Health club and hotel chain Bannatyne Group tumbled into the red in latest accounts after the pandemic triggered the prolonged closure of its venues.
The Darlington based business – launched and owned by former Dragons’ Den entrepreneur Duncan Bannatyne – has a chain of 69 gyms, 47 spas and a number of hotels across the 海角视频, having opened the first site on Teesside 25 years ago and grown membership to more than 210,000.
The pandemic, however, forced the closure of the entire network of health clubs and spas for several months, leading to latest accounts, covering 2020, showing how turnover more than halved from £132.46m to £59.89m.
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The previous year’s pre-tax profit of £12.8m was converted to a loss of £23m and operating profit of £22m for 2019 also tumbled to a loss of £13.9m.
Meanwhile, employee numbers fell from an average of 3,285 to 2,990.
In accounts for the 2020 financial year the firm said it tapped into Government support in the form of £14.24m from the CJRS (Coronavirus Job Retention Scheme) as more than 90% of its staff was furloughed.
Since the year end, and as a result of the national lockdown, the group said it had drawn down a second CLBILS (Coronavirus Large Business Interruption Loan Scheme) loan for £12m.
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Ed James, director, said in his report that the Covid-19 pandemic resulted in the prolonged closure of all of its health clubs and hotels following the first lockdown in March 2020, outlining how they remained closed until July in England and August in Scotland.
They were then closed during a second lockdown and when Tier 4 restrictions continued to keep sites closed in London and the South East.
Mr James said the company invested heavily in PPE, and implemented strict social distancing and cleaning policies, with its Covid-19 Emergency Response Team drawing up detailed plans prepared to both close down all of its sites but also to ensure they could open in a safe and secure manner.
In his report he said: “We furloughed over 90% of our employees across the group (including all health club and hotel employees) to protect the group’s financial position during our enforced closure.
“The directors have considered the impact of severe but plausible downside scenarios including a further peak of Covid 19 infection rates which stops the rebuild of the income base for a three month period. Under this scenario the group is still forecasting to have sufficient liquidity available, and to be in compliance with its bank covenants. A further national lockdown has not been modelled as this is no longer considered a plausible scenario.”
After publication of the accounts, the company said: “These results are entirely expected and reflect the effects of the pandemic.”
Duncan Bannatyne, the group’s chairman, launched the Bannatyne Group after having a skiing accident and needing regular exercise to recover. He couldn’t find facilities locally and decided to use some of the proceeds from the sale of his previous business, Quality Care Homes plc, to establish the fitness chain.
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During the accounts year, in November 2020, Mr Bannatyne wrote to MPs arguing the case for gyms and health clubs to reopen, telling them how exercise improves mental health and that the need to tackle obesity was being obstructed by health club closures in winter months.
He asked for a compromise amendment to allow some facilities, including gyms, to re-open – yet the tier system of restrictions that followed led to their continued closure.
At the time, he said: “I have written to our local MPs to put the case for safe opening of gyms and health clubs based on irrefutable data and carefully developed and proven social distancing and hygiene procedures. This is important for the mental health of the nation, and to help people keep physically fit to fight the virus should they be unfortunate enough to contract it.”
Meanwhile, a luxury ‘express spa’ at Teesside Airport will become its latest opening this year.
Work is currently under way at the airport, where Mr Bannatyne has invested £100,000 in a spa and treatment centre in the airport’s departure lounge, where passengers can treat themselves pre-flight.
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