Fitness First looks at raising £100m

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The Independent Online

Fitness First, the health clubs operator, is expected to announce plans to raise up to £100m via a rights issue when it unveils its full-year results on Thursday.

The group, which pitches itself at the value-for-money end of the fitness market, is seeking funds to support ambitious expansion plans. Mike Balfour, the chief executive, has grown the group to more than 220 clubs in 14 countries since it was founded nine years ago and hopes to have between 700 and 800 by the end of the decade.

A fundraising would provide firepower for further acquisitions since the group took on an extra £80m of debt in October to bolster its financing facilities. Fitness First, which has tapped the equity markets for funds several times since floating in 1996, is spending around £90m a year on opening new clubs.

Fitness First declined to comment ahead of its results. The group is expected to report a dramatic rise in pre-tax profits, exceeding the consensus forecast of £19.6m while reporting that demand remains strong.

The group's shares have been under pressure recently following poor trading at rivals such as Esporta and Topnotch. However, analysts expect Fitness First to be among the sector's winners if fears of an economic downturn put further pressure on the quoted operators.

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