Key Highlights

  • FY26 Revenue increased 12.2% to AUD 237.1mn.
  • Underlying net profit rose 46.4% to AUD 18.9mn.
  • The network reached 694,243 members across 534 open clubs.
  • Viva Leisure declared a maiden fully Franked Dividend of three cents per share.

Viva Leisure (ASX:VVA) is entering FY27 with record membership, higher Earnings and its first dividend. Increased utilisation across the fitness network supported Operating Leverage during FY26, while Cash Flow and Debt metrics also improved. The next test is whether expansion towards one million members can continue without weakening returns or placing additional pressure on the balance sheet.

Recent Developments

Viva Leisure's FY26 result was a standout. Revenue rose 12.2% to AUD 237.1mn, adjusted EBITDA increased 13.3% to AUD 112.3mn at a 47.4% margin, and underlying net profit after tax jumped 46.4% to AUD 18.9mn. Statutory NPAT more than doubled to AUD 12.8mn, while adjusted free cash flow rose to AUD 35.1mn. The headline for income-focused investors was the maiden fully franked dividend of 3.0 cents per share, payable on 20 October 2026, with the company adopting a future payout target of 40-60% of underlying NPAT. Network metrics also hit records: total members reached 694,243 across 534 open clubs, portfolio utilisation topped 80% for the first time, and average membership at corporate clubs climbed to a record 1,351.

Business and Investment Context

Viva Leisure operates and franchises a large network of health clubs across Australia, and its FY26 numbers show the operating leverage in that model coming through as membership density improves. The health-clubs segment lifted revenue about 11% to AUD 208.2mn, and the group added net new corporate locations and members while pushing utilisation past 80%. Just as important for the risk profile, net leverage fell to 1.77x from 2.04x, comfortably inside the 2.50x bank covenant, and Operating Cash Flow reached AUD 76.4mn with net Assets of AUD 122.4mn. The introduction of a dividend, and a formal payout policy, signals management's confidence in the durability of cash generation. The counterweight is that the Business still carries debt and depends on continued membership growth and consumer discretionary spending, both of which are sensitive to the broader economic backdrop.

What to Watch Next

The company has set an ambitious target of one million network members by FY29, and it enters FY27 already tracking above 700,000 - so the pace of new club openings and membership additions will be a key measure of progress. The first dividend payment on 20 October 2026, and how the payout policy evolves, will matter to income investors, while further Margin gains and deleveraging would reinforce the operating-leverage narrative. Risks to watch include softer consumer spending, competition in the fitness market and execution on the expansion runway.

Outlook and Key Considerations

Viva Leisure’s FY26 result showed the benefit of greater membership density across an established club network. Sustainable expansion will require continued member growth, disciplined openings and further deleveraging as the company develops its dividend policy.