Category: Consumer

Key Highlights

  • Revenue increased 12.2% to $237.1 million, marking Viva Leisure's seventh consecutive year of Revenue growth.
  • Statutory NPAT rose 144.5% to $12.8 million, while underlying NPAT increased 46.4% to $18.9 million.
  • Adjusted free Cash Flow increased 7.7% to $35.1 million, while net Leverage declined from 2.04 times to 1.77 times.
  • Viva Leisure declared a maiden fully Franked Dividend of 3.0 cents per share, with payment scheduled for 20 October 2026.

Viva Leisure Limited (ASX: VVA) reported a record FY2026 result for the year ended 30 June 2026, with revenue reaching $237.1 million, up 12.2% from $211.3 million in FY2025. The company delivered the result while deliberately slowing its greenfield corporate rollout and focusing on network utilisation and operating performance.

Operating costs increased 10.2% to $127.1 million, below the rate of revenue growth. Adjusted EBITDA consequently rose 13.3% to $112.3 million, compared with $99.1 million a year earlier. The adjusted EBITDA Margin increased by 50 basis points to 47.4%.

Profit growth was more pronounced further down the income statement. Statutory NPAT increased 144.5% to $12.8 million from $5.2 million, while underlying NPAT rose 46.4% to $18.9 million from $12.9 million. Statutory EPS climbed 150.6% to 13.13 cents, while underlying EPS increased 54.2% to 19.43 cents.

Health Clubs Remain the Main Revenue Contributor

Health Clubs generated $208.2 million of FY2026 revenue, an increase of 11.0% from $187.5 million. Franchise and Investment income rose 13.5% to $9.0 million, while supplements, licensing and retail revenue increased 18.5% to $12.8 million.

Payments and Technology was the fastest-growing reported revenue stream, rising 39.8% to $7.1 million after inter-segment eliminations. On a gross basis, before those eliminations, the segment generated $20.2 million compared with $7.3 million in FY2025.

The segment's standalone EBITDA before inter-segment eliminations increased from $3.7 million to $13.4 million. Viva is transferring its payments and technology Assets into a new subsidiary, Meridium Global, giving those activities a separate structure and strategic direction.

Membership Growth Came From Existing Locations

Network membership reached 694,243 at 30 June 2026, an increase of 73,341 members or 11.8%. Corporate membership increased 6.6% to 275,688, while franchise membership rose 15.5% to 418,555.

The corporate network expanded by only three net locations during the year, reaching 204 sites, while average membership per corporate club increased from 1,286 to 1,351. Total open locations reached 534, up from 491, with franchise and investment locations accounting for much of the increase.

Portfolio utilisation exceeded 80% for the first time, while the company said 170 locations were sold or in the pipeline for opening over the following 12 to 24 months.

Cash Flow and Leverage

Adjusted free cash flow increased 7.7% to $35.1 million from $32.6 million. This funded $31.3 million of growth reinvestment, including $21.4 million of growth capital expenditure, $5.5 million of technology investment and $4.4 million of acquisitions and investments.

Growth reinvestment was substantially lower than the $60.8 million recorded in FY2025, when acquisitions and investments amounted to $36.9 million. The on-market share buy-back also declined to $1.8 million from $4.7 million.

Statutory Operating Cash Flow increased to $76.4 million from $70.0 million. Net leverage declined from 2.04 times to 1.77 times, against a bank covenant of 2.50 times. Closing cash fell by $7.1 million to $5.8 million, although the company stated that approximately $4.4 million of this movement related to Viva Pay settlement funds held for merchants.

First Dividend Marks Change in Capital Allocation

The Board declared Viva Leisure's first fully franked dividend since the company's June 2019 listing. The payment is 3.0 cents per share, representing approximately $2.9 million, equivalent to 15% of underlying NPAT and 8% of adjusted free cash flow.

The dividend is below the company's newly adopted policy range of 40% to 60% of underlying NPAT, reflecting the company's intention to continue funding growth. The ex-dividend date is 28 September 2026, the Record Date is 29 September, and payment is scheduled for 20 October 2026.

Outlook and Operating Priorities

Viva Leisure is targeting one million network members by FY2029. The company plans to increase corporate openings from three net additions in FY2026 to more than 20 from FY2027 onward, alongside more than 150 franchise locations sold or in the pipeline.

The company also plans to expand its Viva 360 data platform, which includes member churn, suspension and targeting models. Management has reported that the churn model has 89.1% accuracy, while the platform is intended to support member retention and Acquisition activity.

Current trading indicators show network membership has passed 700,000 and corporate membership has exceeded 278,000 since the end of FY2026.

Conclusion

Viva Leisure's FY2026 results show higher revenue, Earnings and cash generation alongside lower leverage, despite a slower corporate rollout. Revenue rose 12.2%, underlying NPAT increased 46.4%, and adjusted free cash flow grew 7.7%, while the company also introduced its first dividend. At the same time, the reduction in closing cash and lower overall growth reinvestment compared with FY2025 remain relevant financial developments. The next phase will involve balancing renewed network expansion, technology investment and Shareholder distributions as Viva Leisure pursues its FY2029 membership target.