Ardent sheds weight to deliver strong result
Ardent Leisure’s (ASX: AAD) sale of the Goodlife health clubs and Hypoxi weight loss businesses caught the market by surprise early in the month, with the AAD share price opening 9% higher on the announcement. The gyms had been seen as a headache with business transformation underway to cope with the increasing prevalence of 24-hour gyms and the sale was seen as representing a fair price. The annual result was announced a few days later with solid performances across all divisions; particularly in bowling which is benefiting from a number of initiatives introduced from the US Main Event business. In meetings with management, we had a number of discussions about exiting some businesses such as marinas and health clubs and redeploying that capital into the Main Event roll-out in the US. Credit is due to management, who not only listened, but executed an unexpectedly strong outcome with the sale of the health clubs. With the sale of the marinas business still tracking to schedule, the company is now in a strong position to accelerate the roll-out of Main Event. (VIEW LINK)
Robert was appointed Head of Investments in 2009 and has been a Portfolio Manager since joining OC Funds Management in 2001. Robert is also an Executive Director of parent company, Copia Investment Partners.