Gym Group posted a huge rise in profitability today as it revealed earnings came close to doubling in the first half of 2019.
Pre-tax profits soared 80.5 per cent to £5.6m in the six months to the end of June, compared to £3.1m in the first half of 2018.
Revenue also jumped 26.9 per cent year on year to £74m while net debt climbed £1m from its December total to hit £47.2m.
Gym Group also hiked its interim dividend 28.6 per cent to 45p per share.
Why it’s interesting
Memberships rocketed to boost Gym Group’s top and bottom lines in the first half of the year, rising 10.6 per cent to 796,000. That was helped by Gym Group opening eight new gyms to bring its total number to 165 outlets.
Meanwhile the company grew average monthly revenue per member to £15.47, up by almost £1 compared to last year.
The firm stuck to full-year guidance and revealed a healthy earnings margin of 32.5 per cent, up marginally on last year’s.
Brokers Liberum and Peel Hunt welcomed the results, with the latter saying: “We are holding our forecasts, anticipating 58 per cent earnings growth and 28 per cent net debt reduction over the next two years.”
What Gym Group said
Gym Group CEO Richard Darwin said:
Our rapid and profitable growth has been achieved through operating high quality great value gyms that offer affordable fitness for all. Continued investment in systems, infrastructure and people to scale the business is enabling us to take advantage of the huge growth potential that exists in the low cost gym market.
We are on track to open between 15 and 20 standard catchment gyms this year whilst our new small box format further increases the number of towns that we can go to. We are confident that we can deliver further profitable growth both this year and in the years to come.
Main image credit: Gym Group