Gym Group losses narrow on recovery in membership levels

As of the end of June Gym Group has around 730,000 members

The Gym Group has seen a strong recovery in its membership levels as its reopened its locations having closed them for much of this year.

The firm, which operated 190 gyms across the UK, confirmed an operating loss for the six months to June of £19.4m.

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Its revenue decreased by 21.4% to £29.3m compared to the same period a year before, causing Gym Group’s losses to grow.

The Gym Group is hoping for a “period of sustained recovery and accelerated growth” after it spent over 50% of its trading days closed. It added that there was strong demand for membership as restrictions have been progressively eased since July when gyms were allowed to reopen.

The company, as of the end of June, has around 730,000 members. This compared to the 547,000 recorded at the end of February.

The budget gym sector is emerging as one of the UK leisure sector’s post-covid winners.

“City centre gyms may still be relatively empty but regardless the Gym Group is averaging 1.4 visits per member per week since re-opening. Its young customer base, who may not have the budget or space for at-home equipment, is working out again and the company plans to open 40 new sites by the end of 2022,” said Harry Barnick, senior analyst at Third Bridge.

“Covid has strengthened the idea that health is wealth and The Gym Group is seeing the benefit of new members entering the sector for the first time. However, The Gym Group’s membership base still lags 2019 levels, reaching 721,000 at the end of August 2021. The company will likely pin its hopes on the upcoming crucial period of customer acquisition in September and October, as students return from their summer break. As one of the cheapest operators on the market it is in a good position to drive membership growth beyond today’s figures.”

The Gym Group share price is up by 3.89% during the morning session on Thursday.

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