Vir­gin Ac­tive: One worth watch­ing

Finweek English Edition - - INSIDE -

Re­ports keep cir­cu­lat­ing that Vir­gin Ac­tive will be list­ing on the JSE in the next few months. On the sur­face it is not a busi­ness that I have much in­ter­est in, per­haps be­cause I haven’t been to a gym since be­fore Vir­gin ar­rived in South Africa. But when you con­sider the busi­ness model it is ac­tu­ally very at t r act i ve. It has s t rong a nnuit y in­come in the form of membership fees and while ac­tual utilisation is fairly low, that’s a good thing as it puts less pres­sure on the com­pany’s clubs. Per­haps the big­gest point is that few peo­ple cancel a gym membership as that’s ad­mit­ting one has given up on be­ing f it and healthy, and no­body wants to do that. So this is an IPO which I will have a very close look at when it ar­rives.

Richard Bran­son

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