The Gym Group eyes further expansion as membership soars
The chain said the low-cost fitness market would double in the next seven years.
Low-cost fitness operator The Gym Group has posted another year of rapid growth, as it targets more customers in a booming market.
The chain brought in revenue of £123.9 million during 2018, up 35.6% on the year before.
Adjusted pre-tax profits rose 19.4% to £14.4 million.
Shares rose 6.2% in early trading on Tuesday.
During the period the group opened 17 new gyms and acquired another 13 from easyGym, taking its total estate to 158 sites.
It expects to open another 15-20 gyms in 2019 to take advantage of the rapidly growing budget fitness sector.
According to PwC research commissioned by the company, the low-cost gym market is set to double in size during the next seven years, giving The Gym Group and its rivals space to expand.
Chief executive Richard Darwin said: “Our purpose is to provide affordable access to everyone who wants to improve their wellbeing and we see every day the positive impact we achieve as The Gym continues to make health and fitness available and affordable to all.
“Independent research confirms the low-cost gym market can at least double its number of sites supporting our ambition for further organic growth alongside the maturing of our current estate.”
The company is also planning to open its first “small box” format gym in 2019, opening a new avenue for growth as it is rolled out further.
Meanwhile the success of premium membership option LIVE IT – which gives customers benefits like using multiple gyms or bringing a friend for an additional cost – is expected to bring in additional income.
At the end of December, 11.7% of members had taken up the option. This rose to 13.5% by the end of February 2019.
Analysts at Peel Hunt said the product could even boost the group’s overall results above expectations, saying current targets did not fully account for its potential success.