The UK arm of Virgin Energetic, the health chain managed by South African funding group Brait, has warned of doubts over its capability to proceed as a going concern after authorities lockdowns compelled the closure of its gyms.
In accounts filed at Corporations Home, Virgin Energetic mentioned its debt covenants could be breached until it raised cash and warned that continued lockdowns and decreased footfall to metropolis centres have been including to strain on the enterprise.
Nevertheless, the UK firm mentioned it was making an attempt to lift extra funds and anticipated to have the ability to depend on the assist of its father or mother group.
Virgin Energetic mentioned: “We’re in discussions with all our stakeholders, and with their assist we stay up for getting again to enterprise as traditional throughout all our territories, enabling the enterprise to profit from world developments in the direction of well being and wellness that are accelerating on account of the pandemic.”
Virgin Energetic had 243 well being golf equipment on the finish of 2019, with greater than half in southern Africa and the rest within the UK, Italy and Asia, with 42 within the UK.
The UK accounts report efficiency for 2019. In more moderen unaudited accounts printed on Brait’s web site, the corporate mentioned the broader Virgin Energetic group’s revenues fell to £224.7m within the 9 months to the top of September 2020 from £450.8m a 12 months earlier. This resulted in a loss earlier than curiosity, tax, depreciation and amortisation of £eight.4m, in contrast with a revenue of £102.4m beforehand.
The necessity for additional money underlines the severity of the pandemic, which compelled Virgin Energetic to lift £20m from shareholders in June. Brait, which owns roughly 80 per cent of Virgin Energetic, offered £16m of the fundraising.
Sir Richard Branson’s Virgin Group, which owns the rest of the corporate, injected the remaining and agreed to defer £5m of royalty funds. It’s the newest fundraising required in Mr Branson’s empire, following Virgin Group’s £200m dedication to Virgin Atlantic, the airline, in July.
Financial institution lenders additionally offered entry to £25m of latest debt earlier this 12 months. The group depends on its banks to fund its health chains within the UK, Italy and Asia.
Paperwork present that the corporate might ask for added banking amenities of as much as £50m, or one other quantity topic to settlement from lenders, which embody HSBC, AIB Group, Barclays, Lloyds and Normal Chartered.
Virgin Energetic additionally made use of presidency furlough schemes, together with within the UK, deferred rental funds and agreed workers wage reductions because it froze memberships.
Brait has been promoting belongings because it unwinds a method of investing exterior South Africa. Final November, Brait agreed a deal for personal fairness agency Ethos to handle that course of and return capital to shareholders.
Peter Hayward-Butt, a companion at Ethos, mentioned in an interview with Bloomberg earlier this 12 months that the pandemic had “put a spanner within the works”, delaying the sale of the health chain.
Brait held 60 per cent of UK grocery store Iceland however earlier this 12 months bought its stake again to founder and govt chairman Malcolm Walker.