Full Year Results
Response to Covid-19

The Gym Group plc, the fast growing, nationwide operator of 179¹ low cost, 24/7² no contract gyms, announces its full year results for the year ended 31 December 2019.

Outlook including update on Covid-19

• Trading in the first two months of the year was in line with the Board’s expectations with 891,000 members at the end of February
• The emerging outbreak of Covid-19 has in the last two weeks begun to have an impact on the business: daily gym usage has started to decrease, new joiner numbers are marginally lower than expected, cancellations are higher and the number of members freezing their membership has increased
• As of 18 March we have 870,000 members; all gyms remain open currently
• Operationally, we are monitoring the outbreak carefully and being guided by advice from Public Health England with the health and safety of our members and staff our first priority
• Financially, we have taken a number of actions to reduce cash outgoings, including pausing our pipeline rollout, as we operate through what we anticipate to be a period of significant disruption. Further details are provided in the Financial Review section

2019 Financial highlights

• Revenue of £153.1 million, an increase of 23.6% (2018: £123.9 million)
• Group Adjusted EBITDA of £48.5 million, an increase of 24.0% (2018: £39.1 million); Group Adjusted EBITDA margin remains strong at 31.7% (2018: 31.6%)
• Adjusted profit before tax of £14.0 million, up 36.0% (2018: £10.3 million)
• Statutory profit before tax decreased by 10.6% to £6.2 million (2018: £7.0 million)
• Basic Adjusted Earnings per Share (EPS) of 7.7p, an increase of 32.8% (2018: 5.8)
• Return on invested capital on mature estate above 30% target at 31% (2018: 30%)
• Non-Property Net Debt at £47.4 million (2018: £46.0 million, H1 2019: £47.2 million), demonstrating that we  funded our expansion through operating cash flows
• Proposed final dividend of 1.15p per share, giving a proposed full year dividend of 1.60p per share (2018: 1.30p per share). As part of our response to Covid-19, we currently do not anticipate putting a resolution to the AGM to pay this dividend

2019 Strategic and operational progress

• 20 new gyms opened including our first two small box format gyms increasing the total estate to 175¹ at December 2019
• Total year end members at 794,000, an increase of 9.7% versus prior year (2018: 724,000); average member numbers grew by 14.9% to 796,000 (2018: 693,000)
• LIVE IT continues to grow to 150,000 representing 18.9% of total members at 31 December 2019 (85,000 representing 11.7% of total members at 31 December 2018)
• Average revenue per member per month grew by 7.6% to £16.02 (2018: £14.89); excluding the rental income from personal trainers, growth was 5.2%
• New operating model for personal trainers (New Gym Team) transition completed in September 2019

Richard Darwin, CEO of The Gym Group, commented:

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. Our business has a significant reach with over 10 million member visits already this year and our focus is to be in a strong position when we emerge from the Covid-19 disruption to extend access to affordable fitness across the UK

The information in the RNS is extracted from the Consolidated Financial Statements which are unaudited.  The Company expects to publish its audited Annual Report during the week commencing 23^rd March 2020

An audio webcast of the analyst presentation will be available live on https://kvgo.com/IJLO/TheGymGroup_Full_Year_Results_2019 at 09:00 am.

For further information, please contact

The Gym Group
Richard Darwin, CEO
Mark George, CFO
via Instinctif Partners

Numis
Luke Bordewich
George Price
020 7260 1000

Peel Hunt
Dan Webster
George Sellar
020 7418 8900

Instinctif Partners
Matthew Smallwood
Justine Warren
0207 457 2020

^{1 175 as of 31 December 2019 (vs 158 at 31 December 2018) with twenty new sites opened in 2019 and three gyms closed as previously announced; two sites acquired from the Lifestyle Fitness and easyGym acquisitions plus one site opened in 2015 for which a five year break clause was exercised by the Group. 179 sites as at 19 March 2020}

^{2 All gyms open 24/7 excluding nine gyms as at 31 December 2019 due to licensing restrictions}

^{3 Group Adjusted EBITDA is Group Adjusted EBITDAR minus cash rent costs} 

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