Virgin Active: One worth watching
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.