The Gym Group, a leading budget fitness centre operator in the UK, has reported a significant swing to profit in the first half of 2024.
With 240 locations across Britain, the company now expects full-year earnings to reach the upper end of market forecasts.
The Gym Group has reported a pretax profit of £0.2m for the first six months of 2024, marking a notable improvement from a £6.1m loss during the same period in 2023. Revenue increased by 12% year over year, reaching £112.1m. Membership numbers also saw a rise, up to 905,000 from 867,000.
The company anticipates full-year earnings to be at the top end of recently revised market expectations. The current analyst estimates for the firm’s EBITDA, less normalised rent, are between £42.4m and £44m.
Chief Executive Will Orr stated, “We have increased membership, revenue and profit, and our market-leading proposition is more resonant than ever in a growing market.” He confirmed the company’s target of opening around 50 new high-quality gyms over the next three years, funded from free cash flow.
He further explained, “It is all underpinned by the fact that people are becoming more informed about the benefits of fitness, with social media contributing to this awareness.”
The firm’s approach leverages free cash flow to fund expansion, aiming to balance growth with financial stability.
Operational highlights involve the launch of four new gyms, securing sites for 10 to 12 additional locations, and plans to open 15 to 20 new venues by 2025.
As the firm continues to leverage market opportunities and consumer trends, it is poised to achieve its ambitious targets and strengthen its market leadership.
The Gym Group has shown a strong recovery, marked by increased profitability and revenue growth. Its strategic initiatives and consumer focus drive optimism for continued success in the competitive fitness market.
In summary, The Gym Group has demonstrated a commendable turnaround, with robust financial performance and strategic growth plans.
The company is well-positioned to meet its full-year profit forecasts at the upper end of market expectations, driven by strong revenue growth and expansion initiatives.
