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energie

  • BY: Andrew Hore |
  • POSTED: 20/04/2012 |

Fitness club operator and franchiser energie plans to join Aim following the reversal of its holding company Blusky Investments into Plus-quoted shell HubCo Investments. 

Trading in the shares was suspended on Plus-quoted on 19 April at 10p a share. HubCo raised 800,000 at 10p a share when it joined Plus-quoted on 31 January. Hargreave Hale owns 22.6%. Pro forma cash was 728,000. A further 4.5m (3.6m net) is expected to be raised in the Aim float.

There are four main brands owned by energie energie, energie fitness for women, SHOKKenergie and fit4less. There are sites in the UK, Ireland, Italy, Latvia, Poland and Qatar. There are 98 sites with 70,000 members. The total turnover of the whole network is 23m a year.

Revenues were 2.69m in the year to September 2011, although this excludes a one-off gain of 1.25m from the buy out of the Middle East franchise. The underlying profit in 2010-11 was 600,000.

There are three main aspects to revenues: initial franchise fees, continuing fees and secondary income. Initial franchise fees can be lumpy because they depend on how many franchises have been sold in a financial year. The company plans to roll out its own outlets under the fit4less low cost gym brand and these will provide an additional source of income and they will dominate revenues in two years time.

Each outlet requires capital investment and working capital of between 185,000 to 240,000 depending on whether it is suburban or city centre. The plan is to open 23 outlets over an 18 month period. This can be funded out of cash raised in the flotation or through cash generation from operations.

The owned outlets will not make an operating profit until 2014-15 and it could contribute a major part of group profit by 2016-17.  This means that the loss from this operation will offset the profit generated from the franchise business for the next couple of years. These long-term forecasts are only an indication of how things may go.

The financial year end is being changed to March.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFApril2012_31.pdf

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