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01 Sep 2023
PureGym sees member sign-ups, revenues, EBITDA profits grow and losses reduce as it gears up for refinancing in 2025
BY
Tom Walker
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Pure Gym said the increase in members helped revenue increase by 16.7 per cent
photo: Pure Gym
PureGym added 190,000 new members in the first half of 2023 when compared with H1 2022, taking the total number of members across its clubs from 1,655,555 to 1,840,000*. As a result, the UK's largest gym chain saw its gym-site-adjusted EBITDA increase from £81.4m in 2022 to £95.7m in the six months to 30 June 2023.
Reporting its Q2 and H1 results, PureGym said the increase in members helped revenue increase by 16.7 per cent to £271.6m for the first six months of 2023 – compared to £232.8m for the same period in 2022.
As well as the 11.4 per cent increase in members, the revenue drive was helped by a 5.0 per cent increase in the average revenue per member, which PureGym said resulted from price increases in existing gyms, the maturation of existing less mature gyms and the opening of 57 new corporate-owned gyms in the period from 1 July 2022 to 30 June 2023.
The company also opened 12 new franchises in the first half of 2023, as it quietly builds its global franchise model following openings in the US, Dubai and Saudi Arabia. It's also targeting Japan, South East Asia, China, India and North Africa. The company has set its sights on opening 130 clubs in the Middle East.
The maturation of clubs meant that the average number of members per site increased from 3,226 to 3,307 between H1 2022 and H1 2023.
Operating profit for the six-month period was £39.7m, up from £27.8m in 2022.
At the end of June 2023, PureGym had 566 corporate-owned gyms (up from 521 in 2022) across three markets – UK, Denmark, Switzerland and the US – and 16 franchised gyms (four in 2022) in the Middle East (Saudi Arabia and the UAE).
https://www.healthclubmanagement.co.uk/health-club-management-news/PureGym-to-hit-50-new-openings-in-2022-as-Q2-revenues-exceed-pre-pandemic-levels-Humphrey-Cobbold/349987?source=search
The group opened 22 new corporate-owned sites in the first half of 2023, compared to 17 in the same period in 2022.
Despite the strong growth in trading, the group reported overall losses of £25.9m for the six months to 30 June 2023 – although these were down significantly from the loss of £41.4m in the same six-month period in 2022.
Losses were due to a variety of factors, including interest on its borrowings, which were up from £562.1 million in 2022 to £643 million in the first six months of this year.
Operating expenses also increased by 15.0 per cent (to £161.0m) for the six months ended 30 June 2023 (£140.0m in 2022), which the company attributes to the increase in the number of corporate-owned gym sites, an inflationary uplift in its operating cost base and investments in its head office, made "in preparation for the next phase of growth in the business".
During the period, there were also exceptional costs incurred through the rebranding of the Danish estate from Fitness World to PureGym and various other extraordinary costs, such as £500k on lease modifications.
As at 30 June 2023, the PureGym had cash and cash equivalents of £211.1m – including £30.9m held by the parent company, Pinnacle Topco Limited.
It also has access to undrawn facilities of £145m, giving total liquidity headroom of £356.1m – down from £429.8m in June 2022.
Commenting on its results, CEO, Humphrey Cobbold said: "The current macro-environment remains a challenging time for all, but the business has continued to perform well against this backdrop with strong and accelerating momentum in the first half of the year.
"The group has a robust capital and liquidity position, with £211m of cash on the balance sheet and £356m of available liquidity at 30 June 2023.
"This, coupled with the support of its key shareholders, Leonard Green & Partners LP and KKR, puts the Group in a good position to fund expansion and investment in its estate, while also being well placed to explore refinancing options in advance of the maturity of its Senior Secured Notes in February 2025."
In April 2022, PureGym revealed it planned to more than double in size by 2030, increasing the size of its portfolio to 1,000 locations.
* PureGym reached 1.7 million members at the end of February 2022, when it regained its pre-pandemic numbers.
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