The Gym Share Discussion Threads

[danb45] 17/1/2023 21:09

to be fair - you should consider that site growth has been good and throw Covid / cost of living crisis in too.

[1cripes] 16/1/2023 16:01

Leadership change needed here. Treharnes return doesn’t signal change, he’s been within the leadership group that has mismanaged this company and is not best placed to find a competent successor.

[masurenguy] 13/1/2023 01:35

Richard Darwin steps down as Gym Group loses its bounce

[spob] 12/1/2023 08:09

Financial highlights


-- Total year-end Membership was 821,000, an increase of 14.3% from
the end of last year (Dec 2021: 718,000); Average Members during
the year were 808,000
-- Revenue for the year amounted to GBP172.9m, up 63.1% versus the
prior year (2021: GBP106.0m) and up 12.9% vs 2019 (2019: GBP153.1m)
-- Total like-for-like revenue for the whole year in the pre-Covid
mature estate (sites open up to end of 2018) was 90% compared
to 2019. The membership profile during the year reflected a more
normal seasonal pattern for low cost gyms without further post-Covid
membership recovery in the second half as macro-economic challenges
act as a headwind to underlying demand
-- Year-end Non-Property Net Debt was GBP76.1m (Dec 2021: GBP44.1m)
including GBP11.5m of finance leases. The Company intends to
remain within its stated guidance of 1.5-2.0x Non-Property Net
Debt : Group Adjusted EBITDA Less Normalised Rent


Operational highlights


-- Site numbers increased to 229 (1) (Dec 2021: 202) with 28 new
openings in the year, marking the highest level of new openings
in a single year. Performance of new site openings remains in
line with expectations.
-- Average revenue per member per month for the year (ARPMM) was
GBP17.82. The ARPMM for the second half of the year was GBP18.30,
up 4.8% on the first half of the year (H1 2022: GBP17.46) and
up 4.5% on the second half of the prior year (H2: 2021 GBP17.51).
LIVE IT, the premium price product, ended the year at 29.6% of
total membership (Dec 2021: 27.1%).
-- Visit frequency and satisfaction scores remain materially higher
than pre-Covid scores


Outlook


-- We expect the current difficult macro-economic environment and
consumer behaviour to continue and, as a result, intend to take
a more measured approach to our new site openings in 2023
-- The pipeline of new site opportunities remains promising, but
we are planning for all new site growth to be self-financed in
2023; as a result, we currently expect up to 20 new openings
in the year with a strong second half weighting
-- Energy costs are 96% hedged until the end of 2023. Our current
expectation is that utility costs will increase by c.GBP10m in
2023 compared to 2022
-- January Membership acquisition has started in line with expectations
with a similar profile of demand to previous early January trading
periods


Board Changes


-- Richard Darwin and the Board have agreed that Richard will step
down as Chief Executive following more than seven years leading
the Company as CEO and as CFO. During that period the Company
has grown significantly from 63 to 229 gyms nationwide today.
The Board has already initiated the process to find a new Chief
Executive. Richard will step down from the Board in due course
and he will remain available to support the Company until July
2023.
-- To assist with the transition, John Treharne, the founder and
Chair of TGG, will now act as Executive Chair, working closely
with the Executive Directors until the new CEO is appointed.


John Treharne, Chair of the Gym Group, commented:

"We are in one of the busiest times of the year for our sector. It is clear that even with cost-of-living pressures, many consumers regard gym membership as essential, and they are ever more focussed on receiving value for money. This plays to our strengths. We will continue to grow carefully and fulfil the Company's significant potential to the benefit of all of our stakeholders.

On behalf of the Board, I would like to thank Richard for his commitment and significant contribution to TGG over many years. He has overseen significant growth in the estate during his period as CEO. As we move forward, I am confident that we can build on the strong foundations he has put in place to capture the significant opportunities ahead."

Richard Darwin, Chief Executive Officer commented:

" It has been an honour to help The Gym Group grow into a nationally recognised presence in affordable fitness over the last 7 years, first as CFO and then as CEO. I am extremely proud to have navigated the business through the pandemic, developed the brand and put in place a first-class management team with the capability to take on this next phase of growth. For me this is the right time to step down; TGG is a great business with enormous potential. I wish John and everyone at TGG ongoing success. "

[danb45] 10/1/2023 12:37

my gym's packed as is the norm in January - sure Gym will have good numbers, health a great sector to be invested IMO

[1cripes] 17/11/2022 15:02

Stepping away from the anecdotal the technicals look interesting. Pivot analysis gives a broad set of likely share price movement. I think 0.80p as the bottom, in the round (ceterus barabus). The lowest technical on pivot throws up 0.62p. DYOR

[1cripes] 11/11/2022 15:18

Equipment leasing will also become more expensive as rates continue to increase. They may benefit in the medium term to reduced property rents if values do fall? No divi, painfully high utility costs, labour intensive, Income still below pre covid levels, share price nearly half the IPO value. Oh dear oh dear oh dear.

[johndoe23] 09/11/2022 19:56

Definitely not as many members in my gym. Though it's not GYM

[m_kerr] 09/11/2022 19:00

this is a bad company, and probably a very bad investment. easy enough to spot - no property assets, all the property is leased, so high fixed charges. they compete on price and location, effectively selling a commoditised service.

[masurenguy] 09/11/2022 16:40

That remains to be seen. Many will give up gym membership altogether or go less frequently. However GYM is better placed than most of its 'full service' competitors but they are also carrying a lot of debt, which will cost more to service as interest rates increase.

[danb45] 09/11/2022 16:35

consumer squeeze will mean many will trade down to gym group and pure gym IMO

[masurenguy] 09/11/2022 16:07

Maybe. I exited a couple of years ago and this has been on my watchlist to re-enter since then. They have a good business model which should flourish again in due course but with rising interest rates and the impending consumer squeeze I remain on the sidelines.

[danb45] 09/11/2022 15:56

a good time to average up then :-)

[masurenguy] 09/11/2022 15:49

Biggest daily trading volume in over 3 years. Market did not like the update and the shareprice is off by over 15%. Excluding the brief sharp down spike when COVID was first identified as a pandemic in March 2020, this is now at an ATL. The shareprice is also 47%% below the IPO @195p on the 7th anniversary of their main market debut on 9 November 2015! No current position here.

[kalai1] 09/11/2022 14:50

Gym Group plc issued an encouraging trading update for the four months ended 31st October 2022 this morning. Membership increased through the period, reaching 838,000 at31st October 2022, an increase of 16.7% from the end of last year (Dec 2021: 718,000). Revenue for the ten months ended 31st October 2022 was £143.2m, up 78% versus the COVID-affected prior year (10 months October 2021: £80.5m). Performance in 16 workforce-dependent sites continues to be significantly impacted by changes in working practices. Expansion is ongoing, the Company remains on track to achieve its target of 28 new openings in 2022 and 25-30 new openings in 2023. Share price remains in a correction and valuation is still not particularly helpful with forward PE ratio still over 20x. GYM is a share to monitor for now ... from WealthOracle

hxxps://wealthoracle.co.uk/detailed-result-full/GYM/609

[masurenguy] 28/10/2022 16:36

Borrowing under the RCF is still going to cost them 2.85% but at least this rate is fixed for another 2 years. Nevertheless their finance costs will increase if free cashflow does not.

[hammergaumet] 28/10/2022 13:37

They have an RCF they can use if cashflow were to be insufficient. They have dine detailed stress tests based on renewed covid scenarios or other loss of demand. Its in the latest annual report. The debt outlook is fine according to those stress tests.

[mount teide] 27/10/2022 14:27

'The Gym Group Plc published FY22 results last week. The business enjoyed a solid recovery in 2021 with total members at 31 December 2021 up to 718,000. Revenue was up 31.7% to £106.0m, adjusted EBITDA was up 110.7% to £35.4m, statutory loss for the year was a little lower at -£35.4m. The business was growing briskly pre-Pandemic and is rebounding solidly post-Pandemic. But there is a long way to go to return to pre-Pandemic levels of business, FY19 revenue was £153m.

Valuation is also something of a cloud, PS ratio at 3.3 is third quartile for the sector, PE ratio even less attractive. Share price is also in a 9-month correction and still testing the downside. Balance sheet looks a little fragile with net debt of £373m. GYM is a decent and growing business, but it is a share to monitor for the time being...

...from WealthOracleAM'


Would agree with that - particularly now we're entering the four months of the year Nov - Feb, when gyms are frequented mostly by regular trainers, before the numbers swell again, as people start booking their summer holidays and watching the latest series of 'Love Island'.

Modern gyms are mostly frequented Mar-Oct by people who are largely wasting their time, as a result of training at a level of intensity that is far too low to deliver results much different to regular walking, particularly up hills.

Our local Virgin gym has over 8,500 members and I can count on one hand the number that look any different from one year to the next, apart from having £700 less in their bank account each year. Largely because most have a body fat level greater than 20% and train at a very low level of intensity.

[masurenguy] 27/10/2022 13:36

EBITDA has more to do with operating performance and has really little relevance to debt. The key metric that is relevant to debt is cashflow and, at the interims published a couple of months ago, their free cashflow was only circa £7m.

[hammergaumet] 27/10/2022 11:50

Why would they need a placing to address 55m of debt when they expect ebitda of c 50m this year?

[bionicdog] 09/10/2022 11:36

I bought one as a back up to my Rogue bar and I have to say that I actually prefer it. This finish is better and it's less than half the price. No central knurling and 1mm thinner. The whip only really comes in at very high weights , so I wouldn't use it for bench press at max , but everything else seems fine. The knurling is not nearly as aggressive , but I haven't lost grip yet. Bargain.

[bionicdog] 03/10/2022 11:24

£150 is a good price for this general purpose bar and only £5 delivery. This is not a power bar and will flex.

[masurenguy] 03/10/2022 10:44

Still on the sidelines here. Problem is an interim loss of circa £4m and net debt of circa £55m. The latter makes them vulnerable to further interest rate rises. This is a good business model compared to most of the competition which has higher overheads but they may need a further placing to address the debt before we can see potential for any real upside to the current shareprice.

[sludgesurfer] 03/10/2022 10:28

I'm a buyer sub-£1 here. Now trading at levels not seen since the depths of covid.The market seems to be pricing in many people giving up their memberships as the cost of living bites at a time of significant expansion. Whilst I'd like to see them reign in their growth expectations or at least provide more clarity on the underlying assumptions, I think this is a solid business.Anecdotally, as a member I think they do a decent job although numbers are less that where I thought they'd be now the students are back.