The Gym Group sweated out revenue growth of over 30 per cent last year - but the company's share price fell as losses widened.
The pay-as-you-go fitness company registered revenues of £60m in 2015, up 32 per cent on the £45.5m recorded in 2014.
However, pre-tax losses widened to £12.4m, up 32 per cent on last year's figure of £9.4m, as a result of costs associated with its IPO last November and other one-off costs. Adjusted operating profit came in at £5.3m, just ahead of analyst expectations at £5.1m.
The Gym Group's share price fell on the open, although by the afternoon had recovered much of its losses, leaving it down 1.2 per cent.
Why it's interesting
The company went public last November at 195p per share, giving it a market cap of around £250m. The group's share price may have tumbled today, but it's still up more than 18 per cent since the IPO.
Total year-end membership reached a record high of 376,000, an increase of 28.3 per cent on the 293,000 members the group reported at the end of 2014.
This week The Gym Group opened a new site in Glasgow, bringing the total number of gyms to 75 after opening 19 in 2015.
The company plans to open another 15 to 20 sites in 2016, with around a third of that number planned within the M25, chief executive John Treharne told City A.M., where the company already has 26 gyms operating.
What The Gym Group said
"2015 was a landmark year for The Gym Group with an acceleration in roll out and strong results, culminating in a successful IPO," Treharne said.
"Our low cost, affordable and disruptive model, which we relentlessly strive to improve, resonates with consumers as demonstrated by the near 30 per cent increase in membership in 2015. In January 2016 we moved through the 400,000 member mark.
"A strong site pipeline for 2016 will see us continue to expand at a fast rate to take advantage of our considerable opportunity. We have a proven model, strong market fundamentals and financial strength to continue to prosper and deliver value for shareholders both in 2016 and much further beyond."
What analysts said
"We are holding our forecasts which anticipate earnings more than quadrupling over the next three years, based on assumptions of average revenue/member growth of 1.0-1.5 per cent per annum and minimal benefit from ancillary revenue," travel and leisure analysts at Numis Securities said.
"We believe The Gym Group is positioned to generate strong growth over the next 10 years, during which the number of low-cost gyms in the UK could triple."
Losses may have widened, but the Gym Group is bullish on its outlook.