Upmarket health and fitness club Holmes Place is in talks to step up its US expansion, it emerged today.
The group is hoping to set up a joint venture with US firm Bally Total Fitness that will allow Holmes Place to “explore opportunities” in America.
Bally Total Fitness, the world’s largest operator, wants to use the venture to look at the possibility of rolling out its mid-market fitness concept in Europe.
The talks, which are at an “advanced” stage, follow moves by Bally to develop two Holmes Place clubs in its home town of Chicago.
The US group’s chairman and chief executive Lee Hillman has been a non-executive director at Holmes Place since it floated in 1997.
Today, Graham Reddish, Holmes Place’s chairman, said: “By leveraging the two companies’ infrastructures, resources and expertise, Holmes Place and Bally will be able to explore the growth opportunities for their respective businesses internationally with greatly reduced risk.”
Shares in the London-based group climbed 6.5p to 290p after the news, with the City also buoyed by interim results showing profit growth of 35%.
Holmes Place’s half-year pretax profits hit £6.7m in the six months to 30 June, as the group continued to expand in the UK and Europe.
Membership across the business rose 38% to 228,000, with new clubs opened in Nottingham, Birmingham and Farnborough in Surrey.
The group now has 42 clubs in the UK, where the average basic subscription is £50 to £60 per month, and 14 on the Continent.
Reddish said that six more clubs would open in the UK in the second half, at Epsom, Didsbury in Manchester, Staines and three in London.
The balance of the opening programme will then be switched to Europe, where the group operates clubs in Switzerland and on the Iberian peninsula.
Turnover in the first-half surged 45% to £57 million.
Reddish said: “Holmes Place has made substantial progress towards its objective of becoming Europe’s leading premium health and fitness operator.”
Shareholders will receive an interim dividend of 1.8p per share, a 9% rise.
EGi News 06/09/01
The Press Association
