TRADING UPDATE - QUARTER ENDED 31 MARCH 2002
16 April 2002
TRADING UPDATE - QUARTER ENDED 31 MARCH 2002
Esporta plc, a leading operator of health and fitness clubs in the UK, today
provides a trading update for the quarter ended 31 March 2002.
As indicated in our announcement of 14 March, trading performance in January
and February was ahead of expectations and those trends have continued into
March.
Membership
In the crucial first quarter of 2002, the number of new members joining our UK
clubs opened in 2000 and prior years has increased by 22% on a like-for-like
basis. In addition, several of the clubs that opened in 2001 with disappointing
initial membership numbers have grown strongly in the first quarter of 2002.
Joiner numbers have continued to benefit from the decision to adopt a more
flexible approach to charging joining fees in response to local market
conditions and to the increased use of direct marketing techniques. In addition
to those clubs where joining fees were charged in January and February, joining
fees have been reinstated at a number of our clubs in the month of March and
are now being charged at 16 of our 39 UK clubs. The Board remains confident
that in locations where joining fees are not being charged, the short-term
reduction in joining fee income will be more than compensated by the long term
increase in membership fee income.
At the end of March, total membership stood at 205,000, including 158,000
adults, representing an increase of 31% against the March 2001 closing number,
and an increase of 13% against December 2001. Adult membership for UK clubs
opened in 2000 and prior years has increased by 7% compared with the year-end
and by 10% compared with the end of March 2001. This is above budgeted
expectations and will benefit membership income.
Revenue
Total revenue for the first quarter at £28.3m was 25% higher than in 2001
(adjusting for the Espree disposal).
Total revenue for the quarter for our UK clubs opened in 2000 and prior years
has increased by over 7% on a like-for-like basis, despite the reduction in
joining fee income. Membership income alone has increased by 11% reflecting the
benefits of the level of new joiners attracted.
Outlook
The trading performance in the first quarter, and particularly the level of new
joiners attracted to our clubs, gives the Board continued confidence in the
underlying assets of the business and its capability to achieve attractive
rates of returns. In addition, work is progressing well on achieving the cost
savings identified in the Chief Executive's Review announced on 14 March.
The Board intends to issue a further trading update at the time of the AGM in
May, but it is not the Board's intention to issue quarterly updates thereafter.
Approaches
The Board announced on 11th January that it had received approaches that may,
or may not, lead to an offer, or offers, being made for Esporta. The Board made
clear at that time - and repeated subsequently - that it was completely
open-minded about these approaches and would give appropriate consideration to
any firm proposal in an acceptable form, the guiding principle being the
maximisation of value for shareholders.
To date, no party has put forward an acceptable proposal. This being the case,
and encouraged by the first quarter trading results, the Board has decided not
to continue any discussions with third parties about possible offers and
instead will concentrate on the implementation of the Chief Executive's plans,
in which it has considerable confidence and which it believes are capable of
delivering significant shareholder value. Accordingly the Board confirms that
it is no longer in talks with any third party that might lead to an offer.
Notes:
3 M/e 3 M/e Change As at Change
Mar Mar `01 Yr on Dec On y/e
`02 Yr `01
No No 000s % No %
000s 000s
Joiners
UK Comparable Clubs 19.7 16.2 22%
Adult members
UK Comparable clubs 116.8 106.2 10% 109.6 7%
Total UK 145.9 110.5 32% 128.1 14%
Continental Europe 11.7 6.3 86% 10.9 7%
Total 157.6 116.8 35% 139.0 13%
Revenue - UK Comparable £'m £'m %
Clubs
Membership income 17.3 15.6 11%
Joining fees 0.4 0.9 (56%)
Ancillary income 5.1 4.8 6%
Total 22.8 21.3 7%
UK comparable clubs are those opened in 2000 and prior years. Prior year
numbers have been adjusted for the disposal of the Espree clubs in August 2001.
Enquiries:
Maurice Kelly Chief Executive Esporta plc 0118 912 3503
Michael Ball Finance Director Esporta plc 0118 912 3506
William Brunswick 020 7404 5959
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