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South Africa’s largest health club chain Virgin Active says that a move to adjusted level 3 lockdown restrictions at the end of December 2020, has led to lower usage rates and an increase in member terminations.<\/p>\n
The group’s holding company, Brait, said in a note on Monday (1 February), that despite the recent government enforced level 3 lockdown restrictions, its clubs have remained operational since re-opening on 24 August 2020.<\/p>\n
It said that Virgin had benefitted from a steady improvement in member engagement, with utilisation rates increasing to 70% in December.<\/p>\n
“However, as expected the subsequent level 3 restrictions – which include limiting the number of members in a club – have resulted in lower usage rates, an increase in terminations and lower sales.”<\/p>\n
Virgin Active South Africa, Brait said, remains cash flow neutral at an operating level, and as at the end of December 2020 has sufficient liquidity to fund its business plan.<\/p>\n
Virgin has approximately 138 gyms across the country, and approximately 670,000 members, with around a million total members in eight countries. This figure however, is down from approximately 1.1 million members reported in its most recent annual report, with around 715,000 members in July (2020).<\/p>\n
The company said in November that it is likely to take at least 18-24 months to revert to 2019 levels.<\/p>\n