Two months ago the group acquired Pinnacle, a significant move for a company which reported pre-tax profits of just £500,000 last year. The move is expected to enhance Cannons' metamorphosis into a focused health and fitness operation. The £84m deal, which included an assumption of £21m in debt, increased Cannons' membership by 46% and added ten health clubs to its estate of 23. The deal is expected to have enhanced Cannons' earnings in the first financial year of ownership, a prediction echoed by finance director Steven Palmer. 'This business, which has a strong cashflow, together with the strength of the group balance sheet, gives the business a unique opportunity to develop its leading position in the health and fitness industry as it undergoes a period of rapid and substantial growth,' Palmer said. This year the group plans to invest at least £30m in a phased development programme totalling £115m over the next three years. Several new health clubs have been opened and Cannons is looking to expand further in the second half of the year. Behind its success is the continuing growth of the health and fitness market in the UK. Opportunities for further consolidation are sure to arise which will allow Cannons to apply economies of scale to its operations following further acquisitions.
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