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(Bloomberg) — Brait SE, the investment company owned by South African billionaire Christo Wiese, plans to expand its Virgin Active gym chain in the Asia Pacific as it battles difficult operating conditions in its biggest markets, including South Africa and Britain.
The stock tumbled to a three-year low after the company slid to a full-year loss. Brait is experiencing low growth and a lack of consumer confidence in South Africa, which tipped into a recession in the first quarter, and the U.K., which is clouded in uncertainty over its exit from the European Union. Wiese is South Africa’s third-richest man with a net worth of $6bn and owns a 35 percent stake in Brait.
“We are undertaking an aggressive expansion program of our Virgin clubs in the Asia-Pacific region and see this geography providing long-term future growth,” the San Gwann, Malta-based company said in an emailed response to questions on Tuesday. “The focus for the year ahead is on driving value through the existing portfolio” of businesses, which also includes food and clothing retailers.
While boosting the number of health clubs in Asia and Australia, Brait is also looking to further invest in China through its clothing retailer New Look to diversify the business outside the U.K. The company’s discount grocer in Iceland will be rolling out additional food warehouses and new store concepts. Brait completed the sale of another 14 clubs in the U.K. at the end of last month, it said. It exited 36 clubs in 2016.
The company also owns Premier Group, the South African maker of Blue Ribbon bread and Snowflake flour, which will benefit from recent capital expenditure projects that will come online this year, Brait said. “Maize sales and volumes will normalise after the volatility of market prices, which should provide a foundation for ongoing growth in this business,” it said.
Brait’s stock slumped 6.3 percent to R61.36 as of 4:12 p.m. in Johannesburg, the lowest since June 2014. The shares have slid 29 percent this year, valuing Brait at R32bn ($2.5 billion). The company posted a loss of R15.9bn in the 12 months through March, compared with a profit of R22.2bn a year earlier, the company said on Tuesday.
