Holmes Place International (HLMS) Q3 2024 earnings summary

Executive summary

• Continued growth in Q3 2024, with increases in revenue, EBITDA, and net subscribers compared to Q3 2023.

• Holmes Place operated 66 fitness clubs in Israel as of September 30, 2024, with 193,039 average subscribers, showing growth in both club count and membership year-over-year.

• The company continued expansion, opening new clubs and planning further openings in both Holmes Place and Icon Fitness segments.

• No material impact from the Iron Swords War on operations, though future effects remain uncertain.

• Dividend distributions totaling ₪48M YTD, with an additional ₪15M declared.

Financial highlights

• Q3 2024 revenue up 9.56% year-over-year to ₪147.3M; EBITDA up 10.89% to ₪24.8M (excluding IFRS16).

• Revenue for the nine months ended September 30, 2024, was ₪508.5M, up from ₪381.9M year-over-year.

• Net income for Q3 2024 rose 14.74% to ₪13.6M; nine-month net income was ₪34.8M, up from ₪28.9M.

• EBITDA for the nine months reached ₪71.9M, up from ₪63.6M year-over-year.

• Operating cash flow for the nine months was ₪142.8M, a significant increase from ₪87.6M in the prior year.

Outlook and guidance

• Ongoing expansion with four clubs in development, including one Holmes Place and three Icon clubs.

• Management expects to open 4–5 new clubs by year-end 2024, with additional locations under negotiation.

• The company does not foresee material liquidity issues, supported by positive cash flow and available credit lines.

• Inflationary pressures on rent and municipal taxes expected to persist if index rises, partially offset by index-linked revenues.

• No significant impact from the war or macroeconomic conditions is expected unless escalation occurs.