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Correcting announcement from Leejam Sports Co. (Fitness Time) regarding Leejam's announcement on its condensed interim Financial Results for the Period Ending on 2019-09-30 (Nine Months)

Element ListExplanation
Date of Publishing the Previous Announcement Sought to be Corrected on Tadawul's Website 2019-11-10 Corresponding to 1441-03-13
Incorrect statements in the previous announcement Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to:

Leejam Sports Company (Fitness Time) successfully achieved growth in the current period net profit by 9.32% (SR 11.77M) compared to similar period last year mainly driven by growth in revenue of SR 99.91M, partly offset by increase in cost of revenue by SR 69.50M, and net increase in all other costs (including finance cost and zakat) by SR 18.64M.

Increase in Revenue reasons:

- Membership revenue increased by net SR 78.48M attributable to new center openings in the current period (6 male and 4 female centers), growth in LFL (like-for-like centers) and ramping up of non-LFL centers opened last year,

- Personal Training (PT) revenue increased by SR 22.37M due to higher number of PT centers contributing during the current period, offset by;

- Decrease in rental income by SR 0.94M due to non-renewal of certain real estate contracts.

Increase in Cost of Revenue reasons:

- Driven by higher number of operating centers in the current period, cleaning expenses due to higher number of members, depreciation taken for converted centers, repair works at certain centers and rising external costs, offset by;

- rent adjustment, due to application of new accounting standard for Leases – IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019, and

- cost control initiatives and receipt of one-off refund of 2018 work permit fees in the second quarter of current year.

Advertising & marketing expenses were lower by SR 6.14M (37.42%) due to lower expenditure (with higher focus on social media), lesser campaigns and completion of partnership agreement with FCB (Football Club Barcelona) in June 2018.

General & administrative expenses were lower by SR 3.49M (6.11%), mainly due to decrease in assets written off during the current period, lower YTD staff cost and IT expenses, partly offset by increase in professional fees and provision taken against certain legal cases during the current period.

Net increase in allowance for impairment of trade receivables was mainly due to application of ECL (expected loss model) on trade receivables and outstanding rent receivables.

Finance cost were higher by SR 26.97M (173.02%) mainly due to recording of interest expense of SR 24.79M on lease liabilities recognized under the new accounting standard for leases – IFRS 16, effective from January 1, 2019.

Correct Statement Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to:

Leejam Sports Company (Fitness Time) successfully achieved growth in the current period net profit by 9.32% (SR 11.77M) compared to similar period last year mainly driven by growth in revenue of SR 99.91M, partly offset by increase in cost of revenue by SR 69.50M, and net increase in all other costs (including finance cost and zakat) by SR 18.64M.

Increase in Revenue reasons:

- Membership revenue increased by net SR 78.48M attributable to new center openings in the current period (6 male and 4 female centers), growth in LFL (like-for-like centers) and ramping up of non-LFL centers opened last year,

- Personal Training (PT) revenue increased by SR 22.37M due to higher number of PT centers contributing during the current period, offset by;

- Decrease in rental income by SR 0.94M due to non-renewal of certain real estate contracts.

Increase in Cost of Revenue reasons:

- Driven by higher number of operating centers in the current period, cleaning expenses due to higher number of members, depreciation taken for converted centers, repair works at certain centers and rising external costs, offset by;

- rent adjustment, due to application of new accounting standard for Leases – IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019, and

- cost control initiatives and receipt of one-off refund of 2018 work permit fees in the second quarter of current year.

Advertising & marketing expenses were lower by SR 6.14M (37.42%) due to lower expenditure (with higher focus on social media), lesser campaigns and completion of partnership agreement with FCB (Football Club Barcelona) in June 2018.

General & administrative expenses were lower by SR 3.49M (6.11%), mainly due to decrease in assets written off during the current period, lower YTD staff cost and IT expenses, partly offset by increase in professional fees and provision taken against certain legal cases during the current period.

Net increase in allowance for impairment of trade receivables was mainly due to application of ECL (expected loss model) on trade receivables and outstanding rent receivables.

Finance cost were higher by SR 26.97M (173.02%) mainly due to recording of interest expense of SR 24.79M on lease liabilities recognized under the new accounting standard for leases – IFRS 16, effective from January 1, 2019.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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