Basic Fit

Basic Fit


180108 Basic-Fit | fit for investment 180108 Basic-Fit | fit for investment

No. pages 58

It might sound like if it is a cliché, but investing is for the longer term and especially in the case of Basic-Fit a view beyond the next quarter or even next year is required. Admittedly, after a strong share price performance as of the autumn last year, outspoken short term catalysts might be absent. Instead, Basic-Fit said that it will absorb the Dutch VAT increase from 6% to 9% as of January 2019. Also, we don't believe consensus estimates for FY17-18E are materially different from our forecasts. Still, the recent share price stabilization might be a good opportunity to build a position. After all, what matters are the medium and longer term perspectives, and these are positive, in our view.

In our in-depth company report we analyze and highlight Basic-Fit's profile and the fitness industry and markets in which it is positioned. We also provide detailed benchmarking exercises including Basic-Fit and its main peers to determine the company's performance relative to these peers.  Moreover, we detail several scenarios obviously including our base case growth scenario which is based on a continued aggressive expansion in France followed at a later stage in Spain. Alternatively, our less favorable scenarios show the downside and hence risks to Basic-Fit's aggressive expansion plan. We believe that the company can mitigate risks if its growth trajectory in France and Spain fails to deliver. All our scenarios provide detailed (free) cash flow and leverage estimates.

Topics that we address in our 58-pages report are:

• Fundamentals of the European fitness industry
• The potential for low-cost chains
• Basic-Fit's position as sizeable low-cost player
• Basic-Fit's KPI's versus its main peers
• The important link between the ambitioned expansion and the maturing of club portfolio
• Risks if expansion in France and Spain fails
• The maturing of the portfolio as EBITDA growth driver and contributor to future expansion
• Mature clubs potential cash cows for shareholders in medium term


     executive summary
1   profiling Basic-Fit
2   the European fitness market
3   Basic-Fit’s platform in more detail
4   Basic-Fit top in the European league
5   benchmarking Basic-Fit
6   a closer look at marketing, capex and depreciation
7   in summary, modelling Basic-Fit versus Gym Group
8   estimates, valuation and investment view
9   appendix: estimates


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