Viva Leisure Declares Maiden Dividend in Record FY26 Result

Viva Leisure (ASX: VVA) has delivered record revenue of $237.1 million for the 2026 financial year, exceeding guidance across all five key metrics after deliberately slowing its greenfield club rollout to focus on network optimisation.

Revenue rose 12.2% while operating costs increased 10.2%, helping adjusted EBITDA climb 13.3% to $112.3m and lifting the adjusted EBITDA margin 50 basis points to 47.4%.

Underlying NPAT increased 46.4% to $18.9m, statutory NPAT more than doubled to $12.8m, and adjusted free cash flow reached $35.1m.

The board has responded by declaring Viva Leisure’s first dividend since listing, a fully franked 3.0 cents per share distribution.

The group has also begun a strategic review of its payments and technology assets under the new Meridium Global structure.

Optimisation Lifts Productivity

Viva Leisure ended FY2026 with 694,243 network members across 534 open locations, including 275,688 corporate members and 418,555 franchise members.

Corporate membership increased by 17,117 despite only three net new corporate locations, while average membership per corporate club rose from 1,286 to a record 1,351 and portfolio utilisation exceeded 80% for the first time.

Health Clubs generated $208.2m of revenue, up 11%, with $20.7m of the group’s $25.8m annual revenue increase coming from that segment as gains were driven primarily by the existing estate rather than new openings.

“FY26 was the year we said we would slow the rollout and prove the model—we did both,” chief executive officer Harry Konstantinou said.

“With just three net new corporate clubs we added more than 17,000 corporate members and lifted average membership per club to 1,351, the highest in our history—that is what this business looks like with the growth lever switched off; from here we reaccelerate, targeting one million network members by FY29.”

Robust Cash Flow

Adjusted free cash flow of $35.1m increased 7.7% and fully funded $31.3m of growth reinvestment during the year, including $21.4m of growth capital expenditure, $5.5m of technology investment and $4.4m of acquisitions and investments.

Net leverage fell from 2.04 times to 1.77 times against a 2.50 times bank covenant, while net assets increased to $122.4m and statutory operating cash flow rose to $76.4m.

Maintenance capital expenditure of $6.1m represented 2.6% of revenue, remaining below Viva Leisure’s target of 3%.

The maiden dividend represents about $2.9m in total distributions, with the board adopting an ongoing payout target of 40% to 60% of underlying NPAT subject to reinvestment needs and balance sheet settings.

The first payout has been set below that range as Viva Leisure balances shareholder returns with its FY27 growth program, with payment scheduled for 20 October 2026.

Technology Business Scale

Payments and Technology revenue rose 39.8% on a like-for-like basis to $7.1m after inter-segment eliminations, while gross revenue before eliminations reached $20.2m.

Those assets will transfer into Meridium Global as a standalone business spanning payments and technology products, with standalone EBITDA increasing from $3.7m in FY2025 to $13.4m in FY2026 before inter-segment eliminations.

Viva Leisure has commenced a strategic review to determine how best to realise value from Meridium Global, while its Viva 360 platform is using more than 20 years of owned data to support predictive member retention and has identified about 46,000 cross-sell opportunities.

Growth is continuing into FY27, with network membership already above 700,000 and corporate membership above 278,000 as Viva Leisure shoots for its targets of one million network members by FY29 through renewed corporate openings, franchise expansion, refurbishments, and retention initiatives.