Why the Viva Leisure (ASX:VVA) share price is edging higher today

The Viva Leisure Ltd (ASX: VVA) share price is climbing today following an update on its trading performance and FY21 outlook. Here’s the details.
The post Why the Viva Leisure (ASX:VVA) share price is edging higher today appeared first on The Motley Fool Australia. –

The Viva Leisure Ltd (ASX: VVA) share price is climbing today following an update on its trading performance and FY21 outlook.

At the time of writing, health club operator’s shares are swapping hands for $1.94, up 0.52%.

Let’s take a closer look and see what the company updated the ASX with.

Performance update

Investors are pushing Viva Leisure shares higher after the company released a positive update.

In its presentation, Viva Leisure announced an improvement across the business due to the gradual recovery from the COVID-19 pandemic.

As a result, the business noted that all comparisons made below are against its December half-year result. This is because comparing against 12 months ago is not an accurate reflection on business growth.

For the period until April 2021 (first 4 months of 2021), monthly revenue run rate (RRR) jumped to $8.1 million. This represents a 11.4% increase on its December half-year results. All of Viva Leisure’s facilities were re-opened as of January 2021, highlighting a return of members.

In addition, the company managed to also grow its member base to 295,808 members, a lift of 8% on H1 FY20. Viva Leisure’s continued expansion into new locations increased to 306. This figure is up from 296, which contributed to the improved result.

Revenue surged above $8 million. This is a 58% jump when comparing this month against March 2020, before COVID-19 hit. Particularly, the ACT region was the biggest contributor to the overall scorecard, accounting for roughly 45%.

FY21 outlook

Looking ahead, Viva Leisure stated that it is targeting revenue to range from $81 million to $83 million. Over H1 FY21, this is a 25.6% to 31.2% growth.

Furthermore, earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to come between $13 million to $13.5 million. This reflects a 32.1% to 41.1% increase on the December half-year result. EBITDA margin is also set to jump around 16.5% to 17.5%.

About the Viva Leisure share price

The Viva Leisure share price is down close to 20% over the past 12 months. It’s worth noting that its shares plunged to a low of 1.825 due to market slump this month.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $158 million.

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More reading

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The post Why the Viva Leisure (ASX:VVA) share price is edging higher today appeared first on The Motley Fool Australia.

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