Viva Leisure used FY2026 to prove its existing club network could generate stronger returns without rapid expansion, lifting revenue 12.2% and underlying NPAT 46.4%. The ASX-listed fitness group is now preparing to accelerate openings while reviewing options for its faster-growing payments and technology business.
- Revenue increased 12.2% to $237.1 million
- Adjusted EBITDA rose 13.3% to $112.3 million
- Underlying NPAT climbed 46.4% to $18.9 million
- First fully franked dividend declared at 3.0 cents per share
- Meridium Global strategic review under way
A three-club rollout delivered record earnings
Viva Leisure Limited (ASX:VVA) spent FY2026 opening just three net new corporate clubs. It nevertheless delivered record revenue and earnings, expanded its adjusted EBITDA margin and funded its growth program from cash flow for the first time. The result marks a deliberate shift from adding sites at pace to making the existing estate work harder.
Revenue rose 12.2% to $237.1 million for the year ended 30 June, while adjusted EBITDA increased 13.3% to $112.3 million. Statutory NPAT more than doubled to $12.8 million, up 144.5%, and underlying NPAT rose 46.4% to $18.9 million. Adjusted EBITDA margin widened from 46.9% to 47.4%, as operating costs grew 10.2%, slower than revenue.
Membership did much of the heavy lifting. Network members reached 694,243, up 11.8%, while corporate membership increased by 17,117 to 275,688 despite the limited rollout. Average membership per corporate club rose from 1,286 to 1,351, and portfolio utilisation passed 80% for the first time, according to the annual report. Viva finished with 534 open locations and a further 170 locations sold or in its pipeline.
Cash generation supports the maiden dividend
Adjusted free cash flow reached $35.1 million. That covered $21.4 million of growth capital expenditure, $5.5 million of technology investment, $4.4 million of acquisitions and $1.8 million spent on the on-market buyback. Net leverage, measured by Viva’s stated senior-debt-to-pre-AASB 16 EBITDA metric, declined from 2.04 times to 1.77 times, against a bank covenant of 2.50 times.
The board has declared Viva’s first dividend since its ASX listing: a fully franked 3.0 cents per share payment, scheduled for 20 October 2026. The company has adopted a longer-term payout policy of 40% to 60% of underlying NPAT, although this initial dividend represents 15% of FY2026 underlying NPAT. That lower starting payout leaves more cash available for the next phase of expansion. Viva also bought back 1.176 million shares during the year at an average price of $1.56.
Meridium Global creates a separate strategic question
The most consequential structural change is the separation of Viva’s payments and technology assets into Meridium Global. On a standalone basis, and before inter-segment eliminations, the business generated $13.4 million of EBITDA in FY2026, compared with $3.7 million a year earlier. External revenue from the payments and technology segment rose 39.8% to $7.05 million, while internal charges for services provided to Viva’s own clubs are eliminated from consolidated revenue.
A strategic review is now under way to determine how the value of Meridium Global might best be realised for shareholders. The review has no announced outcome, and the accounting distinction matters: the segment’s $20.15 million of gross management revenue includes $13.10 million of inter-segment revenue that does not contribute directly to consolidated revenue. Meanwhile, Viva’s bank debt stood at $99.0 million and lease liabilities at $291.9 million at year-end.
FY2027 brings a larger growth test
Management is targeting more than 20 net new corporate locations a year from FY2027, alongside more than 150 franchise locations sold or in the pipeline. A Zoo Fit refurbishment and rebrand program across 20 existing sites is expected by management to deliver a 30% to 40% average revenue uplift per location within three months of completion, although that figure is a target rather than guidance and is not included in the FY2026 base.
Viva has also set a target of more than one million network members by FY2029. The next test is whether the operating discipline demonstrated during the slower rollout can survive a return to site growth, refurbishment spending and international expansion. At the same time, the Meridium review could introduce a second, less familiar valuation question: whether the technology platform remains an internal advantage or becomes a separately valued business.
Bottom Line?
Viva has shown that its existing network can generate stronger earnings with restrained expansion; FY2027 will test whether that performance survives a much faster rollout and a potentially important technology separation.
Questions in the middle?
- Can Viva maintain its improved margins as corporate openings rise from three to more than 20 a year?
- Will Meridium Global’s strategic review lead to a transaction, a partnership or continued ownership within Viva?
- How much of the targeted membership and Zoo Fit revenue growth will convert into cash after lease, technology and refurbishment spending?