TIDMGYM
RNS Number : 7470F
Gym Group PLC (The)
09 November 2022
9 November 2022
The Gym Group plc
Trading Update
RESILIENT PERFORMANCE WITH FURTHER MEMBERSHIP AND YIELD
GROWTH
The Gym Group plc, ('The Gym Group', or 'the Company') the
nationwide operator of 224(1) low cost, high quality, 24/7 gyms,
announces the following trading update for the four months ended
31st October 2022.
Key highlights
-- Membership increased through the period, reaching 838,000 at
31st October 2022, an increase of 16.7% from the end of last
year (Dec 2021: 718,000)
-- Revenue for the ten months ended 31st October 2022 was GBP143.2m,
up 78% versus the prior year (10 months October 2021: GBP80.5m)
-- Like for like revenue in the majority of the pre-Covid mature
estate (sites open up to end of 2018) was 93% in October 2022
compared to October 2019; however, performance in 16 workforce-dependent
sites continues to be significantly impacted by changes in working
practices
-- The Company remains on track to achieve its target of 28 new
openings in 2022 and 25-30 new openings in 2023
-- Following tight cost control, leading to strong margins and cash
flow in the period, Non-Property Net Debt at the end of October
2022 was GBP68.5m. The Company intends to remain within its stated
guidance of 1.5-2.0x Non-Property Net Debt : Group Adjusted EBITDA
Less Normalised Rent
-- We continue to manage our utility and other costs carefully.
Energy volumes are 63% hedged until the end of 2023
Business performance
The business has continued to make good progress against its
long-term strategy. Performance in 138 of our 154(2) mature sites
has been encouraging and the 47 new gyms opened between 2019 and
2021 and the 23(3) gyms opened in 2022 are maturing well, in line
with expectations. However, as has been well publicised, there has
been a structural shift in working patterns which has impacted the
performance of 16 workforce-dependent sites.
Like for like revenue in the pre-Covid mature estate of 138
sites was broadly back in line with pre-Covid levels in October (at
93%) compared to the same period in 2019. Performance in the 16
workforce-dependent sites however, was significantly below these
levels. Total like for like revenue in the pre-Covid mature estate
as a whole was at 90% compared to the same period in 2019.
Value will always be a core aspect of The Gym Group's market
leading customer proposition, and we are the lowest cost,
nationwide 24/7 gym operator. Good progress has been made regarding
our yield management strategy. We continued to increase yields in
the four months to October with Average Revenue per Member per
Month ('ARPMM') of GBP18.49, up from the comparable period last
year by 5.5%. We have also continued to enhance our premium price
membership product - 'Live It' - and are pleased to see a positive
response from our members. Take-up of the 'Live It' product
increased to 29.8% of our membership (June 2022: 28.7%).
During the period, we completed the rebranding of The Gym Group.
The new branding has been rolled out across the estate and the
Company's digital assets. This rebranding was accompanied by a new
creative campaign ('Gym Face') which has been deployed across all
media channels during the Autumn campaign. We are pleased and
encouraged by the feedback and positive response to this important
initiative.
The Company remains on track to deliver its rollout plan,
targeting 28 new openings in 2022 and 25-30 in 2023. To date, 23
new sites have been opened in 2022 (including three Fitness First
sites acquired); and five additional new sites are on track to open
before the end of the year. We continue to see opportunities to
take market share as disruption continues in the health and fitness
market and competitors exit.
The Company continues to maintain a tight control of costs and
has driven strong margins and cashflow in the four months ended
31st October 2022. Looking forward, energy volumes are 100% hedged
up to the end of Q1 2023; overall 63% are hedged for 2023 and our
current expectation is that utility costs will rise by GBP8-10m in
2023 compared to 2022. Despite these headwinds, the Board remains
excited about the market opportunities ahead and The Gym Group's
ability to capitalise upon them.
Richard Darwin, CEO of The Gym Group, commented:
"Against an uncertain backdrop, we are pleased to see
memberships continuing to build over the last four months
demonstrating that people are prioritising their physical and
mental health - and that gyms are an important part of the local
community.
Working patterns have continued to evolve post the pandemic and
while performance of our 16 workforce-dependent sites is
disappointing, the rest of the estate continues to recover well and
demonstrate the resilience of our business model. Having delivered
on the most ambitious rollout programme in our history to date, we
are encouraged by the momentum in the pipeline for new gyms next
year and believe that there is considerable scope for further
growth.
We are cognisant of the macro environment and continue to
monitor developments very carefully. However, the Board remains
very confident in the long-term opportunities for The Gym Group;
our value proposition has always been a competitive advantage and
we believe that in the current consumer environment, our high
quality, affordable offer will be even more compelling and
attractive."
***
A conference call for analysts and investors will be hosted by
Richard Darwin, Chief Executive, and Luke Tait, Chief Financial
Officer, at 09:00am today to discuss this statement. Please contact
thegymgroup@tulchangroup.com if you would like to attend.
For further information, please contact:
The Gym Group:
Richard Darwin, Chief Executive via Tulchan Communications
Luke Tait, Chief Financial Officer
Tulchan Communications + 44 (0) 207 353 4200
James Macey White
Elizabeth Snow
Laura Marshall
Market abuse regulation information:
The information contained in this announcement is deemed by the
Company to constitute inside information as stipulated under the UK
version of the Market Abuse Regulation (EU) No. 596/2014 as it
forms part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside
information is now considered to be in the public domain. Katy
Tucker, Company Secretary, is responsible for the release of this
announcement for the purposes of such regulation.
1 Sites as at 7th November 2022 - 202 at the start of the year
with 20 organic openings, three Fitness First sites acquired and
one closure
2 Net of one closure in the year
3 Includes the three Fitness First sites acquired
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END
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