The Gym Group lifts targets after strong summer
The positive update came just two months after it previously upgraded its performance targets.
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Your support makes all the difference.The Gym Group has improved its sales and profit guidance after strong summer trading.
Shares in the company jolted higher after the value gym chain also swung back to profit for the past half-year.
The positive update came just two months after it previously upgraded its performance targets.
Our research found that our customers really saw the value in our products beyond the prices we had set so there have been some changes but we also introduced our cheapest product, an off-peak membership, which has had positive demand
It told shareholders that it benefited from a rise in new members, increased visits from existing members and price increases for certain membership packages.
As a result, revenues grew by 12% to £112.1 million for the six months to June 30.
Gym Group boss Will Orr told the PA news agency it has been boosted by increased focus on health among younger Britons.
“Our typical audience is younger than some of our competitors and they are particularly looking for affordable ways to move towards a healthier lifestyle at the momentum,” he said.
“With the recent economic backdrop there has been a trend in a lot of areas towards low costs operators, and that plays into our strengths.
“Our research found that our customers really saw the value in our products beyond the prices we had set so there have been some changes but we also introduced our cheapest product, an off-peak membership, which has had positive demand.”
It comes after the company launched a new growth plan in March which saw it reduce promotions and focus further on customer retention.
The company is also moving forward with expansion efforts which have seen it open seven new sites far in 2024, with a target of between 10 and 12 for the full year.
Mr Orr said it is still on track with longer-term plans to add 50 sites to its portfolio.
Gym Group said recent trading meant that it is now expecting to see like-for-like revenues rise by between 5% and 6% in 2024. It had previously pointed to growth between 4% and 5%.
The leisure firm also said that its financial performance as a whole will be “at the top end” of market expectations.
Panmure Liberum analyst Anna Barnfather said: “Strong interims and continued momentum over the summer lead us to another round of small upgrades.
“We believe there is more to come with a multitude of initiatives driving customer acquisition and retention, backed by data and behavioural science, and set against an improving consumer backdrop.”
A positive reception from analysts helped the stock increase by 8.3% to 155.8p on Wednesday morning.