virgin Active International’s results show it made a pre-tax loss of £147.3m for 2022, having lost £1.5m in the prior year.
However, its revenue increased from £292.2m to £436.4m over the same period.
The latest pre-tax loss compared to the £583.7m loss it made in 2020 because of the Covid-19 pandemic.
The last time the group made a pre-tax profit was the £22.2m it reported for 2018.
The business is now due to publish its accounts for 2023 by the end of September this year.
Virgin Active’s UK arm published its accounts for 2022 in October last year which revealed its revenue had increased from £66.8 to £105.6m but that it had gone from a pre-tax profit of £60.2m to a loss of £42.7m.
Virgin Active International’s revenue in Italy increased in 2022 from £45m to £97.2m, while its sales went from £141.9m to £1738m in Africa and from £38.4m to £59.8m in Asia Pacific.
Income from membership rose from £262.6m to £376.2m, while ancillary revenue grew from £29.6m to £60.2m.
During the year, the average number of people employed by the group increased from 8,067 to 8,291.
In a statement within the accounts, chief executive Dean Kowarski said: “2022 was the third year that the business was adversely impacted by the Covid-19 pandemic, with operations in all of our countries subject to Covid-related, government-improved volume restrictions during the year.
“While our operations were nimble and flexible to changes in restrictions, this limited the group’s ability to recover from the pandemic.
“I am both proud and grateful for the support of our people, our members, our shareholders and partners who have supported us through a very challenging period.”
Virgin Active was founded in the late 1990s by Richard Branson and Matthew Bucknall, who stepped down as CEO in 2022.
The group’s first club was opened in Preston, Lancashire, while it now runs 232 across the world.
It is owned by South African billionaire Christo Wiese through private equity firm Brait SE and 20 per cent by Richard Branson’s Virgin Group.
In March 2022, Virgin Active raised £88.4m of new capital while existing shareholders Brait and Virgin Group invested £20.2m in the business.
It also received £50m from Titan Premier Investments, a vehicle of Mr Wiese, and £18.2m from a consortium from The Real Foods Group. Existing shareholders also converted £46.3m of guarantees into share capital.
In 2023, Virgin Active received a further £70m from existing shareholders and a committed facility for another £40m.
Mr Kowarski added: “Looking forward, the reopening of economies following Covid-19, the recapitalisation of the group and our expansion into the nutrition space provides a solid platform for the business [to] refocus on growth, not only in exercise but in broader nutrition and wellness.
“In order to deliver this growth, we are investing in our people, our clubs and digital technology to transform the way we acquire, engage, recognise and reward our customers. I look forward to strong growth in the years ahead.”
Virgin Active was approached for comment by City PM