Results for the period ended 31 December 2020

RNS Number : 0924W

Pure Gym Ltd

21 April 2021

 

PureGym emerges a stronger business after brutal year

Financial Results for the period ended 31 December 2020

· Covid-19 lockdowns severely limited the business's ability to trade with gym closures resulting in 37% fewer trading days compared to 2019 (-44% in UK, -29% in Europe) and causing significant declines in revenue and profitability

· Business resilience proven through successfully managing previously unthinkable scenario of zero income for an extended period

· Maintained excellent liquidity position and financial flexibility through a combination of careful cash management, £100m equity injection, £50m increase in debt facilities, £40m bond raise (in Feb 2021 post year end) and a long-term covenant waiver

· Overall support from Governments in UK, Denmark and Switzerland totalled £48m in 2020

· Digital strategy accelerated with significant investment made in PureGym app (contactless access, attendance booking etc.)

· 56% of estate now open including 240 English clubs, 10 of which are brand new openings and 40 sites in Switzerland.

· 1.4m members retained as at 31 March 2021 with revenue "turning back on" as sites reopen

· Excellent member reaction to gym openings in England with over one million member workouts for the first week back, similar levels to the equivalent week in 2019

· PureGym Nuneaton converted to Covid-19 vaccine hub.

	2020	2019[1]	Change (%)
Revenue (£m)	270	447	- 39%
Adjusted EBITDA (£m)	11	132	- 92%
Run Rate Adjusted EBITDA (£m)	38	161	-76%
Gyms	492	504	- 2%
Closing members	1.5m	1.7m	- 12%

21 April London - The PureGym Group, leading European gym operator, today announces its financial results for the year ended 31 December 2020. All key metrics were down over the year especially revenue and profitability as the business was severely impacted by closures which limited its ability to trade. The lockdown related closures meant the estate was closed, on average across the various geographies, for 37% of the year causing group income to decline by £177m and forcing the business to adopt a strategy of aggressive cash conservation and liquidity preservation.

Faced with extended closures, the management team re-set strategic priorities to focus on cash conservation and re-opening under new Covid-safe protocols to protect members and staff. PureGym also accelerated its digital strategy during the year through an enhanced PureGym app which enabled contactless entrance and exit, displayed gym capacity and made available over 400 pre-recorded workouts, classes and nutrition content.

Despite the challenging environment PureGym has maintained its strategic focus and has worked hard to protect the livelihoods of team members and supported those most in need during the pandemic. There was no Covid-driven programme of redundancies or restructuring in the Group and further support was provided by The PureGym Trust, a hardship fund supported by the Partners of Leonard Green for those struggling financially as a result of the pandemic. PureGym is also proud to have played a small part in the UK's fight against the virus by donating its Nuneaton gym to the vaccination programme, at which Crest Pharmacy Group has now administered c.5,000 vaccinations since early March 2021.

Last week PureGym re-opened 240 gyms in England, including 10 brand new gyms across the country, demonstrating its commitment to UK expansion and offering affordable fitness to the nation. This Monday PureGym re-opened its 40 gyms in Switzerland, is looking forward to re-opening in Scotland next week, and currently expects to open Denmark, Wales and Northern Ireland in early May.

The PureGym Group's affordable, accessible proposition and loyal customer base has meant that the business has seen strong member retention despite lockdowns. The business has retained 1.4m members across the group as at 31 March 2021, 82% of December 2019 pre-Covid levels (on a proforma basis). Reaction to its English re-opening has been excellent with tens of thousands of new joiners and over one million workouts in the first week - levels that are below, but not dissimilar to, the equivalent week in 2019 measured on a like for like basis.

Humphrey Cobbold, CEO of The PureGym Group, commented:

"2020 was a very tough year as the world reacted to the consequences of the Covid-19 pandemic, which has adversely impacted lives and livelihoods. Lockdown restrictions prevented us from trading and had a severe impact on our financial performance. But we should be judged on how we managed the things within our control. I am in awe of how our teams in the UK, Denmark and Switzerland rallied to preserve the business, protect our colleagues and members and handled adversity with unbowed optimism, stoicism, professionalism and flexibility. We had to run a business with zero income for extended periods, a previously unthinkable scenario. We had to make major operational changes in the tightest of time frames and alter our proposition in weeks that would have taken years in normal times.

"Whilst the financial trading performance was, frankly, awful that was out of our hands. Our cost control and cash management was exemplary and the actions we took and support received from governments, equity investors and debt providers gives us significant liquidity to not only survive, but importantly now also resume our strategy. We are without doubt a stronger business for having weathered the storm. We are particularly pleased to have received an unqualified audit opinion with no material uncertainty over going concern and emerge from this crisis with real optimism and exciting plans for the future.

"We are more than satisfied with the recent re-opening in England which included 10 brand new sites. Member response and new joiners support our view that underlying demand for gyms is strong. As health and wellness move further up the public agenda there will be strong demand for affordable, flexible fitness where people can use tens of thousands of pounds of equipment over the course of a workout and increasingly use technology to assist with their fitness goals. We want to be Europe's leading fitness provider and are well placed and capitalised to continue to expand to reach this goal."

ENDS

Enquiries

Media enquiries: Sanctuary Counsel - Robert Morgan / Rachel Miller / Katie O'Brien

0208 194 3189 or [e-mail]  

More detailed financial information can be found at https://corporate.puregym.com/investor-relations

About The PureGym Group

The PureGym Group is the second largest gym and fitness operator in Europe (by number of sites).  At its pre Covid-19 peak in February 2020, the combined business had approximately 1.9 million members across circa 500 gyms. The group is majority owned by Leonard Green & Partners, L.P.

The group provides high quality, low cost, flexible physical fitness facilities and has market leading positions across the UK, Denmark and Switzerland operating under the PureGym, Fitness World and Basefit brands respectively. The majority of members pay monthly and have no contractual commitment. Many of its gyms are open 24/7 and offer a full range of top of the line equipment, including cardiovascular equipment, fixed-resistance and free weights.

The acquisition of Fitness World completed in January 2020 and as at 21 April the group has 283 PureGym gyms in the UK, 179 Fitness World gyms in Denmark and 40 Basefit gyms in Switzerland.

For more information about PureGym's TrainSafe protocols see here.

For statistics about the low prevalence of Covid-19 across the fitness sector when gyms were open, see UK Active release here.

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1.  The 2019 Proforma Group comparatives in this table include Fitness World on a proforma basis.

 

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