The Gym Group eyes expansion despite pandemic hit to trading
The Gym Group is eyeing future expansion opportunities despite the impact of the pandemic on trading, which caused revenue to plummet last year.
The budget fitness chain said total revenue last year was £80.5m, down from £153.1m in 2019, as the company lost 45 per cent of trading days due to closure as a result of government Covid-19 restrictions.
However the London-listed firm, which opened eight gyms last year and is in the process of opening three further sites, said it is building a “strong pipeline for 2021 and beyond”.
“The company continues to see an opportunity to access excellent new sites at attractive rents,” it said.
“We will continue to progress new leases during this current period of lockdown. We will determine the timing of the rollout programme once there is greater visibility about a reopening date for gyms”, The Gym Group added in a statement.
The firm’s shares dipped 0.92 per cent following the market update this morning.
The Gym Group said it has shrunk its monthly cash burn to around £5m during the current lockdown – down from £6m during the November closure – due to recently announced grant support from the government.
It is in talks with lenders over reviewing covenant tests relating to its £100m bank facility due to the impact of the latest lockdown.
The company said its lending banks “continue to be supportive”.
The Gym Group had non-property net debt of £47.3m in December, compared to £47.4m the previous year, with £3.8m of deferred rents outstanding at the end of 2020.
The Gym Group chief executive Richard Darwin said: “2020 has been a challenging year for our business, our members and our colleagues.
“Through the outstanding work of our team we provided a Covid-secure exercise environment for our members and demonstrated the resilience of our business model by trading profitably when gyms have been open.
“Our cash management during the pandemic has ensured we ended 2020 with manageable levels of debt and significant liquidity.
“At a time when health and fitness has never been more important to the nation, we are ready to emerge from the pandemic and take advantage of the many opportunities available to us.”