A rare diamond in the rough from another wobbly ASX trading session Tuesday, with Viva Leisure continuing its strong turnaround, while Mirvac announced a couple changes in its boardroom.
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The lack of any lockdown associated with the pandemic has had a liberating impact on the revenue and earnings of Viva Leisure, the health club owner and operator which yesterday revealed a big rebound in September quarter and an upgrade to its 2022-23 guidance.
A year ago, the company’s centres were on lockdown or operating on a very restricted basis in most states, now it’s full speed ahead across the country with the company planning to boost memberships and the number of new centres.
The company “Viva Leisure has started strongly in FY23. Revenue far exceeds where we were 12 months ago, and growth continues to accelerate.
“We achieved record quarterly revenue of $33.0 million, supported by our increasing and record corporate owned memberships, and increased average revenue per member to now sit at $15.26. In addition, corporate members now number above 163,000, an incremental increase of 4,300 for the quarter.
“Our record quarterly EBITDA result of $6.4 million was further supported by our ability to improve our portfolio utilisation to 70.7%, up 2.0.% for the quarter, driven by data analytics and insights that are unmatched in the sector combined with targeted local marketing campaigns. This higher utilisation rate allows us to increase margin due to limited additional costs that are needed to add new members to an already operating location.
This big improvement saw Viva tell the market it is now budgeting for a substantial growth in revenues and earnings.
The company said it now sees revenue for the year “between $137 million to $140 million, up 51% to 54% (FY22: $90.8 million), EBITDA between $28 million to $30 million, up 409% to 445% (FY22: $5.5 million)
Viva said it is looking for a solid rise in the number of corporate members to between 173,000 – 178,000 (FY22: 159,000); Average Revenue per member per week between $15.25 – $15.35 (FY22: $14.59); Utilisation between 70% – 73% (FY22: 69.3%) and an increase in corporate Locations (owned) included in guidance between 165 – 170 (from 151 in 2021-22)
Viva Leisure CEO Harry Konstantinou said in yesterday’s statement “This guidance shows how well the business has rebounded out of COVID restrictions that affected our ability to trade and how we are ideally placed in the health club sector. This is further highlighted by Q1 FY23 EBITDA already exceeding the twelve-month Full Year 2022.”
Viva shares did well yesterday, rising more than 4% to $1.13 by the close on the confident upgrade.
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Property giant Mirvac is getting a clean out at the top with the chair and CEO to both retire next year.
Group chair John Mulcahy said he will leave the company in December before the end of his latest three-year term and will be followed six months later by CEO Susan Lloyd-Hurwitz who will exit at the end of next June.
Mr Mulcahy had previously indicated at the 2022 AGM that he would retire prior to the end of his three-year term and on Tuesday confirmed he will leave on December 31.
He has served on the board since 2009 and been chair since 2013.
At the same time, Lloyd-Hurwitz also announced her plan to retire with the company now searching for a replacement.
“This is the right time for both Sue and I to leave Mirvac and hand the baton over to the next generation of leaders of Mirvac,” Mulcahy said in Tuesday’s statement.
In line with the board’s succession plan, Mirvac non-executive director (and former CSR CEO) Rob Sindel has been appointed as the new chair from January 1 next year.
Ms Lloyd-Hurwitz said in the statement that she only recently initiated a discussion with Mulcahy about her intention to retire, but the timing allowed a long window for a smooth transition and continuity.
“It was not an easy decision, however it is the right time to hand over to the next leaders of Mirvac to guide the group through its next phase.”
“It has been rewarding and humbling to lead Mirvac for the past 10 years. There is so much for us to be proud of in the legacy Mirvac is continuing to build – having a positive impact on our urban environments, driving towards ever increasing sustainability, providing a workplace where all people can belong and thrive, and delivering returns for our stakeholders,” Lloyd-Hurwitz said.
Mirvac shares closed at $1.92 on Tuesday, down 2% on the surprise news. The shares are down more than 30% year to date.
