Highlights

  • Record FY2026 Revenue of $237.1 million, up 12.2%, with underlying NPAT up 46.4% to $18.9 million.
  • Viva Leisure declared its first Dividend since listing, 3.0 cents per share fully franked.
  • Network membership reached 694,243, up 11.8%, with portfolio utilisation exceeding 80% for the first time.
  • Net Leverage fell to 1.77 times from 2.04 times, well within the 2.50 times bank covenant.

Viva Leisure (ASX:VVA) shares climbed to $1.57 on 19 August 2026, up 10.60%, after the health club and fitness operator announced record FY2026 results, stronger Earnings growth and the declaration of its first dividend since listing. The result was precisely what shareholders had been hoping for: record revenue of $237.1 million, up 12.2% from $211.3 million, combined with a 46.4% jump in underlying NPAT to $18.9 million from $12.9 million.

Operating Leverage Drives Margin Expansion

Operating costs increased 10.2% to $127.1 million, materially slower than the 12.2% revenue growth, demonstrating positive operating leverage. Adjusted EBITDA jumped 13.3% to $112.3 million from $99.1 million, with the adjusted EBITDA margin expanding 50 basis points to 47.4%.

Profit growth was even more pronounced further down the income statement. Statutory NPAT surged 144.5% to $12.8 million from $5.2 million, while EPS jumped 150.6% to 13.13 cents. Underlying NPAT of $18.9 million produced underlying EPS of 19.43 cents, up 54.2%.

Revenue Streams Across the Business

Health Clubs, the core business, generated $208.2 million in FY2026 revenue, up 11% 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. The fastest-growing stream was Payments and Technology, up 39.8% on a reported basis to $7.1 million, reflecting inter-segment eliminations — on a gross basis the segment generated $20.2 million, up from $7.3 million in FY2025.

Membership Growth and a Deliberate Slowdown in Rollout

Network membership reached 694,243 at 30 June 2026, up 11.8%, with growth coming primarily from existing locations. Corporate membership rose 6.6% to 275,688, while franchise membership surged 15.5% to 418,555. Notably, the corporate network expanded by only three net locations to reach 204 sites, as management deliberately slowed greenfield rollout to focus on utilisation at existing clubs.

That strategy is paying off: average membership per corporate club rose from 1,286 to 1,351, and portfolio utilisation exceeded 80% for the first time. Management noted 170 locations are in the sales pipeline or slated to open over the following 12 to 24 months, suggesting corporate expansion will accelerate from FY27.

Cash Generation and Balance Sheet Strength

Adjusted free Cash Flow rose 7.7% to $35.1 million from $32.6 million. Growth reinvestment fell to $31.3 million from $60.8 million, partly because FY25 included $36.9 million of acquisitions, reflecting a transition from an Acquisition and rollout phase to a more disciplined Capital deployment approach. Net leverage declined to 1.77 times from 2.04 times, against a bank covenant of 2.50 times.

First Dividend Signals Confidence

Viva Leisure declared its first dividend since listing — 3.0 cents per share, fully franked — representing a meaningful shift in capital allocation. The payment of approximately $2.9 million equates to 15% of underlying NPAT and 8% of adjusted free cash flow, sitting below the company's newly adopted policy range of 40–60% of underlying NPAT as management continues to fund growth.

Technology and the Path to One Million Members

Viva has developed Viva 360, a data platform featuring member churn, suspension and targeting models, with the churn model reporting 89.1% accuracy — a technological edge expected to support retention and acquisition.

Looking ahead, Viva is targeting one million network members by FY2029, planning to increase corporate openings from three net additions in FY2026 to more than 20 from FY27 onward, while selling or placing in pipeline more than 150 franchise locations. Current trading indicators show network membership has already passed 700,000 and corporate membership has exceeded 278,000 since year-end.

Conclusion

The combination of record revenue, strong earnings growth, a maiden dividend, improving leverage and an ambitious one-million-member target gives Viva Leisure a compelling growth narrative heading into FY27.