The Gym Group Plc (£GYM) - A Valuation On 9th April 2021
This British gym business has amassed a mountain of leasehold commitments. How much of a haircut will landlords have to take or will the bounce-back the market is pricing-in come to pass?
This gym operator in the UK has enormous leasehold commitments. How much of a haircut will landlords have to take or will the bounce-back the market is pricing-in come to pass?
The Story - The Gym Group Plc £GYM
The Gym Group is a chain of no contract, low-cost gyms and fitness clubs in the UK. The company, which started as a single gym in Hounslow, West London, in 2008, has experienced fantastic growth and, as of the end of 2020, operated 183 gyms with 578k members (547k end of Feb ‘21). When measured by the number of members, The Gym Group was the 2nd largest gym operator in the UK and the 5th largest in Europe.
In its pre-COVID life, the company was growing revenues at a c.31.7% CAGR and was capitalising on improving economies-of-scale to improve operating margins. From 2012-’15, the company wasn’t making an operating profit, but post-IPO from 2016-’19, with the improved scale, margins averaged c.12.5%.