Fitness First, the world’s biggest health club operator, will announce today that it has opened its 500th club as it reports a 7 per cent jump in underlying earnings.

The company, which is controlled by BC Partners, the private equity firm, is also close to completing an estimated £80 million equity fundraising enabling it to continue its aggressive expansion programme.

It has opened 12 clubs in five countries since the start of its financial year in November — including its 500th in Singapore — and expects to have added between 50 and 60 by the end of the 12-month period, including its first clubs in India, at a cost of £50 million.

Colin Waggett, the chief operating officer, said that he was close to securing two sites in Delhi and one in Bombay and, despite very high rents in India, he believed that there was capacity for at least 100. “It could be a huge market,” he said.

He added that he was also looking at “a few early-stage options” in Russia, but did not expect to enter the market before next year probably through the acquisition of an existing operator.

Fitness First, which has debt of about £550 million, has expanded from 350 clubs in 14 countries to 501 in 17 countries since it was taken private by Cinven four years ago in a £403 million deal. The private equity firm sold the business to BC Partners 17 months ago for £835 million.

Today the group will report a 7 per cent increase in like-for-like earnings before interest, tax, depreciation and amortisation (ebitda) at club level to £111.6 million in the year to October 31. Revenue was 15.5 per cent higher at £463.4 million on the back of 49 openings. Its like-for-like sales increased by 4.2 per cent, and the number of members rose by 15 per cent to 1.4 million. In the UK, where it has 179 clubs, like-for-like sales have risen for 16 consecutive months on the back of improved retention rates, with total sales rising by 5 per cent to £142.7 million.

Mr Waggett said he believed that the UK market was “in the best shape for some time”. He added: “Rates of growth are more sensible and the sites that are being taken of are much better positioned.”

Despite the shorter exit time-frames prevalent in the private equity industry, Mr Waggett insisted that BC Partners had no plans to sell or float Fitness First in the foreseeable future. “We’ve still got plenty of organic growth potential and an exit really isn’t on the agenda.”

The £80 million fundraising will be by way of a rights issue to be completed in April. He said that BC Partners had decided to take up its rights in respect of its entire 80 per cent holding, although it was unclear what proportion the management, which owns the balance, would take up.

Mike Balfour, the group’s former chief executive, has been elevated from deputy chairman to co-chairman alongside Stefano Quadrio Curzio from BC Partners, reflecting his increased involvement.

Fit figures

-Founded by Christopher Pearce and Mike Balfour — now co-chairman — in 1992

-First club opened in Bournemouth

-Became first health and fitness company to float on the AIM

-Run 501 clubs in 16 countries, including 179 clubs in the UK. India is the new “huge market”

-Cinven-backed £400 million management buyout in 2003

-BC Partners acquired the group for £835 million acquisition in 2005

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