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British Military Fitness
British Military Fitness
British Military Fitness
Health Club Management

Health Club Management

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UNITING THE WORLD OF FITNESS
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Health Club Management

Health Club Management

News

Buy shares in Gym Group says Peel Hunt, as gym reopenings in Europe raise hopes of recovery

Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.

Peel Hunt says if gyms in the UK can reopen soon, evidence suggests The Gym Group "could resume profitable trading soon." In this scenario, it expects its financial forecasts for the company to 'remain intact'.

"The US and Switzerland have led the way in allowing gyms – which should be part of the solution in this health crisis – to re-open." says the note issued by Peel Hunt.

"Planet Fitness in the US experienced only a 'slight cancellation bump' in membership and Pure Gym in Switzerland has retained over 90 per cent of paying members", says the note, "both are ahead of our Gym Group forecast assumption of 25 per cent fewer members in the second half of 2020.

"In our view, the safe re-opening of gyms overseas under strict protocols could justify the re-opening timetable for UK gyms being brought forward."

Peel Hunt said: "Gyms are part of the long-term solution and they should be re-opened soon....the overseas experience suggests that The Gym Group could resume profitable trading soon.

"We estimate that The Gym Group could re-open on a cash-neutral basis with membership at 60 per cent of historic levels. This is helped by a 99 per cent gross margin and a labour ratio at c10 per cent."

Peel Hunt's analysis picks up on the performance of Gym Group's close competitor, Pure Gym, and gives insights into its Swiss portfolio of clubs as evidence, saying they're performing "in line with expectations" since they reopened on 11 May.

Continuing to cite Pure Gym's as an example, Peel Hunt explains its opening protocols and expected results as follows:

"With gym capacity restrictions limited to 10 sq m per person; minimum separation of 2m between attendees at all times; group exercise limited to five participants; locker rooms and showers open, but with social distancing maintained; and extensive cleaning and sanitation regimes. PureGym’s forecast member base at re-opening vs original (pre-COVID-19) budget is 82 per cent in the UK."

"The company [Pure Gym] has experienced no significant change in its membership base since its full-year results in April," notes Peel Hunt. "Across the group, 85 per cent of members were still retained as at 22 May, and the company expects to close the gap (to 100 per cent) as re-openings prove successful and as lockdown measures start to soften.

"In Switzerland, two weeks after reopening, Pure Gym's club attendance was at 65-70 per cent of 2019 levels (61k vs 92k); and paying members were over 90 per cent of 2019 levels (54k vs 59k).

"Attendance is weighted towards younger members, and evening peaks in attendance have been suppressed. In our view, this is helped by the 24/7 trading model and more flexible lifestyles, with more working from home."

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Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.
HAF
2020/THUMB345592_443522_391154.jpg
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News

Buy shares in Gym Group says Peel Hunt, as gym reopenings in Europe raise hopes of recovery

Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.

Peel Hunt says if gyms in the UK can reopen soon, evidence suggests The Gym Group "could resume profitable trading soon." In this scenario, it expects its financial forecasts for the company to 'remain intact'.

"The US and Switzerland have led the way in allowing gyms – which should be part of the solution in this health crisis – to re-open." says the note issued by Peel Hunt.

"Planet Fitness in the US experienced only a 'slight cancellation bump' in membership and Pure Gym in Switzerland has retained over 90 per cent of paying members", says the note, "both are ahead of our Gym Group forecast assumption of 25 per cent fewer members in the second half of 2020.

"In our view, the safe re-opening of gyms overseas under strict protocols could justify the re-opening timetable for UK gyms being brought forward."

Peel Hunt said: "Gyms are part of the long-term solution and they should be re-opened soon....the overseas experience suggests that The Gym Group could resume profitable trading soon.

"We estimate that The Gym Group could re-open on a cash-neutral basis with membership at 60 per cent of historic levels. This is helped by a 99 per cent gross margin and a labour ratio at c10 per cent."

Peel Hunt's analysis picks up on the performance of Gym Group's close competitor, Pure Gym, and gives insights into its Swiss portfolio of clubs as evidence, saying they're performing "in line with expectations" since they reopened on 11 May.

Continuing to cite Pure Gym's as an example, Peel Hunt explains its opening protocols and expected results as follows:

"With gym capacity restrictions limited to 10 sq m per person; minimum separation of 2m between attendees at all times; group exercise limited to five participants; locker rooms and showers open, but with social distancing maintained; and extensive cleaning and sanitation regimes. PureGym’s forecast member base at re-opening vs original (pre-COVID-19) budget is 82 per cent in the UK."

"The company [Pure Gym] has experienced no significant change in its membership base since its full-year results in April," notes Peel Hunt. "Across the group, 85 per cent of members were still retained as at 22 May, and the company expects to close the gap (to 100 per cent) as re-openings prove successful and as lockdown measures start to soften.

"In Switzerland, two weeks after reopening, Pure Gym's club attendance was at 65-70 per cent of 2019 levels (61k vs 92k); and paying members were over 90 per cent of 2019 levels (54k vs 59k).

"Attendance is weighted towards younger members, and evening peaks in attendance have been suppressed. In our view, this is helped by the 24/7 trading model and more flexible lifestyles, with more working from home."

Sign up for FREE ezines & magazines
Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.
HAF
2020/THUMB345592_443522_391154.jpg

News

Technogym has announced the launch of live streaming and on-demand classes. The new content will
A number of gym operators are concerned that local lockdowns could come into effect in
Prime Minister Boris Johnson has announced that gyms may be able to reopen in a
UK consumer confidence has improved significantly since the beginning of the lockdown, with a fifth
The PGA Tour has recently bought 1,000 Whoop bands for its golfers, after PGA Tour
ukactive has announced that Active Uprising and the National Summit are going digital as part
EMD UK
EMD UK
Incorpore and MoveGB are pleased to announce they have entered into a landmark partnership, combining
Industry body ukactive has today (1 July) hosted a delegation of government and public health
Health and fitness company Ingesport – which operates the GO fit chain of gyms in
Mountainside Fitness in Arizona has filed a lawsuit against state's governor, Doug Ducey, after he
Physical activity levels in England have continued to fall from those recorded at the initial
Franchise operator Club Pilates has shown that there is growing confidence in the US fitness
Fitness and athletic apparel firm Lululemon will acquire at-home fitness tech firm Mirror in a
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Gymbox has broken ranks and announced it will reopen all its gyms on 4 July,
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Features
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The over-70s were treated as one homogenous group during the lockdown and advised to shield. Colin Milner, founder and CEO of the International Council on Active Aging says this is leading to an increase in ageism that the industry must fight to overcome
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BMF, the outdoor fitness franchise company co-owned by Bear Grylls, is launching a £1m initiative designed to offer financial support to PTs and exercise professionals in getting back to work after the lockdown
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The level of tension in the business around continually pushing things on to another level again is energising, and sometimes exhausting. That tallies with me. I don’t like to sit back
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Ben Lucas

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We advise our Flow Athletes to complete classes at a ratio of one yoga class to one strength class to one cardio class. This combination has very positive effects
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Jo Smallwood

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We saw the opportunity to initiate new partnerships with the Oldham Foodbank to help local residents during the COVID-19 crisis. We can’t serve our community in the way we would usually do, so we’ve moved resources to help where people need us most
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Aaron Smith

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Featured supplier: Incorpore and MoveGB ink groundbreaking partnership to transform corporate wellness offering
Incorpore and MoveGB have entered into a landmark partnership, combining the UK’s largest provider of corporate gym memberships with the nation’s biggest network of classes.
Featured supplier news
Featured supplier: myFitApp launches branded live-streaming as part of its COVID-19 support package
Innovatise, the company behind myFitApp, has announced the immediate availability of its customer- branded live-streaming solution.
Video Gallery
Temple Gym - Nautilus Equipment
Core Health & Fitness
Temple Gym - Nautilus Equipment Read more
More videos:
Company profiles
Company profile: Octane Fitness
A global innovator of high-performance fitness equipment, Octane Fitness, a Nautilus, Inc. brand, continually redefines ...
Company profiles
Company profile: Pavigym
PAVIGYM is the premier innovator of flooring and interactive solutions for the global fitness industry....
Catalogue Gallery
Click on a catalogue to view it online
Directory
Management software
Fisikal: Management software
Fitness equipment
TRX Training: Fitness equipment
Wearable technology solutions
MyZone: Wearable technology solutions
Design consultants
Zynk Design Consultants: Design consultants
Trade associations
International SPA Association - iSPA: Trade associations
Spa software
SpaBooker: Spa software
Gym flooring
REGUPOL/Berleburger Schaumstoffwerk (BSW): Gym flooring
Fitness software
Go Do.Fitness: Fitness software
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Lockers/interior design
Fitlockers: Lockers/interior design
Property & Tenders
Greywell, Hampshire
Barnsgrove Health and Wellness Club
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Diary dates
06-07 Jul 2020
Eastwood Hall, Nottingham, United Kingdom
Diary dates
28-31 Aug 2020
Expo Centre & Riviera di Rimini, Italy
Diary dates
21-24 Sep 2020
Loews Coronado Bay Resort, Coronado, United States
Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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British Military Fitness
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