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Governance: A

SPORT CLUBS

Sport Clubs Co.

6.78 SAR / Share

As of: May 28, 2026

18.4x P/E Ratio Trailing 12 Months

2.9x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

775.63M SAR Market Cap Total Valuation

0.86 Beta Systematic Risk Index

11.1% Net Margin Net Profit / Revenue

The Story

A vertically integrated fitness and sports retail operator transitioning from a private entity to a public growth vehicle through facility expansion and diversified membership streams.

Source: Q1 2026 (2026-05-10)

Value Creation +0.4% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

—

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+5.7%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

11.1%

ROIC Return on Invested Capital

11.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

18.4x

P/B Ratio Market capitalization compared to corporate book value

2.9x

EV / EBITDA Operating multiple reflecting core operational leverage

5.8x

EV / SALES Asset pricing multiple relative to total topline revenue

2.3x

Quality Radar

Where this company sits versus sector peers on observable fundamentals.

Financial Health8 / 9Based on the Piotroski F-Score

Percentiles are versus sector peers. Scores fill in as new annual filings are processed; “N/A” means not enough data yet.

Growth Story

Revenue has climbed from SAR 327.4 million in fiscal 2024 to SAR 376.2 million in fiscal 2025, reaching a TTM figure of SAR 379.9 million. This expansion is supported by a 5.74% sustainable growth rate, derived from a five-year average ROIC of 11.10% and a reinvestment rate of 51.74%. The company is actively deploying capital into new facilities, evidenced by SAR 108.8 million in capital work in progress as of March 31, 2026. While the Central region remains the primary revenue driver, contributing SAR 54.3 million in the first quarter of 2026, growth is being pursued across Eastern, Northern, and Western segments. Seasonality plays a role in the growth trajectory, with the fourth quarter historically benefiting from National Day promotions and favorable weather conditions that enhance customer acquisition.

Profitability Dynamics

The company maintains an operating margin of 19.98% and a net profit margin of 11.10% on a TTM basis. Value creation is positive but narrow, with a five-year average ROIC of 11.10% slightly exceeding the WACC of 10.71%, resulting in a 0.40% gap. Profitability is driven largely by the Men’s fitness segment, which contributed SAR 15.9 million in gross profit for the three months ended March 31, 2026, while the Women’s segment added SAR 5.1 million. The business model benefits from upfront cash collection, reflected in SAR 106.1 million of contract liabilities, which provides a steady stream of recognized revenue over time. However, the capital-intensive nature of the business is highlighted by TTM capital expenditures of SAR 117.6 million, reflecting the ongoing costs of maintaining and expanding the club network.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.86

Cost of Equity Minimum required rate of return demanded by shareholders

8.1%

WACC Weighted average cost of total debt and equity funding

10.7%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

17.9%

Risk Factors

Financial risk is characterized by a total debt of SAR 139.0 million and significant lease liabilities totaling SAR 373.0 million, associated with long-term club contracts ranging from five to twenty years. The company’s debt is secured by land mortgages valued at SAR 21.5 million as of March 31, 2026. While the relevered beta of 0.858 suggests lower volatility relative to the broader market, the cost of debt after-tax is 25.45%. Operational risks include geographic concentration in the Central region and credit risk management, with SAR 1.97 million in expected credit losses against SAR 14.7 million in gross trade receivables. Additionally, the company must manage the transition of its legal status and the integration of its building cleaning and maintenance subsidiary, Third Amaken Sports Company.

Governance Disclosures

Rating: A

We track 6 key governance and oversight matters for this company in our database.

Significance: 3/10 Info Asymmetry

Transactions with Entity Under Common Directorship

The Group engaged in transactions with Aldrees Petroleum and Transport Services Company, an entity under common directorship because its CEO is also the Vice Chairman of the Board of Directors of the Group. During the three-month period ended March 31, 2026, the Group made purchases of SAR 135,248 and payments of SAR 135,000, leaving a balance due of SAR 20,027.

Mitigating Factors: These transactions were carried out in accordance with the terms specified in the agreements concluded with the related parties and approved by the management.

Significance: 6/10 Propping

Shareholder Guarantees for Bank Facilities

The Group has a credit facility agreement with a local bank for SAR 175 million, which is secured by a land mortgage and a guarantee from shareholders who pledged their share of ownership in the Group. The loan balance was SAR 119,029,893 as of March 31, 2026.

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In-Depth Analysis