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Esporta reveals healthy figures
Customer service and a strict policy of non-discounting have been credited for the strong 2004 figures reported by health and fitness chain Esporta.
The company, which has been under the guidance of CEO Neil Gillis and a new management team for just over a year, reported an increase in sales of 7.3 per cent to £168.3m and a 6 per cent increase in earnings (EBITDA) to £36.9m.
New joiners were up 7 per cent and like for like retention rose by 2 per cent. Members are also spending more time in clubs, resulting in an increase in revenue per member. Despite operating in tough market conditions the company also delivered £1.2m in staff incentives and bonuses.
“After two and a half difficult years, a lot of management change and a decline in business, we are back into organic growth,” said finance director Michael Ball. “This growth has been driven by keeping yield up and not discounting.”
Esporta’s strategy moving forward is to concentrate on its successful racquets concept and it is actively seeking new sites for development. The company’s racquets clubs currently constitute 70 per cent of earnings and it plans to sell half of its mid-market clubs in future to focus on its premium concept. “I think the market can take a lot more racquets clubs,” said Gillis. “Racquets is where we see the future.”
The company has £100m earmarked for its new racquets sites with acquisitions already made in Bath, Swindon and Basingstoke. Further sites are under negotiation throughout the country including Stevenage, Reading, Newcastle and York.
As to the future of the health and fitness industry, Gillis predicted a bout of consolidation and said its owner, Duke Street Capital, was likely to be a consolidator of rival businesses.