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FITNESS, HEALTH, WELLNESS

features

News report: Set for growth

Will Orr has been talking to HCM about the company’s new strategy for 2024, as Kath Hudson reports

Published in Health Club Management 2024 issue 3
The company has laid out a strategy to drive growth over the next three years / photo: The Gym Group
The company has laid out a strategy to drive growth over the next three years / photo: The Gym Group
Analysts have been excited by The Gym Group’s plans to open 50 sites with an ROI of 30 per cent, up from the current 20 per cent

Will Orr, CEO of The Gym Group, revealed the company’s results for 2023 recently, along with a trading update and a new strategy, called Next Chapter, which will involve strengthening the core business to increase returns from the estate, accelerating rollouts and establishing new revenue streams.

1. Strengthening core business
“There’s a significant opportunity to improve member retention, which will drive yield and volume,” Orr told HCM. “The highest churn occurs in the first 45 days of a membership, before a habit has formed. We’ll be focusing on helping new members build lasting habits – whether that’s via our expert teams in the gyms, or through digital channels, such as our app.”

A number of growth-drivers have been identified to deliver increased returns: yield and revenue management; member acquisition and improving retention, with Orr’s experience with recurring subscription models at The Times a key reason for his recent appointment.

“Our analysis shows that within the catchment of our existing 233 sites, there are a further circa five million people, who are either members of another gym or considering joining a gym,” said Orr.

2. Accelerating rollout
The company opened six sites in 2023 and is planning 10-12 this year, 16-18 in 2025 and 20 in 2026 to make a total of 50 as growth ramps up.

Analysts have been excited by the company’s plans to open these with an ROI of 30 per cent, against the current 20 per cent. Orr did not divulge how this will be achieved, although Pure Gym and Basic-Fit have been reducing build-costs over the last year, so it’s likely The Gym Group will follow suit as one part of the strategy.

Low-cost gym market potential
As yet unpublished research into the low-cost health club market from PricewaterhouseCoopers (PwC), found the potential for a further 600 to 850 locations in the UK, with two-thirds at the current size and the other third delivered in smaller formats to fit less densely populated areas.

PwC says there’s 10-15 years’ growth potential in the UK market at the current rate of development.

3. Broadening growth – new revenue streams
Broadened growth options are being strategically assessed, but might include further developments to the existing proposition; format innovation; investigating new channels to market; and introducing adjacent revenue streams, such as corporate wellness programmes.

Given the commercially sensitivity of these moves, details were not given, although it’s noteworthy that operators such as Everyone Active are adding access to medical advice to their packages through partnerships with companies such as Health Hero.

More: www.hcmmag.com/TGG14/2/24

• NEWSFLASH:
Will Orr will be speaking at the HCM Summit on 24 October in London. Find out more at www.HCMmag.com/summit

2023 RESULTS REPORT: The Gym Group

Revenues across the business were up 18 per cent year-on-year from £172.9 million to £204.0 million.

2023 closed with membership at 850k, reaching 909k at March 2024. Membership increases were driven by new site openings, not by growth in existing clubs, which remained stable.

Average revenue per member per month was up 9 per cent. The ‘Ultimate’ membership was chosen by 31.7 per cent of members, while off-peak – launched in 2023 and starting at £13.99 – is drawing in new members who are older and have greater time flexibility.

Average visits-per-member were up 10 per cent and 92 per cent of members rated The Gym Group either 4/5 or 5/5 for overall satisfaction.

Group Adjusted EBITDA Less Normalised Rent was up 1 per cent from £38.0 million to £38.5 million and there was a bottom line improvement of 57 per cent on statutory loss after tax, from (-£19.3 million) to (-£8.4 million) through cost control.

Non-property net debt dropped 13 per cent from (-£76 million) to (-£66.4 million) and cashflow was up 62 per cent from £16.7 million to £27.0 million.

Will Orr, CEO of The Gym Group / photo: The Gym Group
Will Orr, CEO of The Gym Group / photo: The Gym Group
https://www.leisureopportunities.co.uk/images/2024/387148_276388.jpg
Will Orr, has been talking to HCM about the company’s new strategy for 2024, as Kath Hudson reports
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features

News report: Set for growth

Will Orr has been talking to HCM about the company’s new strategy for 2024, as Kath Hudson reports

Published in Health Club Management 2024 issue 3
The company has laid out a strategy to drive growth over the next three years / photo: The Gym Group
The company has laid out a strategy to drive growth over the next three years / photo: The Gym Group
Analysts have been excited by The Gym Group’s plans to open 50 sites with an ROI of 30 per cent, up from the current 20 per cent

Will Orr, CEO of The Gym Group, revealed the company’s results for 2023 recently, along with a trading update and a new strategy, called Next Chapter, which will involve strengthening the core business to increase returns from the estate, accelerating rollouts and establishing new revenue streams.

1. Strengthening core business
“There’s a significant opportunity to improve member retention, which will drive yield and volume,” Orr told HCM. “The highest churn occurs in the first 45 days of a membership, before a habit has formed. We’ll be focusing on helping new members build lasting habits – whether that’s via our expert teams in the gyms, or through digital channels, such as our app.”

A number of growth-drivers have been identified to deliver increased returns: yield and revenue management; member acquisition and improving retention, with Orr’s experience with recurring subscription models at The Times a key reason for his recent appointment.

“Our analysis shows that within the catchment of our existing 233 sites, there are a further circa five million people, who are either members of another gym or considering joining a gym,” said Orr.

2. Accelerating rollout
The company opened six sites in 2023 and is planning 10-12 this year, 16-18 in 2025 and 20 in 2026 to make a total of 50 as growth ramps up.

Analysts have been excited by the company’s plans to open these with an ROI of 30 per cent, against the current 20 per cent. Orr did not divulge how this will be achieved, although Pure Gym and Basic-Fit have been reducing build-costs over the last year, so it’s likely The Gym Group will follow suit as one part of the strategy.

Low-cost gym market potential
As yet unpublished research into the low-cost health club market from PricewaterhouseCoopers (PwC), found the potential for a further 600 to 850 locations in the UK, with two-thirds at the current size and the other third delivered in smaller formats to fit less densely populated areas.

PwC says there’s 10-15 years’ growth potential in the UK market at the current rate of development.

3. Broadening growth – new revenue streams
Broadened growth options are being strategically assessed, but might include further developments to the existing proposition; format innovation; investigating new channels to market; and introducing adjacent revenue streams, such as corporate wellness programmes.

Given the commercially sensitivity of these moves, details were not given, although it’s noteworthy that operators such as Everyone Active are adding access to medical advice to their packages through partnerships with companies such as Health Hero.

More: www.hcmmag.com/TGG14/2/24

• NEWSFLASH:
Will Orr will be speaking at the HCM Summit on 24 October in London. Find out more at www.HCMmag.com/summit

2023 RESULTS REPORT: The Gym Group

Revenues across the business were up 18 per cent year-on-year from £172.9 million to £204.0 million.

2023 closed with membership at 850k, reaching 909k at March 2024. Membership increases were driven by new site openings, not by growth in existing clubs, which remained stable.

Average revenue per member per month was up 9 per cent. The ‘Ultimate’ membership was chosen by 31.7 per cent of members, while off-peak – launched in 2023 and starting at £13.99 – is drawing in new members who are older and have greater time flexibility.

Average visits-per-member were up 10 per cent and 92 per cent of members rated The Gym Group either 4/5 or 5/5 for overall satisfaction.

Group Adjusted EBITDA Less Normalised Rent was up 1 per cent from £38.0 million to £38.5 million and there was a bottom line improvement of 57 per cent on statutory loss after tax, from (-£19.3 million) to (-£8.4 million) through cost control.

Non-property net debt dropped 13 per cent from (-£76 million) to (-£66.4 million) and cashflow was up 62 per cent from £16.7 million to £27.0 million.

Will Orr, CEO of The Gym Group / photo: The Gym Group
Will Orr, CEO of The Gym Group / photo: The Gym Group
https://www.leisureopportunities.co.uk/images/2024/387148_276388.jpg
Will Orr, has been talking to HCM about the company’s new strategy for 2024, as Kath Hudson reports
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Leisure, lifestyle, wellness and entertainment growth investor, Imbiba, has invested in boutique gym brand, 1Rebel's ...
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Urban Gym Group will launch PILAT3S at ClubSportive in Amsterdam next month, to create a ...
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The American Council on Exercise has appointed Dr Cedric Bryant as its new CEO. Bryant ...
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Sport England’s This Girl Can team has launched a new campaign, Let’s Get Out There, ...
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Featured supplier news
Featured supplier news: Introducing the Schwinn Z Bike: where innovation meets performance
In the dynamic world of indoor cycling, Schwinn has consistently been at the forefront of innovation. Now, we proudly present the Schwinn Z Bike, the culmination of our legacy of excellence.
Company profiles
Company profile: MyFitApp
Innovatise’s myFitApp is an open, flexible, hybrid fitness platform. Gyms, leisure centres and health clubs ...
Company profiles
Company profile: Wattbike
Wattbike is chosen by the world’s top sporting teams, elite athletes, coaches, plus hundreds of ...
Supplier Showcase
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Catalogue Gallery
Click on a catalogue to view it online
Featured press releases
Perfect Gym press release: PerfectGym joins Sport Alliance
Sport Alliance, a Hamburg-based provider of innovative software solutions and services to gyms and fitness suites, has announced the acquisition of PerfectGym, the international software provider to fitness and leisure businesses.
Featured press releases
Greenwich Leisure Limited press release: GLL fitness instructor smashes World Record
Anthony Bryan, a fitness instructor at GLL’s Southbury Leisure Centre, recently took part in the London Marathon.
Directory
Cryotherapy
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Salt therapy products
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Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Snowroom
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Lockers
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Spa software
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Loughton, IG10
Knight Frank
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Grantham, Leicestershire
Belvoir Castle
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Diary dates
23-24 May 2024
Large Hall of the Chamber of Commerce (Erbprinzenpalais), Wiesbaden, Germany
Diary dates
30 May - 02 Jun 2024
Rimini Exhibition Center, Rimini, Italy
Diary dates
08-08 Jun 2024
Worldwide, Various,
Diary dates
11-13 Jun 2024
Raffles City Convention Centre, Singapore, Singapore
Diary dates
12-13 Jun 2024
ExCeL London, London, United Kingdom
Diary dates
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Diary dates
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Diary dates
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Diary dates
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Locations worldwide,
Diary dates
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Diary dates
09-13 Oct 2024
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Diary dates
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Diary dates
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Diary dates
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In person, St Andrews, United Kingdom
Diary dates
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