Viva Leisure : FY2022 Half Year Financial Statements

For personal use only

VIVA LEISURE LIMITED

Interim Financial Statements

For the half Year Ended 31 December 2021

1

Viva Leisure Limited

For personal use only

Viva Leisure Group

Interim Financial Statements for the
Half-Year Ended 31 December 2021
Contents
DIRECTORS' REPORT .............................................................................................................................	3
Directors ...........................................................................................................................................	3
Review of Operations and Financial Results.....................................................................................	3
AUDITORS INDEPENDENCE DECLARATION ........................................................................................	5
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.....	6
CONSOLIDATED STATEMENT OF FINANCIAL POSITION....................................................................	7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ....................................................................	8
CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................	9
Note 1	Summary of Significant Accounting Policies......................................................................	10
Note 2	Profit for the Period ...........................................................................................................	11
Note 3	Cash and Cash Equivalents ..............................................................................................	11
Note 4	Leases ..............................................................................................................................	12
Note 5	Borrowings........................................................................................................................	13
Note 6	Business Combinations.....................................................................................................	14
Note 7	Segment reporting ............................................................................................................	14
Note 8	Contingent Liabilities and Contingent Assets ....................................................................	14
Note 9	Events After the Reporting Period .....................................................................................	15
Note 10	Fair Value Measurement...................................................................................................	15
DIRECTORS' DECLARATION ................................................................................................................	16
INDEPENDENT AUDITOR'S REVIEW REPORT ....................................................................................	17

2022 Interim Financial Report Half Year Ended 31 December 2021

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Viva Leisure Limited

For personal use only

DIRECTORS' REPORT

The Directors of Viva Leisure Limited (Viva Leisure) present their Report together with the financial statements of the Consolidated Entity, being Viva Leisure Limited (the Company) and its controlled entities (Viva Leisure Group or the Group) for the half-year ended 31 December 2021.

Directors

The following persons were Directors of Viva Leisure during or since the end of the financial half-year:

• Harry Konstantinou
• Bruce Glanville
• Rhys Holleran
• Louise Bolger (appointed 5 July 2021).

Review of Operations and Financial Results

The Group recorded a loss of $10,446,237 (2020: loss of $3,302,675).

During the half-year ended 31 December 2021, the following events took place:

• Completed seven separate acquisitions comprising:
• • Four Plus Fitness sites in Manly, Mona Vale, and Rydalmere, New South Wales and Beerwah, Queensland;
  • The assets of One Health South Morang, Vic and Live Well Gregory Hills, New South Wales
  • The Master Franchise of the Rebalance Group and assets of the corporate owned sites comprising eight Yoga/Pilates studios in Queensland, New South Wales and Victoria
• Completed a fully underwritten $11.7m equity raising by way of an institutional placement of approximately 7.56m ordinary shares at $1.55
• Opened two new greenfield sites in Castle Hill, NSW and Belconnen, ACT.

COVID-19 Impacts

Viva Leisure Limited's clubs were subjected to significant closures during the period of July to October 2021.

The Company took immediate steps to mitigate exposure to ongoing costs and to preserve cash:

• Wage costs reduced significantly by the stand down of significant numbers of staff during this period of closure,
• Rent relief negotiations commenced with landlords for the period of shutdown
• Delayed all un-committed capital works on rollouts
• Funding received through the NSW JobSaver Grant
• Undertook a capital raise to further preserve the cash position.

During this period, the Group suffered a significant reduction in revenues, which in turn has affected profits for the period.

In addition, the Plus Fitness business suffered a reduction in Franchise Fees (clubs closed by reason of government direction) and lower than normal territory rollouts due to uncertainty across the sector.

The onset of the Omicron variant then led to a reluctance of members to attend our facilities, suppressed the rate of new members joining and led to an increase of voluntary suspensions by existing members.

Over the period to 31 December, the Viva Group delayed the works on several of its greenfield locations to preserve cash in the uncertain COVID environment, whilst in many cases carrying full rent costs. These delays have deferred club openings into late in the second half of FY2022.

2022 Interim Financial Report Half Year Ended 31 December 2021

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Viva Leisure Limited

For personal use only

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the group based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the group operates.

Revenues and financial outcomes were significantly impacted during the closure periods and where appropriate, this has been addressed in the specific notes, estimates and judgements in the Financial Statements. There remains uncertainty with respect to future events or circumstances which may continue to impact the financial results of the consolidated entity.

As announced to the ASX on 17 May 2021, the Company received a draft statement of claim prepared on behalf of a number of Plus Fitness franchisees. The draft statement of claim advised of the possibility of proceedings being commenced against Viva Leisure and its subsidiary Australian Fitness Management (AFM).

No claim has been filed with any Court as at the date of this report, and accordingly no provision or contingent liability has been recorded. Viva Leisure is confident that it and its group companies are dealing with franchising appropriately and in accordance with the law.

This directors' report is signed in accordance with a resolution of the Board of Directors:

Director

Harry Konstantinou

Dated this

24

day of

FEBRUARY

2022.

2022 Interim Financial Report Half Year Ended 31 December 2021

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Viva Leisure Limited

AUDITORS INDEPENDENCE DECLARATION

For personal use only

2022 Interim Financial Report Half Year Ended 31 December 2021

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