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.

| More on:
An investor sits at her desk and stretches her arms above her head in delight.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

asx share price boosted by us investment represented by hand waving US flag across winning athlete
Best Shares

Here are the best-performing ASX 200 shares since the US election result

We reveal the 10 ASX stocks that have had the highest share price gains since the US Presidential election.

Read more »

A young man sits at his desk working on his laptop with a big smile on his face due to his ASX shares going up and in particular the Computershare share price
Share Market News

5 things to watch on the ASX 200 on Friday

A decent finish to the week is expected for Aussie investors.

Read more »

A smiling man at a shop counter takes payment from a female customer, with racks of plants in the background.
Best Shares

Here's why I think Wesfarmers shares are a great buy for any ASX investor

I argue that Wesfarmers offers investors both growth and income potential.

Read more »

A golfer celebrates a good shot at the tee, indicating success.
Share Market News

Here are the top 10 ASX 200 shares today

ASX investors finally enjoyed a win this Thursday...

Read more »

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Industrials Shares

Up 39% in a year, is there more growth to come for this ASX 200 share?

IML Equity Analyst Josh Freiman shares his views on a major ASX 200 industrial stock.

Read more »

Man looking at his grocery receipt, symbolising inflation.
Share Market News

What the latest US inflation print means for ASX 200 investors

The ASX 200 is likely to benefit if the US Fed cuts interest rates again in December. But will it?

Read more »

guy helping girl invest in shares and dividends
Opinions

5 ways for investors buying ASX shares to stay focused during economic uncertainty

AMP Chief Economist, Dr Shane Oliver, offers advice on how to handle the Trump factor.

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why Graincorp, Light & Wonder, Orica, and Wildcat shares are falling today

These shares are having a tough time on Thursday. But why?

Read more »