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GYM The Gym Group Plc

114.80
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
The Gym Group Plc LSE:GYM London Ordinary Share GB00BZBX0P70 ORD 0.01P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 114.80 114.80 115.40 115.80 110.60 115.80 433,082 16:28:43
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Physical Fitness Facilities 172.9M -19.3M -0.1082 -10.61 204.81M

The Gym Group plc Acquisition of 18 gyms from Lifestyle Fitness (8565Q)

15/09/2017 7:00am

UK Regulatory


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TIDMGYM

RNS Number : 8565Q

The Gym Group plc

15 September 2017

15 September 2017

The Gym Group Plc

("the Group")

Acquisition of 18 gyms from Lifestyle Fitness

Significant acceleration of new site rollout

The Gym Group ("TGG"), the fast growing, nationwide operator of 98 low cost gyms branded "The Gym", announces that it has acquired 18 gyms (1) from Lifestyle Fitness for a total cash consideration of GBP20.5m (the "Acquisition"). TGG has entered into a binding sale and purchase agreement with Competition Line (U.K.) Limited ("CLL") the owner of the sites and the deal is expected to complete on 29 September 2017.

TGG has grown rapidly since the opening of its first site in Hounslow in 2008 and has become the second largest player in the low cost gym market. It expects to open 20 new sites under its organic rollout programme in 2017, having opened 15 new sites in 2016 and 19 new sites in 2015.

The Group, as part of its stated strategy, has also sought to identify bolt-on acquisitions as a way of accelerating its rollout.

As a result of the Acquisition:

-- All 18 sites, which are high quality, well invested locations mainly in the Midlands and North of England (2) will transfer as going concerns including the existing membership. Staff dedicated to the sites will also transfer to TGG along with 5 other central staff. CLL will support the integration of the sites through a Transitional Services Agreement ("TSA").

-- 10 of the sites will be converted to The Gym brand immediately following assignment of the leases. The Group expects these sites will have been converted by the end of Q1 2018. These 10 sites are anticipated to have the potential to perform strongly with maturity expected to be shorter than the Group's normal two-year profile due to the existing membership base. Each conversion is expected to cost GBP450k.

-- A further 8 sites will continue to operate under the Lifestyle Fitness brand and will be considered for conversion to The Gym brand in due course. Each of these gyms will be provided with some initial capital investment, primarily in gym equipment, expected to total GBP110k per site.

-- The 18 sites being acquired earned site EBITDA (excluding central costs) of GBP3.45m in the 12 months to 31 December 2016 (3) with revenues of GBP11.1m and a net book value of GBP19.2m.

-- The Acquisition is to be funded from the Group's existing financing facilities. In addition, the Group has extended its existing capex facility by a further GBP10m.

-- The Acquisition is expected to be significantly earnings enhancing by 2019 as a result of the expected growth in membership of the acquired sites.

(1) The headline prices per month for the 18 sites being acquired mostly range between GBP20 - GBP25 per month for members not entering into contracts. As a result of the majority of no contract prices being greater than GBP20, The Leisure Database Company ("LDC") in its analysis of the market does not define Lifestyle Fitness as a low cost gym. Lifestyle also offers 12 month contracts where the headline prices per month mostly range between GBP15 and GBP20.

   (2)       In addition one site in London and one in Scotland 
   (3)       Extracted from the accounts of Competition Line (U.K.) 

John Treharne, CEO of The Gym Group, commented:

"Lifestyle is an excellent and complementary fit with our existing estate. These are well invested gyms in strong locations with an established membership. The acquisition strengthens The Gym Group's position in the Midlands and North in areas where we are currently underrepresented and accelerates our expansion plan. The addition of these gyms is anticipated to be significantly earnings enhancing by 2019."

For further information, please contact

 
 The Gym Group           via Instinctif 
  John Treharne, CEO 
  Richard Darwin, CFO 
 
    Numis 
    Oliver Cardigan 
    Oliver Hardy 
    Toby Adcock            020 7260 1000 
 Instinctif 
  Matthew Smallwood 
  Justine Warren         0207 457 2020 
 

Forward-looking statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, such statements involve risk and uncertainty since they relate to future events and circumstances. Actual results may, and often do, differ materially from any forward-looking statements.

Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement. Save as required by law or by the Listing Rules of the UK Listing Authority, the Company undertakes no obligation to publicly revise any forward-looking statements in this announcement following any change in its expectations or to reflect subsequent events or circumstances following the date of this announcement.

Inside Information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACQOKPDBPBKKOCD

(END) Dow Jones Newswires

September 15, 2017 02:00 ET (06:00 GMT)

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