29th Aug 2018 10:24
LONDON (Alliance News) - The Gym Group PLC on Wednesday reported a decrease in interim profit despite a rise in revenue, members and gyms, as the no-frills, no-contract gym chain also hiked its dividend.
Gym Group posted an pretax profit of GBP5.1 million in the six months ended June 30, down 14% from the GBP5.9 million posted a year before.
Revenue was up 36% to GBP58.3 million from GBP42.8 million the previous year. Average revenue per member per month increased by 1.6% to GBP14.7 from GBP14.4.
The company's exceptional items were GBP1.0 million in the period, up from GBP112,000. The higher one-off costs primarily relate to Gym Group's acquisition of 13 gyms from easyGym in June.
Gym Group's adjusted earnings before interest, tax, depreciation and amortisation, a key metric for the company, increased 28% to GBP17.5 million from GBP13.7 million.
The company said earnings were hurt by seven months of closures related to rebranding, for which customers were compensated.
The average number of members increased 34% in the half-year to 664,000 from 495,000, due to the increase in the number of gyms to 134 from 95 - which does not include the 13 gyms acquired from easyGym.
The proforma member total increased 42% to 720,000 from 508,000, largely due to the easyGym acquisitions.
Gym Group declared an interim dividend of 0.35 pence per share, up 17% from 0.30 pence the year before.
The company also said its search for a new chief financial officer is ongoing, with an appointment expected to made by the end of September.
Current CFO Richard Darwin is set to take the chief executive officer position from John Traherne, who will be stepping down - but remaining on the company's board - on September 17.
Chief Executive Officer John Treharne said: "This has been another excellent period for The Gym Group with the hard work of 2017 beginning to come to fruition. We now have systems and technology in place to support a business of considerable size and scale with our ERP system safely landed. These investments will allow us to start the roll out of the new Personal Trainer model and further capitalise on LIVE IT, our premium pricing offer, which is proving popular with our members and experiencing strong levels of take up.
"In my last set of results as CEO, I am confident that the business is in as strong a position as ever to execute its strategy and deliver further accelerated profitable growth. After a strong first half we are on track to meet market expectations for the full year and look forward to further progress in the second half of the year."
Shares in the Gym Group were down 0.3% Wednesday at 324.00 pence each.
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