Buy shares in Gym Group says Peel Hunt, as gym reopenings in Europe raise hopes of recovery
Leisure Opportunities
Job search
Job Search
see all jobs
Latest job opportunities
Everyone Active
Competitive hourly rate
Sutton-in-Ashfield , United Kingdom
truGym
Competitive
Nationwide, United Kingdom
énergie group
Self-employed
Southwark SE1, UK
Xercise4Less
Competitive
Newcastle-under-Lyme, UK

Buy shares in Gym Group says Peel Hunt, as gym reopenings in Europe raise hopes of recovery

Job opportunities
training opportunity
Les Mills
location: Nationwide, United Kingdom
more jobs

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."

Sign up for FREE ezines & magazines
Corporate broking and advisory firm, Peel Hunt, has issued a 'buy' recommendation for shares in The Gym Group.
HAF
2020/THUMB345592_443522_391154.jpg

More News

1 - 15 of 42,803
03 Jul 2020
Technogym has announced the launch of live streaming and on-demand classes. The new content will be delivered via the Technogym Mywellness app. The service will ... More
03 Jul 2020
A number of gym operators are concerned that local lockdowns could come into effect in some areas of the UK before gyms reopen, further delaying ... More
03 Jul 2020
Prime Minister Boris Johnson has announced that gyms may be able to reopen in a ‘couple of weeks’. Johnson made the comments during an interview ... More
03 Jul 2020
Polar has announced the launch of Polar Unite, its new fitness watch. The watch features personalised workouts, wellbeing guidance, connected GPS functionality and a toolbox ... More
02 Jul 2020
UK consumer confidence has improved significantly since the beginning of the lockdown, with a fifth of households now thinking they will be better off in ... More
02 Jul 2020
Tenzing Natural Energy, the drinks brand behind the Tenzing Clean Air Tracker, has recently added new functionality to its free mobile tool, now enabling its ... More
EMD UK
EMD UK
02 Jul 2020
The PGA Tour has recently bought 1,000 Whoop bands for its golfers, after PGA Tour golfer Nick Watney said he was alerted via his Whoop ... More
01 Jul 2020
ukactive has announced that Active Uprising and the National Summit are going digital as part of free events programme for 2020 The events will be ... More
01 Jul 2020
Kathryn Moore, founder of Spa Connectors, has announced the launch of the Hall of Wellness Awards (HOW Awards) to recognise those excelling in their fields ... More
01 Jul 2020
Industry body ukactive has today (1 July) hosted a delegation of government and public health officials on visits to a number of gyms and leisure ... More
01 Jul 2020
Health and fitness company Ingesport – which operates the GO fit chain of gyms in Spain and Portugal – has secured an official certification by ... More
01 Jul 2020
Mountainside Fitness in Arizona has filed a lawsuit against state's governor, Doug Ducey, after he ordered gyms to shut their doors again for at least ... More
STA
STA
30 Jun 2020
Physical activity levels in England have continued to fall from those recorded at the initial phase of lockdown – partly due to schools, shops and ... More
30 Jun 2020
Franchise operator Club Pilates has shown that there is growing confidence in the US fitness and wellness sector, by revealing details of an expansion push ... More
30 Jun 2020
Fitness and athletic apparel firm Lululemon will acquire at-home fitness tech firm Mirror in a deal worth around US$500m (€446m, £407m). Mirror is an interactive ... More
1 - 15 of 42,803
Manchester Metropolitan University
Manchester Metropolitan University