Gym group doubles site rollout to 10 to 12 per year / Image source: Adobe
  • Revenue and profit ahead of expectations
  • Accelerated site rollout plan
  • Focus on high quality, high return site openings

Continued positive momentum saw low-cost gym operator Gym Group (GYM) deliver better than expected full year results and announce an acceleration of new site openings.

Investors welcomed the upbeat outlook and new growth target with the shares trading up 5% to 115.1p, taking year to date gains to 12% compared with a 0.5% gain for the FTSE All-Share index.

Revenue for the year to 31 December 2023 increased 18% to £204 million, slightly ahead of market forecasts and representing 9% growth on a like-for-like basis.

Demonstrating robust trading amid the cost-of-living crisis and the attraction of the group’s low cost, high-value proposition revenue growth was driven by 8% higher average membership numbers and a 9% increase in yield.

Members visited more often averaging six visits per month while satisfaction levels were maintained.

Group adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) less adjusted normalised rent was slightly ahead of the prior year at £38.5 million, but above consensus forecasts.


Will Orr, who joined the company as chief executive in September 2023, said: ‘We have maintained positive momentum in revenue through the second half to deliver results that have offset cost inflation, in line with our guidance.

‘With a strong start to 2024, and clear signs that demand for health and fitness has never been stronger, these are solid foundations on which to build our Next Chapter growth plan.’

Revenue in the first two months of 2024 was up 16% on the prior year reflecting 3% growth in average members and 13% growth in yield. On a like-for-like basis revenue was up 12%.


The company said it expects like-for-like revenue in 2024 to increase between 4% and 5% as early price increases normalise.

After opening six new sites in 2023, Gym Group plans to double the rate of openings to 10 to 12 sites in 2024 funded from free cash flow and aims to deliver circa 50 site openings over the next three years.

Orr told Shares Gym Group is taking a ‘returns driven’ approach to growth. This means the firm is prioritising a ‘disciplined’ rollout of high quality and high-returning sites, maintaining a 30% target return on invested capital.

Management believes there is an opportunity in the UK for an additional 600 to 850 sites in the low-cost gym market. At recent rates of site expansion by all low-cost gym operators, this suggests scope for 10 to 15 years of further growth.


Analysts at Liberum said they do not expect to make any changes to 2024 earnings forecasts which call for EBITDA less normalised rent of £41.1 million.

‘As the company scales and sites mature, we anticipate that the adjusted EBITDA LNR margin will expand from 18.9% to 20.6% by FY26E. This leaves significant upside potential if management can further narrow the gap against pre-Covid margins of 31.7%’, said Liberum.

Numis commented: ‘A strong start to 2024 leaves GYM positioned to accelerate openings and reduce leverage.’


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Issue Date: 13 Mar 2024