This leading low-cost gym operator is another company reporting its Interim Results tomorrow morning.
The company reported positive trading trends in the early July Trading Update for the six months to end-June.
For the period the group’s revenue increased by 12% to £112.1m (H1 2023: £99.8m), with membership of 905,000 as at 30th June 2024, against 867,000 at the same time last year.
Encouragingly, the average monthly revenue per member was 9% higher at £20.44 (£18.81).
In the first half, the group opened another four gyms, taking it up to 237, with another four due soon – following its strategic aim of 10-12 new gyms yearly.
CEO Will Orr stated that:
"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.
After a strong first half, we expect to deliver full year results at the higher end of market expectations."
Estimates for the year to end-December, suggest revenues up to £220m (£204m) and adjusted pre-tax losses slightly lower at £4.6m (loss of £5.5m).
For the year 2025, some £234m of takings could well lead to a severely reduced loss of just £0.8m.
Analyst Douglas Jack at Peel Hunt is expecting the group to pump up its sales this year as it makes a robust recovery.
He has recently reiterated his ‘Buy’ recommendation with a Price Objective of 225p.
The group reported sales this year to the end of March were up 16% on 2019 pre-Covid levels and Jack forecasts that they will grow to 45% above 2019 levels for the full year.
“We expect expansion to be second-half weighted, with seven of 11 new sites opening in the second half of this year.
The company is targeting a 30% average return on invested capital on 50 new openings over three years, which is ahead of our assumption.”
We will get a clearer pointer tomorrow morning when the half-timers are released.
After my previous Profile on the group the shares have been substantially higher, before easing back to a low of 82p in April this year.
The £247m capitalised group’s shares are now trading at around 138p, while market analysts indicate that 180p a share is within the group’s medium-term price range.
(Profile 11.04.19 @ 220p set a Target Price of 300p*)
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