DJ Ardent Leisure's Gym Business Needs Time to Become Fit -- Market Talk
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AAD
$2.61-$0.02 (-0.8%)
$2.60$2.61
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10 Nov 2015 09:32:58
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17:32 ET - It will be some time yet before Ardent Leisure's (AAD.AU) health-club business becomes fit, says UBS. The broker says Ardent has converted only 25 gyms to 24/7 by 1Q FY16 with another 20 clubs expected to be converted over the fiscal year as a whole. The remaining 32 gyms will be converted to 24/7 or extended hours over the following year. "The 1Q result showed increased membership sales of 33% in converted clubs, but gaining members is costly," analyst Jordan Rogers says. "We view the gyms conversions as 'stay-in-business' capex, and do not expect to see a meaningful uplift in earnings until 1H FY17 at the earliest." UBS keeps a buy call, and A$3.10/share price target on the stock. It likes the long-term opportunity for Ardent's Main Event cinemas business. AAD last traded at A$2.55. ([email protected]; @dwinningWSJ) (END) Dow Jones Newswires November 09, 2015 17:32 ET (22:32 GMT)
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AAD Price at posting:
$2.60 Sentiment: Buy Disclosure: Held
