Ben Dunne’s gym group swung back into the black last year, recording operating profit of €3 million.
The business returned to profit following Mr Dunne shutting down six of his 12 gyms after exiting rent deals for the various premises.
“Paying rent is a mug’s game,” Mr Dunne said in an interview. “My own business has shrunk dramatically but there was a very good reason for that as we took a view on rents which were crazy,” he added.
Mr Dunne said with revenues declined from €13 million to €6.5 million while membership fell by half to 25,000 today.
“We are feeling good about our business today,” said. “This time last year we didn’t know if people would go back to the gyms.”
After shrinking the business, Mr Dunne is now eyeing opportunities to expand it again.
“We have a very strong balance sheet, no borrowings and plenty of cash. We want to expand but not expanding anywhere where we have to pay rent.”
Instead, he plans to buy outright any potential new locations.
During the Covid-19 pandemic, his gym business “was caught badly” with the costs associated with its rented premises “but it didn’t put us out of business”.
Mr Dunne said that only two of his gyms today are rented properties but said that they “are capped and collared. Rent can only go up by 2 per cent and can only drop by 1 per cent and we have break clauses in our favour”.
On the turnaround in the business, he said that in the 12 months to the end of last May the company recorded an opening profit of €3 million after making an operating loss of €3 million in the previous year.
“There is no fun in losing money, it really becomes hard work.”
“We have had a huge swing-around. Any business that swings around from making big losses to making a profit – you would be very naive to say you are not happy with that.”
Mr Dunne said that turning around the business involved working hard.
“I didn’t play golf for three years while all of this was going on. When your business is in trouble something has to give and you can’t play golf three days a week with your business under the cosh – well I couldn’t do it anyway.”
