2nd Jul 2021 11:06
(Alliance News) - Gym Group PLC on Friday said it raised GBP31.2 million for its gym pipeline though a placing of 11.4 million new ordinary shares at 275 pence each.
The no-frills gym chain first announced the placing with bookrunners Numis Securities Ltd and Peel Hunt LLP on Thursday. The placing share price represents a 3.5% discount to Thursday's closing price of 285.00p.
Shares in Gym Group were trading at 281.00p, down 1.4% on Friday morning. Also on Friday, Peel Hunt raised its price target on the stock to 350p from 325p, maintaining its buy rating.
Gym Group said on Thursday that funds from the placing will be directed towards the company's "strong potential pipeline" of around 80 sites suitable for conversion into standard and small box gyms.
Chief Executive Richard Darwin added: "Our new gym pipeline is the strongest it has ever been and we thank shareholders for their support in today's successful placing which allows the company to accelerate its rollout to 40 new sites over the next 18 months."
The gym operator said it usually opens between 15 and 20 sites each year, with expansion limited by low availability of suitable spaces with affordable rent. In the first half of 2021, the company has opened four new gyms.
Membership numbers have recovered substantially since gyms reopened from enforced closures earlier this year. On Thursday, Gym Group said its membership at the end of June hit 734,000, approaching its 794,000 pre-pandemic membership and well up from 547,000 at the end of February.
Gym Group expects the placing shares to be listed on London Stock Exchange's main market by next Tuesday, at the latest. After which, Gym Group's will have 177.6 million total shares in issue.
By Scarlett Butler; [email protected]
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