- Full year revenue beats forecasts
- Like for like revenue accelerating
- 2024 site roll-out plan increased
Low-cost gym operator GYM Group (GYM) said strong first-half momentum had continued into the second half resulting in full year revenue climbing 18% to £204 million, slightly above market expectations.
The revenue beat together with news that the company is accelerating its site roll-out to between 10 to 12 sites in 2024 was well received with the shares up 3% to 108p in early trading.
Over the last year the shares have lost 12% compared with a flat performance for the FTSE All-Share and are still almost two-thirds below their 300p pre-pandemic level.
WHAT DID THE COMPANY SAY?
Chief executive Will Orr, who joined the group in September 2023, commented: ‘We have delivered good growth in both membership and revenue which will underpin FY23 results in line with guidance, and we are well-prepared for our key recruitment period in the coming quarter, with a flexible, high-value, low-cost offer that makes gym membership even more accessible for everyone.
‘These are strong foundations on which to build our "Next Chapter" growth plan and I will provide an update on this with our full year results in March.’
STRONG REVENUE GROWTH/ ANALYST UPGRADE
Revenue growth was driven by an 8% increase in average new members, taking the total number to 850,000 as of 31 December 2023, and average revenue per member which increased 9% to £19.50.
Full-year like-for-like revenue grew 8% compared with 2022, implying an acceleration from the first half's growth of 7%. A net four new sites were opened during the period.
Net debt as of 31 December 2023 was £66.4 million, reflecting a 13% reduction compared with 2022. The group said it had implemented a three-tier pricing structure with the roll-out of an Off-Peak membership to the whole estate after a successful trial.
Analysts at Numis described the trading update as reassuring and nudged up their 2024 earnings before interest, tax, depreciation, and amortisation estimate by 3.5% to £37.7 million.
‘We are encouraged that profitability stabilised in FY23, with revenue showing promising recent momentum, leaving GYM positioned to accelerate openings and reduce leverage in FY24’, said Numis.
Gym group will publish full 2023 results and provide a strategy update on 13 March.
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