'Muscle in on growth': Jefferies starts Basic Fit, Gym Group with 'buy'

Basic-Fit

16/02/2022 09:49

** Jefferies initiates Dutch discount gym chain Basic Fit
 BFIT.AS  and Britain's Gym Group  GYM.L  with "buy", saying
heightened interest in health and post-COVID wellbeing fuels a
growing market for gyms, especially for value operators 
    ** Jefferies welcomes Basic Fit's target to grow its network
to 3,000-3,500 clubs by 2030; "long duration, visible,
self-funded, high growth pathway should command a premium
valuation", it says
    ** As the number two value operator in Britain, Gym Group is
well placed to capture market share from the mid-market and roll
out into white space, the broker adds
    ** According to Jefferies, new site opportunities will
supply more aggressive roll-outs, helped by lower property costs
due to reduced competition from retail 
    ** The brokerage says both operators are taking share by
expanding markets, with the option for "no fixed contract"
attracting new customers
    ** At the same time, they are taking market share from
existing mid/upper operators, it adds
    ** The brokerage also notes a nationwide or "clustered" gym
network permits members to mirror hybrid working, with gyms
close to offices and homes

 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))