DW Sports expects to offset losses of £8m (US$10.8m, €9m) from the last financial year as its new portfolio of Fitness First health clubs starts to bear fruit.
The group bought 62 clubs in the financial year ending March 2017, causing pre-tax profits to drop from £3.6m (US$4.9m, €4.1m) in 2016 to losses of £8m in 2017.
However, the business saw turnover grow by 28 per cent to £203.5m (US$275.6m, €228.8m), from £159.6m (US$216.1m, €179.5m) in 2016, according to accounts submitted to Companies House.
The report states: “The acquisition of the Fitness First Clubs Ltd portfolio during the year provided the group with substantial presence in the London market and is anticipated to bring significant benefits to the group and our members.”
The group’s operating losses are attributed to the “timings of costs associated with new store openings, the acquisition of Fitness First and portfolio management costs surrounding site closures”.
The business, which operated 131 health clubs, 88 retail stores and one football club shop as of March 2017, saw its net debt rise to £112.9m (US$152.9m, €126.9m), from £56.7m (US$76.8m, €63.8m) in 2016, mainly as a result of £48.4m (US$65.6m, €54.4m) in loans.
Since
buying the Fitness First gyms in September 2016, DW Sports has closed some of its health clubs and sold seven gyms that were “not considered to be part of the core Fitness First portfolio”.
