The Gym Group (GYM) H1 2024 earnings summary

Executive summary

• Revenue rose 12% year-over-year to £112.1m, driven by a 3% increase in average members and a 9% rise in average revenue per member per month (ARPMM).

• Membership at period end reached 905,000, up 4% year-over-year and 6% since year-end 2023.

• Free cash flow surged 73% to £24.5m, supporting net debt reduction and new site expansion.

• Opened seven new sites year-to-date, with four in H1, and made progress on the Next Chapter growth plan.

• Full-year results are expected at the top end of recently revised market expectations.

Financial highlights

• Group Adjusted EBITDA Less Normalised Rent increased 28% to £22.1m, with margin up 3 percentage points to 20%.

• Statutory profit before tax improved to £0.2m from a £6.1m loss last year; adjusted profit before tax was £0.5m.

• Free cash flow of £24.5m, up £10.3m year-over-year.

• Net debt reduced by £11.8m to £54.6m; leverage ratio improved to 1.3x from 1.7x at year-end.

• Basic adjusted EPS: 0.3p (vs. (2.9)p prior year); statutory EPS: 0.1p (vs. (3.4)p prior year).

Outlook and guidance

• Like-for-like revenue growth now expected at 5-6% for the year, up from previous 4-5% guidance.

• Full-year EBITDA Less Normalised Rent expected at the top end of the £42.4m–£44m analyst forecast range.

• On track to open 10-12 new sites in 2024, with seven already opened and two more on site.

• CapEx for 2024 expected between £35m–£40m, with higher spend in H2.

• Adjusted Leverage expected at the lower end of 1.5–2.0x range.