- The Gym Group is looking to open ten to 12 new locations this year
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The Gym Group is looking to open up to 12 new locations this year as part of expansion plans under its new “next chapter” strategy.
The group plans to open around 50 new sites over the next three years, it told shareholders on Wednesday, with an average return on invested capital of 30 percent.
The Gym Group cited analysis by PwC suggesting there is scope for between 600 and 850 new gyms across the UK, but did not reveal the locations of the proposed new gyms.
The average price of a standard membership at The Gym Group increased to £23.16 in December 2023, compared to £21.49 in December 2022.
New gyms: The Gym Group is looking to open ten to 12 new locations this year
Signup prices for new members increased, while more users signed up for the group’s premium membership offerings during the period, demonstrating strong demand.
The Gym group shares rose 5.29 per cent or 5.8 pence to 115.40 pence on Wednesday, after falling more than 10 per cent in the last year.
The group reported earnings before interest, tax, depreciation and amortization for the year of £75.5 million, up six per cent year-on-year.
It reported a pre-tax statutory loss of £8.4m, an improvement on the £19.3m loss reported last year. Its adjusted annual loss before tax was £5.5 million.
Revenue for the year reached £204 million, up 18 percent from £172.9 million in 2022.
The group closed the year with 850,000 members, up 4 percent from 2022, while average membership for the entire year was 8 percent ahead of the previous year.
He added: “Average revenue per member per month increased 9 per cent on the year to £19.50 as we continue to optimize our core tariff and drive penetration of our premium subscription product.”
Will Orr, group chief executive, said: “We have maintained positive revenue momentum throughout the second half to deliver results that have offset cost inflation, in line with our guidance.”
‘With a strong start to 2024 and clear signs that demand for health and fitness has never been stronger, these are solid foundations on which to build our Next Chapter growth plan.
‘Over the next three years, we aim to strengthen the performance of our core business and accelerate the launch of The Gym Group site. “There remains considerable scope for low-cost gyms in the UK and we are fully focused on our goal of making high-value, low-cost fitness even more accessible to everyone.”
Russell Pointon, consumer director at Edison Group, said: ‘CEO Will Orr spoke of the “strong foundations” reflected in the results, which will underpin the recently unveiled Next Chapter growth plan.
‘This initiative aims to optimize the profitability of existing assets, expand the footprint with the addition of 10 to 12 quality sites in 2024 and the possibility of adding many more thereafter, and explore new revenue streams.
‘Looking ahead, 2024 is off to a promising start, reflected in a 12 per cent increase in LFL revenue and 7 per cent growth in membership, reaching 909,000 in February.
“If The Gym Group executes its growth plan effectively, it will be able to drive sustainable profitability and cash generation, positioning it for continued success in the competitive fitness industry landscape.”