| Gyms deliver strong profits
PUMPING iron is driving bulging profits as gyms around the country grow strong on the back of a growing fascination with fitness. But as consolidation brings more big business to the sector it is the punters who pay but don't turn up who provide the extra cream on the industry's profits. Dreamworld owner Macquarie Leisure is the latest big player to muscle in on the gym industry, this week paying $60 million for the predominantly Queensland-based Goodlife Healthclub business. It is the second most profitable player in Australia, with world leader Fitness First dominating. That company, owned by European private equity group BC Partners, now controls 70 gyms across Australia and has more than 500 gyms across 15 countries. Macquarie Leisure chief executive officer Greg Shaw says there's plenty of room for growth and expansion would be ideally suited to some of the company's existing AMF bowling sites around the country.
IT Services Consolidation Shows No Sign of Slowing in Q2
The number of mergers and acquisitions in the IT services space during the second quarter of 2007 was up by 23% on the same period of the previous year, as the rate of consolidation showed no sign of slowing. In the three months to the end of June, ComputerWire tracked a total of 102 M&As involving IT services vendors, up from 83 in the second quarter of 2006. In total, the first half of 2007 has seen a massive 192 deals announced, up 19% on the first six months of last year. The two biggest deals of the quarter both involved private equity firms buying credit card processing companies. In April, First Data agreed to a buyout by Kohlberg Kravis Roberts valued at $29bn. Then, one month later, Alliance Data Systems was acquired by Blackstone Group in a $7.8bn agreement, representing roughly a 30% premium on Alliance's share price.
Finance, Accounting and Consultancy
The subprime mortgage market consists of loans to borrowers with high credit risk, and the mechanisms that have evolved to originate, service, and finance those loans. While this market has existed since the early 1980s, it was not until the mid-1990s that the growth of the subprime industry gained significant momentum. .
Australians 'need to rethink borrowing habits'
MORTGAGEE companies say Australians will have to rethink their borrowing habits after the central bank today lifted interest rates. The Reserve Bank of Australia (RBA) hiked rates by 25 basis points to 6.50 per cent to head off inflationary pressures in the economy.Mortgage broker Mortgage Choice says some borrowers have been resting on their laurels when it comes to managing their mortgage. "This month's widely predicted rise should be the jump start many need to seriously reconsider their current mortgage situation, which should be done every year anyway,'' national manager, corporate affairs, Warren O'Rourke said. "Some people will be quite shocked at the increase because they havent been keeping in touch with industry commentary and predictions."And for the large number of people who have secured their first mortgage in the last 12 months, it will be the first time they have had to budget extra dollars per month for their property repayments. "This will take some adjustment.''Mr O'Rourke said borrowers should consider debt consolidation, fixing some or part of their loans, or refinancing.Housing Industry Association (HIA) managing director Ron Silberberg said the rise in interest rates will make it much harder for those with mortgages and for those trying to enter the housing market.Dr Silberberg said the rise was a double whack for average Australians looking to buy a home, with house prices also higher. "Too many are being locked out of the market, which is having some disturbing consequences for the private rental sector which is already strained,'' Dr Silberberg said.
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