Armah mulls to open 9 new clubs by 2026-end: CEO

Fahad Alhagbani, CEO of Armah Sports Co

Fahad Alhagbani, CEO of Armah Sports Co., said the company is proceeding with its expansion plans through opening two new clubs in Jeddah in 2025, in addition to seven more clubs currently under construction, scheduled to open in 2026.

This reflects the company’s rapid expansion aimed at boosting revenue and increasing its subscriber base, Alhagbani told Argaam.

He noted that Armah intends to offset its accumulated losses and convert them into retained earnings this year, to reflect the continuous financial performance improvement and positive profit growth outlook.

The company has not restructured its loans but renegotiated the current financing agreements, which led to lower interest margins and accordingly had a positive impact on its income statement.

As a result, the firm achieved a one-off profit increase of SAR 4.5 million in 2024, in accordance with the IFRS9 accounting standard.

Commenting on financial results, the CEO said the company's profit surged by 314.9% in the second half of 2024, driven by key factors, including a 92.2% revenue increase and a 121.2% leap in gross profit margin.

He attributed this growth to higher subscription and personal training revenues, an expanding subscriber base, and the opening of new clubs.

These factors mirror Armah’s success in boosting revenues and improving operational efficiency, leading to a significant profit surge, Alhagbani said, noting that the improved gross profit margin resulted from cost reductions and enhanced operational efficiency.

Demand for subscriptions and personal training grew significantly, with the number of active subscribers reaching 36,000. Some clubs reached full capacity, prompting the company to halt monthly subscriptions in certain locations and focus on delivering a premium customer experience.

The 92.2% revenue increase in the second half of 2024 was driven by two main factors. The first was the maturity of three sports clubs, which entered a mature operational phase, contributing to revenue growth as they operated for 12 months compared to less than six months in 2023. The second factor was expansion through opening four new clubs in Riyadh and Jeddah, strengthening revenue streams.

Alhagbani also said the company halted new subscriptions at three "Optimo" clubs in July 2024 due to reaching full capacity, with waitlists now in place. Additionally, some monthly and quarterly subscription plans at "B-Fit" clubs were discontinued, and the 12-month subscriptions were maintained to control the subscriber numbers and enhance customer experience.

Regarding personal training, the CEO said the company focuses on enhancing service quality through hiring certified and experienced trainers, which helps improve the customer experience and achieve fitness goals.

On pricing policy, Alhagbani said Armah follows a unified pricing strategy and offers the same level of services to both genders, ensuring an equitable sports experience for all members.

He highlighted that the company does not differentiate between male and female subscribers in performance analysis or growth metrics but instead focuses on overall performance indicators and sustainable subscriber base growth.

As for the possibility of transitioning to the main market, the CEO said this move is part of the company’s plans but is subject to regulatory and board approvals.

He added that a decision would be announced by the end of 2025 or early 2026 in line with the company’s growth strategy and plans to strengthen its financial market presence.

The executive management currently focuses on executing expansion plans, opening new projects, and securing prime locations, with the goal of reaching 29 sports clubs by 2027/2028, Alhagbani concluded.