Strong trading momentum, rollout continues to plan

The Gym Group plc, the fast growing, nationwide operator of 80 low cost gyms branded "The Gym", announces a trading update for the half year ended 30 June 2016.

• Trading for the half year has met the Board's expectations and profit for the full year 2016 is anticipated to be in line with consensus market expectations
• In line with plan, 6 new gyms opened in the first half increasing the total estate to 80 sites with 4 of the openings within the M25
• Total members at 30 June 2016 of 424,000, are up 19.4% versus H1 2015 (June 2015: 355,000). Average membership for H1 of 420,000 is up 22.8% (H1 2015: 342,000) ⁽¹⁾
• Strong cash generation in the period with net debt reduced to £2.5m at 30 June 2016 (December 2015: £7.1m)
• Pipeline continues to strengthen with a further 8 sites having exchanged contracts or on site. The pipeline for the next financial year (2017) is more advanced than at the corresponding time last year. The Board is confident of achieving its guidance of 15 to 20 openings for 2016 and 2017.
• During the first half the Performance Share Plan, and Share Incentive Plan (including a free shares issue and a partnership share scheme open to all employees) were implemented. The Board now expects the charge for long term employee incentives for the full year 2016 to be £0.7m rising to £0.9m in 2017 and £1.5m in 2018 ⁽²⁾. Fixed Asset Depreciation is expected to be 17% of revenue for the full year.
• A number of Board changes and Executive appointments are outlined in a separate announcement
• The Company expects to announce its Interim Results at the end of August 2016 

John Treharne, CEO of The Gym Group, commented:

This is another strong performance underlining the strength of our business model, the power of our low cost proposition and the success of our roll out. We are on track at the half way stage and are now focussed on delivering our goals in the rest of the year to come.

1. On a comparable basis: average members for H1 2015 of 342,000 (with corresponding average revenue per member per month in H1 2015 of £14.08)

2. The Company will report going forward Group Adjusted EBITDA excluding the charge for long term employee incentives. Group Adjusted EBITDA is operating profit before depreciation, amortisation, exceptional items, other income and long term employee incentives charge. Adjusted Profit before Tax will include the charge for long term employee incentives. Adjusted Profit before Tax is Group Adjusted EBITDA less depreciation, long term employees incentives charge and interest.

For further information, please contact

The Gym Group
John Treharne, CEO
Richard Darwin, CFO
via Instinctif

Numis
Oliver Cardigan
Oliver Hardy
Toby Adcock
020 7260 1000

Instinctif
Matthew Smallwood
Justine Warren
0207 457 2020