Entrepreneur Ben Dunne has permanently closed half the gyms in his gym group due to the business impact of Covid-19.
In an interview, Dunne described the business impact of Covid-19 on his gym business as “horrendous”.
“I will give you an idea of what Covid has cost us,” he said.
“We had 12 clubs, now we have six clubs. Our income is less than 50% of what it was before Covid,” he added.
Dunne said the business was heading towards €13m in revenue before Covid “and in the current year we are heading towards €6m”.
He said that in the group’s current fiscal year through the end of May “we will make some money.”
“I’ve lost a lot of money, but we’ve gotten out of that situation and we’re making a profit again,” he said.
Dunne said the group’s new financial year starts in June “and we’re forecasting earnings growth again.”
Dunne listed the six Ben Dunne gyms it closed: Lucan, Jervis Street, Beacon, Sandyford in Dublin along with Navan and Waterford.
When asked why he moved to close those gyms, Dunne said “they were showing a terrible trend.”
“If I had the overhead that I had, they wouldn’t talk to me because there would be nothing to talk about. I had to control my overhead,” he explained.
“If you close a business for two years, whether it’s because of a strike or a pandemic, it has a disastrous effect.”
Dunne said the hardest thing to do during the pandemic “was get your nerves under control.”
“I know I did. I’m still here. I’m talking. I’m in business,” he said.
Dunne dismissed any idea of expanding the number of gyms as “naive”.
“I find it very lucky that I’m standing, I’m in business and I’m not losing money,” he said.
Mr. Dunne said that over the next three years he sees business improving at his small gym group compared to how it is doing now.
“We were making operating profits of €6m a year – in my lifetime we will never have €6m again.”
“We are not going to be able to go back to that because we have half the number of gyms and trying to get money from the banks is almost impossible and if I could I would not like it because I do not like loans. “, she added.
Dunne said he’s exploring adding kid zones at some gyms to boost revenue.
“It’s survival of the fittest now,” he said.
Dunne made his comments when asked to comment on new accounts filed by his Barkisland (Developments) Ltd showing revenue fell 91% or €5.17m, from €5.66m to €494,840. in the 12 months to the end of last May.
Barkisland, which represents a number of gyms in the group, posted a pre-tax loss of €1.55m and this followed a pre-tax profit of €1.2m in the previous year.
Accounts indicate that Ben Dunne’s gyms were closed for most of the period between March 2020 and June 2021 and since they resumed trading in June 2021 “they are trading heavily”.
The accounts show that members’ income plummeted from €5.22 million to €482,448.
The loss takes into account non-cash depreciation expense of €1 million.
The company has received government aid for Covid-19 worth €601,295 during the year.
Dunne has invested €13.67m in interest-free loans in the business and last year the net amount he advanced was €2.3m.
A note attached to the accounts indicates that Mr. Dunne has confirmed that he will not seek repayment of his loan until the company is in a position to pay and the funds are available to the company for the foreseeable future.
Barkisland’s accumulated profits at the end of last May amounted to 12.76 million euros.
The value of Barkisland’s tangible assets amounted to 28.9 million euros.
“Government grants have been very helpful in keeping the business going. Tariffs are being introduced and now we are back with all the overhead and the next six months will show us a lot,” said Mr Dunne.