The Gym Group shares climb as Britain embraces post-lockdown workouts with 40 new sites in the works
- The Gym Group reported strong membership growth as lockdown ended
- Its shares rose more than 9% in response to the interim results
- The group recently raised funds to help build 40 new sites by 2022
The Gym Group shares climbed 8 per cent after the chain reported booming membership numbers amid the post-lockdown reopening of its sites.
The rise comes despite the company, which operates 190 discount gyms across the UK, posting a £19.4million operating loss for the half-year to June as revenues fell 21.4 per cent on the same time last year to £29.3million.
Like all firms in its sector, The Gym Group has struggled since the onset of the pandemic, with lockdowns forcing business to grind to a halt for months at a time.
However, The Gym Group reported better-than-expected membership growth, as total figures grew by around a third in the first six months of the year to 730,000 members at the end of June – up from 547,000 at the end of February.
Markets reacted as The Gym Group reported strong membership growth
The Gym Group was closed for more than half of its trading days for the half-year but said it is now looking forward to a ‘period of sustained recovery and accelerated growth’.
It is currently in the process of building 40 new sites over the next 18 months with the firm tapping investors for more than £31million to fund the expansion in June. Bosses said at the time that the impact of Covid-19 on the property market has provided a ‘unique opportunity’ to buy new sites on ‘favourable commercial terms’.
While the group reported losses for the first half of 2021, it was able to demonstrate positive cash flow in May and June when gyms were able to fully open.
CEO of The Gym Group Richard Darwin said: ‘Since the re-opening of gyms in April, The Gym Group has performed strongly with excellent member feedback, a higher rate of visits per member and a rapid recovery in overall membership levels.
‘We have identified some exciting growth opportunities to expand our estate further and raised additional funds from shareholders to capitalise upon them.’
The Gym Group shares are currently trading at 305.5p, recovering the vast majority of losses seen during the initial market shock at the onset of the pandemic when they were trading at around 310p. Shares were trading as low as 79p in March last year.