The Gym Share Discussion Threads

[twirl] 10/8/2017 14:01

I'm interested as its in a position to grow massively, using the cash it generates, in a market which it can undercut enormously.

Happy with my holding as I was at 175 and the brokers growth price targets are very attractive.

Some boards attract the wrong sort of posting and I don't miss them.

Looking fwd to interims on 30th

[shauney2] 10/8/2017 12:33

It is surprising the lack of interest considering the current bull market for growth stocks.
Be interesting to see what it does if it hits 220p

[mount teide] 10/8/2017 10:46

Rather surprised that a thread for a company that has been perpetually self funding circa 20% annual expansion, and which is breaking out from an 8 month downtrend following a placing of 39m shares by an existing investor in March at 175p, is so quiet?

[mount teide] 08/8/2017 17:00

Very strong closing auction: 52,020 @208.5p

Twice the total volume for the entire trading day!

[mount teide] 02/8/2017 10:56

Buyers above 200p for the first time in over 8 months.

[mount teide] 26/7/2017 12:42

The GYM Group - GYM - growth with no debt and entirely financed by its existing estate!

The FY2016 Accounts show a 4 year CAGR of: revenue 38.4%, adjusted EBITDA of 39.5%, and gym/membership of 28.2% - all financed by its existing business.

15 new gyms were added in the year to the existing 74 gyms, which generated £73.5m in revenue, and EBITDA £22.7m (31% margin)

Operating Cash Flow conversion of 109.9%. OCF of £24.9m, which is net of maintenance capex.

Expansionary capex of £20.9m

At £1.4m per new gym, that gives 20.9/ 1.4 = 15 new gyms

To grow the number of gyms by over 20% in FY2016, the company took on no debt and, actually increased its net cash position at year end by £2m.

For mature sites, each gym generates £476K in EBITDA. So a payback period of 3 - 4 years.

Looking at FY2017, the company can open around 18 new gyms based on year 2016 assumptions, and all organically without raising a penny of finance.

Looking at the market as a whole, I strongly suspect the low cost gym revolution(4 year CAGR of 44%), is still in its infancy, accelerating and has probably a decade or more to run before getting close to saturation level.

Today there are 3,504 private gyms with an average monthly fee of £50, 2,709 public gym facilities with an average monthly fee of £30, and just 515 low cost gyms with an average fee of £17 a month.

I expect Public sector gyms (CAGR over last 5 years of 1%), to be one of the main targets of the low cost gyms over the next decade, particularly since public sector sports facility funding has been cut sharply over the last 3 years (16% down).

Some Gym Market Statistics: Source: Leisure Database - State of the UK Fitness Industry Report - dated 31 March 2017.

Pure Gym is the current low cost market leader. On average Pure Gym charge around £7.60 more per month than The Gym Group. If Gym Group increased their charges by just £3.80 a month, half of the price difference with that of Pure Gym; on current membership levels of circa 500,000, that would more than double Gym Groups current EBITDA of £22.7m.

Across high population London, Gym Group have got 38% of the current low cost market, nearly twice their largest two rivals combined.

Despite the rapid growth over the past few years, there are still only 515 low cost gyms nationwide, just 7.6% of the current total gym market. Low cost gym membership has grown over the last 5 years at an average CAGR of 44%, while traditional high cost private and public sector gyms has seen growth of 0% and 1% respectively.

Low cost gym membership today, still only represents just 22% of total gym membership nationwide.

There are over 2700 public gyms - each has on average only 26% of the equipment of a low cost gym, 23% of the membership numbers, and a membership fee some 76% higher. And there has been a 16% reduction in spending on public sector sporting facilities over the last three years, which remains on a sharp downward trend.

Declaration - completed building a position here last week - Gym Group is a top 5 portfolio holding.

[ppreston1] 26/7/2017 11:56

Wow someone is confident. Over 3m shares bought earlier today. Starting to rise nicely.

[twirl] 13/7/2017 18:46

Yes flippers need to show a profit - and at 175p they don't. But will probably return before H1 results.

[shauney2] 13/7/2017 15:42

Good call on the 175p support.

[ppreston1] 13/7/2017 10:25

Wow nice bounce indeed off 175p. Twirl - looks like you were totally right about that floor! Hope to see these around 200p in the run up to the interims.

[ppreston1] 12/7/2017 10:34

Hopefully we'll see a bounce now we've hit 175p. Being walked down on low volumes.

[farmsted] 12/7/2017 09:21

Testing times !!

[ppreston1] 11/7/2017 09:11

Thanks twirl. Hope you're right about that 175 floor!

[twirl] 10/7/2017 17:18

Placing of 39m shares by existing investor ie no dilution - in March at 175p.

Will be a fair number of flippers amongst the Institutional Investors that took up the placing.

Chart shows bounce maybe at 175p which seems to be bottom of recent range with 200p the top.

[ppreston1] 10/7/2017 15:35

Interims to be reported on 30th August. Anyone with views on the recent price weakness?

[twirl] 16/6/2017 20:26

Spreadex closed at a pre auction price 191.3/194.7. Lol

[mount teide] 16/6/2017 18:05

Some large buys going through today, topped off by the huge 375,283 closing auction trade @199.75p, nearly 3% above pre close offer price.

Suspect this has gained the interest of more II's following the trading update and presentation, by an impressive management.


Health, body image and well being has never had a higher priority among many youngsters; for who low cost, city centre Gyms are tailor made - and at a price less than half the monthly rental cost of a low spec smartphone.

Over the last year 18-25 year olds have left my local Virgin Active in increasing numbers to go to these low cost alternatives, since many of their friends who previously could not afford to join Virgin Active or David Lloyd, now train there.

A neighbour's daughter is another who is making the move: "for what i pay at Virgin(£50 a month with 1 year minimum commitment), i can now go to the new low cost gym for £15 a month with no commitment, and upgrade to a new I phone 7 and still have money left over!" That is certainly one way of looking at it!

[rolandormrod] 16/6/2017 17:55

Am i right in thinking that the final trade of the day at £700k was a buy? Looks like there was a big jump up to 199 at the end of the day.

[twirl] 15/6/2017 13:41

Suspect still flippers from the placing

[zoolook] 15/6/2017 08:49

I added again this morning. Not sure why this isnt getting more attention

[mount teide] 15/6/2017 08:45

This flexible, low cost gym model is the right product at the right time, able to take advantage of the cheap long term rental rates on high quality city centre commercial properties, in high population locations.

At around a quarter of the cheapest pricing for highly restricted access Virgin Active/David Lloyd membership, it gives 24/7 access to the best gym equipment for the masses at a fraction of the price, and without the 12 month membership commitment.

Now a top 5 portfolio holding.

[bantrader] 15/6/2017 00:05

@twirl , meh market reaction, this company is really cheap , 10% FCF yield growing at 20%

[twirl] 14/6/2017 07:22

Trading well on course with market expectations.

[twirl] 03/5/2017 12:27

hxxps://shareinvestors.co.uk/2017/03/18/gym-group-flexes-biceps-to-maiden-profits-buy-on-this-news/