Businessman Ben Dunne has permanently shut down half the number of gyms in his gym group due to the business impact of Covid-19.
In an interview, Mr Dunne described the Covid-19 business impact on his gym business as "horrendous".
He said: “I’ll give you an insight into what Covid has cost us. We had 12 clubs - we now have six clubs. Our revenues are less than 50 per cent of what they were pre-Covid.”
Mr Dunne said that the business was heading towards €13 million in revenues pre-Covid “and in the current year we are heading towards €6 million”.
Mr Dunne said that in the group's current financial year to the end of May “we will make some money”.
He said: “I have lost an awful lot of money, but we have swung away from that situation, and we are making a profit again”.
Mr Dunne said that the group’s new financial year starts in June “and we are forecasting an increase in profit again”.
Mr Dunne listed off the six Ben Dunne gyms he shut down - Lucan, Jervis Street, Beacon, Sandyford in Dublin along with Navan and Waterford.
Asked why he moved to shut down those gyms, Mr Dunne said “they were showing a terrible trend”.
He explained: “If I had the overheads that I had, you wouldn’t be talking to me because there would be nothing to talk about. I had to get my overheads under control.”
He said: “If you close a business down for two years whether it is due to a strike or a pandemic it has a disastrous effect.”
Mr Dunne said that the hardest thing to do during the pandemic “was to hold your nerve”.
Asked did he do that, Mr Dunne replied: “I know I did. I am still here. I am talking. I am in business.”
Mr Dunne dismissed any notion of expanding the number of gyms as "naive".
He said: “I find it very fortunate that I am standing, I am in business, and I am not losing money.”
Mr Dunne said that over the next three years he does see business improving at his slimmed down gym group compared to how it is doing now.
He said: “We were making operating profits of €6 million a year - in my lifetime we won't be back at €6 million.
He added: “We won’t be able to get back to that because we have half the number of gyms and to try to get money is next to impossible from the banks and if I could, I wouldn’t want to because I don’t like borrowings."
Survival of the fittest
Mr Dunne said that he is exploring the addition of kids’ zones to some gyms to increase revenues. He said: “It is survival of the fittest now.”
Mr Dunne made his comments when asked to comment on new accounts lodged by his Barkisland (Developments) Ltd which show that revenues plunged by 91 per cent or €5.17 million from €5.66 million to €494,840 in the 12 months to the end of May last.
Barkisland - which accounts for a number of gyms in the group - recorded a pre-tax loss of €1.55 million and this followed a pre-tax profit of €1.2 million in the prior year.
The accounts state that Ben Dunne gyms were closed most of the period from March 2020 to June 2021 and since resuming trading in June 2021 “are trading strongly”.
The accounts show that membership income plunged from €5.22 million to €482,448. The loss takes account of non-cash depreciation charges of €1 million.
The business received Government Covid-19 grants of €601,295 during the year.
Mr Dunne has ploughed €13.67 million in interest free loans into the business and last year the net amount advanced by him was €2.3 million.
A note attached to the accounts states that Mr Dunne has confirmed that he will not seek repayment of his loan until such time as the company is in a position to pay and that funds will be available to the company for the foreseeable future.
Barkisland’s accumulated profits at the end of May last totalled €12.76 million. The value of Barkisland’s tangible assets amounted to €28.9 million.
Mr Dunne said: "The Government grants have been very helpful in keeping the business going. Rates are being introduced, and now we are back on full overheads and the next six months is going to show us an awful lot.”
