19th Mar 2020 11:04
(Alliance News) - The Gym Group PLC on Thursday posted a double-digit revenue rise but added that it will not propose paying a final dividend at its annual general meeting.
In 2019, revenue rose 24% to GBP153.1 million from GBP123.9 million, though pretax profit slipped 11% to GBP6.2 million from GBP7.0 million.
Administrative expenses surged 23% to GBP124.0 million, and Gym Group saw an 18% rise in finance cost to GBP14.9 million.
On an adjusted basis, pretax profit rose 36% to GBP14.0 million from GBP10.3 million.
During 2019, the company opened 20 new gyms, including two small former sites, taking its total estate to 175.
Year-end membership numbers rose 9.7% to 794,000 from 724,000. Average numbers over the course of 2019 were 15% higher at 796,000 from 693,000.
Chief Executive Officer Richard Darwin said: "Whilst 2019 was another successful year in which The Gym Group delivered substantial growth in members, revenue and profits, we are now focused on planning for the potential impact on our business of Covid-19. To date, we have seen a small impact on trading and all 179 of our gyms remain open. We go into a period of anticipated disruption with an established membership base, a cash generative business model and a strong balance sheet. As the scale of the outbreak escalates we have contingency plans in place."
The company proposed a final dividend of 1.15 pence per share, which would take its total payout to 1.60p, up 23% from 1.30p in the year prior.
However, Gym Group said it does not "anticipate" putting forward a motion at its AGM to pay the final dividend. The company said the decision was part of its "response to Covid-19".
"In the first two months of the year trading was in line with the board's expectations. Membership numbers at the end of February show an increase to 891,000, another record level, with a 12% increase since December 2019. In the last two weeks there has been a small impact on trading from Covid-19, and we have drawn up plans to react to an ever changing situation. Currently all gyms are open and any actions we take in the future will be guided by advice from Public Health England," the company said.
Shares in the company were 1.2% higher at 83.00p each in London on Thursday morning.
By Eric Cunha; [email protected]
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