The Gym Share Discussion Threads

[quepassa] 22/5/2020 12:01

Seems like David Lloyd -which generally operate from significantly larger sites- will be utilising/sacrificing other parts of their premises (indoor tennis courts??) to increase gym footprint.

They have sent members a message including the following:

"....Plus to ensure social distancing measures are achievable, over 80% of our UK Clubs will be able to facilitate a second gym in other areas of the Clubs"




Smaller-format gym operators do not have the luxury of being able to do this.


ALL IMO. DYOR.
QP

[rp] 21/5/2020 02:30

The Times today says that gym owners are hopeful that gyms will open up in July, with new health and safety protocols developed with the government. Pure Gym say they are operating these already in Switzerland and doing 70% of last years business.

[dassera] 11/5/2020 07:59

Not us then

[bigboots] 11/5/2020 07:48

HUGE NEWS - GYM GROUP EXPANDS IN TO CHINA AND JAPAN

GYM group are moving their model to China and Japan with two deals already signed
Budget operator, Pure Gym, has revealed it’s trialling a franchise offering to grow the brand globally.
Speaking at the Fit Summit in Singapore today (5 May 2020), Pure’s chief strategy officer, Francine Davis, said the company is looking for master franchise partners in countries such as China, India, and Japan. She said Pure was testing the model and the first couple of deals had already been agreed.

[quepassa] 23/4/2020 07:50

All a bit more messy now for the re-opening prospects for the leisure sector which is looking more and more challenged in terms of timing and distancing requirements.

An insightful article in today's FT covers this thorny topic.

The FT article ( page 11) is entitled " Hospitality sector plans for life after lockdown - Cafes, hotels and gyms implement measures that adhere to prolonged social distancing and stricter rules on cleanliness"

The FT article mentions arch-rival PureGym where "Humphrey Cobbold, CEO of PureGym ... said the chain would space out treadmills and limit the number of members on site at one time".

Clearly that is a major change for low-cost gyms which rely on high usage of their sites and will likely significantly impact member access, especially perhaps for smaller gyms.

I guess if running machines and workout machines are currently spaced, let's say, one foot apart, the likely new distancing requirements would significantly impact/reduce the number of machines per club going forward.


ALL IMO. DYOR.
QP

[quepassa] 21/4/2020 07:30

The share price was nicely marched up the hill to get to the 161p new equity issue price.

But it seems to me that the challenges facing the sector are nowhere near over yet.

Given the enormous and rising unemployment levels, the question is how rapidly members come back on stream when things ease. The rate of re-joining by members may take a lot longer than hoped for.


ALL IMO. DYOR.
QP

[shakespeare4] 18/4/2020 17:51

The governments about restruants and pubs regarding the use of toilets in public and private establishments give some cause for concern

[masurenguy] 17/4/2020 12:52

Some variation in the latest broker forecasts although how they can provide any meaningful projections, when we still have no idea how soon they can reopen and what decline (if any) in the number of users may be, is just beyond me !

GYM The Gym Group. Berenberg: Buy 220
GYM The Gym Group. Liberum Capital: Buy 300
GYM The Gym Group. Peel Hunt: Buy 300

[masurenguy] 17/4/2020 09:43

17 April 2020
The Gym Group PLC

Results of the Placing

The Gym Group plc, the nationwide operator of 179 low cost 24/7, no contract gyms, announces the successful completion of the placing announced yesterday. A total of 27,396,606 new ordinary shares of 0.01p each in the capital of the Company have been placed by Numis Securities and Peel Hunt, at a price of 150p per Placing Share (the "Placing Price"). Together, the Placing and Subscription of 27,512,181 new Ordinary Shares raised gross proceeds of approximately £41.3m. The Placing Price represents a discount of 6.8% to the closing share price of 161p on 16 April 2020. The Placing Shares and Subscription Shares (defined below) being issued represent together approximately 19.9% of the existing issued ordinary share capital of the Company prior to the Placing and Subscription.

Overview (16 April)

-- The net proceeds of the Placing and Subscription will be used to strengthen TGG's balance sheet and provide liquidity whilst TGG's gyms are closed during this period of unprecedented COVID-19 disruption

-- The Board believes that a strengthened balance sheet will enable the Company to take advantage of growth opportunities in the immediate aftermath of the COVID-19 crisis both in terms of membership acquisition and by restarting its site roll out programme

-- Credit approval has been received for an amendment to the Company's existing £70m committed bank facility, maturing October 2023, with its existing lenders HSBC, Natwest and Banco de Sabadell to provide commitments for an incremental £30m for an 18 month period (the "New Debt Facility"). The amendment which remains subject to final documentation, provides for a revised financial covenant testing regime and is subject to completion of the Placing

-- The Board is confident that the additional financing from the Placing and Subscription and New Debt Facility, alongside a broad range of cost saving actions, will ensure sufficient liquidity even in the event of its most pessimistic trading scenario

-- Directors and certain members of the Executive Management team intend to subscribe for Subscription Shares to contribute approximately £175k in aggregate.

Rationale for the Placing

The Company entered 2020 following a year of strong performance in 2019, and trading in January and February of 2020 was encouraging with the Group reaching record membership numbers of 891,000 at the end of February. However, in line with UK Government guidelines in response to COVID-19, on 20 March 2020 the Company temporarily closed all 179 of its sites.

As announced on 19 March 2020, in anticipation of potential closures, management put in place a number of actions to reduce cash outgoings including halting the roll out of new sites and reducing both capital and operating expenditure to essential spend only. The Company also commenced discussions with its existing lenders HSBC, Natwest and Banco de Sabadell (the "Banks"). These discussions have progressed such that credit approval has been received for an amendment to its existing £70m committed bank facility, maturing October 2023, to provide additional commitments of £30m for an 18 month period. The amendment also provides for a revised financial covenant testing regime, taking into account the current period of closure of the Company's gyms and their reopening over the next six months, and remains subject to final documentation and completion of the Placing. During the period that the New Debt Facility can be accessed the payment of dividends requires the consent of the Banks.

The Company has also continued to take further actions to conserve cash. This has involved ongoing discussions with the Company's landlord, supplier and employee stakeholders. In addition, the executive directors have taken a material temporary reduction in salaries and have deferred 50% of their 2019 bonus award. All non-executive Board members have agreed to forego their board fees for the second quarter of 2020. The Company is also participating in a number of the relevant UK Government COVID-19 support initiatives announced to date, including rates relief, the Coronavirus Job Retention Scheme for furloughed workers, and the deferral of some payments due to HMRC. As at 31 March 2020, the Company had cash on hand of £22.4m, having fully drawn its £70m existing bank facility. Management's immediate mitigation actions have in aggregate reduced the Company's monthly cash burn during the temporary closure period to £5m, excluding the unwind of working capital and other capital commitments over the next five months, which in total are approximately £12m.

Given the uncertainty of the duration of the current disruption, the Board believes the Placing and Subscription to be a prudent measure to further strengthen the Company's balance sheet, working capital and liquidity position. The Board is confident that the steps being taken will ensure sufficient liquidity even in the event of its most pessimistic trading scenario which assumes a total closure of the estate for the remainder of 2020 and a significantly reduced membership upon reopening. The Board also believes that the strengthened balance sheet will provide the Company with the ability to take advantage of growth opportunities in the immediate aftermath of the COVID-19 crisis both in terms of membership acquisition and by restarting its site roll out programme.

[dtaliadoros] 14/4/2020 09:14

Suprised this are still holding at these levels given the continuation of lock down, zero revenue and prospect of landlords suing for rent.

[porsche1945] 08/4/2020 11:34

Lame the company have not put out a statement. Need to know the numbers, zero income so whats still going out? Will they do as asos and others have done this morning and sell more shares into the market, a possible dilution coming up. UK totally screwed, weak from the brexit fiasco and now this, ftse 350 the worst of all markets, as usual.

[quepassa] 07/4/2020 12:49

Re 581.

A far better way to secure the fortunes of The Gym Group in these troubled times.

Offer 10,000 unique one-time only LIFETIME MEMBERSHIPS for £9,995.

When David Lloyd was in its infancy many moons ago and was tight of cash, they did this with great success. The members who readily bought these one-off lifetime memberships generally consider them as the best investment they ever made.

Amongst Gym Group's 800,000 members, there would surely be 1% wealthy enough to lap up such an offer.

ALL IMO. DYOR.
QP

[quepassa] 07/4/2020 08:07

An opportunity for Gym Group in difficult times.

The publicly traded bonds of arch-rival Pure Gym (6.375% Pinnacle BidCo 02/25 ISIN XS1756633126 on the Boerse Berlin) are now trading at c. 66% of par.

You own the debt, you own the company??


ALL IMO. DYOR.
QP

[ronwilkes123] 06/4/2020 17:22

Asking for voluntary monthly payments now due to public messages of support

[manuelbeanster] 01/4/2020 16:56

Bigboots, isn't Pure Gym highly leveraged? What do you mean by "they do not need it"? thanks

[blueball] 28/3/2020 08:58

Tipped by MF at 250p on 1st March what idiots they are.

[bigboots] 26/3/2020 07:56

We own a number of sites that PURE operate from. They have requested to hold back paying rent for the foreseeable future

With their cash balances, we have told them quite categorically that we will not accept their request

It seems that they are jumping on the bandwagon of the support given from the Government when they do not need it

PURE leave this money for businesses who do !!

[dtaliadoros] 25/3/2020 00:19

Not sure how these have managed to bounce 30 percent given that as things stand gym has zero income and no idea as to how long these will stay shut.

[supercity] 23/3/2020 12:54

My gym emailed to say they are closing for now and will not be taking any payments for the time they are shut - have to say regular gym goers will flock back once they open again

[markwell] 23/3/2020 12:53

Why should anyone trust you?

[ronwilkes123] 23/3/2020 12:23

Trust me plenty losing jobs will just cancel a membership when there is no contract Discretionary spending goes first