- Full-year profit above top end of forecasts
- 2025 profit to be above top end
- Site openings to accelerate
Low-cost gym operator GYM Group (GYM) revealed that positive trading momentum has continued into the second half, with full-year profit now expected to be above consensus analyst estimates.
Mr Market gave the pre-close trading update a thumbs-up with the shares jumping as much as 10% before settling around 9p or 6.4% higher at 150.8p.
Continued business momentum has seen the shares rise 42% over the last year, easily outstripping the 8% gain in the FTSE-All Share index.
WHAT DID THE COMPANY SAY?
CEO Will Orr commented: ‘We have delivered strong progress and momentum in our Next Chapter growth plan, that will result in FY24 profits ahead of the top end of previous guidance.
‘There is plenty more still to come as we execute our plan, and we look to 2025 with confidence. We are well prepared for our key member recruitment period in the current quarter and beyond, with our strengthening new site pipeline and our flexible, high value, low-cost offer making gym membership more accessible for all.’
Revenue for the year to 31 December increased 11% to £226.3 million, above consensus estimates, driven by 7% growth in like-for-like sales and a 7% increase in average revenue per member per month to £20.81.
Group adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) less normalised rent is expected to be above market forecasts of between £42.5 million and £45.5 million.
The company opened 12 sites during the year, the top end of the 10 to 12 guided range and plans to accelerate openings in 2025 to between 14 and 16 sites, all financed from internally generated cash, putting the group on target to deliver 50 additional sites over three years.
Despite an estimated £1.3 million impact from the Autumn Budget, group EBITDA less normalised rent for 2025 is expected to be above the market consensus range of £47.2 million to £49.7 million.
Shore Capital’s Greg Johnson raised his 2024 and 2025 EBITDA forecast by £2 million to £46 million and £1 million to £50 million, respectively.
‘With underlying cost inflation set to benefit from lower utility costs, we believe our estimates can be achieved with circa 3% like-for-like revenue growth, with a proportion of this arguably baked in from yield progression over the last year, and contribution from ongoing expansion,’ explained Johnson.
