REG - Gym Group PLC (The) - Pre-Close Trading Update and Board Changes

GYMAnnouncement

12/01/2023 07:00

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RNS Number : 5135M  Gym Group PLC (The)  12 January 2023

12 January 2023

The Gym Group plc

 

Pre-Close Trading Update and Board Changes

 

 

The Gym Group plc, ('The Gym Group', or 'the Company') the nationwide operator
of 229(1) low cost, high quality, 24/7 gyms, announces the following trading
update for the year ended 31st December 2022.

 

Financial highlights

 •    Total year-end Membership was 821,000, an increase of 14.3% from the end of
      last year (Dec 2021: 718,000); Average Members during the year were 808,000
 •    Revenue for the year amounted to £172.9m, up 63.1% versus the prior year
      (2021: £106.0m) and up 12.9% vs 2019 (2019: £153.1m)
 •    Total like-for-like revenue for the whole year in the pre-Covid mature estate
      (sites open up to end of 2018) was 90% compared to 2019. The membership
      profile during the year reflected a more normal seasonal pattern for low cost
      gyms without further post-Covid membership recovery in the second half as
      macro-economic challenges act as a headwind to underlying demand
 •    Year-end Non-Property Net Debt was £76.1m (Dec 2021: £44.1m) including
      £11.5m of finance leases. The Company intends to remain within its stated
      guidance of 1.5-2.0x Non-Property Net Debt : Group Adjusted EBITDA Less
      Normalised Rent

 

Operational highlights

 •    Site numbers increased to 229(1) (Dec 2021: 202) with 28 new openings in the
      year, marking the highest level of new openings in a single year. Performance
      of new site openings remains in line with expectations.
 •    Average revenue per member per month for the year (ARPMM) was £17.82.  The
      ARPMM for the second half of the year was £18.30, up 4.8% on the first half
      of the year (H1 2022: £17.46) and up 4.5% on the second half of the prior
      year (H2: 2021 £17.51). LIVE IT, the premium price product, ended the year at
      29.6% of total membership (Dec 2021: 27.1%).
 •    Visit frequency and satisfaction scores remain materially higher than
      pre-Covid scores

 

Outlook

 •    We expect the current difficult macro-economic environment and consumer
      behaviour to continue and, as a result, intend to take a more measured
      approach to our new site openings in 2023
 •    The pipeline of new site opportunities remains promising, but we are planning
      for all new site growth to be self-financed in 2023; as a result, we currently
      expect up to 20 new openings in the year with a strong second half weighting
 •    Energy costs are 96% hedged until the end of 2023. Our current expectation is
      that utility costs will increase by c.£10m in 2023 compared to 2022
 •    January Membership acquisition has started in line with expectations with a
      similar profile of demand to previous early January trading periods

 

Board Changes

 •    Richard Darwin and the Board have agreed that Richard will step down as Chief
      Executive following more than seven years leading the Company as CEO and as
      CFO. During that period the Company has grown significantly from 63 to 229
      gyms nationwide today. The Board has already initiated the process to find a
      new Chief Executive. Richard will step down from the Board in due course and
      he will remain available to support the Company until July 2023.
 •    To assist with the transition, John Treharne, the founder and Chair of TGG,
      will now act as Executive Chair, working closely with the Executive Directors
      until the new CEO is appointed.

John Treharne, Chair of the Gym Group, commented:

"We are in one of the busiest times of the year for our sector.  It is clear
that even with cost-of-living pressures, many consumers regard gym membership
as essential, and they are ever more focussed on receiving value for money.
 This plays to our strengths. We will continue to grow carefully and fulfil
the Company's significant potential to the benefit of all of our stakeholders.

 

On behalf of the Board, I would like to thank Richard for his commitment and
significant contribution to TGG over many years. He has overseen significant
growth in the estate during his period as CEO. As we move forward, I am
confident that we can build on the strong foundations he has put in place to
capture the significant opportunities ahead."

 

Richard Darwin, Chief Executive Officer commented:

"It has been an honour to help The Gym Group grow into a nationally recognised
presence in affordable fitness over the last 7 years, first as CFO and then as
CEO. I am extremely proud to have navigated the business through the pandemic,
developed the brand and put in place a first-class management team with the
capability to take on this next phase of growth. For me this is the right time
to step down; TGG is a great business with enormous potential. I wish John and
everyone at TGG ongoing success."

 

***

 

For further information, please contact:

 

 The Gym Group:                       via Tulchan Communications

 John Treharne, Chair

 Richard Darwin, Chief Executive

 Luke Tait, Chief Financial Officer

 Tulchan Communications:              +44 (0) 207 353 4200

 James Macey White

 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 31 December 2022 - 202 at the start of the year with 28
organic openings including three Fitness First sites and one closure

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