BANNATYNE Fitness, the 59-club health chain created by 'Dragon's Den' entrepreneur Duncan Bannatyne, is back on the acquisition trail after refinancing its £120 million debt.

A £35m loan with RBS and a £92m leaseback deal with M & G Investments has put the UK's biggest health club group back on the front foot, after recording what it says was a "dramatic" rise in profits for 2013.

It has also reported 14% growth in new membership for the first two months of 2014 compared to the same period in 2013, and a 98% rise in online sales.

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Unveiling last year's results, the Newcastle-based group said yield per customer had fallen slightly to £35.27 but operating profit before impairments and exemptions was up from £13.3m to £14.7m, while underlying pre-tax profit jumped 30% from £8.8m to £11.5m.

The published accounts show declared pre-tax profit up from £4.3m to £10.5m, thanks to no impairments of fixed assets after the previous year's £4.4m. The group cut 170 jobs, ending the year with a headcount of 2342.

It said the strengthened financial position meant it was "moving back into a position whereby it can consider acquisitions in the future".

Membership last year was stable, with fewer than 2000 memberships lapsing, standing at around 170,000.

The refinancing deals, including sale and leaseback of 39 of its sites, enabled Bannatyne to repay its "expensive" debt with Anglo-Irish Bank, after reducing total debt in 2013 from £136m to £123m.

Mr Bannatyne, founder and chairman, said: "These fantastic results vindicate our strategy to reduce debt and focus on new ways to deliver exceptional service to members.

"Early post-balance sheet indicators show that the use of internet booking and the introduction of three different levels of health club have had a significant effect on activity and membership growth."

He added: "During 2013, paying a modest amount off the debt with Anglo- Irish bank had a real impact on the annual interest payments and we were able to achieve real productivity gains with very few redundancies. The result is a stronger business which has the resources to invest and grow in the future.

"At the beginning of this year the business went further and paid off its expensive and cumbersome Anglo-Irish loan. This move has already resulted in improved cash flow and liquidity, allowing the company to consider acquisitions in a consolidating market."

The accounts show remuneration of the highest-paid director, assumed to be Mr Ballantyne, rose from £297,333 to £365,000. The group's shareholder funds increased from £41m to £50m.