Gym Group making gains as new membership options lift sales

Shares in the Gym Group rose as much as 2.7% this morning after a new tiered membership structure helped the low-cost gym operator grow its customer base.

The firm, dubbed the easyJet of Gyms, offers three levels of membership starting from a £13.99-a-month off-peak subscription.

That has helped average membership numbers grow 8% to 872,000 in 2023 while total sales grew 18% to top £200 million for the first time. But final membership numbers fell back to 850,000 at year-end. The premium ‘Ultimate’ membership which includes multi-gym access accounts for around a third of the firm’s customers.

Gym Group’s net debt shrunk from £76 million to £66 million as the company said revenue growth had offset utility-driven cost inflation and leverage is expected to remain within the range of 1.5 to 2.0x.

CEO Will Orr told the Standard: “We continue to see good uptake of our memberships at both ends of the spectrum.

“I think there’s a lot of growth to come in the future, the fundamentals are fantastic as well as the appetite from consumers who are getting more well-informed about health and fitness.”

He added that a greater proportion of members were doing more weight training and resistance training, “stuff you can’t do in the park.”

Gym Group said it plans to add another twelve sites to its estate by the end of the year, including some in London where it already has 70 gyms.

Orr said: “It’s about areas of good population density – London very often fits the bill, with good transport links and the right kind of demographic profile.