Why fund managers see Viva Leisure as more than a gym network
Viva Leisure has pivoted from rapid gym network expansion to monetising its existing 500-plus locations through technology, payments and ancillary products.
30 Apr 2026 · 4 min read
In short
Viva Leisure operates Australia's second largest gym network, with around 500 locations and visibility to 660 within a couple of years.
Revenue rose 17.6% to $116.5 million and underlying net profit after tax rose 46.8% to $8.1 million in its most recent reported half.
DMX Asset Management describes the stock's sub-10-times forward earnings multiple as too low for a cash generative, double-digit growth business, and management has begun a share buy-back.
Gym operator Viva Leisure has shifted from an acquisition-led growth phase to one focused on extracting more value from its existing network, according to Prime Value Asset Management's August 2025 Monthly Report, which described the company as Australia's second largest gym network with around 500 locations and visibility to 660 within a couple of years.
More than a gym company
Prime Value's report emphasised that Viva Leisure is far more than a gym company, employing a team of software developers to support a large captured network into which it can sell payments processing, access hardware and software, screen advertising, vending machines and gym supplements, all high-margin and high-return-on-capital add-ons. DMX Asset Management's February 2026 Monthly Report confirmed the pivot was translating into results, with the stock rising 17% on a strong result and the manager describing the sub-10-times forward earnings multiple applied to the business as far too low for a cash generative double-digit grower.
Viva has considerable upside potential in the years ahead from both earnings growth and multiple expansion as its story becomes more widely understood among smaller companies investors.
— DMX Asset Management, Monthly Report, February 2026
Perennial Partners' February 2026 Monthly Report detailed the scale of the improvement: revenue up 17.6% to $116.5 million and underlying net profit after tax up 46.8% to $8.1 million, supported by strong growth across the health club network and a 44.7% revenue increase in the higher-margin technology segment. Adjusted free cash flow rose 25% to $19.9 million, with FY26 guidance for revenue and underlying EBITDA reaffirmed.
What managers are watching next
DMX Asset Management's March 2026 Monthly Report flagged a share buy-back as further evidence of the capital allocation discipline now in place, describing management as recognising the market is undervaluing the business and buying back shares below intrinsic value to enhance returns for remaining investors. Perennial Partners' April 2026 update noted the stock had nonetheless drifted lower on no newsflow, a pattern it attributed to a continued lack of investor interest in smaller market cap companies despite what it called attractive fundamentals.
Questions
Is Viva Leisure just a gym company?
No. Prime Value Asset Management notes Viva Leisure employs a team of software developers and monetises its gym network through high-margin ancillary products including payments processing, access hardware, screen advertising, vending machines and supplements.
Why do fund managers think Viva Leisure is undervalued?
DMX Asset Management argues the sub-10-times forward earnings multiple applied to Viva Leisure is too low given its double-digit growth and strong cash generation, seeing upside from both earnings growth and multiple expansion.
Is Viva Leisure buying back shares?
Yes. DMX Asset Management notes Viva Leisure has been buying back shares, viewing it as a rational capital allocation decision given management's assessment that the market is undervaluing the business.
4 managers, 7 comments, with each manager's latest recorded position.
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