Low cost fitness provider Gym Group (GYM) today provided a trading update for the six months to 30 June, reporting revenue up 27% to £74m, and said it was on track to deliver on its full year target, giving the shares a leg-up of 4% to 256p.
The company opened eight new sites and expects to complete another seven to 12 over the remaining six months as it continues to grow market share, which rose from 22.4% in June 2018 to 24% at the half year.
PLENTY OF GROWTH POTENTIAL
A study by consultants Price Waterhouse estimates that the UK low-cost gym market has the potential to double by 2026. In other markets such as Belgium and Germany, the penetration of low-cost gyms has reached around 70% compared with 45% in the UK.
Importantly, both membership and revenues per member were higher, with total membership up 10.6% to 796,000, and average revenues per month per member up 5.6% to £15.47.
A big contributor to improving revenues per customer has been the impact of rolling out the LIVE IT premium product, which now has 135,000 members, or 16.9% of the total, up from 11.7% six months ago.
The product gives members access to all Gym Group nationwide, unlimited fitness and body-composition measurements as well as discounts and perks.
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The nationwide roll-out of the new personal trainer model was implemented in March and is running to plan to convert all the gyms by September.
The idea is to attract the best trainers to enhance the customer experience and the early feedback shows that customer satisfaction scores have improved.
The company launched its ‘First Steps’ campaign in May in an attempt to cater for the next generation of gym users. It offers 16 to 18 year-olds free off-peak membership during the summer break, with the aim to be to sign them up for the new term starting in September. The average age of Gym’s customers is currently around 32.
