TIDMGYM
RNS Number : 8499U
Gym Group PLC (The)
04 August 2022
4 August 2022
The Gym Group plc
('The Gym Group', 'the Group' or 'the Company')
2022 Interim Results
Strong recovery continues; good progress with growth
strategy
The Gym Group, the nationwide operator of 215(1) low cost, high
quality, 24/7 no contract gyms, announces its interim results for
the six month period ended 30 June 2022.
Key financial metrics(2)
Six months ended 30 June 2022 Six months ended Movement
30 June 2021
Revenue (GBPm) 84.2 29.3 187%
Group Adjusted EBITDA (GBPm) 33.5 6.7 400%
Group Adjusted EBITDA Less Normalised Rent (GBPm) 17.0 (8.1) n/a
Adjusted Loss before tax (GBPm) (4.7) (27.4) 83%
Basic and Diluted Adjusted Loss per share (p) (0.8) (12.6) 94%
Statutory Loss after tax (GBPm) (4.4) (21.8) 80%
Basic and Diluted Statutory Loss per share (p) (2.6) (13.1) 80%
Free cash flow (GBPm) 6.9 (4.4) n/a
Non-Property Net Debt (GBPm) (as at period end) (57.6) (60.4) 5%
--------------------------------------------------- ------------------------------ ----------------- ---------
Financial highlights
-- Strong financial recovery with Group Adjusted EBITDA Less Normalised
Rent of GBP17.0m for H1 2022 (H1 2021: loss of GBP8.1m) up GBP25.1m
vs H1 2021; last 12 months (LTM) Group Adjusted EBITDA Less Normalised
Rent of GBP30.8m at June 2022
-- Member numbers building well and in line with seasonal norms;
790,000 members at 30 June 2022, up 10% from December 2021 (Dec
2021: 718,000); like-for-like revenue in June 2022 of 90%(3)
versus June 2019
-- Free cash flow of GBP6.9m in H1 ; leverage ratio(4) reduced
to 1.9x at June 2022 (March 2022: 2.2x)
-- Yield strengthened while still remaining the lowest priced UK
low cost gym operator; average price of a standard DO IT membership
in June 2022 was GBP20.89 (Dec 2021: GBP19.27); premium LIVE
IT penetration was 28.7% (Dec 2021: 27.1%)
Strategic highlights
-- Growth strategy for FY25 launched at the Capital Markets Day
with key targets of 300+ sites, GBP95-105m Group Adjusted EBITDA
Less Normalised Rent, and GBP40-50m Profit before Tax
-- Site expansion plan on track with seven sites opened in the
first half of the year and four opened since period end; will
deliver 28 in the year, including the conversion of acquired
sites
-- Strong operational performance with continuing record member
satisfaction scores and high staff engagement
-- New technology platform launched in April 2022 already driving
higher website traffic and conversion
-- Brand transformation in Q3 including rebranding of estate and
website, and launch of creative platform
Outlook
-- Trading in July continued to be in line with our expectations
-- September and October 2022 is next key period of membership
growth as students return to in-person education and working
patterns continue to normalise
-- Site pipeline building well with at least 25-30 openings targeted
for 2023 and 2024
(1) As at 3 August 2022 - number stated net of one closure; 212
sites as at 30 June 2022 including three acquired Fitness First
sites (31 December 2021: 202; 30 June 2021: 190)
(2) For a summary of KPI definitions used in the table see the
'Definition of non-statutory measures' section
(3) 151 sites open at December 2018 excluding four London city
centre sites
(4) Leverage ratio is defined as the ratio of Non-Property Net
Debt to Group Adjusted EBITDA Less Normalised Rent for the last 12
months
Richard Darwin, CEO of The Gym Group, commented:
"We are pleased with our financial and operational performance
during the first half of 2022, demonstrating the resilience of our
business. People across the country rely on our gyms for their
physical and mental health, and demand for our affordable, high
quality fitness experience is recovering well. As we expand, we
welcome more members in communities across the UK, and we are
making further progress with our ambitious growth plan, with 28 new
gym openings scheduled for 2022. The future is bright for The Gym
Group - our new technology platform, combined with our brand
relaunch later this month, positions us well to capture the demand
for affordable fitness and take advantage of this once in a
generation opportunity for growth."
A live audio webcast of the analyst presentation will be
available at 9:30 a.m. today via the following link:
https://stream.brrmedia.co.uk/broadcast/62c6a2101c26317a5ff3f236
For further information, please contact:
The Gym Group via Tulchan
Richard Darwin, CEO
Ann-marie Murphy, COO
Numis
Luke Bordewich
George Price 020 7260 1366
Peel Hunt
Dan Webster
George Sellar 020 7418 8900
Tulchan
James Macey-White
Elizabeth Snow 020 7353 4200
Forward-looking statements
This announcement includes statements that are, or may be deemed
to be, 'forward-looking statements'. By their nature, such
statements involve risk and uncertainty since they relate to future
events and circumstances. Actual results may, and often do, differ
materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with
respect to future events as at the date of this announcement. Save
as required by law or by the Listing Rules of the UK Listing
Authority, the Company undertakes no obligation to publicly revise
any forward-looking statements in this announcement following any
change in its expectations or to reflect subsequent events or
circumstances following the date of this announcement.
Chief Executive's Review
Our sites have now been open for just over a year since the
lockdowns of early 2021 and trading is recovering well, in line
with our expectations. We have made good progress with our new gym
rollout plan to take advantage of the demand for high quality,
affordable gyms. We now have 215(1) sites open, with further
openings scheduled for the coming months, and we remain on track
for our target of 28 in the year.
Our key operational metrics are stronger than ever, with member
satisfaction at an all-time high of 58.5% and rejoiner rates at
45%, demonstrating the willingness of members to come back quickly
following a positive experience. Our upgraded technology platform
is in place, enabling us to attract and convert new joiners and
facilitate further growth. This is a business that is well-placed
to capitalise on the market opportunity.
Recovering membership and revenue
At the end of June, our membership number had increased to
790,000 up 10% versus the start of year position of 718,000.
Average members were 810,000, reflecting a 10% increase versus Q4
of 2021. Like-for-like revenues in June (for the 151 sites open at
the end of 2018 excluding four London city centre sites) was 90% of
the pre-COVID level. This level of performance is in line with our
expectations and seasonal norms.
The member recovery is reflected in the improved financial
performance. Group Adjusted EBITDA Less Normalised Rent was
GBP17.0m in the first half, up GBP25.1m compared to H1 2021 when
gyms were closed for three and a half months of the period. In the
second quarter, the Group Adjusted EBITDA Less Normalised Rent was
GBP11.5m, equivalent to an annualised run rate of GBP46m, which
gives us confidence in delivering in line with our expectations for
the full year. The performance in the first half of the year does
not yet translate into profit overall, with an adjusted loss before
tax of GBP4.7m (H1 2021: loss of GBP27.4m) and a statutory loss
after tax of GBP4.4m (H1 2021: loss of GBP21.8m).
We expect further recovery in membership and revenue in the
second half of the year, as working environments continue to
normalise, and as we benefit from the operational investments and
yield management improvements we have made in the first half. We
are excited about the campaigns in place for our next key member
recruitment season in September and October which focuses
predominantly on students returning to universities.
Balance sheet strength
Our leverage position is strong with Non-Property Net Debt at 30
June 2022 of GBP57.6m (31 December 2021: GBP44.1m; 30 June 2021:
GBP60.4m). In line with the financial targets set out at the recent
Capital Markets Day, we are aiming to operate within a leverage
ratio of 1.5x - 2.0x Non-Property Net Debt : Group Adjusted EBITDA
Less Normalised Rent. On a last 12 months (LTM) Group Adjusted
EBITDA Less Normalised Rent basis, our leverage ratio at 30 June
2022 was 1.9x, down from 2.2x at 31 March 2022(2) (31 December
2021: 7.7x). Our strong recovery means that we have quickly
returned to within our target range, albeit we expect to remain
towards the top end of the range in H2 as we incur expansionary
capital expenditure as a result of our rollout. We expect, with
continued recovery and growth, that the ratio will continue to fall
which will give us future flexibility in our capital allocation.
The GBP57.6m of Non-Property Net Debt gives us good levels of
liquidity against our current committed facilities of GBP92.5m
(including finance leases).
Growth strategy and progress towards FY25 targets
At the Capital Markets Day on 19 May 2022, we set out our growth
strategy and key FY25 targets, and outlined our four key strategic
priorities, the enablers of growth and the significant work
completed over the past two years that will allow us to take
advantage of what we see as the most exciting growth opportunity in
the Group's history. We are encouraged by the progress we are
making to deliver our key FY25 targets which include:
-- 300+ sites
-- GBP95-105m Group Adjusted EBITDA Less Normalised Rent
-- GBP40-50m Profit before Tax.
The materials presented are available on the website
(tggplc.com) and are a detailed examination of the opportunity for
our business over the next few years.
Attractive market opportunity
We believe the UK low cost gym market has the potential to reach
1,700-1,900 sites by 2030, albeit this growth will partly depend on
the continuing availability of supply of suitable premises. In the
near term, we continue to see significant opportunity as our
pipeline for 2023 and 2024 is building well.
The recently published Leisure Database Company (LDC) report on
the market estimated that The Gym Group's market share at March
2022 was 27.5%, up from 23.5% in March 2019. LDC estimated that the
total low cost market at March 2022 was 741 sites (up from 683 in
2019), with increases from The Gym Group and other established
operators being partly offset by some operators moving out of low
cost (having moved their pricing above the LDC definition of low
cost), and partly by site closures of some franchise and smaller
operators. Since the report was released, we have further increased
market share to 28.0% at the end of June 2022.
Our positioning in the market as a high quality, affordable gym
product priced at an average headline price of GBP20.89 is
compelling and will enable us to continue to grow market share over
the coming years.
Site rollout and new gym format
We are pleased with the speed and quality of our site rollout,
having opened seven new gyms across the country in the first half
of the year, including sites in East Glasgow, Norbury and Basildon,
as well as taking on three Fitness First sites in London. We have
opened a further four gyms in July 2022, bringing the total number
of open sites to 215(1) . We have a further seven openings
scheduled for the remainder of the third quarter and are on track
for our target of 28 in the year and over 300 by FY25. The new gyms
opened in the first half are performing well.
Our ability to expand rapidly is partly driven by our ability to
optimise formats and open sites of anything between 7,000 and
21,000 sq. ft. This increased flexibility of gym format enables us
to access more catchments across the country. The current property
market has also been very beneficial for us, with a good level of
supply of high quality locations available at affordable rents. We
expect that around 60% of our sites opening in 2022, including two
of the three Fitness First sites that we acquired in March 2022,
will be on retail parks where our gyms have a track record of
performing well.
Developing the technology platform
In the first half, we launched our new technology platform with
mobile-centric developments of the website and the members area and
further enhancements to the app. The immediate transition to the
new platform has been very successful, with the team achieving all
its post-launch goals and maintaining strong levels of web traffic
and Google rankings. Improvements in site speed and the ability to
identify and remove areas of friction during the join journey are
already driving SEO benefits and increased conversion rates. Around
one in ten visits now converts to a new joiner. We expect to
continue to see the benefits of this investment over the coming
months, particularly during our more active marketing periods. Our
app score rating is 4.7 on Apple and 4.5 on android, among the
highest in the industry.
Optimising yield
During the period, we conducted extensive research with members
and non-members, as well as detailed analysis in partnership with a
well-known industry consultant. The research indicated that the
perceived value of what we deliver and the quality of our
proposition are seen as greater than the cost charged. In short,
the value perception of our product suggested that we had an
opportunity to improve yield. As a result, in the first half of the
year, we put through an average headline price increase of GBP1.62
for new members across the majority of our sites, as well as some
selective repricing of the base membership. The effect of these
rises takes a while to filter through which is why we expect
like-for-like revenue to rebound more strongly in H2. Despite the
increases, we remain the lowest priced low cost gym operator in the
UK, ensuring that we provide excellent value for money.
Rolling out the new brand
The brand transformation work is well underway and our members
are responding positively to the changes. All new sites are now
being opened with the new visual identity, and we have commenced
the task of rebranding the existing estate. The new creative
platform work with our agencies will be launched as part of our
September and October marketing campaign, with further creative
campaigns planned for the important January and February peak
trading period. We are excited about the opportunities available to
us under our modern, vibrant and inclusive brand and visual
identity, and I am confident that this brand transformation will
result in greater awareness and position us to trade very well
across all channels and ultimately drive revenue growth.
Sustainability
We are very proud of our sustainability work centred around our
purpose of breaking down barriers to fitness for all. The Gym Group
is dedicated to increasing the social value it generates while
helping members to get great value from their gym membership
through motivational initiatives to drive the percentage of members
visiting our gyms at least four times per month. Initial results
are encouraging and in the first six months of 2022, we have seen
an uplift in the percentage of members exceeding the four times per
month threshold.
We are pleased to be the first carbon neutral gym chain in the
UK and, following our carbon reduction and net-zero commitment to
SBTi, we are now developing our pathway for verification by SBTi,
whilst at the same time implementing energy saving programmes like
our recent '20 is Plenty' campaign which has seen us increasing the
temperature in our gyms during the summer months from 19 C to 20
C.
People
Maintaining our inclusive, supportive culture is key to the
success of our gyms and our future growth. We have been pleased to
receive several awards in recognition of this, particularly from
our own employees: we were voted in the Top 25 for engagement by
Glassdoor and also the Top 25 for Senior Leadership through the
pandemic. Our engagement scores are as high as they have ever been.
I would like to thank all our employees for their tremendous work
in setting up our business for sustained success over the next few
years.
On 1 July 2022, Mark George our CFO left to join Wickes Group
plc. Mark made a tremendous impact on our business over nearly four
years - I am very grateful for his tireless efforts during the
COVID disruptions to shore up our finances and ensure we were in a
position to prosper once the pandemic was over. Luke Tait will take
over in mid-October - Luke brings a wealth of commercial experience
from SSP plc and Nando's and will, I am sure, build on the
exceptionally strong foundations in Finance that Mark has
established.
On 25 July 2022, Penny Hughes retired from the Board and has
been succeeded by Founder Director, John Treharne. Penny joined The
Gym Group just after the IPO in 2015 and has been an inspirational
leader of the Board, helping the business to scale successfully and
build a team capable of delivering long term growth. John naturally
brings to the role a tremendous amount of fitness industry insight
and experience, and I look forward to working closely with him to
implement our growth strategy.
Outlook
We saw a compelling market opportunity as soon as it was clear
that there was a strong route out of the pandemic via the vaccine
programme; and we have acted swiftly to capitalise on this
opportunity. This has meant not only expanding our site portfolio,
but also putting in place the necessary infrastructure
improvements, such as the technology platform and the re-branding,
that will enable us to deliver on our growth ambitions in the
coming years. I have never been more confident about the quality
and impact of the work we are doing and the results that it will
deliver. With a high margin model and value price point, we are in
a strong position to withstand the cost of living pressures
impacting all UK consumers and, as a result, we will continue to
expand rapidly and offer affordable fitness to thousands more
members across the country over the coming months and years.
Richard Darwin
Chief Executive Officer
4 August 2022
(1) As at 3 August 2022 - number stated net of one closure; 212
sites as at 30 June 2022 including three acquired Fitness First
sites (31 December 2021: 202; 30 June 2021: 190)
(2) Unaudited; extracted from Management Information
Financial Review
Presentation of results
This financial review uses a combination of statutory and
non-statutory measures to discuss performance in the period. The
definitions of the non-statutory Key Performance Indicators can be
found in the 'Definition of non-statutory measures' section. To
assist stakeholders in understanding the financial performance of
the Group, aid comparability between periods and provide a clearer
link between the Financial Review and the Condensed Consolidated
Financial Statements, we have also adopted a three-column format to
presenting the Group Income Statement in which we separately
disclose underlying trading and non-underlying items.
Non-underlying items are income or expenses that are material by
their size and/or nature and that are not considered to be incurred
in the normal course of business. These are classified as
non-underlying items on the face of the Group Income Statement
within their relevant category. Non-underlying items include
restructuring and reorganisation costs (including site closure
costs), costs of major strategic projects and investments,
impairment of assets, amortisation and impairment of business
combination intangibles, profit/loss on disposal of assets and
businesses, revaluation gains or losses on borrowings, and
refinancing costs. Further details on non-underlying items are
provided later in this report.
Summary
The first half of 2022 has been a period of strong recovery for
The Gym Group with member numbers growing from 718,000 at 31
December 2021 to 790,000 at 30 June 2022, up 10%. Our gyms have
been open for the full six month period (closed for three and a
half months of the prior year period), although trading in the
early part of the year was adversely impacted by the ongoing COVID
pandemic and in particular the prevalence of the Omicron variant at
that time. The extensive closure period in the prior year means
that the year on year comparison is not always representative.
We opened seven new gyms in the first half of 2022 and acquired
a further three from Fitness First, taking our total estate to 212
gyms as at 30 June 2022. A further four gyms have been opened since
30 June 2022 and we remain on track to deliver 28 new sites in
total in 2022. The gyms that we have opened to date are performing
well.
Six months ended 30 June 2022 Six months ended 30 June 2021 Movement
-------------------------------------- ------------------------------ ------------------------------ ---------
Total number of gyms at period end 212 187 13%
Total number of members at end of
period ('000) 790 730 8%
Revenue (GBPm) 84.2 29.3 187%
Group Adjusted EBITDA (GBPm) 33.5 6.7 400%
Group Adjusted EBITDA Less Normalised
Rent (GBPm) 17.0 (8.1) n/a
Adjusted Loss before Tax (GBPm) (4.7) (27.4) 83%
Adjusted Loss for the period (GBPm) (1.5) (20.9) 93%
Statutory Loss before Tax (GBPm) (8.6) (28.5) 70%
Statutory Loss for the period (GBPm) (4.4) (21.8) 80%
Group Operating Cash Flow (GBPm) 9.4 (3.4) n/a
Free Cash Flow (GBPm) 6.9 (4.4) n/a
Non-Property Net Debt (GBPm) (57.6) (60.4) 5%
--------------------------------------- ------------------------------ ------------------------------ ---------
Results for the period
Six months ended 30 Six months ended 30
June 2022 June 2021
Underlying Non-underlying Total Underlying Non-underlying Total
result items result items
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 84.2 - 84.2 29.3 - 29.3
Cost of sales (0.8) - (0.8) (0.5) - (0.5)
------------------------------- ----------- --------------- ------- ----------- --------------- -------
Gross profit 83.4 - 83.4 28.8 - 28.8
Other income 0.3 - 0.3 6.5 - 6.5
Operating expenses
before depreciation,
amortisation and impairment (50.8) (1.2) (52.0) (30.2) (0.1) (30.3)
Depreciation, amortisation
and impairment (29.4) (0.1) (29.5) (24.4) - (24.4)
------------------------------- ----------- --------------- ------- ----------- --------------- -------
Operating profit/(loss) 3.5 (1.3) 2.2 (19.3) (0.1) (19.4)
Finance costs (8.2) (2.6) (10.8) (8.1) (1.0) (9.1)
Loss before tax (4.7) (3.9) (8.6) (27.4) (1.1) (28.5)
Tax credit 3.2 1.0 4.2 6.5 0.2 6.7
------------------------------- ----------- --------------- ------- ----------- --------------- -------
Loss for the period
attributable to shareholders (1.5) (2.9) (4.4) (20.9) (0.9) (21.8)
Loss per share
Basic and diluted
(p) (0.8) (2.6) (12.6) (13.1)
------------------------------- ----------- --------------- ------- ----------- --------------- -------
Revenue
Revenue in the period increased to GBP84.2m (H1 2021: GBP29.3m),
reflecting the increased number of open trading days compared to
the prior year when gyms were closed for three and a half months,
as well as higher average membership numbers throughout the period
and increased yields. Average membership numbers in the six months
to 30 June 2022 were 810,000. We closed the period with 790,000
members, up 10% on 31 December 2021 and in line with seasonal
norms.
Revenue recovered well in the first half of the year despite
ongoing uncertainty around the Omicron variant in the early peak
trading period. The average headline price of a standard DO IT
membership increased to GBP20.89 in June 2022 compared with
GBP19.11 in June 2021 and GBP19.27 in December 2021, largely as a
result of the price increases for new members that we put through
in April across the majority of our sites, as well as some
selective repricing of the base membership . Despite the increases
implemented, we remain the lowest priced low cost gym operator in
the UK.
In June 2022, the proportion of members taking our premium LIVE
IT membership was 28.7% compared with 24.7% and 27.1% in June 2021
and December 2021 respectively. Average Revenue Per Member Per
Month (ARPMM) in the first half of 2022 was GBP17.36 compared with
GBP17.60 in the second half of 2021, with the reduction reflecting
a greater level of promotional activity undertaken in the first
quarter to support peak season trading. ARPMM in the second quarter
of 2022 was GBP18.09.
Cost of sales
Cost of sales increased to GBP0.8m in H1 2022, (H1 2021:
GBP0.5m) as a result of the revenue recovery and increased trading
days. However, the year on year increase was lower than expected as
a result of improved stock management.
Other income
Other income in the period amounted to GBP0.3m (H1 2021:
GBP6.5m). The prior period income consists largely of income
received under the various COVID-related Government grant schemes.
As all gyms were open throughout the current period, no grants have
been received in H1 2022.
Underlying operating expenses before depreciation, amortisation
and impairment
Underlying operating expenses before depreciation, amortisation
and impairment are made up as follows:
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBPm GBPm
---------------------------------------------------- ----------- -----------
Site costs before Normalised Rent 41.8 21.5
Add: Normalised Rent 16.5 14.8
---------------------------------------------------- ----------- -----------
Site costs including Normalised Rent 58.3 36.3
Central support office costs 8.4 7.1
Long-term employee incentive costs 0.6 1.6
---------------------------------------------------- ----------- -----------
67.3 45.0
Less: Normalised Rent (16.5) (14.8)
---------------------------------------------------- ----------- -----------
Underlying operating expenses before depreciation,
amortisation and impairment 50.8 30.2
---------------------------------------------------- ----------- -----------
Site costs including Normalised Rent
Site costs including Normalised Rent in H1 2022 increased to
GBP58.3m (H1 2021: GBP36.3m). Variable costs, in particular in
respect of cleaning, marketing, utilities and repairs and
maintenance increased as a result of the return to more normal
operating conditions, with sites open for the whole period. Staff
costs, business rates and administration expenses also increased
year on year as COVID-related Government support and rent
concessions from landlords were removed. New openings in 2021 and
2022 also contributed to some site cost increases year on year.
Normalised Rent costs, which are defined as the contractual
rents that would have been paid in normal circumstances without any
agreed deferments, recognised in the monthly period to which they
relate, amounted to GBP16.5m in the period (H1 2021: GBP14.8m). The
increase year on year reflects the growing gym portfolio and return
to more normal trading conditions.
Central support office costs
Central support office costs increased in the six months to 30
June 2022 to GBP8.4m (H1 2021: GBP7.1m) reflecting the continued
investment in people and technology in the second half of 2021 and
the first half of 2022 to ensure we are set up to achieve our
growth ambitions.
Long-term employee incentive costs
Long-term employee incentive costs in the period amounted to
GBP0.6m (H1 2021: GBP1.6m). The reduction year on year reflects a
number of leavers from the scheme and share price movements.
Underlying depreciation and amortisation
Underlying depreciation and amortisation charges in the period
amounted to GBP29.4m (H1 2021: GBP24.4m). The increase year on year
reflects the increased gym portfolio as well as accelerated
depreciation and amortisation on a number of assets that have been,
or are being, replaced following the launch of the new consumer
website and brand.
Group Adjusted EBITDA Less Normalised Rent
The Group's key profit metric is Group Adjusted EBITDA Less
Normalised Rent as the Directors believe that this measure best
reflects the underlying profitability of the business. Group
Adjusted EBITDA Less Normalised Rent is reconciled to statutory
operating profit/(loss) as follows:
Six months Six months
ended 30 June ended 30 June
2022 2021
GBPm GBPm
Operating profit/(loss) 2.2 (19.4)
Non-underlying operating items 1.3 0.1
Long-term employee incentive costs 0.6 1.6
Underlying depreciation and amortisation 29.4 24.4
Group Adjusted EBITDA 33.5 6.7
Normalised Rent (16.5) (14.8)
------------------------------------------ --------------- ---------------
Group Adjusted EBITDA Less Normalised
Rent 17.0 (8.1)
------------------------------------------ --------------- ---------------
Group Adjusted EBITDA Less Normalised Rent was GBP17.0m in the
period (H1 2021: loss of GBP8.1m) and reflects the increased site
profitability as a result of the higher proportion of open trading
days, partially offset by an increase in support function
costs.
Underlying finance costs
Underlying finance costs in the period amounted to GBP8.2m (H1
2021: GBP8.1m). The implied interest relating to the lease
liability was GBP6.9m (H1 2021: GBP6.6m). Finance costs associated
with our bank borrowing facilities were GBP1.3m (H1 2021: GBP1.5m)
comprising interest costs and fee amortisation.
In May 2022, the Group made certain changes to its RCF facility.
These included a one-year extension of Facility A (GBP70m) to
October 2024; the cancellation in full of the temporary Facility B
(GBP30m) and replacement with a new GBP10m facility to October
2024; and further relaxation of finance lease restrictions. Funds
borrowed under the RCF now bear interest at a minimum rate of 2.85%
(previously 2.60% whilst Facility B was in place).
Non-underlying items
Non-underlying items are costs or income which the Directors
believe , due to their size or nature, are not the result of normal
operating performance. They are therefore separately disclosed on
the face of the income statement to allow a more comparable view of
underlying trading performance.
Six months Six months
ended 30 June ended 30 June
2022 2021
GBPm GBPm
Affecting operating expenses before depreciation,
amortisation and impairment
Costs of major strategic projects and investments 1.3 -
Restructuring and reorganisation costs (including
site closures) (0.1) 0.1
1.2 0.1
Affecting depreciation, amortisation and
impairment
Amortisation of business combination intangible
assets 0.1 -
0.1 -
Affecting finance costs
Remeasurement of borrowings 2.6 1.0
2.6 1.0
Total all non-underlying items before tax 3.9 1.1
Tax credit on non-underlying items (1.0) (0.2)
--------------------------------------------------- --------------- ---------------
Total all non-underlying items 2.9 0.9
--------------------------------------------------- --------------- ---------------
Non-underlying items affecting operating expenses before
depreciation, amortisation and impairment amounted to GBP1.2m in
the period (H1 2021: GBP0.1m).
The costs of major strategic projects and investments in the
period of GBP1.3m relate predominantly to the brand transformation
project which is progressing to plan. We expect the total costs in
2022 to be in the region of GBP7m, the majority of which will be
capital expenditure for site signage.
Restructuring and reorganisation costs in the period include the
costs of restructuring the Group's marketing department, together
with the costs and lease surrender income associated with the
closure of a small number of gyms.
Non-underlying costs affecting depreciation, amortisation and
impairment in the period amounted to GBP0.1m (2021: GBPnil) and
relate to the amortisation of business combination intangibles
acquired as part of the Lifestyle and easyGym acquisitions .
Non-underlying items affecting finance costs amounted to GBP2.6m
in the period (H1 2021: GBP1.0m) and reflect the remeasurement of
the Group's Revolving Credit Facility (RCF) following the changes
agreed with the lenders in the period .
Taxation
The tax credit in the period was GBP4.2m (H1 2021: credit of
GBP6.7m), representing an effective tax rate 48.8% (H1 2021:
23.5%). The increase in effective rate is driven predominantly by
the temporary enhanced capital allowances regime that was announced
in the March 2021 Budget (the super-deduction tax break).
Earnings
As a result of the factors discussed above, the statutory loss
before tax for the period was GBP8.6m (H1 2021: loss of GBP28.5m)
and the statutory loss after tax for the period was GBP4.4m (H1
2021: loss of GBP21.8m).
Adjusted loss before tax is calculated by taking the statutory
loss before tax and adding back the non-underlying items. Adjusted
loss before tax in the period was GBP4.7m (H1 2021: loss of
GBP27.4m). Adjusted loss after tax was GBP1.5m (H1 2021: loss of
GBP20.9m).
The basic and diluted loss per share was 2.6p (H1 2021: loss of
13.1p), and the basic and diluted adjusted loss per share was 0.8p
(H1 2021: loss of 12.6p).
Dividend
It is a condition of the new GBP10m additional RCF Facility that
the Company shall not declare or pay a dividend. Although this
facility currently remains undrawn, the Directors would like to
continue to have access to it as necessary and, as a result, the
Directors are not proposing an interim dividend in respect of
2022.
Acquisition of sites operating under the Fitness First brand
On 22 March 2022, we acquired three sites operating under the
Fitness First brand for cash consideration of GBP5.4m. The sites
are located in residential areas of East London, where we have
traditionally been very successful. They are expected to be
converted to The Gym Group format in September and October 2022. A
Transitional Service Agreement (TSA) is in place during the period
between acquisition and conversion.
A preliminary valuation has been performed on the tangible and
intangible assets acquired in the transaction, resulting in
preliminary goodwill of GBP4.1m. Further information is included in
note 7 to the Condensed Consolidated Financial Information.
Cash flow
Six months Six months
ended 30 June ended 30 June
2022 2021
GBPm GBPm
-------------------------------------------- --------------- ---------------
Group Adjusted EBITDA Less Normalised
Rent 17.0 (8.1)
Rent working capital (1.6) 1.2
Movement in other working capital (3.2) 4.8
Maintenance capital expenditure (2.8) (1.3)
-------------------------------------------- --------------- ---------------
Group operating cash flow 9.4 (3.4)
Non-underlying items (1.1) -
Bank interest paid (including refinancing
fees) (1.9) (1.0)
Taxation 0.5 -
Free cash flow 6.9 (4.4)
Expansionary capital expenditure funded
by leases (1.8) (1.5)
Expansionary capital expenditure funded
by other sources (13.2) (7.2)
Net consideration paid on acquisition (5.4) -
Cash flow before movement in debt (13.5) (13.1)
Net increase in finance lease indebtedness 0.6 1.4
Net drawdown of borrowings 12.5 14.0
Net cash flow (0.4) 2.3
-------------------------------------------- --------------- ---------------
The Group operating cash inflow in the period was GBP9.4m (H1
2021: outflow of GBP3.4m), reflecting the Group's return to
profitability at the Group Adjusted EBITDA Less Normalised Rent
level.
There was a net outflow on rent working capital of GBP1.6m in
the period (H1 2021: inflow of GBP1.2m), reflecting the unwind of
deferred rents from 2020 and 2021 and a general return to more
normal rental payment patterns. As at 30 June 2022, GBP0.8m of rent
deferrals remained outstanding (31 December 2021: GBP2.1m; 30 June
2021: GBP5.5m).
The net outflow on working capital (excluding rent) in the
period was GBP3.2m (H1 2021: inflow of GBP4.8m) which reflects the
recovery and growth of the business and a return to more normal
patterns of working capital.
Fixed asset additions in respect of maintenance capital
expenditure in the period amounted to GBP2.8m (H1 2021: GBP1.5m) as
we returned to more typical levels of maintenance to mirror the
return to regular operations. Adjusting for the movement in capital
creditors, the cash flow from maintenance capital expenditure was
GBP2.8m (H1 2021: GBP1.3m).
Fixed asset additions in respect of expansionary capital
expenditure in the period amounted to GBP14.7m (H1 2021: GBP7.3m)
and relate to the Group's investment in the fit-out of new gyms and
technology projects . The fit-out costs are stated net of
contributions towards landlord building costs. During the period,
we opened seven new sites and completed work on a further four
sites which were opened in July 2022, spending a total of GBP10.7m.
The investment in technology in the period of GBP4.0m relates
largely to enhancements made to the member experience, including
improvements to the Group's website and new functionality in the
app. Adjusting for the movement in capital creditors, the cash flow
from expansionary capital expenditure was GBP15.0m (H1 2021:
GBP8.7m), including GBP1.8m funded by finance leases (H1 2021:
GBP1.5m).
The net consideration paid on acquisition of GBP5.4m relates to
the acquisition of three sites from Fitness First.
Balance sheet
31 December
30 June 2022 30 June 2021 2021
GBPm GBPm GBPm
------------------------- ------------- ------------- ------------
Non-current assets 569.3 527.9 549.9
Current assets 16.1 11.0 14.8
Current liabilities (56.8) (51.3) (57.4)
Non-current liabilities (380.5) (353.4) (355.2)
------------------------- ------------- ------------- ------------
Net assets 148.1 134.2 152.1
------------------------- ------------- ------------- ------------
Non-current assets increased in the period by GBP19.4m to
GBP569.3m. GBP9.7m of the increase relates to the preliminary fair
value accounting in relation to the acquisition of the Fitness
First sites. Right-of-use assets and Property, plant and equipment
also increased as a result of the opening of a further seven
organic sites in the period; and deferred tax assets also increased
as a result of the impact on losses carried forward of the
temporary enhanced capital allowances regime that was announced in
the March 2021 Budget (the super-deduction tax break).
Full details of the preliminary fair values of all assets
acquired as part of the Fitness First transaction are set out in
note 7 to the Condensed Consolidated Financial Information.
Leasing liabilities increased by GBP8.8m in the period since 31
December 2021 reflecting the new site openings and the acquisition
of the three sites from Fitness First. Drawings under the RCF
increased by GBP12.5m in the period to fund both of these.
At 30 June 2022, the Group had Non-Property Net Debt of GBP57.6m
(31 December 2021: GBP44.1m; 30 June 2021: GBP60.4m) comprising
drawn facilities of GBP57.5m and finance leases of GBP7.0m, less
cash of GBP6.9m.
Going concern
The Board has reviewed the financial forecasts and downside
scenario of the Group and has a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the period to 31 December 2023. As a result, the Directors
continue to adopt the going concern basis in preparing the Interim
Financial Statements. In making this assessment, consideration has
been given to the current and future expected trading performance;
the Group's current and forecast liquidity position; the support
received to date from our lenders and shareholders; and the
mitigating actions that can be deployed in the event of reasonable
downside scenarios. Further detail is provided in note 2 of the
Interim Financial Statements.
Trading update and outlook
Trading in July has continued to be in line with our
expectations and membership levels over the summer months reflect
normal seasonal trends. We expect September and October 2022 to be
the next key period of membership growth as students return to
in-person education and working patterns continue to normalise. We
are confident that we will deliver 28 new sites in 2022 and the
longer term pipeline is building well with 25-30 openings targeted
for 2023 and 2024.
Principal risks and uncertainties
A summary of the principal risks and uncertainties that the
Group faces is set out below. Further detail about each of the
risks can be found on pages 64 to 68 of the Annual Report and
Accounts 2021, published on 16 March 2022.
-- Significant business interruption
-- Operational gearing
-- Member experience
-- Trading environment
-- Our people
-- IT dependency
-- Scale of change
-- Data protection
-- Reputation, brand and trust
The Directors have reviewed the principal risks and
uncertainties and believe they remain valid at the date of this
report.
Responsibility statement
The Directors of the Company are listed on pages 72 and 73 of
the Annual Report and Accounts 2021. On 1 July 2022, Mark George,
Chief Financial Officer, resigned from the Board and left the
Group. Luke Tait will assume the role of Chief Financial Officer in
October 2022. On 25 July 2022, Penny Hughes retired from the Board
and has been succeeded as Chair by John Treharne.
The Directors confirm that, to the best of their knowledge:
-- the Interim Financial Statements have been prepared in accordance
with IAS 34 Interim Financial Reporting;
-- the Interim Management Report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during
the first six months and description of principal risks and uncertainties
for the remaining six months of the year); and
-- the Interim Management Report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions
and changes therein).
On behalf of the Board
Richard Darwin
Chief Executive Officer
4 August 2022
Definition of non-statutory measures
-- Group Adjusted EBITDA - operating profit/loss before depreciation,
amortisation, long-term employee incentive costs and non-underlying
items.
-- Normalised Rent - the contractual rent that would have been
paid in normal circumstances without any agreed deferments, recognised
in the monthly period to which it relates.
-- Adjusted Loss/Profit before Tax - loss/profit before tax before
non-underlying items.
-- Adjusted Earnings - loss/profit for the period before non-underlying
items and the related tax effect.
-- Basic Adjusted EPS - Adjusted Earnings divided by the basic
weighted average number of shares.
-- Group Operating Cash Flow - Group Adjusted EBITDA Less Normalised
Rent, movement in working capital and maintenance capital expenditure.
-- Free Cash Flow - Group Operating Cash Flow less cash non-underlying
items, bank and non-property lease interest and tax.
-- Non-Property Net Debt - bank and non-property lease debt less
cash and cash equivalents.
-- Maintenance capital expenditure - costs of replacement gym equipment
and premises refurbishment.
-- Expansionary capital expenditure - costs of fit-out of new gyms
(both organic and acquired), technology projects and other strategic
projects. It is stated net of contributions towards landlord
building costs.
Consolidated Statement of Comprehensive Income
For the period ended 30 June 2022
6 months ended 30 June 6 months ended 30 June
2022 2021
(Re-presented*)
Unaudited Unaudited
------------------------------------- -------------------------------------
Underlying Non-underlying Total Underlying Non-underlying Total
(note (note
4) 4)
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 3 84.2 - 84.2 29.3 - 29.3
Cost of sales (0.8) - (0.8) (0.5) - (0.5)
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Gross profit 83.4 - 83.4 28.8 - 28.8
Other income 0.3 - 0.3 6.5 - 6.5
Operating expenses
before depreciation,
amortisation and impairment (50.8) (1.2) (52.0) (30.2) (0.1) (30.3)
Depreciation, amortisation
and impairment (29.4) (0.1) (29.5) (24.4) - (24.4)
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Operating profit/(loss) 3.5 (1.3) 2.2 (19.3) (0.1) (19.4)
Finance costs (8.2) (2.6) (10.8) (8.1) (1.0) (9.1)
Loss before tax (4.7) (3.9) (8.6) (27.4) (1.1) (28.5)
Tax credit 5 3.2 1.0 4.2 6.5 0.2 6.7
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Loss for the period
attributable to equity
shareholders (1.5) (2.9) (4.4) (20.9) (0.9) (21.8)
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Other comprehensive
income for the period
Items that may be
reclassified to profit
or loss
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Changes in the fair
value of derivative
financial instruments 0.1 - 0.1 - - -
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Total comprehensive
expense attributable
to equity shareholders (1.4) (2.9) (4.3) (20.9) (0.9) (21.8)
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
Loss per share (p) 6
Basic and diluted (0.8) (2.6) (12.6) (13.1)
------------------------------ ----- ----------- --------------- ------- ----------- --------------- -------
* During the prior year, the Directors agreed to change the way
they present the consolidated income statement and adopt a columnar
format because they believe this provides the reader with
supplemental data relating to the financial condition and results
of operations. See note 2 for further details.
Reconciliation of Operating Profit/(Loss) to Group Adjusted
EBITDA Less Normalised Rent (1)
6 months ended 6 months ended
30 June 2022 30 June 2021
Unaudited Unaudited
Note GBPm GBPm
Operating profit/(loss) 2.2 (19.4)
Add: Non-underlying operating items 4 1.3 0.1
Long-term employee incentive costs
(included in Operating expenses) 13 0.6 1.6
Underlying depreciation and amortisation 29.4 24.4
Group Adjusted EBITDA 33.5 6.7
Normalised Rent(2) (16.5) (14.8)
-------------------------------------------------- ----- --------------- ---------------
Group Adjusted EBITDA less Normalised
Rent(1) 17.0 (8.1)
-------------------------------------------------- ----- --------------- ---------------
(1) Group Adjusted EBITDA Less Normalised Rent is a
non-statutory metric used internally by management and externally
by investors. It is calculated as operating profit before
depreciation, amortisation, long term employee incentive costs and
non-underlying items, and after deducting Normalised Rent
(2) Normalised Rent is the contractual rent that would have been
paid in normal circumstances without any agreed deferments,
recognised in the monthly period to which it relates.
Consolidated Statement of Financial Position
As at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
---------- ---------- ------------
Note GBPm GBPm GBPm
--------------------------------- ----- ---------- ---------- ------------
Non-current assets
--------------------------------- ----- ---------- ---------- ------------
Intangible assets 91.8 85.8 86.0
Property, plant and equipment 8 166.8 167.4 165.6
Right-of-use assets 9 289.3 259.0 281.2
Investments in financial assets 11 1.0 1.0 1.0
Deferred tax assets 5 20.4 14.7 16.1
--------------------------------- ----- ---------- ---------- ------------
Total non-current assets 569.3 527.9 549.9
Current assets
--------------------------------- ----- ---------- ---------- ------------
Inventories 0.7 0.2 0.3
Trade and other receivables 8.1 4.7 6.3
Income taxes receivable 0.4 0.1 0.9
Cash and cash equivalents 6.9 6.0 7.3
--------------------------------- ----- ---------- ---------- ------------
Total current assets 16.1 11.0 14.8
Total assets 585.4 538.9 564.7
--------------------------------- ----- ---------- ---------- ------------
Current liabilities
--------------------------------- ----- ---------- ---------- ------------
Trade and other payables 31.1 24.3 30.4
Lease liabilities 9 25.1 25.8 27.0
Other financial liabilities - 1.2 -
Provisions 0.6 - -
Total current liabilities 56.8 51.3 57.4
Non-current liabilities
--------------------------------- ----- ---------- ---------- ------------
Borrowings 10 58.7 64.3 44.3
Lease liabilities 9 320.0 287.8 309.3
Provisions 1.8 1.3 1.6
Total non-current liabilities 380.5 353.4 355.2
Total liabilities 437.3 404.7 412.6
--------------------------------- ----- ---------- ---------- ------------
Net assets 148.1 134.2 152.1
--------------------------------- ----- ---------- ---------- ------------
Capital and reserves
--------------------------------- ----- ---------- ---------- ------------
Own shares held 0.1 0.1 0.1
Share premium 189.7 159.5 189.7
Hedging reserve - (0.2) (0.1)
Merger reserve 39.9 39.9 39.9
Retained deficit (81.6) (65.1) (77.5)
--------------------------------- ----- ---------- ---------- ------------
Total equity shareholders'
funds 148.1 134.2 152.1
--------------------------------- ----- ---------- ---------- ------------
Consolidated Statement of Changes in Equity
For the period ended 30 June 2022
Own shares Share Hedging Merger Retained
held premium reserve reserve deficit Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- ----- ----------- --------- --------- --------- --------- -------
At 1 January 2021
(Audited) 0.1 159.5 (0.2) 39.9 (44.9) 154.4
Loss for the period
and total comprehensive
expense - - - - (21.8) (21.8)
Share-based payments 13 - - - - 1.2 1.2
Deferred tax on
share-based payments - - - - 0.4 0.4
-------------------------- ----- ----------- --------- --------- --------- --------- -------
At 30 June 2021
(Unaudited) 0.1 159.5 (0.2) 39.9 (65.1) 134.2
Loss for the period - - - - (13.5) (13.5)
Other comprehensive
income for the period - - 0.1 - - 0.1
-------------------------- ----- ----------- --------- --------- --------- --------- -------
Total comprehensive
expense - - 0.1 - (13.5) (13.4)
Issue of ordinary
share capital - 30.2 - - - 30.2
Share-based payments 13 - - - - 1.2 1.2
Deferred tax on
share-based payments - - - - (0.1) (0.1)
-------------------------- ----- ----------- --------- --------- --------- --------- -------
At 31 December
2021 (Audited) 0.1 189.7 (0.1) 39.9 (77.5) 152.1
Loss for the period - - - - (4.4) (4.4)
Other comprehensive
income for the period - - 0.1 - - 0.1
-------------------------- ----- ----------- --------- --------- --------- --------- -------
Total comprehensive
expense - - 0.1 - (4.4) (4.3)
Share-based payments 13 - - - - 0.6 0.6
Deferred tax on
share-based payments - - - - (0.3) (0.3)
-------------------------- ----- ----------- --------- --------- --------- --------- -------
At 30 June 2022
(Unaudited) 0.1 189.7 - 39.9 (81.6) 148.1
-------------------------- ----- ----------- --------- --------- --------- --------- -------
Consolidated Cash Flow Statement
For the period ended 30 June 2022
6 months 6 months
ended ended
30 June 30 June
2022 2021
Unaudited Unaudited
Note GBPm GBPm
----------------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
Loss before tax (8.6) (28.5)
Adjustments for:
Finance costs 10.8 9.1
Non-underlying operating items 1.3 0.1
Underlying depreciation of property, plant
and equipment 8 13.5 11.4
Underlying depreciation of right-of-use
assets 9 13.4 11.2
Underlying amortisation of intangible assets 2.5 1.8
Long-term employee incentive costs 13 0.6 1.6
Rent concessions 9 (0.1) (1.1)
Loss on disposal of property, plant & equipment
and right-of-use assets - 0.1
Increase in inventories (0.4) -
(Increase)/decrease in trade and other receivables (1.4) 1.5
(Decrease)/increase in trade and other payables (1.4) 4.4
Payment of deferred consideration - (1.4)
----------------------------------------------------- ----- ---------- ----------
Cash generated from operations 30.2 10.2
----------------------------------------------------- ----- ---------- ----------
Tax received 0.5 -
Net cash inflow from operating activities
before non-underlying items 30.7 10.2
Non-underlying items (1.1) -
----------------------------------------------------- ----- ---------- ----------
Net cash inflow from operating activities 29.6 10.2
----------------------------------------------------- ----- ---------- ----------
Cash flows from investing activities
Business combinations 7 (5.4) -
Purchase of property, plant & equipment 8 (13.1) (7.3)
Purchase of intangible assets (2.9) (1.2)
Net cash outflow used in investing activities (21.4) (8.5)
----------------------------------------------------- ----- ---------- ----------
Cash flows from financing activities
Repayment of lease liability principal (12.6) (5.9)
Lease interest paid (6.8) (6.6)
Bank interest paid (1.1) (0.9)
Payment of financing fees (0.6) -
Drawdown of bank loans 18.0 19.0
Repayment of bank loans (5.5) (5.0)
Net cash flow (used in)/from financing
activities (8.6) 0.6
----------------------------------------------------- ----- ---------- ----------
Net (decrease)/increase in cash and cash
equivalents (0.4) 2.3
Cash and cash equivalents at the start of
the period 7.3 3.7
----------------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at the end of
the period 6.9 6.0
----------------------------------------------------- ----- ---------- ----------
Notes to the Consolidated Financial Information
1. General information
The Directors of The Gym Group plc (the Company) and its
subsidiaries (the Group) present their interim report and unaudited
condensed consolidated financial statements (Interim Financial
Statements) for the six months ended 30 June 2022. The Group
operates low cost, high quality, 24/7, no contract gyms .
The Company is a public limited company whose shares are
publicly traded on the London Stock Exchange and is incorporated
and domiciled in the United Kingdom. The registered address of the
Company is 5th Floor, OneCroydon, 12-16 Addiscombe Road, Croydon,
CR0 0XT, United Kingdom.
The Interim Financial Statements were approved by the Board of
Directors on 4 August 2022. They have not been audited or formally
reviewed by the auditors. The financial information shown for the
half year periods ended 30 June 2022 and 30 June 2021 does not
constitute statutory financial statements within the meaning of
section 434 of the Companies Act 2006. The information shown for
the year ended 31 December 2021 has been extracted from the Group's
Annual Report and Accounts for the year ended 31 December 2021 and
does not constitute statutory accounts within the meaning of
section 434 of the Companies Act 2006.
The Interim Financial Statements should be read in conjunction
with the Annual Report and Accounts for the year ended 31 December
2021. The Consolidated Financial Statements for the year ended 31
December 2021 have been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for
2021 was unqualified and did not contain a statement under 498(2)
or (3) of the Companies Act 2006.
Further copies of the Interim Financial Statements and Annual
Report and Accounts may be obtained from the address above.
2. Basis of preparation
The Interim Financial Statements have been prepared in
accordance with the Listing Rules and the Disclosure Guidance and
Transparency Rules of the United Kingdom Financial Conduct
Authority (where applicable), international accounting standards in
conformity with the requirements of the Companies Act 2006, and
United Kingdom adopted international accounting standards,
including IAS 34. The accounting policies applied are consistent
with those described in the Annual Report and Accounts for the year
ended 31 December 2021 of the Group. The Group has not
early-adopted any other standard, interpretation or amendment that
has been issued but is not yet effective.
The functional currency of each entity in the Group is pounds
sterling. The Interim Financial Statements are presented in pounds
sterling and all values are rounded to the nearest one hundred
thousand pounds, except where otherwise indicated.
The Interim Financial Statements have been prepared on a going
concern basis under the historical cost convention as modified by
the recognition of derivative financial instruments, financial
assets and other financial liabilities at fair value through the
profit and loss and the recognition of financial assets at fair
value through other comprehensive income.
The Interim Financial Statements provide comparative information
in respect of the previous period. In addition, the Group presents
an additional statement of financial position at the beginning of
the preceding period when there is a retrospective application of
an accounting policy, a retrospective restatement, or a
reclassification of items in Financial Statements.
During the prior year, the Directors decided to change the way
they present the consolidated income statement to provide the
reader with supplemental data relating to the financial condition
and results of operations. The principal changes that have been
adopted are:
-- Presentation of the profits/losses in a three-column format showing
'Underlying', 'Non-underlying' and 'Total' numbers. Items of
income and expense that are material by their size and/or nature
and are not considered to be incurred in the normal course of
business, are classified as non-underlying items on the face
of the income statement within their relevant category. Further
details are provided in note 4.
-- Presentation of 'Operating expenses before depreciation, amortisation
and impairment' and 'Depreciation, amortisation and impairment'
separately on the face of the consolidated income statement;
previously both were summed together and shown as 'Administration
expenses'. As a result of this change, expenses are now presented
on the face of the income statement as a mixture of by nature
and by function.
The Group presents profits/losses for the period before
non-underlying items as the Directors believe that this shows more
clearly the trends in the Group's business and gives an indication
of the Group's ongoing sustainable performance. The Directors
believe the changes above also provide the reader with additional
and relevant information as well as providing better linkage with
the numbers discussed in the Financial Review by simplifying the
reconciliation to Group Adjusted EBITDA Less Normalised Rent.
Going concern
In assessing the going concern position of the Group for the
period ended 30 June 2022, the Directors have considered the
following:
-- the Group's trading performance in the first half of 2022;
-- future expected trading performance to December 2023 (the going
concern period), including membership levels and behaviours;
-- the Group's site rollout programme; and
-- the Group's financing arrangements and relationship with its
lenders and shareholders
The first half of 2022 has been a period of strong recovery for
The Gym Group with member numbers growing from 718,000 at 31
December 2021 to 790,000 at 30 June 2022, up 10% . We opened seven
new gyms in the first half of 2022, all of which are performing
well; and we remain on track to open a further 21 in the second
half of the year, including the conversion of the three sites
trading under the Fitness First brand that were acquired in March
2022. All new sites are expected to meet the Group's 30%+ return on
invested capital (ROIC) threshold on maturity.
To facilitate the accelerated growth, in March 2022, we agreed
revised terms on our banking facility from our lending banks. These
amendments provide the Group with greater flexibility around
capital expenditure and finance lease arrangements.
As at 30 June 2022, the Group had Non-Property Net Debt of
GBP57.6m (including finance leases) and GBP34.9m of headroom under
its GBP92.5m total lending facilities (GBP80m Revolving Credit
Facility (RCF) and GBP12.5m finance leases). The RCF is subject to
quarterly financial covenant tests on leverage (Non-Property Net
Debt : Group Adjusted EBITDA Less Normalised Rent) and fixed charge
cover. In addition, the Group is subject to a minimum liquidity
covenant.
The Group's base case forecast for the period to 31 December
2023 anticipates continued recovery of membership and growth in
yields, together with the successful execution of the new site
rollout plan. Under this scenario, all financial covenants are
passed and the Group can operate within its financing
facilities.
The Directors have also considered a downside scenario which
anticipates a significant reduction in membership growth throughout
the period (resulting in 16% lower closing membership at the end of
2023 compared to the base case), and a reduced new site rollout
programme. Under this scenario, all financial covenants continue to
be passed and the Group continues to operate within its financing
facilities.
In the event that trading deteriorated further than assumed in
the downside scenario, mitigating actions that the Directors would
introduce include (i) further slowing down of the Group's new site
rollout plan; (ii) reducing discretionary and controllable
operating costs, marketing and maintenance capital expenditure;
(iii) careful management of supplier payments; (iv) discussions
with lenders to secure additional debt facilities and/or covenant
waivers; and (v) the potential to raise additional funds from third
parties.
Conclusion
The Board has reviewed the financial forecasts and downside
scenario of the Group and has a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the period to 31 December 2023. As a result, the Directors
continue to adopt the going concern basis in preparing these
Interim Financial Statements. In making this assessment,
consideration has been given to the current and future expected
trading performance; the Group's current and forecast liquidity
position; the support received to date from our lenders and
shareholders; and the mitigating actions that can be deployed in
the event of reasonable downside scenarios.
New and amended IFRS standards that are effective for the
current year
Reference to the Conceptual Framework - Amendments to IFRS 3
The amendments replace a reference to a previous version of the
IASB's Conceptual Framework with a reference to the current version
issued in March 2018, without significantly changing its
requirements.
The amendments add an exception to the recognition principle of
IFRS 3 Business Combinations to avoid the issue of potential 'day
2' gains or losses arising for liabilities and contingent
liabilities that would be within the scope of IAS 37 Provisions,
Contingent Liabilities and Contingent Assets or IFRIC 21 Levies, if
incurred separately. The exception requires entities to apply the
criteria in IAS 37 or IFRIC 21, respectively, instead of the
Conceptual Framework, to determine whether a present obligation
exists at the acquisition date. The amendments also add a new
paragraph to IFRS 3 to clarify that contingent assets do not
qualify for recognition at the acquisition date.
These amendments had no material impact on the Interim Financial
Statements of the Group.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test
for derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when
assessing whether the terms of a new or modified financial
liability are substantially different from the terms of the
original financial liability. These fees include only those paid or
received between the borrower and the lender, including fees paid
or received by either the borrower or lender on the other's behalf.
There is no similar amendment proposed for IAS 39 Financial
Instruments: Recognition and Measurement.
This amendment had no material impact on the Interim Financial
Statements of the Group.
Other standards and amendments that became effective in the
period, but that do not apply to the Interim Financial Statements
of the Group are:
-- Property, Plant and Equipment: Proceeds before Intended Use -
Amendments to IAS 16
-- Onerous Contracts - Costs of Fulfilling a Contract - Amendments
to IAS 37
-- IFRS 1 First-time Adoption of International Financial Reporting
Standards - Subsidiary as a first-time adopter
-- IAS 41 Agriculture - Taxation in fair value measurements.
3. Revenue
The principal revenue streams for the Group are membership
income, rental income from personal trainers and ancillary income.
The majority of revenue is derived from contracts with customers
and all revenue arises in the United Kingdom.
Disaggregation of revenue
In the following table, revenue is disaggregated by major
products and service lines and timing of revenue recognition.
6 months 6 months
ended ended
30 June 2022 30 June 2021
Unaudited Unaudited
GBPm GBPm
----------------------------------------- -------------- --------------
Major products/service lines
Membership income 79.1 28.6
Rental income from personal trainers 3.9 0.4
Ancillary income 1.2 0.3
----------------------------------------- -------------- --------------
84.2 29.3
----------------------------------------- -------------- --------------
Timing of revenue recognition
Products transferred at a point in time 1.6 0.5
Products and services transferred over
time 82.6 28.8
----------------------------------------- -------------- --------------
84.2 29.3
----------------------------------------- -------------- --------------
Contract liabilities at 30 June 2022 amounted to GBP8.3m (H1
2021: GBP7.5m).
The Group operates in a market that experiences a small degree
of seasonality. The majority of members join during the first
quarter of the year as a result of a post-Christmas drive to
improve fitness levels and general health. A second wave of new
joiners is experienced in September and October as students return
to university, with quieter periods experienced during the school
holidays. Marketing expenditure is phased towards peak joining
periods, particularly the January/February campaign.
4. Non-underlying items
6 months 6 months
ended ended
30 June 2022 30 June 2021
Unaudited Unaudited
GBPm GBPm
------------------------------------------------ -------------- --------------
Affecting operating expenses before
depreciation, amortisation and impairment
Costs of major strategic projects and
investments 1.3 -
Restructuring and reorganisation (income)/costs
(including site closures) (0.1) 0.1
Total affecting operating expenses before
depreciation, amortisation and impairment 1.2 0.1
Affecting depreciation, amortisation
and impairment
Amortisation of business combination
intangible assets 0.1 -
------------------------------------------------ -------------- --------------
Total affecting depreciation, amortisation
and impairment 0.1 -
------------------------------------------------ -------------- --------------
Total affecting operating expenses(2) 1.3 0.1
Affecting finance costs
Remeasurement of borrowings 2.6 1.0
Total affecting finance costs 2.6 1.0
Total all non-underlying items before
tax 3.9 1.1
Tax on non-underlying items (1.0) (0.2)
------------------------------------------------ -------------- --------------
Total non-underlying charge in income
statement 2.9 0.9
------------------------------------------------ -------------- --------------
(2) Depreciation, amortisation and impairment are non-cash
items. Of the other items affecting operating expenses, GBP1.1m are
cash outflows (H1 2021: cash outflow of GBPnil).
The costs of major strategic projects and investments in the
period of GBP1.3m relate predominantly to the brand transformation
project which is progressing to plan. We expect the total costs in
2022 to be in the region of GBP7m, the majority of which will be
capital expenditure for site signage.
Restructuring and reorganisation costs in the period include the
costs of restructuring the Group's marketing department, together
with the costs and lease surrender income associated with the
closure of a small number of gyms.
Non-underlying costs affecting depreciation, amortisation and
impairment in the period amounted to GBP0.1m (2021: GBPnil) and
relate to the amortisation of business combination intangibles
acquired as part of the Lifestyle and easyGym acquisitions .
Non-underlying items affecting finance costs amounted to GBP2.6m
in the period (2021: GBP1.0m) and reflect the remeasurement of the
Group's Revolving Credit Facility (RCF) following the changes
agreed with the lenders in the period .
T he tax credit arising on the Group's non-underlying items is
calculated at the tax rate expected to be in place when the losses
are utilised.
5. Taxation
The tax credit in the Consolidated Statement of Comprehensive
Income of GBP4.2m (H1 21: credit of GBP6.7m) has been calculated
based on management's best estimate of the annual income tax rate
expected for the full financial year, applied to the loss before
tax for the half year ended 30 June 2022.
The effective tax rate on the statutory loss before tax for the
period ended 30 June 2022 was 48.8% (H1 2021: 23.5%).
The net deferred tax asset recognised at 30 June 2022 was
GBP20.4m (31 December 2021: GBP16.1m; 30 June 2021: GBP14.7m). This
comprised deferred tax assets in respect of all tax losses and
other timing differences where the Directors believe it is probable
that these will be recovered within reasonable future periods. At
each of 30 June 2022, 31 December 2021 and 30 June 2021, there were
no unrecognised deferred tax assets relating to unrecognised tax
losses.
6. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of ordinary shares outstanding during the period, excluding
unvested shares held pursuant to The Gym Group plc Share Incentive
Plan, The Gym Group plc Performance Share Plan, The Gym Group plc
Restricted Stock Plan, The Gym Group plc Long Service Award Plan
and The Gym Group plc Save as You Earn Plan.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. During the period ended
30 June 2022, the Group had potentially dilutive shares in the form
of share options and unvested shares issued pursuant to The Gym
Group plc Share Incentive Plan, The Gym Group plc Performance Share
Plan, The Gym Group plc Restricted Stock Plan, The Gym Group plc
Long Service Award Plan and The Gym Group plc Save as You Earn
Plan. As the Group is in a loss-making position, all potential
dilutive share options will not be dilutive.
6 months ended 6 months ended
30 June 2022 30 June 2021
Unaudited Unaudited
------------------------------------------- --------------- ---------------
Loss (GBPm)
Loss for the period attributable to
equity shareholders (4.4) (21.8)
Adjustment for non-underlying items 2.9 0.9
------------------------------------------- --------------- ---------------
Adjusted loss for the period attributable
to equity shareholders (1.5) (20.9)
Weighted average number of shares
Basic and diluted weighted average
number of shares 176,618,656 165,857,174
Earnings per share (p)
Basic and diluted loss per share (2.6) (13.1)
Adjusted basic and diluted loss per
share (0.8) (12.6)
------------------------------------------- --------------- ---------------
At 30 June 2022, 7,443,898 share awards (H1 2021: 6,593,345)
were excluded from the diluted weighted average number of ordinary
shares calculation because their effect would be anti-dilutive.
7. Acquisition of three sites trading under the Fitness First brand
On 22 March 2022, the Group acquired the trade and assets of
three sites trading under the Fitness First brand. The property
lease agreements in respect of these gyms are being transferred to
the Group and the gyms will be rebranded to operate under The Gym
Group brand. The details of the transaction, the purchase
consideration, the net assets acquired, and the preliminary
goodwill arising are as follows:
Fair value
recognised
on acquisition
GBPm
Assets
Intangible assets 0.3
Property, plant and equipment 1.1
Right-of-use assets 3.6
Deferred tax assets 0.6
------------------------------------------------- ----------------
5.6
Liabilities
Trade and other payables (0.5)
Provisions (0.4)
Lease liabilities (3.4)
(4.3)
Total identifiable net assets at fair value 1.3
------------------------------------------------- ----------------
Goodwill arising on acquisition 4.1
Purchase consideration paid - satisfied by cash 5.4
Net cash flow arising on acquisition
Cash consideration (5.4)
------------------------------------------------- ----------------
Net cash outflow (5.4)
------------------------------------------------- ----------------
The fair values of assets acquired are provisional and will be
finalised within 12 months of the acquisition date.
A reconciliation of the carrying amount of goodwill at the
beginning and end of the reporting period is presented below:
Goodwill
GBPm
Gross and net carrying amount
At 1 January 2022 77.7
Acquisition of sites trading under the Fitness First
brand 4.1
At 30 June 2022 81.8
------------------------------------------------------ ---------
The Group measured the acquired lease liabilities using the
present value of the remaining lease payments at the date of
acquisition. The right-of-use assets were measured at an amount
equal to the lease liabilities.
The sites contributed revenues of GBP0.6m and net loss of
GBP0.1m to the Group's results for the period from 22 March 2022 to
30 June 2022. The revenues and net loss that would have been
recorded had the sites been acquired on 1 January 2022 have not
been disclosed as the relevant information is not available.
The goodwill recognised is primarily attributed to the synergies
and economies of scale expected from combining each gym within the
Group's operations, the premium associated with advantageous site
locations, potential growth opportunities offered by each gym and
the assembled workforce. It will not be deductible for tax
purposes.
Acquisition-related costs of GBP1.3m were incurred during the
second half of 2021 and were treated as non-underlying items in the
financial statements. No additional costs have been recognised in
H1 2022.
8. Property, plant and equipment
Fixtures,
Assets Leasehold fittings Gym and Computer
under construction improvements and equipment other equipment equipment Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- -------------------- -------------- --------------- ----------------- ----------- --------
Cost
----------------------------------------------------------------------------------------------------------------------
At 1 January
2021 2.3 191.9 11.3 84.5 3.6 293.6
Additions 1.9 16.4 0.2 2.5 0.7 21.7
Disposals (0.1) (1.5) - (0.5) - (2.1)
Transfers (2.0) 1.9 - 0.1 - -
At 31 December
2021 2.1 208.7 11.5 86.6 4.3 313.2
Additions 5.1 7.1 0.1 0.8 0.4 13.5
Business
combinations - 1.1 - 0.1 - 1.2
Transfers (1.2) 1.1 - 0.1 - -
At 30 June
2022 6.0 218.0 11.6 87.6 4.7 327.9
--------------------- -------------------- -------------- --------------- ----------------- ----------- --------
Accumulated depreciation
----------------------------------------------------------------------------------------------------------------------
At 1 January
2021 - (63.0) (8.0) (48.4) (2.9) (122.3)
Charge for
the year - (14.6) (1.1) (7.4) (0.5) (23.6)
Impairment - (2.8) - (0.4) - (3.2)
Disposals - 1.2 - 0.3 - 1.5
At 31 December
2021 - (79.2) (9.1) (55.9) (3.4) (147.6)
Charge for
the period - (7.9) (0.4) (4.9) (0.3) (13.5)
At 30 June
2022 - (87.1) (9.5) (60.8) (3.7) (161.1)
--------------------- -------------------- -------------- --------------- ----------------- ----------- --------
Net book value
----------------------------------------------------------------------------------------------------------------------
At 31 December
2021 2.1 129.5 2.4 30.7 0.9 165.6
At 30 June
2022 6.0 130.9 2.1 26.8 1.0 166.8
--------------------- -------------------- -------------- --------------- ----------------- ----------- --------
Business combinations includes GBP0.1m of SDLT payable in
relation to the leasehold improvements acquired.
Included within additions for the period are GBP0.4m of capital
contributions from landlords not yet received (31 December 2021:
GBP0.1m) and GBP1.2m of accrued capital expenditure (31 December
2021: GBP2.2m).
Outstanding capital commitments at 30 June 2022 totalled GBP8.6m
(31 December 2021: GBP2.9m).
9. Right-of-Use Assets and Leases
Amounts recognised in the consolidated statement of financial
position in respect of right-of-use assets are as follows:
Property Non-property
leases leases Total
GBPm GBPm GBPm
-------------------------- --------- ------------- --------
Cost
-------------------------- --------- ------------- --------
At 1 January 2021 345.4 - 345.4
Additions 42.8 7.2 50.0
At 31 December 2021 388.2 7.2 395.4
Additions 16.8 1.8 18.6
Business combinations 3.6 - 3.6
Disposals (0.8) - (0.8)
At 30 June 2022 407.8 9.0 416.8
-------------------------- --------- ------------- --------
Accumulated depreciation
-------------------------- --------- ------------- --------
At 1 January 2021 (89.8) - (89.8)
Charge for the year (23.3) (0.2) (23.5)
Impairment (0.9) - (0.9)
At 31 December 2021 (114.0) (0.2) (114.2)
Charge for the period (12.6) (0.7) (13.3)
At 30 June 2022 (126.6) (0.9) (127.5)
-------------------------- --------- ------------- --------
Net book value
-------------------------- --------- ------------- --------
At 31 December 2021 274.2 7.0 281.2
At 30 June 2022 281.2 8.1 289.3
-------------------------- --------- ------------- --------
The split of lease liabilities between current and non-current
is as follows:
31 December
30 June 2022 30 June 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
------------------------- ------------- ------------- ------------
Current 25.1 25.8 27.0
Non-current 320.0 287.8 309.3
------------------------- ------------- ------------- ------------
Total Lease liabilities 345.1 313.6 336.3
------------------------- ------------- ------------- ------------
The maturity analysis of lease liabilities is as follows:
31 December
30 June 2022 30 June 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
----------------------------- ------------- ------------- ------------
Within one year 41.1 39.5 39.1
Greater than one year but
less than two years 40.4 33.7 37.8
Greater than two years but
less than three years 38.8 33.7 37.8
Greater than three years
but less than four years 37.3 33.5 35.4
Greater than four years but
less than five years 37.4 33.0 35.5
Five years or more 245.3 227.8 242.7
440.3 401.2 428.3
Less: unearned interest (95.2) (87.6) (92.0)
----------------------------- ------------- ------------- ------------
Total Lease liabilities 345.1 313.6 336.3
----------------------------- ------------- ------------- ------------
During the period, the Group entered into additional leasing
arrangements with a total available facility of GBP3.0m to finance
the fit-out of new gyms, increasing the total available facilities
to GBP12.5m (31 December 2021: GBP9.5m; 30 June 2021: GBP4.0m). As
at 30 June 2022, the amount outstanding on these facilities was
GBP7.0m (31 December 2021: GBP6.4m; 30 June 2021: GBP1.4m).
The Group has benefited from unconditional waivers of lease
payments and additional rent-free benefits on one property (H1
2021: six properties) in exchange for the removal of break clauses
without modification to the original lease contract. The waiver of
lease payments of GBP0.1m (H1 2021: GBP1.1m) has been included as a
credit within underlying operating expenses and a reduction in the
lease liability, in line with the IASB practical expedient for
COVID-19-related rent concessions in relation to IFRS 16
Leases.
10. Borrowings
31 December
30 June 2022 30 June 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
--------------------------------- ------------- ------------- ------------
Revolving credit facility 57.5 65.0 45.0
Remeasurement adjustment
& unamortised loan arrangement
fees 1.2 (0.7) (0.7)
--------------------------------- ------------- ------------- ------------
58.7 64.3 44.3
--------------------------------- ------------- ------------- ------------
The Group has in place a Revolving Credit Facility (RCF) which
is syndicated to a three-lender panel of NatWest, HSBC and Banco de
Sabadell. Until May 2022, the Group had GBP100.0m of available
facilities under the RCF and it was due to mature in 2023.
In May 2022, the Group made changes to its RCF facility. These
included a one-year extension of Facility A (GBP70.0m) to October
2024; the cancellation in full of the temporary Facility B (GBP30m)
and replacement with a new GBP10.0m Facility to October 2024; and
further relaxation of finance lease restrictions.
The funds borrowed under the RCF bear interest at a minimum
annual rate of 2.85% (H1 2021: 2.60%) above the Sterling Overnight
Index Average (SONIA) plus a credit adjustment spread.
The average interest rate paid in the period on drawn funds was
3.23% (H1 2021: 2.64%). Following the changes made in May 2022 to
the facility, undrawn funds currently bear interest at a minimum
annual rate of 1.54% (H1 2021: 0.91%).
The Group's borrowings are held at amortised cost using the
effective interest method. Each reporting period, the Group reviews
its cash flow forecasts and if these have changed since the
previous reporting period, the borrowings are remeasured using the
original effective interest rate. Any remeasurement of borrowings
is treated as non-underlying and excluded from adjusted
earnings.
The RCF is subject to financial covenants relating to leverage,
fixed charge cover and liquidity.
The proportion of the RCF that was undrawn and available at 30
June 2022 was GBP22.5m (31 December 2021: GBP55.0m; 30 June 2021:
GBP35.0m).
Non-Property Net Debt at the period end was as follows:
31 December
30 June 2022 30 June 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
--------------------------------- ------------- ------------- ------------
Borrowings 57.5 65.0 45.0
Less: Cash and cash equivalents (6.9) (6.0) (7.3)
--------------------------------- ------------- ------------- ------------
Non-Property Net Debt excluding
non-property leases 50.6 59.0 37.7
Non-property leases (note
9) 7.0 1.4 6.4
--------------------------------- ------------- ------------- ------------
Non-Property Net Debt 57.6 60.4 44.1
--------------------------------- ------------- ------------- ------------
11. Financial instruments and investments in financial
assets
IFRS 7 requires fair value measurements to be recognised using a
fair value hierarchy that reflects the significance of the inputs
used in the value measurements:
-- Level 1: inputs are quoted prices in active markets
-- Level 2: a valuation that uses observable inputs for the asset
or liability other than quoted prices in active markets
-- Level 3: a valuation using unobservable inputs i.e. a valuation
technique
There were no transfers between levels throughout the periods
under review.
With the exception of the Group's borrowings, the carrying value
of financial assets and liabilities equal their fair value. The
carrying value of borrowings of GBP58.7m (June 2021: GBP64.3m;
December 2021: GBP44.3m) have a fair value of GBP57.5m (June 2021:
GBP65.0m; December 2021: GBP45.0m). The fair values of financial
derivatives and borrowings have been calculated by discounting the
future cash flows at prevailing market interest rates. Other than
the fair value of financial assets at fair value through profit and
loss that are categorised as Level 3, the fair value of all other
financial assets and liabilities are categorised as Level 2.
In February 2020, the Group purchased convertible loan notes in
Fiit Limited for cash consideration of GBP1.0m. These notes are
measured at fair value through profit and loss and the carrying
value at 30 June 2022 was GBP1.0m (31 December 2021 and 30 June
2021: GBP1.0m). This is a level 3 valuation under the fair value
hierarchy and was determined based on the performance of the
business post-acquisition against the business plan produced at the
time of the investment. The range of sensitivity in the valuation
of 30 June 2022 to reasonably possible changes in the assumptions
used is not considered to be material.
12. Issued capital
The total number of shares in issue as at 30 June 2022 was
177,942,272 (31 December 2021: 177,519,174).
13. Long-term employee incentive costs
The Group operates share-based compensation arrangements under
The Gym Group plc Share Incentive Plan (SIP), The Gym Group plc
Performance Share Plan (PSP), The Gym Group plc Restricted Stock
Plan (RSP), The Gym Group plc Long Service Award Plan and The Gym
Group plc Save as You Earn Plan . During the period, a total of
1,517,061 shares were granted under the PSP, the RSP and the SIP.
These grants and their vesting criteria are similar in nature to
those awarded during 2021.
For the period ended 30 June 2022, the Group recognised a total
charge of GBP0.6m (H1 2021: GBP1.6m) in respect of the Group's
share based long-term incentive plans and related employer's
national insurance.
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END
IR EAPPDELFAEFA
(END) Dow Jones Newswires
August 04, 2022 02:00 ET (06:00 GMT)
Grafico Azioni The Gym (LSE:GYM)
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Grafico Azioni The Gym (LSE:GYM)
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