The Gym: Ready to return to growth

Today, The Gym Group plc, the nationwide operator of 186 low-cost, no-contract gyms, announced its full year results for the year ended 31 December 2020. The results reflect a year of significant disruption in which the Company’s gyms were required by the UK Government to close for 45% of the trading days in the year due to COVID-19. The loss of trading days plus reduced membership levels resulted in a 47.4% reduction in revenue. Strong cost control and Government support limited EBITDA less Normalised Rent loss to GBPm 10.2. Low levels of debt and low-cost base enabled trading to be cash flow positive when gyms were open even with reduced membership levels.

Total year end members were at 578,000, a decrease of 27.2% versus prior year (2019: 794,000) due to prolonged periods of closure; average member numbers fell by 11.1% to 708,000 (2019: 796,000). Higher levels of membership retention have been seen during the current lockdown versus previous closure periods; as at 28 February 2021 membership level was 547,000 (31 December 2020: 578,000). 97% of current members say they expect to return to the gym as soon as possible, with 75% stating that fitness will be more important to them than it was pre-COVID. Gyms in England are expected to re-open on 12 April 2021 with gyms in Scotland re-opening 26 April 2021.

In 2020, eight new gyms opened increasing the total estate to 183 at December 2020. Three new sites are planned to open in April and one in May, with an additional four starting on-site imminently. In addition, The Gym’s growing pipeline has a further six leases exchanged with several more in advanced negotiations

Richard Darwin, CEO of The Gym Group, commented: “During 2020 we demonstrated the resilience of our business and its culture even in the most challenging of times. By freezing subscriptions when closed and by providing an excellent COVID-secure environment in our gyms when open, we have retained most of our members; by supporting colleagues with topped-up furlough pay, honest communications and a comprehensive wellbeing plan we have high levels of staff retention and engagement; and by managing cash carefully we will emerge from the crisis with manageable levels of debt. We are ready to start rebuilding our memberships levels and growing our estate from 12 April, extending affordable fitness at a time when health and fitness has never been more important.”

Source: The Gym Group plc
Picture: The Gym Group plc

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