The Gym Group has worked up a good sweat since its market debut in November after an upbeat trading update released today by the budget fitness chain sent shares soaring nearly four per cent.
The company, which operates 74 low cost gyms, said profits for 2015 are on track to meet market expectations after winning over new customers and launching 19 new sites.
At the end of December, the group had 376,000 members using its gyms, up 28.3 per cent on the previous year.
It is targeting 15 to 20 openings for 2016, with 12 new gyms already signed and a further 21 locations for the next two years in solicitors’’ hands.
The group said its balance sheet was also strong after recording a lower than expected net debt of £7.1m.
John Treharne, chief executive said: “2015 was an important year for The Gym Group with significant expansion of our estate and a successful IPO. The excellent performance in 2015 has established a strong base from which to execute our planned rollout programme.”
The Gym Group and rival Pure Gym have helped shake up the market and challenge traditional players by offering cheaper memberships, offering 24-hour opening times, and scrapping contracts.
The company’s 195p-a-share float in November valued the chain at £250m and shares have risen 17 per cent since then, as it presses ahead with its expansion.
Peel Hunt analyst Nick Batram yesterday raised his 2015 earnings, before tax, depreciation and amortisation (EBITDA) forecast to £16.4m, bringing it in line with consensus, and reiterated “buy”.
“The shares have performed well post IPO but there is much more to come as investors appreciate the scale of the growth presented by The Gym,” he said.