The Gym Group #GYM was floated on the AIM market in November 2015 at a price of 195p / share. I've had this company on my watch list since early last year, I thought I had missed the opportunity to invest as the share price moved up to a high of 343p in September of last year before succumbing to the overall market sell off in the final quarter of 2018.
Merian Global Investors has today announced reducing its holding from 5.81% to below 5% this may explain the continued price weakness in 2019.

Current Price 207p
Mkt. Cap. £286m
EV £307m
PER 17.5
Div Yield 0.86%

The Gym Group #GYM is the second largest low cost 24/7 hour gym operator in the UK. Their business model is to rapidly expand both organically by opening new (15 – 20 gyms/year) and by opportunistic purchase and rebranding such as the acquisition and conversion of 13 “easyGym's” purchased in July of 2018.

The company aims to maximise on space and economy of scale by getting rid of non productive areas such as foyers and dining areas and concentrating on equipment space, these are generally spacious gyms that can accommodate high membership numbers. Current membership is £15/month with no upfront fees and no contract so can be cancelled with no notice required.


The market is expected to polarize over the next few years into low cost and more expensive gyms.
#GYM's main rival is the privately owned Puregym which has a similar charging cost and structure and owns over 200 gyms in the UK.

Higher end gyms tend to create life style environments such as swimming pools, saunas, squash courts and dining areas etc. which comes at a cost of 4 x or greater.

The mid market is mainly made up from private gyms and municipally controlled such as the not for profit Greenwich leisure (GLL) which operates 194 gyms for local authorities. As a guide my local authority charge a £30 joining fee and £44/month membership for single rolling DD payment. I think that small private gyms will find it very difficult to survive in this relatively new market of large low cost gyms.

As of 2018 there are estimated just over 7000 gyms, 9.9m members with a total market value of £4.9bn in…

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