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Introduction & Market Context
Holmes Place International Ltd (TASE:HLMS) presented its Q2 2025 financial results on August 21, 2025, revealing continued growth despite significant operational challenges during the period. The fitness club operator, which manages the Holmes Place, GO active, and ICON Fitness brands, saw its stock decline 2.99% to 728 NIS following the presentation.
The company’s performance during the quarter was notably impacted by what it referred to as "Operation with Clalvia," which resulted in temporary club closures and subsequent compensation measures for members. Despite these headwinds, Holmes Place demonstrated resilience in its financial results and continued to execute on its expansion strategy.
Quarterly Performance Highlights
Holmes Place reported Q2 2025 revenue of 141,416 thousand NIS, representing a 4.75% increase compared to 135,009 thousand NIS in the same period of 2024. This growth is particularly noteworthy considering the operational disruptions experienced during the quarter.
As shown in the detailed profit and loss statement below, the company maintained positive momentum across key financial metrics despite the challenges:
For the first half of 2025, Holmes Place’s revenue growth was even more robust at 7.89%, reaching 284,412 thousand NIS compared to 263,621 thousand NIS in the first half of 2024. This indicates that the company’s growth trajectory remained intact despite the temporary setbacks in Q2.
Operation with Clalvia Impact
A significant portion of the presentation focused on the impact of "Operation with Clalvia," which forced the company to temporarily close its clubs. During this period, Holmes Place placed employees on unpaid leave to reduce expenses, with staff applying for unemployment benefits.
The company detailed the financial impact of these closures, noting that the potential revenue damage was estimated at 14,000 thousand NIS, while the actual damage was limited to 6,500 thousand NIS. This was achieved through strategic management of both revenue and cost factors during the disruption.
Rather than providing direct refunds to members for the closure period, Holmes Place offered a basket of compensation options. The company reported that more than half of its clients selected one of these options, with many choosing training incentives they had never previously utilized. Approximately 20% of those who selected training incentives continued with similar paid training programs afterward, creating a new revenue stream.
The accounting treatment for these compensation measures was carefully structured. For members who chose to postpone their memberships, revenue recognition was delayed until reactivation, helping to distribute the financial impact over time.
Detailed Financial Analysis
Holmes Place’s financial performance can be further understood by examining its segment results. The Holmes Place premium brand generated 103 million NIS in revenue, while the ICON Fitness brand contributed 39 million NIS.
The company’s subscriber metrics showed some fluctuation across quarters. The presentation included detailed analysis of average member counts across its brands and the Average Revenue Per User (ARPU), which was negatively impacted by 10.8 NIS in the quarterly calculation due to the operational disruptions.
Holmes Place noted that family plans have a significant impact on its ARPU calculations, as these plans typically generate lower per-user revenue while maintaining strong overall value.
Strategic Initiatives
Despite the operational challenges, Holmes Place continued to execute on its strategic growth initiatives during the quarter. The company highlighted several significant developments:
Key strategic moves included:
1. Opening of a new ICON Fitness location in Or Akiva
2. Winning a tender to operate the Family Bar Yaakov club
3. Acquiring a 51% stake in REBO Pilates, expanding the company’s service offerings
These initiatives demonstrate Holmes Place’s commitment to growth through both organic expansion and strategic acquisitions, diversifying its portfolio of fitness offerings and geographical presence.
Forward-Looking Statements
Holmes Place’s presentation indicated confidence in its ability to continue growing despite the temporary setbacks experienced in Q2 2025. The company decided not to distribute dividends during this period, potentially preserving capital for future growth initiatives, though it noted that 23 million NIS had been distributed previously.
The company’s ability to mitigate the financial impact of club closures through strategic compensation options rather than direct refunds suggests a strong customer relationship management approach that may benefit retention metrics in future quarters.
While the presentation did not provide explicit guidance for the remainder of 2025, the positive revenue trends in the first half of the year, combined with ongoing expansion efforts, indicate that Holmes Place is positioning itself for continued growth in the Israeli fitness market.
Full presentation:
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