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Technogym
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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."

If you would like to get each issue of HCM magazine sent direct to you for FREE, plus the weekly HCM ezine, sign up now!
Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.
HAF
2020/THUMB345592_443522_391154.jpg
Latest News
The hospitality and attractions sectors will benefit from a temporary cut to VAT as part ...
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We see ourselves as a truly European player. We’re analysing France, Germany, Italy and the UK for development
People
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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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Catalogue Gallery
Click on a catalogue to view it online
Directory
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21-24 Sep 2020
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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."

If you would like to get each issue of HCM magazine sent direct to you for FREE, plus the weekly HCM ezine, sign up now!
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

The hospitality and attractions sectors will benefit from a temporary cut to VAT as part
The UK's fitness industry can finally get back to business on Saturday 25 July, following
HCM understands a decision on reopening dates for gyms and also for spas will be
Interest in gym reopening in England is reaching fever pitch, with an announcement expected any
Exercising increases levels of a protein hormone secreted by the bones which has a powerful
A free-to-access training platform has launched to help the sport and fitness workforce confidently return
ukactive
ukactive
As countries around the world gear up to relax their lockdown rules, there remains a
Glasgow Life, which runs leisure and culture facilities on behalf of Glasgow City Council, has
Fitness equipment firm Nautilus Inc is looking for a buyer for its commercial equipment brand
Boutique gym operator, Gymbox, faced threats of legal action over its bid to reopen on
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
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Features
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The fitness & leisure industries should seek out ways to become advocates for the health and wellbeing of older adults
Features
Statistics
More than 65,000 people responded to a survey designed to gauge what members want and expect from the sector after lockdown, as Leisure-net’s Dave Monkhouse reports
Features
Partner briefing
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
Features
Strength
It’s considered a fundamental part of our fitness routines by medical professionals, but many exercisers, particularly women, are still put off by strength training. We asked leading suppliers what they’re doing to champion strength
Features
Reopening
David Lloyd Leisure has launched a raft of outdoor classes, including an enhanced role for its Battlebox concept, as Liz Terry reports
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We see ourselves as a truly European player. We’re analysing France, Germany, Italy and the UK for development
People
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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

general manager, Oldham Leisure Centre
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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Professor Zhen Yan

director of the Center for Skeletal Muscle Research, University of Virginia
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Dr Jonathan Leary

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Featured supplier news
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: EGYM presents Corona Gym Solution, for the successful re-opening of fitness studios
Finally, the time has come: fitness and health facilities around the globe are gradually resuming operations.
Video Gallery
Temple Gym - Nautilus Equipment
Core Health & Fitness
Temple Gym - Nautilus Equipment Read more
More videos:
Company profiles
Company profile: Healthcheck Services Ltd
Here at Healthcheck Services, we want to empower you, your clients & your staff to ...
Company profiles
Company profile: Harlands Group
Harlands Group is the leading provider of membership management services to leisure operators, processing over ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Exercise equipment
Technogym: Exercise equipment
Management software
Fisikal: Management software
Fitness software
Go Do.Fitness: Fitness software
Locking solutions
Monster Padlocks: Locking solutions
Spa software
SpaBooker: Spa software
Fitness equipment
TRX Training: Fitness equipment
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Wearable technology solutions
MyZone: Wearable technology solutions
Gym flooring
REGUPOL/Berleburger Schaumstoffwerk (BSW): Gym flooring
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Property & Tenders
Greywell, Hampshire
Barnsgrove Health and Wellness Club
Property & Tenders
Derby City Council
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Diary dates
21-24 Sep 2020
Loews Coronado Bay Resort, Coronado, United States
Diary dates
22-23 Sep 2020
Heythrop Park, United Kingdom
Diary dates
17-23 Oct 2020
Pinggu, Beijing, China
Diary dates
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Diary dates
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Online,
Diary dates
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Diary dates
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