The Gym Group announced its pre-closure trading update for 2018 on Tuesday morning. Adjusted earnings are expected to be weakened from a lower opening programme and the impact associated with outlet conversions from its Lifestyle Fitness acquisitions. Shares in the group dropped by almost 5.5% this morning on the back of the announcement.
Total revenue has grown 35.6%, increasing to £123.9 million for the year ended 31 December 2018.
Year-end net debt was recorded at £46 million as a result of the easyGym acquisition and investment in 17 new openings.
The company has released an expected full year adjusted earnings for 2018 to be roughly £37 million.
In 2017, the company opened a new 16,000 square feet outpost on White Hart Lane, just moments from Tottenham Hotspur FC’s new stadium.
CEO of The Gym Group, Richard Darwin, commented on the announcement:
“The Gym Group continues to deliver strong, profitable growth whilst also establishing the platform for a bigger business in the future. The pace of expansion was significant in 2018: we opened 17 new gyms, converted the acquired Lifestyle sites, acquired easyGym and over the last 30 months have doubled the number of gyms in our estate. We have recently reached the milestone of 750,000 members, demonstrating the ongoing appeal of our business model.”
“Looking forward we have a good pipeline of new sites and expect to open a further 15-20 gyms in 2019. We are well placed to continue to generate high levels of growth whilst maintaining strong returns on capital. We are confident that in 2019 we will continue to develop and build the business to deliver another year of profitable growth for shareholders.”
The group reported that its total year-end membership numbers were ahead by 19.3%, to 724,000. This figure compares to the 607,000 recorded in December 2017. Additionally, it posted its average members of 693,000, which is up 31.2%.
Elsewhere on the stock market today, Boohoo revised its full-year sales outlook following a strong Christmas sales period.
At 09:48 GMT today, shares in GYM Group plc (LON:GYM) were trading at -5.42%.