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Gym Group hails reopening boom ‘outperforming’ all expectations

·2-min read
The Gym Groyp (PA)
The Gym Groyp (PA)

The Gym Group has said it plans to pursue further expansion after seeing reopening "outperform" all expectations.

The budget fitness chain, which sank to a £47 million loss in 2020 as lockdowns shuttered its sites, said new joiner rates are at "record levels" and that its total membership has increased from 547,000 at the end of February to 729,000 this week.

The company plans to take advantage of lower rents in retail parks and open at least 14 new gyms, following four recent site openings including one in Sydenham this week - an opening chief executive Richard Darwin said "shows our confidence in London".

The firm said it expects to be cash flow positive this month, and will direct this towards its new site rollout.

Darwin said the group is in discussions with banks to "increase our financial flexibility" and allow an accelerated openings programme. He said the firm is about to start work on four new gyms, has exchanged leases on another 10 sites, and is "scouring the market for more".

The CEO said: "Visits per member and new joiner sign-up rates are at record levels. With membership levels growing strongly, we are building our pipeline of new gyms to take advantage of what we see as a unique opportunity to extend affordable fitness to even more locations across the UK.

"Pre-pandemic we were opening 15-20 sites [per year], and I can see a world where we go faster than that, but clearly we need to do the financing discussions."

Net debt at the end of April was £63.1 million, plus £9.4 million in VAT and deferred rent costs, which Darwin labelled “very manageable”. Pre-pandemic The Gym Group was profitable, making a £6.2 million profit in 2019.

The group also cautioned that summer is a quieter time for its 187 gyms, and that it expects to see "limited" gains in new members over the next few months.

Shares were up 5.5% on Wednesday morning.

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