Fitness First PLC - Joint Venture

RNS No 0802m
FITNESS FIRST PLC
1st December 1997

 THE UK'S LEADING INDEPENDENT HEALTH AND FITNESS CLUB OPERATOR, FITNESS FIRST,
 TO FORM #10 MILLION JOINT VENTURE WITH LEADING PROPERTY COMPANY, THE BERKELEY
                     GROUP, TO DEVELOP UP TO 15 NEW CLUBS.


Highlights:

*    Fitness First plc ("Fitness First"), the UK's leading independent health
     and fitness club business, which operates through its brand "Affordable
     Fitness", today announces that it has agreed to establish a joint venture
     with The Berkeley Group PLC ("The Berkeley Group"), one of the UK's
     leading house building and property companies, under the name Fitness
     First Berkeley Limited ("FFB") to develop and operate a chain of health
     and fitness facilities under the Fitness First name.

*    The joint venture will have an initial funding of #10 million available
     to finance the opening of 10 - 15 new clubs.

*    This joint venture will combine the health club design and operating
     expertise of Fitness First with the site identification and buying skills
     of The Berkeley Group.  The Berkeley Group will also provide suitable
     exclusive site opportunities from its existing property portfolio.

*    In Mintel's special report on Health and Fitness Clubs produced in
     Septermber 1997, Fitness First was noted as the largest independent
     health and fitness club operator in the UK.  It currently has 14 clubs
     open with 6 under construction, due to open between December 1997 and
     March 1998.

*    The Berkeley Group is also to invest #1 million in Fitness First through
     a subscription for 533,333 new ordinary shares at 187.5p, equivalent to
     the closing mid-market price of Fitness First ordinary shares on 28
     November 1997.  This is subject to shareholder approval.  Irrevocable
     acceptances have already been received from shareholders accounting for
     53.3% of the ordinary issued share capital of Fitness First.


The FFB joint venture brings together Fitness First, the UK's leading operator
of "Affordable Fitness", with The Berkeley Group, one of the UK's leading
house building and property companies.  The Berkeley Group, best known for its
Berkeley Homes division, also has a commercial property development division
and investment property interests.

The Berkeley Group will provide FFB with suitable opportunities on an
exclusive basis from its existing development and investment property
portfolio and will utilise its central and regional land buying expertise to
find further suitable sites.  FFB will exploit these using the design skill
and operating expertise of Fitness First.

The market for health and fitness in the UK, whilst still at an early stage in
its development, is growing at a fast rate.  FFB provides Fitness First with
the ability to accelerate significantly the pace of expansion and to maximise
its position as an innovative, focused operator determined to exploit the
opportunities available as a consequence of the fragmented nature of the
health and fitness industry.  Fitness First is vigorously pursuing its own
development and club opening programme.  To date, eight new clubs have been
opened in 1997 with a further six under construction, taking the total to
twenty.

Fitness First and The Berkeley Group will subscribe, in equal proportions, a
total of #4,000,000 for a mixture of ordinary and preference share capital in
FFB.  Together with the banking facilities that have been arranged, FFB will
have #10,000,000 of funds available to finance the opening of ten to fifteen
new FFB clubs under the Fitness First name.

The Berkeley Group has agreed, subject to the approval of Fitness First's
shareholders, to subscribe for cash for 533,333 new ordinary shares of 25p
each in Fitness First at a price of 187.5p per share representing 1.9% of the
enlarged ordinary share capital of Fitness First.

The issue of the shares to The Berkeley Group, and therefore the establishment
of the joint venture, is subject to the approval of Fitness First's
shareholders which will be sought at an extraordinary general meeting convened
for 24th December, 1997.  Irrevocable acceptances have already been received
from shareholders accounting for 53.3% of the ordinary issued share capital of
Fitness First.

Following the issue to The Berkeley Group and assuming the passing of all of
the above resolutions, 8,330,000 ordinary shares (disregarding those shares
reserved for issue on the exercise of options outstanding under the Company's
share option scheme) will remain authorised but unissued, representing
approximately 31% of the enlarged authorised ordinary share capital of the
Company.  Save for such reserved shares and such further shares required to be
reserved to meet additional grants of share options, the directors have no
present intention of issuing any part of such unissued share capital.

Commenting on this news, Michael Balfour, Managing Director of Fitness First
said:-

"I am delighted to be able to announce a joint venture with a partner of the
stature of The Berkeley Group to invest in what continues to be one of the
fastest growing leisure sectors in the UK.
"The combination of our Affordable Fitness brand with The Berkeley Group's
considerable expertise in being able to provide excellent sites, will enable
us to substantially enhance our pace of development and allow Fitness First to
consolidate its position as the UK's leading independent health and fitness
club operator."

Tony Pidgley, Managing Director of the Berkeley Group added:-

"We recognise the tremendous growth potential that the health and fitness
industry is currently offering and to this end we are delighted to be forming
a joint venture with what is clearly one of the most innovative and successful
dedicated health club operators in the UK market.

"In particular, our focus in London and the South of England should
considerably assist with the expansion of Fitness First clubs in a geographic
region in which the Company is currently under represented."


Notes to editors:-

1.   Fitness First was floated on the Alternative Investment Market in October
     1996 at a price of 80 pence per share.

2.   Founded in 1992, Fitness First was created with the objective of
     developing a chain of health and fitness clubs to focus on the concept of
     "Affordable Fitness", providing health and fitness club facilities that
     tend to be in most demand for a relatively modest annual subscription fee
     of approximately
     #29 per month and a joining fee of typically #60.

3.   At a share price of 187.5p the Group has a market capitalisation #52
     million.

4.   Clubs currently open by location:-

     Birmingham, Bournemouth, Bromborough, Camberley, Coventry, Derby,
     Edinburgh, Fareham, Hartlepool, Huddersfield, Northampton, Shrewsbury,
     Southend, Rotherham.

5.   Clubs in the following locations are currently under construction and due
     to open between December 1997 and March 1998:-

     Chatham (Kent), Chelmsford, Dundee, Glasgow, Halifax, Ipswich.

For further information please contact:

Fitness First plc
Michael Balfour, Managing Director                        Tel: 01202 390 444
Christopher Pearce, Chairman                              Tel: 01932 865 065

Gavin Anderson & Company                                  Tel: 0171 457 2345
Adrian Shaw

Berkeley Homes PLC                                        Tel: 01932 868555
Peter Darby, Finance Director


END



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