Final Results for 12 months to 31 December 2017

RNS Number : 1942M

Pure Gym Ltd

26 April 2018

 

Expansion drives significant growth in profits

Financial Results for 12 months to 31 December 2017

·   24% growth in revenue and 63% growth in EBITDA driven by new site rollout, and new, innovative membership propositions;

·      Extended position as the UK's leading gym operator, opening 20 new gyms in 2017, taking the year-end total to 192;

·      13% growth in members to 927,000, a third of whom have no previous gym membership;

·      Acquired by Leonard Green & Partners in November 2017;

·      Membership growth continued in early 2018 with over one million members as of end of March;

·      Eight new gyms opened already this year with 200th gym opened in March; and

·      Long run financing in place: £360m bond issuance heavily over-subscribed in January 2018.

	2017	2016	Change (%)
Revenue (£'000)	198,032	159,937	+ 24%
Group EBITDA1 (£'000)	64,405	39,524	+ 63%
Gyms	192	172	+ 12%
Members	927,000	822,000	+ 13%

April 26, 2018, London - PureGym, the UK's leading gym operator, today announces its annual results for 2017, demonstrating another year of strong revenue growth and significant improvement in profits.  The business benefitted from growth in its mature estate and the ramp up of newer gyms including the 31 gyms acquired from LA Fitness in 2015, all of which have now been converted to the PureGym format.

The Group continued its expansion throughout the year, investing £32m to create an unrivalled nationwide network. Over the year, membership grew by 13% to 927,000, while the number of sites grew by 12% to 192 across the UK. PureGym remains over 50% larger than the number two operator in the market by number of sites.

As well as strong growth in revenues and profits, the company delivered an eight percentage point improvement in EBITDA margin from 25% to 33%, a result of the maturity of new site openings from 2015 and 2016 - especially former LA Fitness gyms. At the end of 2017, 69% of the gym portfolio was mature[1] compared to 49% in 2016. The 63% increase in Group EBITDA was, in large part, due to the strong performance from the maturing sites and the successful launch of new commercial products such as multi-gym membership and off-peak membership.

PureGym's popularity has been built on a member proposition that offers tremendous value, a great gym experience that is highly relevant to the modern consumer and that does not seek to bind people into 12-month contractual obligations. A key part of this is a high-quality, well invested estate and over £7m was spent on existing gym maintenance and refurbishment over the year.

In November, PureGym was acquired by Leonard Green & Partners, a leading private equity investment firm, who backed the management team's plans for continued growth and development.

Humphrey Cobbold, Chief Executive of PureGym, said:

"2017 was a landmark year for PureGym. We delivered on the full promise of the sites acquired or opened in 2015/2016; we continued to invest in technology that drives both better experiences for our members and delivers higher revenues and great profit growth to the business; and we managed a transition in ownership from CCMP to Leonard Green & Partners.

Above all, however, we have benefitted from the truly extraordinary commitment of our colleagues in gyms and service centres across the country. These individuals - and the teams in which they work - stop at nothing to support our members' efforts in the gym. They are the heartbeat of this business and I am particularly proud of how they have responded to the challenge to innovate and develop new ways of working. We believe firmly that the positive structural trends in our market will continue to intensify and we're confident that we have the right processes, systems, and capabilities in place, to remain at the forefront of our industry in the years to come. Everyone who works at PureGym is committed to helping the UK become a more active, healthier and happier nation."

In January, the business refinanced its debt, successfully placing £360m of bonds in an offer that was heavily over-subscribed.

Looking forward, the outlook remains very positive with a strong pipeline of new sites. The company will continue to invest in marketing, technology and innovation to both reinforce its offer and drive growth.

ENDS

Media Enquiries: Teneo Blue Rubicon - Robert Morgan/Ben Ullmann/Rebecca Hislaire, 020 7420 3140

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Notes to editors

1.   PureGym is the UK's leading gym operator providing low-cost and high-quality fitness facilities for over one million members spread across 200 sites. PureGym was launched in 2009 and pioneered the model for affordable, flexible, high-quality fitness clubs in the UK. Members pay monthly and have no contract commitment. Most of its 200 gyms are open 24 hours a day across the UK and offer a full range of top of the line equipment including cardiovascular equipment, fixed-resistance and free weights. Each gym typically offers over 220 pieces of fitness equipment and up to 80 group exercise classes each week delivered by around 2,200 personal trainers. In November 2017, affiliates of Leonard Green & Partners, L.P. acquired a controlling interest in the business.

2.   The company has received a number of awards and accolades over the last year including appearing in the Sunday Times Virgin Fast Track 100 for the fifth consecutive year, The Sunday Times Top 100 companies to work for, and The Sunday Times BDO Profit Track 100.

 

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[1] Gyms that have been open for 24 months or more as of the end of the relevant reporting period.

 

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