Accounts filed at Companies House last week show that in 2008 Darlington-based
Bannatyne Fitness made an £8.2m pre-tax profit, up from £2.7m in 2007.
The highest paid director of the company, which is wholly owned and chaired by
Mr Bannatyne, received a £185,731 salary, up from £158,333 in 2007.
But no dividend was paid to Mr Bannatyne last year or in 2007 and the profits
were retained within the company.
“The only person who would receive a dividend is me. I sold Just Learning
for £22m a few years ago and paid 10pc tax on that. I just don’t need the
money,” said Mr Bannatyne. His personal fortune is estimated at £320m
in the Sunday Times Rich List.
Mr Bannatyne said that as the credit crisis took hold in the spring last year
the company had made the conscious decision to focus on managing the
integration of the 24 Living Well clubs it had acquired from Hilton in 2006
as well as improving its operations.
“In 2008 what we decided to do because of the banking crisis we decided
to stop expanding and focus the group on maximising profits. Our turnover is
up 2pc on 2008, so we are trading well,” he said.
Despite the recession, membership of gyms and health clubs is up 1pc this year
and Bannatyne’s membership numbers are “even”, said Mr Bannatyne.
Those members are becoming more profitable, with the average yield per club
member of the 60-strong Bannatyne Health Clubs and spa centres from £32.63
to £33.31 last year.
And the £79m turnover business covered its £11.9m interest payments due on its
£167m short and long term bank debts from its £22.8m cash flow.
The directors said that having “considered the current economic challenges”
and using the company’s 2008 performance and initial forecast for 2009 as a
guide that they were “confident” it would trade within its
existing banking covenants.
Mr Bannatyne said: “We have long-term funding in place and as long as we
don’t break any covenants the banks have to accept it at the price they
agreed. We have not come close to breaking them.”
Bannatyne Fitness’ bank is Anglo Irish Bank, which Mr Bannatyne said had gone
through a “nervous” period last year before being nationalised by
the Irish government in December. It was not focused on its “long-term
customer relationships” he added.
Mr Bannatyne said he was considering expanding another of his businesses,
Bannatyne Hotels, and would negotiate with that company’s bank, Barclays,
over the coming months. “It all depends on the price [interest rate]
they charge us,” he said.
His assessment of the impact of the recession? “We are finding it not
very challenging. We’re 2pc up on last year. We are finding it hard to
believe ourselves,” he said.