Viva Leisure posted a 12.2% revenue increase to $237.1 million and a 144.5% jump in net profit after tax for FY2026, declaring its first fully franked dividend and launching Meridium Global as a standalone payments and technology business.
- 12.2% revenue growth to $237.1 million
- 144.5% surge in net profit after tax to $12.8 million
- Maiden fully franked dividend declared at 3.0 cents per share
- Payments and Technology segment revenue up 39.8%
- Meridium Global subsidiary launched to unlock tech business value
Record FY2026 Financial Performance
Viva Leisure Limited (ASX:VVA) delivered a standout FY2026 with revenue climbing 12.2% to $237.1 million and net profit after tax soaring 144.5% to $12.8 million. This marks the company’s seventh consecutive year of revenue growth and its most profitable year to date, underscoring a successful strategy of network optimisation and operational leverage.
Adjusted EBITDA rose 13.3% to $112.3 million, lifting the margin to 47.4%, a 50 basis point improvement. The company’s underlying NPAT, which excludes one-off items, increased 46.4% to $18.9 million. Earnings per share jumped 150.6% on a statutory basis to 13.13 cents, while underlying EPS grew 54.2% to 19.43 cents.
Operational Highlights and Membership Growth
Viva Leisure’s health club services revenue expanded 11.1% to $211.7 million, driven by higher member volumes and new site contributions. The network grew to 694,243 members across 534 open locations, with corporate membership rising 6.6% to 275,688 despite only three net new corporate sites opening. Average membership per corporate club reached a record 1,351, pushing portfolio utilisation above 80% for the first time.
The franchise segment also gained momentum, with franchise operations revenue up 9.6% to $8.0 million, supported by strong territory sales for Plus Fitness. The company has secured 52 domestic franchise territories yet to open and is advancing international expansion with sites planned in Singapore and the United Kingdom.
Payments and Technology Business Spinoff
Viva Pay and technology services emerged as a significant growth driver, with segment revenue soaring 39.8% to $7.05 million externally and $20.15 million including inter-segment charges. Segment EBITDA reached $13.43 million before eliminations. Recognising its distinct scale and potential, Viva Leisure launched Meridium Global, a new subsidiary to house and operate its payments and technology platform as a standalone business. This move aims to unlock value and facilitate strategic focus on the tech assets, which support both corporate and franchise networks.
Capital Management and Shareholder Returns
For the first time, Viva Leisure fully funded its $31.3 million growth program from operating cash flow, with adjusted free cash flow rising 7.7% to $35.1 million. Net leverage dropped from 2.04x to 1.77x against a bank covenant of 2.50x, reflecting disciplined balance sheet management.
The Board declared the company’s maiden fully franked dividend of 3.0 cents per share, amounting to approximately $2.9 million. The dividend represents 15% of underlying NPAT and 8% of adjusted free cash flow, signaling a cautious but meaningful step toward returning capital to shareholders while maintaining reinvestment capacity.
Growth Outlook and Strategic Priorities
Looking ahead, Viva Leisure targets one million network members by FY2029, up from just over 700,000 currently. The company plans to reaccelerate greenfield openings with more than 20 new corporate locations expected annually from FY2027, alongside a refurbishment and rebranding program for Zoo Fit locations designed to boost revenue per site by 30-40% within months of completion.
Franchise growth remains robust with over 150 franchise locations sold or in the pipeline across multiple brands, fully funded by franchisees. Meanwhile, Viva 360, the company’s proprietary member intelligence platform, is enhancing retention through predictive analytics and automated intervention, aiming to reduce churn and increase lifetime member value.
Viva Leisure’s dual focus on scaling its core fitness network and growing its technology and payments platform creates a diversified, capital-efficient growth profile. The strategic review underway for Meridium Global could further crystallise value for shareholders, positioning the company well for the next phase of expansion.
Bottom Line?
Viva Leisure’s FY2026 results showcase operational discipline and growth potential, but investors should watch how the newly launched Meridium Global subsidiary evolves and the pace of greenfield reacceleration.
Questions in the middle?
- How will the strategic review of Meridium Global impact Viva Leisure’s valuation and capital allocation?
- Can Viva sustain margin expansion as it reaccelerates greenfield openings and international franchise growth?
- What risks might arise from slowing greenfield rollout in FY2026 and how will they be managed going forward?