Leejam has continued to power forward in its quest to maintain its leading position in the sports and fitness industry. After the challenges during the Covid-19 related lockdowns in 2021, Leejam adapted and came out on top. Continuing its evolution has been key to the Company’s success. Leejam continued to maintain its market leading edge, offering an unparalleled and eclectic mix of products and services, whilst pushing forward with its conversion of centres to ensure members experience the latest state-of-the-art technology; delivered by partnerships from around the world. The driving force and motivation for the Executive team – execute the Company’s strategy aligning Leejam’s goals and Saudi Arabia’s Vision 2030; to get people exercising daily and to lead a healthier lifestyle.
2021 Key Highlights
Financial and Operational excellence is driven by the company Key Performance Indicators. Driving the business, continually improving and ensuring delivery of the agreed strategy.
Total Shareholders Equity
Profit Per Share
Leejam aims to offer a winning solution to the masses; an easily affordable and accessible fitness centre that allows users to access market-leading facilities, with different sizes, locations, products and services to accommodate for people with varying budgets and requirements. These solutions give Leejam a unique opportunity to maximise outreach, leveraging its leading edge and experience in the market, along with its synonymous name to maximise return on capital for its shareholders.
Ali Hamad Al-Saqri
It is my honour and pleasure to present to you our Annual Report for the year 2021, a year which proved the strength in depth of our business, our winning mentality and allowed us to end the year in record breaking style.
With the grace of Allah Almighty, and the gracious guidance of the Custodian of the Two Holy Mosques and His Royal Highness, the Crown Prince thereafter; our dear country was able, through international cooperation and its leading position in the G20, to present an exemplary approach and act as a role model against the Covid-19 pandemic. A model characterized by balance in protective measures, economic stimulus, and providing support to the private sector in order to overcome these repercussions and preserve jobs, gains and achievements, with the implementation of one of the largest and fastest vaccination campaigns in the world. This thankfully resulted in the gradual return to normal life, starting from the middle of 2021, and ending with a full return by the end of the year. This was in addition to achieving a major step forward for our national economy in accordance with the Kingdom’s Vison 2030.
This global pandemic, with its difficult repercussions and the comprehensive impact to life it has brought, not only on the global economy but on our lifestyles and the working environment, confirmed in a practical way, the strength and depth of the strategic direction Leejam takes to motivate everyone to exercise daily and enjoy good physical fitness as one of the basic requirements for building a healthy lifestyle, which contributes to raising the morale, increasing the productivity of individuals and groups and reaching the desired level of happiness and quality of life. As such, we have made sure that this trend is at the core of our mission, values and development programs.
The main features of our annual report for the year 2021, which we are pleased to present to our customers, partners and the wider community interested in following sports and public health, are to fully focus on achieving all the aspirations of our valued customers, by continuing in our comprehensive development of the level of services and providing the most modern and innovative new technology and services in the world of fitness. The report also elaborates on the Company’s efforts to adapt to the repercussions of the pandemic and to continue providing services despite all difficulties and challenges, albeit which were less severe than the previous year, 2020. This helped us to increase our efforts and launch with greater force to compensate for the previous periods of decline whereby distinguished rates of performance and diversification of services were recorded in our highly-equipped fitness centres available throughout the Kingdom of Saudi Arabia and the United Arab Emirates, with the expansion of the roll-out of our female centres along with the application of the latest technologies and training programs in the field of fitness, and other development efforts that witnessed greater momentum due to the positive developments represented in the gradual return to normal life throughout our beloved Kingdom.
By reviewing the most important performance indicators during the past year, Leejam continued to enhance its capabilities with the gradual return to normal life, the continuation of digital transformation, and the readiness to establish and open new centres to be added to the existing centres amounting to 145 centres, including 43 female centres, and to provide incentives and attractive offers which increased our membership numbers to 292,000 members. With the continuation of our Saudization programs, supporting our national cadres and allowing them to shine and succeed in the world of sports and fitness services, the revenues have also improved significantly, reaching SAR 885.3M, an increase of SAR222.7M compared to 2020. By utilising all of our potential and energy, which will help propel us towards achieving an unprecedented boom in performance and services in 2022, we hope to see more success in controlling the pandemic, so that everyone will return and practice sports activities, helping the population to reach the desired level of physical fitness for all, which is by far the healthiest way to live.
In conclusion, I would like to express my most sincere gratitude and appreciation to our shareholders, members, partners and government agencies for their ongoing and continued support as we overcome the difficulties of previous years. I would also like to convey my appreciation to the dedicated, hard-working core of our business, our employees. They have continued to work tirelessly every day for the greater cause, and have made me extremely proud to welcome into the Leejam family. For our success is only possible because of their input.
Finally, we ask Allah Almighty to perpetuate this generous country, and to continue to bless us with security, progress, good health and prosperity, and to allow us to continue in our pioneering role serving the nation and humanity.
With that in mind, we are proud to review the main features of the Annual Report for 2021. The performance and achievements continued with the full support of our esteemed Board of Directors, the collective efforts of my senior management team along with our hard-working employees. Alongside this effort we had the continued cooperation of our partners and the trust of our valued customers. We are grateful to all who contributed to Leejam’s success, overcoming the challenges faced over the past 12 months, including of course the restrictions during the Covid-19 pandemic. We also benefitted from the positive energy from the success of our Nation’s leaders in confining the pandemic and achieving some of the highest global levels in vaccination rates. The positive effect of this over the past 12 months has led to a gradual return to normal life.
Despite the challenges, following the framework of our strategy, we continued to innovative and develop areas of the business contributing to financial success. The combined efforts and dedication from our internal and external customers helped manage the process of club enhancements and new openings. This collective effort helped ensure we further enhanced our position of being accessible and affordable to as many people as possible. Improved productivity from comprehensive business reviews significantly motivated the teams to achieve their own personal goals which collectively sets the standards and expectations for next year. We are delighted to report a record-breaking year; we now move forward, continually improving our operational excellence, listening to customers and aligning ourselves with global trends within the industry to ensure we exceed our members’ expectations.
The year 2021 was the starting point for many achievements in terms of operational performance, as it became possible to return fully to pre-pandemic rates. In this context, we continue to develop our product and service. This included the launch of a new website and application (FT Connect) allowing a better user experience offering a full end to end solution. We continue to update these services with new initiatives as they develop with our customer focus at the heart of the integrated services we offer. As we continue our forward momentum our ambitious plans for geographical expansion throughout the Kingdom continued by opening 16 new centres. 11 were ‘Xpress’ characterized as a low cost/high value, efficient operating model and open 24 hours bringing the total number of centres across Saudi and the United Arab Emirates to 145. We also launched our FT90 service; this is available to all members. This new service provides members with the opportunity to complete a 90-day trainer led program with a focus on personal goals and targets.
An important part of our future is the training and development of local staff, both male and female, through the adoption of comprehensive training programs. We successfully launched the training program “Be the Trainer” in July with many applicants wanting to take part and become qualified trainers with internationally recognised certification. This was a great success and will see further development and enhancement as we embed such initiatives into the business.
As we look to our future with confidence and optimism, we at Leejam spare no effort in our continuous work to further increase our profitability and exceed the record-breaking levels of 2021, while strengthening our leadership in the global health and fitness landscape. Our strategy will steer us towards our targeted milestones as we strive towards increasing our membership number from 292,000 to 500,000 by 2025, as well as increasing our cash reserves to mitigate any shocks or negative effects on our performance and services at any time.
I must mention in closing that our success is as a result of the incredible teamwork and contribution of all our employees, with whom we all share common interests and goals. I would like to extend my heartfelt gratitude and appreciation to all of our honourable contributors and partners; from my colleagues to Government agencies and institutions. A final and very heartfelt, special mention must also go out to the Chairman and the Board of Directors for their full support and guidance offered throughout what has been a tremendous year for us.
Last, but not least, it has been a real privilege to lead Leejam over the course of 2021, and an honour that the Chairman and the Board entrusted me with this responsibility. I also wish to show my immense appreciation for our shareholders, who day after day continue to shower us with their unwavering support and loyalty.
Leejam’s business model looks at the ways in which the Company is able to generate value for its stakeholders, along with the resources used to achieve all strategic objectives. These are built taking consideration towards the Company’s vision to be the people’s favourite and most accessible wellness club, and the Company’s mission to steer society towards a healthy lifestyle and encourage people to exercise daily.
- Diligent and risk-based decision making
- Customer centricity
- An innovative and diverse range of products and services tailored to meet customer needs
- Focus on quality and efficiency
- Long term lease of land and construction of state-of-the-art and technologically superior facilities
- High value membership
- Strategic locations
- Certified trainers and experts
- Brands catering to various KSA demographics
- Internationally certified training programs
- Provision of opportunities for women.
- Customer Service
- Operational Efficiencies
- Represented Brands
Services and Features
- Personal Training
- CrossFit Style
- High Intensity
- Interval Training (HIIT)
- Extreme Boxing
- Half Olympic Sized
- Soccer, Basketball and Volleyball Courts
- Business centres
Leejam’s Value Creation
- Membership growth, retention and loyalty
- Sustainable returns
- for shareholders
Steering society towards a healthy lifestyle
- Consistency in increasing market share.
For Leejam to achieve on its strategic objectives, a clear and concise framework is required outlining the way in which the Company plans to execute its strategy and achieve its goals.
To lead by example
- Portray the core values of Leejam in all company activities starting with leadership and cascaded down to the entire organization.
- Coaching theme must be embraced for direct reports and mentoring the great talents in all teams to create a pool of outperformed.
- Conduct well-planned meetings internally, scheduled one-on-one and team meetings regularly.
- Project the right image for the Company throughout the company and centres. Leadership image will reflect on Company’s image.
To manage business performance
- Ensure all Financial KPIs are cascaded and distributed to departmental teams. Monitor approved KPIs on a monthly basis and immediate action plan for any deviation is required.
- Ensure all other KPIs (customers, regulatory, processes) are also cascaded down to all teams.
- As for Strategic projects and expansions, stakeholders must be accountable and responsible for execution within their allocated timeframes.
To ensure structure and process
- Driving improvement and enhancements across the organization. Without limitations, to set the strategy but continually scan the market locally and internationally to adopt what is beneficial for future growth.
- Focus on evolution, diversification, innovation, and digitalisation.
Marching On in Style
After the trials and tribulations of a tempestuous 2020, 2021 was all about showing the world the winning mentality of Leejam. And what a year it was. Even with a short-term total shutdown of operations again in February for a period of 30 days, we defied the odds and ended the year in record-breaking fashion.
As we continued to pull out from the effects of Covid-19, we not only returned to pre-pandemic levels, but actually exceeded them, with our highest ever annual Net Profit figures recorded, hitting SAR206million over the course of 2021, compared to a Net Loss of SAR58.7million the previous year, driven mainly by a growth in revenue, a decrease in cost of revenue and a net decrease in all other costs. All our key figure showed tremendous growth; Revenue was up 33.6% year on year, reaching SAR885.3million, whilst Gross Profit increased from SAR139.9million to SAR372.3million, an increase of 166.2%. Total Shareholders’ equity also increased 21.1% to SAR804.6million, up from SAR664.5million.
Understanding the consumer spending habits was key to our success, and we were perfectly placed to maximise and take advantage of society returning to what used to be the norm. Increases in revenue are attributable to increased membership subscriptions along with new members joining, and as gyms were open for more number of days comparing last year, a greater number of personal training sessions were held increasing our PT income. Coupled with the increases in revenue are decreases in the cost of revenue of 1.86%, amounting to SAR9.75million, which were down to an increase in rent concessions of SAR10.82million,
and lower consumable expenses as a result of initiatives taken over the course of 2021, albeit these have been offset by increases in salaries, related benefits and Government related costs.
Whilst general and administrative expenses may have increased 14.84% to SAR11.41million as a result of increases in staff costs and IT costs, impairment loss, ECL and write off on non-financial assets decreased SAR41.29million during the year, and we were able to capitalise on the lower SIBOR rates and decrease our financing costs.
My appreciation goes out to the Board of Directors, who continued to give us their unwavering support. It is because of the foundations we built under their guidance that we won against Covid and were able to end the year on such a high. We continued to go from strength to strength, ramping up our expansion of the Xpress line of centres and ensuring the Company maintained its leading position in the market
Summary of statement of income
Summary of balance sheet
|Total Equity & Liabilities||1,504,934,605||1,608,632,466||2,516,299,338||2,567,317,237||2,593,818,096|
Geographical analysis of the Company’s total revenues
|Headquarters and Central Province||314,235,232||391,363,826|
|United Arab Emirates||13,361,000||17,532,204|