Source - LSE Regulatory
RNS Number : 2629W
The Gym Group plc
15 April 2019

15 April 2019


The Gym Group Plc

(the 'Company')


Annual Report and Accounts 2018 and Notice of 2019 Annual General Meeting


Following the announcement on 19 March 2019 of its full year results for the year ended 31 December 2018 (RNS: 2208T), the Company announces that it has posted its Annual Report and Accounts 2018.


The Company also announces that it will hold its Annual General Meeting at 11.00am on Tuesday 4 June 2019 at the offices of Allen & Overy LLP, One Bishops Square, London, E1 6AD.


Copies of the Annual Report and Accounts 2018 and the Notice of the 2019 Annual General Meeting are available to view on the Company's website at They have also been submitted to the National Storage Mechanism and will shortly be available for inspection at


Copies of those documents, together with a form of proxy for use in connection with the 2019 Annual General Meeting, have been posted or otherwise made available to the Company's shareholders today.


For further information, please contact


The Gym Group

via Instinctif Partners

Richard Darwin, CEO

Mark George, CFO


Instinctif Partners

0207 457 2020

Matthew Smallwood

Justine Warren


The additional information set out below, which is extracted from the Annual Report, is included in compliance with Disclosure Guidance and Transparency Rule 6.3.5. This information should be read in conjunction with the Annual Report as a whole:

Principal Risks and Uncertainties

Risk Management

In order to gain an understanding of the risk exposure of the Group, we review each area of our business annually and use a methodology that will assist the Group in measuring, evaluating, documenting and monitoring its risks within all areas of its operations.

We use our risk management process as described to identify, monitor, evaluate and escalate risks as they emerge, enabling management to take appropriate action wherever possible in order to control them and also enabling the Board to keep risk management under review.

Principal risks 

The risk factors addressed below are those which we believe to be the most material to our business model, which could adversely affect the operations, revenue, profit, cash flow or assets of the Group and which may prevent us from achieving the Group's strategic objectives. Additional risks and uncertainties currently unknown to us, or which we currently believe are immaterial, may also have an adverse effect on the Group.

Principal risk





Competition and Market Saturation


The Group may face increased competition and pressure from competitor pricing decisions. This will become more significant if the low cost gym market becomes saturated.

The ability of the Group to hold or increase prices and therefore achieve performance targets could be affected.

·      A recent PwC report indicates significant headroom in the low cost gym market.

·      Maintain price discipline and leadership.

·      Maintain focus on choosing the best sites in a geographical area.

·      Continue to invest in the member proposition.


Organic Rollout

Site scarcity may affect the delivery of our rollout plan.

Delays to our rollout plan may have an adverse impact on growth targets and operational returns.


·      Our highly experienced property team are focussed on site selection and sourcing the best deals.


Member Experience

Failure to provide members with a high quality product and service would damage the Group's reputation.


The Group also relies on third parties to provide high quality equipment and services.


Reductions in actual or perceived member service could result in a decrease in membership numbers and revenue generation.

·      Monitor utilisation and member satisfaction scores.

·      Enhance monitoring and feedback processes.

·      Ongoing review of equipment usage to ensure we meet member requirements.

·      Explore further innovations to improve the member experience.

·      Service level agreements and monitoring of service levels for key suppliers.


Staff Retention

Loss of key staff through retention policy and failure to manage succession.

A lack of experienced and motivated staff will have a detrimental impact on all areas of the business, from operations to central functions.

The Group uses a variety of techniques to attract, retain and motivate staff at all levels across the business. These techniques include:

·      competitive remuneration packages;

·      opportunities to own shares in the Company;

·      opportunities for training and progression;

·      short, clear reporting lines; and

·      succession planning.


Economic Conditions

The result of Brexit could cause significant disruption to business conditions.

Incoming equipment and materials could increase in cost due to currency movement and additional import costs.

·      As part of our Brexit planning we have stockpiled the capital requirements needed to be imported from Europe to ensure we can continue to meet our rollout target in the first six months.


Information Technology Dependency

Our ability to enrol members, carry out online marketing activity, process payments and control gym access is dependent on the performance of our IT systems.

Disruption in critical IT systems could have a negative impact on our reputation and our ability to collect revenue.

·      Our primary data systems are hosted by fully qualified organisations in suitable data centres.

·      Our primary IT infrastructure is fully managed by specialist IT companies who provide best-practice architecture and support.

·      All membership and business information is backed up using third party locations.

·      Robust disaster recovery and business continuity plans are in place.


Data Protection

The Group holds business critical and confidential information electronically. A breach of security or data protection rules is a key risk.

Unauthorised access, loss or disclosure of this information may lead to legal claims, regulatory penalties, disruption of operations and reputational damage.

·      The Group's networks and systems are protected by firewalls, security software and secure passwords.

·      All sensitive data is captured and presented using SSL encryption. Our transactional website is scanned quarterly to ensure PCI compliance.

·      Access to central member data systems requires 2-Factor authentication.

·      All customer payment data is stored externally on systems that are PCI-DSS and/or BACS certified.

·      A third party data security audit took place in 2018.


Operational Gearing

High operational gearing from the fixed cost base

A limited number of corrective options in the cost base could be made to correct any underperformance in membership numbers, which could have an adverse impact on profitability.


·      Monthly monitoring and re-forecasting of business performance at site level.

·      Active yield management on a gym-by gym basis.

·      Regular financial management by Executive Committee and Board.



Failure to adhere to regulatory requirements such as the Listing Rules, taxation, the Data Protection Act, employment law, health and safety requirements, planning regulations, noise abatement and advertising and marketing regulations.

Potential reputational damage and penalties.

·      The Board has oversight of the management of regulatory risk and compliance, and delegates specific responsibilities to senior management.

·      Expert opinion sought where relevant.

·      Legal advice taken to ensure systems, processes and documentation conform with the Data Protection Act.

·      Third party health and safety risk assessments and audits carried out. Staff conduct periodic health and safety assessments.

·      Employment and continuous training and development of appropriately qualified staff.




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