- Full year profit guidance raised
- Implies 13% profit growth
- New three-year banking facility
Low-cost gym operator GYM Group (GYM) said it expected to deliver results for the year to 31 December at the top end of market forecasts after a positive first half which saw revenue grow by 12% to £112.1 million.
Investors welcomed the positive pre-close trading update, marking the shares 6% higher to a new 12-month high of 130.2p, taking gains for the year to 26%, comfortably ahead of the 6% gain for the FTSE-All Share index.
PUMPED UP
Analysts expect 2024 EBITDA (earnings before interest, tax, depreciation, and amortisation) less normalised rent to be in the range of £38 million to £43.1 million, according to company compiled consensus data.
Delivering EBITDA at the upper end of the forecast range implies growth of around 13.4% compared with the £38 million reported in 2023.
Robust trading in the second half of 2023 has continued into 2024 with like-for-like sales growth up 9% year-on-year, tracking ahead of the 4% to 5% guidance given by management at the full-year earnings report in March.
STRONG CASH FLOW
Memberships totaled 905,000 on 30 June, equating to 4% growth compared with the first half of 2023, while average revenue per member grew 9% to £20.44.
These metrics translated into further strong cash flow in the first half with net borrowing falling to £54.6 million compared with £66.4 million on 31 December 2023.
The group successfully refinanced its bank debt after agreeing a new three-year facility comprised of a £45 million term loan and £45 million revolving credit facility, at a minimum annual interest rate of 2.75% above sterling overnight borrowing rates.
ACCELERATED SITE OPENINGS
The group opened four new gyms in the first half, taking the total estate to 237 sites, and it remains on track to open 10 to 12 new gyms by the year-end as guided in March when management announced an acceleration of site openings.
Chief executive Will Orr commented: ‘We are making encouraging progress with our strategic priorities under our Next Chapter growth plan, delivering good growth in membership and yield.
‘We have further strengthened our financial position, whilst stepping up our opening programme in line with our target to open 50 high quality sites over the next three years, funded from free cashflow.’
