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Fitness First flies on takeover hopes
by Algernon Craig Hall on Jan 30, 2003 at 12:22
(Update) Fitness First is in talks with a third party that could lead to an offer for the troubled health club operator.
News that Fitness First's 'review of shareholder value' was making progress revived its shares which jumped 14.5p to 148p .
Last November the company revealed it was seeking offers after being approached by several private equity firms following its profits warning in October.
We reported at the time that Simon Ware-Lane, the financier who helped bring the company to market picked up a 5.1% holding, after the warning which more than halved its shares to 99p. The recovered to a high of 161p earlier this month.
Independent directors Walter Goldsmith and John Denning are supervising the talks.
The announcement accompanied full-year results that showed Fitness First has managed to meet the City's reduced expectations for the 12 months to the end of October but has yet to make it out of the woods.
Earnings before tax, goodwill and exceptional charges increased 17% to £24.1 million on turnover up 68% at £224.2 million. Earnings per share nudged up 3% to 13.9 million.
After £2.9 million exceptional charge, which related to the removal of potentially hazardous spa baths from 67 clubs and restructuring costs, and goodwill charges profits before tax came in at £18.5 million, just £400,000 up on last year.
The top line growth at the expansive chain did not come cheap.
Capital expenditure, mainly connected to the opening of 111 new clubs during the year, came in at £135.6 million which compares with 119.6 million last year.
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