The pandemic has hit the results of Benefit Systems, the operator of the MultiSport program, hard. However, the management believes that everything will return to normal by the end of the year.
The fitness industry has been particularly badly affected by the coronavirus. The clubs were closed from mid-March to early June, and after the easing of restrictions, they returned to work half-heartedly, which apart from the pandemic was affected by the standard seasonal effect, because summer is always the worst period for them.
The scale of the pandemic’s impact on the industry is clearly visible in the financial results of Benefit Systems, the operator of the MultiSport program and the owner of several club networks. In the second quarter, Benefit’s revenues decreased year-on-year to PLN 161.4 million, and the company lost over PLN 40 million on a net basis.
– During the lockdown, all sports and recreation facilities, including our clubs, were closed, so our revenues were much lower. We managed to keep 30 percent. sports cards in Poland thanks to the efficient expansion of the online offer. Despite this, in order to be ready for the frostbite of the fitness market, we incurred significant costs throughout the period related to the maintenance of our own fitness clubs and the structures of the MultiSport program in Poland and on foreign markets – explains Bartosz Józefiak, member of the management board and head of finance at Benefit Systems.
Only on the Polish market, revenues fell by 78%. The company also operates in the Czech Republic, Croatia, Bulgaria and Slovakia. Year on year, foreign markets increased sales, because the company significantly increased the scale of its operations there, and the restrictions lasted shorter – in the case of the Czech Republic, clubs could re-open at the end of April. In the entire first half of the year, Benefit generated less than PLN 0.55 billion in revenues, which means a decrease by a quarter. At the operating level, it had a profit of PLN 9.1 million, and the net loss attributable to the shareholders of the parent company amounted to PLN 38.8 million. That the results would be bad was to be expected, but it did not turn out to be as bad as analysts feared. As a result, the company’s stock rose during the Thursday session. As part of cost cutting in the fitness segment, Benefit has already decided to close four “permanently unprofitable” clubs in Poland and does not rule out the closure of more. For the company, however, it is more important whether users will still want to pay for MultiSport cards.
During the pandemic, the payment could be temporarily suspended, which meant that at the end of June there were less than 500,000 active (i.e. paying) MultiSport users in Poland, while at the end of the first quarter it was 1.18 million. However, after the end of the second quarter, the number of active customers began to grow – in August there were 745 thousand of them in the country, and 287.5 thousand abroad. The company’s management expects that in the fall – unless the pandemic gets in the way – the number of active cards will grow rapidly.
“We expect a similar year-on-year number of active sports cards at the end of 2020.” – reports the company.
–
