9th Nov 2020 12:27
(Alliance News) - Gym Group PLC on Monday confirmed the temporary closure of its 167 gyms in England due to the government lockdown but assured that its strong financial position puts it in a good position once the restrictions are lifted.
The gym operator highlighted that, following the end of the first lockdown, it re-opened with 658,000 members, of which 574,000 were ongoing paying members.
However Gym Group noted that while membership grew until the second half of September, the emergence of a second wave meant member levels started to decline, registering a total of 639,000 at the end of October. Despite this, over the three-month period, ongoing paying members were 588,000, up 2.4% from the figures at re-opening.
"The business has traded profitably during the period, and we are confident that our strong financial position, with very low levels of net debt and close to GBP70 million of unused facilities, will provide the platform to resume our growth path once we reopen," said Chief Executive Richard Darwin.
Net debt as at October 31 was GBP32 million, down from GBP35.7 million at the end of July. Monthly cash burn during the period of closure is expected to be GBP6.0 million.
Turning to expansion, the company noted contractors are on site in Chichester and are about to start two further builds in York and Sydenham, with all three sites scheduled to open in the first quarter of 2021.
"The company continues to see an opportunity to access attractive potential new sites and is building a pipeline for new openings in 2021; four additional sites have leases exchanged with several more under negotiation," Gym Group added.
The stock was trading 20% higher at 164.80 pence each midday Monday in London.
By Ife Taiwo; [email protected]
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