TIDMGYM
RNS Number : 2099I
The Gym Group plc
20 March 2018
20 March 2018
The Gym Group plc
('the Company' or 'The Gym')
Full Year Results
Accelerated profitable growth, significant pipeline progress
The Gym Group plc, the fastest growing, nationwide operator of
130 low cost gyms(1) , announces its full year results for the year
ended 31 December 2017.
Financial Highlights
-- Revenue of GBP91.4 million, an increase of 24.3%
(2016: GBP73.5 million)
-- Group Adjusted EBITDA(2) of GBP28.0 million,
an increase of 23.2% (2016: GBP22.7 million)
-- Adjusted earnings per share(3) increased to
7.4p (2016: 5.6p)
-- Adjusted profit before tax(4) increased to GBP12.0
million (2016: GBP8.7 million)
-- Statutory profit before tax of GBP9.2 million
(2016: GBP6.9 million)
-- Proposed final dividend of 0.90p per share,
giving a proposed full year dividend of 1.20p
per share
Operational Progress
-- 21 new gyms opened and 18 acquired from Lifestyle
Fitness in 2017, increasing the total estate
to 128
-- Total year end members at 607,000(5) , an increase
of 35.5% versus prior year (2016: 448,000);
Average member numbers grew by 23.4% to 528,000
(2016: 428,000).
-- Launch of LIVE IT., our premium pricing product,
with rollout on course to complete by May 2018
-- Return on Capital on mature estate maintained
at 32% (2016: 32%)
-- Average Mature Site EBITDA(6) decreased to GBP461,000
(2016: GBP476,000)
Outlook
-- The new financial year has started well and
current trading is in line with the Board's
expectations with 664,000 members at the end
of February, an increase of 9.4% since the year
end
-- Expect to achieve guidance range of 15 to 20
sites openings for 2018.
John Treharne, CEO of The Gym Group, commented:
"We have made considerable progress in 2017 and were the fastest
growing low cost fitness operator, substantially increasing our
market share and rapidly expanding our estate.
We continue to see potential for substantial growth in 2018 as
we plan to open a further 15-20 new gyms and benefit from the
profitability of those sites opened in recent years reaching
maturity.
We have had a strong start to 2018 and are excited about the
future and confident in our team's ability to maximise our
opportunity."
An audio webcast of the analyst presentation will be available
later today via our website www.tggplc.com
A copy of the Annual Report and Accounts will be available later
today via our website.
For further information, please contact
The Gym Group
John Treharne, CEO
Richard Darwin, CFO
via Instinctif
Numis
Oliver Cardigan
Toby Adcock
020 7260 1000
Instinctif
Matthew Smallwood
Justine Warren
0207 457 2020
1 120 sites branded The Gym and 10 sites currently branded
Lifestyle Fitness.
2 Group Adjusted EBITDA is calculated as operating profit before
depreciation, amortisation, long term employee incentive costs and
exceptional items.
3 Adjusted earnings per share is calculated as the Group's
profit for the year before amortisation, exceptional items and the
related tax effect, divided by the diluted weighted average number
of shares.
4 Adjusted profit before tax is calculated as profit before tax
before amortisation, exceptional items.
5 Average members excludes sites not open at the period end.
6 Average Mature Site EBITDA is calculated as Group Adjusted
EBITDA contributed by the mature gym portfolio, divided by the
number of mature sites. Mature sites are defined as gyms that have
been open for 24 months or more measured at the end of the
year.
Chairwoman's Statement
This has been a year of significant success for The Gym Group.
2017 will be remembered for the acceleration of number of sites
from 89 to 128 as a result of 21 organic openings and the
acquisition of 18 sites from Lifestyle Fitness. This is now a
significant business with over 600,000 members enjoying millions of
gym visits a year. We are reporting strong financial results which
has allowed the Board to recommend a final dividend of 0.90p taking
the full year dividend to 1.20p, ahead of the 1p declared in the
prior year. It was also significant that our share register
normalised as our prior Private Equity owners sold their final
tranche of shares and we welcome those new investors who have
joined the register during the year.
This rate of business growth has required us to mature our
capabilities. Our Operations organisational structure has developed
and new talent, particularly in Marketing and Technology, gives
both enhanced capability and also greater resilience. The Board was
impressed that our significant technology investment in our new
Member Management System was successfully launched entirely to
plan. Work progresses on the next phase of our infrastructure
development programme, Enterprise Resource Planning (ERP) system,
which is on schedule to be implemented mid-2018. These are
fundamental milestones to support our future growth potential.
Our approach to property selection is rigorous. We are building
a business with strong capital discipline as a result of a
thoroughly researched approach to site selection, utilising the
skills and experience of our property team supported by the
strength of our covenant. This is an area of significant
competitive advantage. When we can accelerate openings such as in
2017 we will, but our expectation is to maintain good discipline as
we continue to target 15-20 organic openings a year.
My Board colleagues and I continue to enjoy visiting sites to
see first-hand the energy and commitment of our general managers
and just how much our members appreciate their gym. We believe the
quality and fit out of our new sites and refurbishments are a stand
out feature in the market place. This is such an important part of
ensuring that going for a work out is an appealing activity for our
members. We may be growing quickly, but I can still say I have
visited the majority of our gyms! Our work to transform our
acquired sites into The Gym Group's branding is particularly
impressive and member response has been overwhelmingly positive.
Recently, we were delighted to be awarded the prestigious FEEFO
Trusted Service Award.
During the course of the year we have been focused on evolving
our relationship with the Personal Trainers that operate their
businesses out of our sites. It is estimated that 80% plus of
qualified Personal Trainers in the health and fitness industry are
self-employed; in our model to date Personal Trainers have been
wholly self-employed. However, as we wish to further enhance the
service we give our members, we think it is timely to move this
model on. We have commenced a number of trials that will allow some
Personal Trainers to be part time employees, during which time they
will be directly managed to deliver services on the gym floor. We
hope that this change will benefit all stakeholders. Personal
Trainers will have access to an enhanced range of opportunities and
relevant benefits and members will benefit from a more reliable and
committed programme of activities in the gym. These are important
changes that we are trialling to understand the learnings, before a
wider implementation during the course of 2018.
Many businesses are having to reflect on a more uncertain
economic environment and the potential impact of Brexit. We believe
The Gym Group is particularly well positioned, with no material
identifiable impacts from Brexit at this time and the ability to
thrive even if the economy becomes less buoyant as we offer such
good value for money gym membership.
This business has such a positive purpose. To provide affordable
access to exercise facilities and expert help to every person who
wants to improve their wellbeing, whatever their starting point,
whatever their destination.
The impact The Gym Group has had in enabling and encouraging
people from all walks of life - we believe several million over the
last ten years - to commit to becoming more active is a good news
story of which we are incredibly proud because we know that every
new gym that opens can be a force for good in its community. We
actively seek to establish gyms where there may previously have
been no affordable alternatives. We currently have 36 gyms situated
in the top 20% "most inactive" local authority areas and 41 gyms (a
third of all our gyms) situated in the top 20% "most deprived"
local authority areas. The average age of our members is 31 so, if
they can get into fitness and staying healthy while relatively
young, the benefits for them and for society are clear.
We have an engaged and talented Board and I am grateful to my
non-executive colleagues for their willingness to both challenge
and support the business; they bring a wealth of relevant insight
and experience. But most credit must go to the Management team led
by CEO John Treharne and all our colleagues. The Gym Group has a
special culture; we look forward to giving many more members their
best gym experience yet.
Penny Hughes
Chairwoman
20 March 2018
Chief Executive's Review
Introduction
This has been a very significant year of growth for the
business, one where we have substantially increased our market
share in the low cost gym sector through a combination of
acquisition and organic openings.
During the year we expanded our estate by 39 sites, up from 89
in 2016 to 128 at the end of 2017. 21 of these new sites were as a
result of our organic opening programme. In September 2017, the
acquisition of 18 additional sites from Lifestyle Fitness gave us a
strong set of profitable locations to convert into The Gym brand
and develop our geographic footprint.
This expansion substantially grew our membership base with total
year end members up 35.5% to 607,000 (2016: 448,000) and average
members up 23.4% to 528,000 (2016: 428,000). The impact of this
growth is demonstrated by increases in all our key metrics; revenue
up 24.3% to GBP91.4 million (2016: GBP73.5 million) and Group
Adjusted EBITDA up by 23.2% to GBP28.0 million (2016: GBP22.7
million). Adjusted Profit before Tax increased by 38.2% to GBP12.0
million (2016: GBP8.7 million) and Adjusted Earnings per Share up
by 32.1% to 7.4p (2016: 5.6p). Our statutory profit before tax has
increased to GBP9.2 million (2016: GBP6.9 million).
During the year we put in place foundations that will enable us
to support a business of size and substance. A key part of this was
the launch of a new Member Management System in July, an
infrastructure development that gives us the flexibility and
ability to launch new products and react to changes in market
conditions through our pricing structure. It is the backbone of our
technology architecture. To launch such a major technological
change in a 24/7 business without any interruption in member
service was an excellent achievement by our team. The development
effort will continue in 2018 as we plan the launch of a new
Enterprise Resourcing Planning (ERP) platform, a development that
gives the finance team the capability to support the increased
scale of the business.
The low cost gym market is developing and growing rapidly, and
our investment strategy has allowed us to take advantage of these
market trends. The Group achieved 2/3rds of the estimated net site
growth of the low cost market between March 2017 and December 2017.
Overall our market share is up from 17.7% in March 2017 to 22.4% in
December 2017. Our model continues to attract new members,
including first time gym-goers who are new to the market, as well
as taking share from other operators. We have introduced affordable
health and fitness provision for those that previously couldn't
access it. In doing so, we are positively impacting the nation's
collective fitness, a great purpose for a business. Even if the
economic environment becomes more difficult, we believe that our
core proposition of a quality low cost operation will continue to
flourish.
Strategic progress
Delivering performance from gyms
At the year end we had 74 sites that have been operating for
more than two years (2016: 55 sites). We continue to drive
significant increases in overall profitability as sites mature.
Overall Mature Site EBITDA was GBP34.1 million up 30.3% (2016:
GBP26.2 million). Mature Site EBITDA per site was GBP461,000 (2016:
GBP476,000). This is in line with our expectation reflecting recent
moves to relatively smaller sites built at lower capital cost;
these sites can achieve our target returns at lower member numbers
than we have historically achieved. Overall we have maintained the
return on capital in the mature estate at 32% (2016: 32%). The
return on capital for mature sites opened between 2008 and 2013 and
for sites opened in 2014 and 2015 is also consistent at 32%
overall.
The considerable growth in our estate through our organic roll
out and acquisition means that, at the year end 42% of our sites
have been open for less than two years (2016: 38%). This means that
growth from sites that are still to reach maturity is substantial,
and will be a key profit driver over the coming year.
The sites acquired as part of the Lifestyle transaction are a
key part of that growth. We acquired 18 sites for a total
consideration of GBP20.5 million. To date we have converted 8 of
the sites to The Gym brand, and a further two are planned for
conversion. Recently, we decided to convert the remaining 8
Lifestyle sites and expect to conclude the entire programme by
September 2018. Total conversion costs to all 18 sites are expected
to be GBP470,000 per site. We target 20% plus return on capital on
acquisition opportunities such as Lifestyle. This is lower than for
our organic openings, reflecting the acquisition premium incurred
on such sites and the faster timeline on which sites with an
existing membership base will mature, compared to the organic sites
that we open from scratch.
Improving operating efficiencies
Mature EBITDA margin in 2017 was 47.0% (2016: 47.5%), reflecting
our continued ability to apply our operating model across a
business of growing scale. We continue to operate with disciplined
cost control, selecting the right sites and negotiating acceptable
levels of rent and other fixed costs (rates and service charges).
This is assisted by a stronger covenant with landlords through
being a listed company.
Our membership is the beneficiary of the low cost base, as we
pass on the positive impact of disciplined cost control to them.
This means an average headline price of GBP17.50 (2016: GBP17.00)
and a membership fee range (excluding LIVEIT.) of GBP10.99 to
GBP28.99 per month. We do however, endeavor to increase yield
wherever the local market allows and pricing decisions are
intelligently made through a combination of data analytics and
local market intelligence. Average revenue per member per month
increased 0.7% across our estate and we expect further progress in
2018 as sites become more established. Revenue progression will be
enhanced by the integration of the Lifestyle sites into our
operating model and will benefit from the rollout of the LIVE IT.,
our premium pricing initiative, across the estate.
Achieving our rollout strategy
We organically opened 21 sites in 2017. As in recent years there
was a strong London bias, with seven of the sites located within
the M25 and a further five within the South East. Our proposition
goes from strength to strength, and one recent opening saw our
record for the largest number of members on launch (day one)
broken. Small scale acquisitions from previous years contributed to
the strong organic growth as we converted three sites acquired from
Fitness First in 2016. We continue to view the acquisition of
existing gyms as an important element of our growth plan, and at
the end of 2017 we were able to acquire a site in Aylesbury from
another operator.
It is encouraging that the availability of excess space from
retailers is increasing. Sites in Edinburgh, Walthamstow and
Altrincham have arisen from retailers giving up such space. Other
sites we have opened are located in new build developments or were
previously used for alternative leisure activities.
Our new sites continue to trade well, in line with our
expectations. Encouragingly, our pipeline is strong and expanding
rapidly and we entered 2018 with the confidence that we will once
again be able to open between 15-20 sites in the coming year.
The strong returns on capital are now benefiting from the
savings which have been achieved on multiple stages of the fit-out
process, including build costs, gym equipment and fixtures and
fittings. During 2017 our average fit-out cost was GBP1.35 million
compared to a historical average on all mature sites of GBP1.46
million. In the coming year we will once again be tendering our gym
equipment supply contract, using our increased scale to benefit
capital cost.
Developing the customer proposition
Our latest branding means that sites are modern, well-equipped
and well-lit as our members expect. We refurbished 17 sites in 2017
taking advantage of their cyclical five year refurbishment to bring
them in line with our latest specification. By the end of 2018 we
expect all our sites to have been updated to a common and high
quality standard. Our experience is of improved performance levels
on the completion of a refurbishment, giving us the ability to
relaunch the site to prospective members.
During the year we introduced a new system of tracking Net
Promoter Score, which measures customer feedback, enabling us to
introduce member satisfaction as a metric within the incentive
programme at site level. This system is still in its implementation
phase. The previous system, which ran until June 2017, showed an
NPS of 63% - a continuation of the high levels achieved in previous
years. We continue to see member service as a key differentiating
factor in the running of a successful low cost gym and this new
system is a key part of improving the already high standards across
our estate.
The most significant innovation in 2017 was the launch of
LIVEIT. our premium pricing product. The early results from this
were promising, allowing us to expand the initial rollout to the
whole estate. LIVEIT. gives members four specific benefits; the
ability to bring a friend, multi-site access, use of a fitness
measurement machine (Fitquest) and affiliate member offers from
third parties. The rollout is on course to complete by May 2018.
LIVEIT. is just one part of our strategy to drive yield. Price
increases for new members are introduced where applicable, and as
markets mature a discounted joining fee is used as a key
promotional tool to drive volume.
Our people
During the year we announced plans to trial a new operating
model within our estate that would enable some of our Personal
Trainers to take up part time employment. Outside of the contracted
12 hours, they will continue to run their business on a
self-employed basis in our gyms by payment of a rent. The trials
are proceeding according to plan and we are in the process of
extending the trial, with a full scale rollout currently scheduled
in for the summer. The new model is driven by our desire to improve
member satisfaction by exercising control over Personal Trainers in
their contracted hours. We are confident that this significant
change will deliver tangible benefits and importantly retain the
competitive advantage that we have that enables us to have the best
Personal Trainers operating out of our gyms.
During the year the business has recruited new talent to ensure
that our Marketing, Technology and Finance teams have the scope to
operate the business at the scale that is required. The benefits of
this investment have already been seen in the various
value-enhancing projects that have been launched in the year
including the new Member Management System, the Lifestyle
acquisition and the LIVEIT. launch. Enhancing our quality team and
business infrastructure enables us to drive the business forward at
pace. Throughout the business our culture remains to drive
performance at a local level while providing high quality central
support. This is a philosophy that has served the business well in
its first 10 years and will, I am sure, continue to do so in the
coming years. The commitment of all our people remains key to the
success of this business whether it be in supporting new site
openings or in the day to day operations. I was delighted that at
our employee conference in 2017 we were able to recognise 20
employees who have been with us for more than five years and I hope
this number grows exponentially in the coming years.
Our use of technology
With the launch of the new Member Management System now
complete, the business can focus on using its technological edge to
drive performance. Part of this includes using the newly-created
platform to launch functional improvements that enhance the
customer journey. We will continue to research ways in which using
technology will enhance the customer experience for existing
members. We are also seeking to improve conversion levels through
our website. Artificial Intelligence that can drive efficiencies in
our operating processes, dynamic pricing and the development of an
app are also part of the plan. Technology and systems development
such as the ERP project will remain fundamental to the delivery of
our business model and help to facilitate the low cost environment
that we operate in.
2017 was also the year when we started to realise the benefits
of past technology investment. This includes use of the email sales
platform (Salesforce), the new website and a business intelligence
platform that supports the data analytics team. In a data rich
business we increasingly see the potential to enhance performance
and efficiency by using data gathered on member behavior. We
believe this is an area of significant competitive advantage
compared to the traditional market.
During the past 12 months, we have celebrated a number of key
milestones, not least our 10 year anniversary from when I founded
the business. The launch of the 100(th) gym at Feltham by Jonnie
Peacock was a great way to celebrate, and we are well on our way to
the next landmark with site numbers having increased to 128 at the
year end. We also welcomed our 100 millionth member visit in
November. While we celebrate these successes, we remain fiercely
ambitious to establish new milestones as we grow the business.
Outlook
The new financial year has started well and current trading is
in line with the Board's expectations. Membership numbers at the
end of February show an increase to 664,000, a record level, with a
9.4% increase since December 2017. This continued level of member
growth helps to underpin our performance for the rest of the year.
In 2018 we anticipate opening 15 to 20 sites, with 6 openings
expected in the first half of the year. South East openings are
more likely to be geared towards the second half of the year. While
it remains early days in the rollout of LIVEIT., we expect to
continue to see promising levels of take-up as the initiative is
launched across the estate. We expect that it will underpin
increased yield growth and we will give a further update at the
half year once the rollout has been completed.
After a year in which our business has increased in scale more
than at any stage in its history, 2018 will see the realisation of
the benefits of our recent investments. This will assist in
achieving the uplift in profitability built into our plans and in
continuing to expand at a rapid rate. It is an exciting time for
everyone involved with the Company as we look to extract the
inherent value within our business.
John Treharne
Chief Executive Officer
20 March 2018
Financial Review
Summary
We are pleased to have delivered another strong set of financial
results with revenue growth of 24.3% and Group Adjusted EBITDA
growth of 23.2%.
The growth in Group Adjusted EBITDA has been achieved despite
significant pre-opening costs of GBP2.6 million in the opening of
21 new gyms and investment in central services. Overall we consider
that GBP0.3 million of incremental pre-opening cost that has been
incurred in 2017 related to Q1 2018 openings.
Group Operating Cash Flow decreased by 1.1% despite the increase
in Group Adjusted EBITDA offset by a 113.7% increase in maintenance
capital expenditure due to the refurbishment of 17 (2016: 8) sites
under the refurbishment programme.
2017 2016
GBP'000 GBP'000
------------------------------------------ -------- --------
Total Number of Gyms 128 89
Total Number of Members ('000) 607 448
Revenue 91,377 73,539
Group Adjusted EBITDA(1) 27,963 22,691
Group Adjusted EBITDA before Pre-Opening
Costs(2) 30,598 24,888
Statutory Profit before Tax 9,191 6,940
Adjusted Earnings(3) 9,527 7,153
Group Operating Cash Flow(4) 24,677 24,944
------------------------------------------ -------- --------
(1) Group Adjusted EBITDA is calculated as operating profit
before depreciation, amortisation, long term employee incentive
costs, and exceptional items.
(2) Group Adjusted EBITDA before Pre-Opening Costs is defined as
Group Adjusted EBITDA excluding the costs associated with new site
openings.
(3) Adjusted Earnings is calculated as the Group's profit for
the year before amortisation, exceptional items, and the related
tax effect.
(4) Group Operating Cash Flow is calculated as Group Adjusted
EBITDA less working capital less maintenance capital expenditures
and is a non-IFRS GAAP measure.
Result for the year
2017 2016
GBP'000 GBP'000
------------------------------------ --------- ---------
Revenue 91,377 73,539
Cost of sales (982) (830)
------------------------------------ --------- ---------
Gross profit 90,395 72,709
Administration expenses (78,015) (64,153)
Long term employee incentive costs (774) (519)
Exceptional costs (1,664) (321)
------------------------------------ --------- ---------
Operating profit 9,942 7,716
Finance income 12 19
Finance costs (763) (795)
------------------------------------ --------- ---------
Profit before tax 9,191 6,940
Tax charge (2,020) (1,237)
------------------------------------
Profit for the year 7,171 5,703
------------------------------------ --------- ---------
Tax charge 2,020 1,237
Amortisation of intangible assets 1,175 1,442
Exceptional administration expenses 1,664 321
-------------------------------------
Adjusted profit before tax 12,030 8,703
------------------------------------- -------- --------
Tax charge (2,020) (1,237)
Tax effect of above items (483) (313)
-------------------------------------
Adjusted Earnings 9,527 7,153
------------------------------------- -------- --------
Revenue
The 24.3% increase in revenue is as a result of the growth in
Average Member Numbers and a 0.7% increase in the Average Revenue
per Member per Month to GBP14.41 (2016: GBP14.31).
Member satisfaction is one of our key strategic drivers and our
membership numbers reflect the ongoing effectiveness of our
proposition. Member Numbers at the year end grew significantly,
from 448,000 in 2016 to 607,000 in 2017.
Our average member numbers grew by 23.4% to 528,000 (2016:
428,000), largely due to the opening of 21 sites during the year.
Average Revenue per Member per Month increased from GBP14.31 to
GBP14.41 in 2017 as our pricing continues to mature.
As a result, revenue for the year ended 31 December 2017
increased to GBP91.4 million (2016: GBP73.5 million).
Administration expenses
Administration expenses increased by 21.6%, primarily due to the
number of gyms increasing from 89 at 31 December 2016 to 128 at 31
December 2017.
The largest cost within administration expenses is property
lease rentals. These increased from GBP13.5 million in 2016 to
GBP17.3 million in 2017 due to the increase in the number of gyms
and head office. Staff costs also form a significant part of
administration expenses and increased from GBP9.9 million to
GBP13.2 million, excluding a charge of GBP0.8 million (2016: GBP0.5
million) from long term employee incentives. The increase was
driven by both gym openings and a scaling up of head office support
costs to support future growth.
Head office costs increased from GBP7.3 million in 2016 to
GBP9.1 million in 2017. This was largely due to the effect of
headcount increases in 2017 and staff bonuses associated with
improved operating performance.
Depreciation charges increased from GBP12.7 million in 2016 to
GBP14.4 million in 2017, largely as a result of the increased
number of sites. During the year the Group carried out a
re-assessment of the estimated useful lives of gym equipment
resulting in a GBP1.3 million decrease in the depreciation charge.
Depreciation as a percentage of revenue decreased from 17% in 2016
to 16% in 2017, reflecting the growing maturity of our estate.
Amortisation charges decreased from GBP1.4 million to GBP1.2
million due to certain intangible assets recognised on the
acquisition of The Gym Limited becoming fully amortised. This is
offset by three months of amortisation on new intangibles
recognised on the Lifestyle acquisition during the year.
Group Adjusted EBITDA
2017 2016
GBP'000 GBP'000
------------------------------------ -------- --------
Operating profit 9,942 7,716
Depreciation of property, plant
and equipment 14,408 12,693
Amortisation of intangible assets 1,175 1,442
Exceptional items 1,664 321
Long term employee incentive costs 774 519
------------------------------------
Group Adjusted EBITDA 27,963 22,691
------------------------------------ -------- --------
Group Adjusted EBITDA increased by 23.2% to GBP28.0 million
(2016: GBP22.7 million), due to an increase in the number of
existing sites reaching mature profit levels.
Group Adjusted EBITDA is adversely affected by pre-opening costs
incurred in the process of opening new sites. Group Adjusted EBITDA
before Pre-Opening Costs increased by 22.9% to GBP30.6 million.
Pre-opening costs increased from GBP2.2 million to GBP2.6 million,
reflecting 21 site openings in 2017 compared to 15 in 2016. In 2017
GBP0.3 million of the costs related to Q1 2018 openings.
Growth in EBITDA from our mature sites has contributed
significantly towards the growth in Group Adjusted EBITDA. Mature
Site EBITDA(1) contributed by the 74 mature sites increased by
30.3% to GBP34.1 million (2016: GBP26.2 million from 55 sites).
EBITDA from new sites decreased from GBP3.8 million in 2016,
representing 34 sites, to GBP3.0 million in 2017, with 54 sites at
31 December 2017. This is as a result of the timing of gyms
openings in 2017 compared to 2016 and just 3 months contribution
from the 18 Lifestyle sites. The new gyms opened in 2016 and 2017
are performing well.
Exceptional items
Exceptional costs have increased significantly year on year from
GBP0.3 million in 2016 to GBP1.7 million in 2017. In 2017
Exceptional items includes GBP0.5 million of acquisition costs and
GBP0.6 million of integration costs associated with the acquisition
of the Lifestyle Fitness portfolio. A further GBP0.5 million
related to the restructuring costs associated from the
restructuring of the operating model associated with the personal
trainers used within the business.
Long term employee incentives
During the year the Group granted further Performance Share Plan
('PSP') and Share Incentive Plan ('SIP') shares to certain members
of senior management. The Group also introduced Restricted Stock
Option granted to certain members of senior management and Long
Service Awards granted to employees of the Group. The awards vest
in three years providing continuous employment during this period
and in the case of the PSP certain performance conditions are
attained relating to the earnings per share ("EPS") and Total
shareholder returns ("TSR").
The Group continues to operate a matching shares scheme under
the SIP, where for every share purchased by an employee the Group
will award one matching share, up to a maximum value, which vest in
three years subject to continued employment.
The Group recognised a charge of GBP0.8 million (2016: GBP0.5
million) in relation to these share based payment arrangements.
Finance costs
Finance costs were unchanged at GBP0.8 million in 2017 (2016:
GBP0.8 million) despite drawing GBP28.0 million from our facilities
to fund the Lifestyle acquisition, however this occurred in the
final quarter of 2017. The Group currently has undrawn facilities
of GBP12.0 million of its five year bullet repayment facility
having increased the facility available by GBP10.0 million during
the year.
Taxation
The Group has incurred a tax charge of GBP2.0 million for the
year ended 31 December 2017, which represents an effective tax rate
(ETR) on statutory profit before tax of 22.0% (2016: 17.8%). The
increase in ETR was driven by the adjustments in respect of prior
year depressing the ETR for 2016 in addition to which the Group
incurred a greater level of costs in 2017 which were not deductible
for tax purposes relating to the Lifestyle acquisition and fit-out
and refurbishment costs.
The underlying effective tax rate on adjusted profit before tax,
after adjusting for amortisation and exceptional items, is
20.8%.
(1) Mature sites are defined as gyms that have been open for 24
months or more measured at the end of the year. New sites are
defined as gyms that have been open for less than 24 months at the
end of the year, and includes all 18 Lifestyle sites.
Earnings
The statutory profit before tax increased to GBP9.2 million
(2016: GBP6.9 million), largely as a result of the increase in
Group Adjusted EBITDA, offset by increased depreciation due to
increased number of sites and higher exceptional costs. The Group
delivered a profit for the year of GBP7.2 million (2016: GBP5.7
million) as a result of the factors discussed above.
Basic earnings per share ('EPS') was 5.6p (2016: 4.5p). Adjusted
EPS was 7.4p (2016: 5.6p). Adjusted EPS is calculated by excluding
amortisation, exceptional items, and the resultant tax effect from
earnings.
Dividend
The Board expect to continue to adopt a progressive dividend
policy. When making proposals for the payment of dividends, the
Board considers the resources available to the Group.
Due to an oversight interim accounts were inadvertently not
filed at Companies House prior to payment of dividends in 2017,
totalling GBP1,347,000 and hence these distributions were paid in
technical infringement of the Companies Act 2006 ("the Act"). We
are undertaking a series of administrative steps in order to
rectify this issue and put the Company's shareholders and the
Directors, insofar as possible, in the position that was originally
intended. At the Annual General Meeting of the Company's
shareholders to be held on 4 June 2018, a special resolution is
proposed to authorise the appropriation of distributable profits to
the payment of the relevant dividends, to waive any rights of the
Company to pursue shareholders who received the distributions or
past, present or future Directors in respect of payment of the
distributions and to approve entering into deeds of release in
favour of such shareholders and Directors. Entry into the deeds of
release constitutes a smaller related party transaction under
Listing Rule 11.1.10 and a related party transaction under IAS 24
"Related party disclosures". The overall effect of the resolution
being proposed is to return all parties to the position they would
have been in had the relevant dividends been made in full
compliance with the Act. The Directors consider it in the best
interests of the Company to regularise the position since
sufficient distributable reserves were available to make the
payment and it was intended that shareholders should receive the
dividends.
The Group declared an interim dividend of 0.30p per share. The
Board recommends a final dividend of 0.90p per share in respect of
the financial year ending 31 December 2017, resulting in a full
year dividend of 1.20p per share. Shareholders will be asked to
approve the dividend at the AGM on 4 June 2018, for payment on 14
June 2018 to shareholders whose names are on the register on 25 May
2018. This final dividend will be paid by reference to interim
accounts, which will demonstrate that the Company has adequate
distributable reserves to pay the final dividend, to be filed with
Companies House in compliance with the Act.
Cash Flow
2017 2016
GBP'000 GBP'000
------------------------------------- --------- ---------
Group Adjusted EBITDA 27,963 22,691
Movement in working capital 2,981 5,186
Maintenance capital expenditure(1) (6,267) (2,933)
------------------------------------- --------- ---------
Group Operating Cash Flow 24,677 24,944
Expansionary capital expenditure(2) (52,453) (20,922)
Exceptional items (1,147) (944)
Taxation (1,050) (243)
Finance costs (759) (552)
Dividends paid (1,347) (321)
Other net cash flows from financing
activity 27,714 -
-------------------------------------
Net cash flow (4,365) 1,962
------------------------------------- --------- ---------
(1) Maintenance capital expenditure comprises the replacement of
gym equipment and premises refurbishment.
(2) Expansionary capital expenditure relates to the Group's
investment in the fit-out of new gyms, the acquisition of the
Lifestyle portfolio, product enhancements, acquisitions and
technology projects. It is stated net of contributions towards
landlord building costs.
(3) Items 1) & 2) are non-IFRS measures
The Group's increasing Group Adjusted EBITDA and efficient use
of working capital continues to deliver strong cash flows. Group
Operating Cash Flow has declined marginally by 1.1% from GBP24.9
million to GBP24.7 million despite greater cash generation from
mature sites as a result of the continuation of the site
refurbishment programme: in the current year 17 (2016: 8) sites
were refurbished. Total maintenance capital expenditure was GBP6.3
million (2016: GBP2.9 million). Given this our Group Operating Cash
Flow Conversion has fallen significantly to 88.2% for the year
(2016: 109.9%), despite the continuing positive effects of our
negative working capital profile.
Expansionary capital expenditure of GBP52.5 million (2016:
GBP20.9 million) arises as a result of the fit-out of new gyms and
the acquisition of the Lifestyle portfolio.
The funding of the Lifestyle acquisition and expansionary
capital expenditure has resulted in an increase in Net Debt to
GBP37.5 million (2016: GBP5.2 million) and the Net Debt:Group
Adjusted EBITDA to 1.34x (2016: 0.23x). Target threshold under
banking covenants is less than 3.25x.
Balance sheet
2017 2016
GBP'000 GBP'000
------------------------- --------- ---------
Non-current assets 196,253 148,157
Current assets 9,691 10,795
Current liabilities (44,971) (34,257)
Non-current liabilities (40,089) (10,405)
-------------------------
Net assets 120,884 114,290
------------------------- --------- ---------
Our business model and strong conversion from revenue to cash
results in an uncomplicated balance sheet.
Non-current assets have increased by GBP48.1 million to GBP196.3
million (2016: GBP148.2 million). This is largely as a result of
capital expenditure in property, plant and equipment and
intangibles totalling GBP63.3 million, offset by depreciation and
amortisation of GBP15.6 million.
Current assets have decreased due to lower cash balances, as
discussed above mitigated by an increase in prepayments as a result
of the increase in the number of sites. Current liabilities have
increased by GBP10.7 million as a result of lease incentives
associated with new gyms opening in the year, and increases in
trade and other payables as the size of our operations
increases.
The Group has drawn GBP38.0 million of its five year bullet
repayment facility. GBP12.0 million of the facility was undrawn at
31 December 2017 and will be utilised to fund new sites, working
capital and capital expenditure.
Guidance
We reiterate the guidance that we have made previously:
-- We expect 15 to 20 new openings for 2018;
-- Depreciation is expected to be 16% of revenue
in 2018;
-- The charge for long term employee incentives
is anticipated as GBP1.5m in 2018, rising
to GBP1.8m in 2019; and
In addition, in 2018:
-- We expect the new sites fit-out costs to continue
to be between GBP1.3 million and GBP1.4 million
per site, with a further GBP4.0 million to
GBP4.5 million of capital spend on IT, the
ERP platform and other expansionary projects;
-- The 18 Lifestyle conversions are expected
to complete at a total cost in 2017 and 2018
of GBP470,000 per site. A total of GBP1.5m
was spent in 2017 on the 6 conversions;
-- Maintenance capital expenditure is expected
to equate to 5.5% of revenue in 2018;
-- To support the growth of the business we expect
support office costs to be around 8.5% to
9.0% of revenues (2017: 10%).
-- The future effective tax rate, after adjusting
for amortisation and exceptional items, is
estimated to be 23% in 2018 (2017: 20.8%)
Richard Darwin
Chief Financial Officer
20 March 2018
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
31 December 31 December
Note 2017 2016
GBP'000 GBP'000
Revenue 91,377 73,539
Cost of sales (982) (830)
Gross profit 90,395 72,709
Administration expenses (80,453) (64,993)
Operating profit 9,942 7,716
Being:
- Group Adjusted EBITDA(1) 27,963 22,691
- Depreciation 7 (14,408) (12,693)
- Amortisation (1,175) (1,442)
- Exceptional items 3 (1,664) (321)
- Long term employee
incentive costs 5 (774) (519)
Finance income 12 19
Finance costs (763) (795)
Profit before tax 9,191 6,940
Tax charge 6 (2,020) (1,237)
Profit for the year attributable
to equity shareholders 7,171 5,703
------------ ------------
Other comprehensive income
for the year - -
Total comprehensive income
attributable to equity
shareholders 7,171 5,703
------------ ------------
Earnings per share 4 pence pence
Basic 5.6 4.5
Diluted 5.6 4.4
1-Group EBITDA is a non-GAAP metric used internally by
management and externally by investors
Consolidated Statement of Financial Position
As at 31 December 2017
31 December 31 December
Note 2017 2016
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 7 133,356 99,037
Intangible assets 62,066 48,717
Trade and other receivables 515 403
Available-for-sale financial
assets 316 -
------------ ------------
Total non-current assets 196,253 148,157
Current assets
Inventories 197 159
Trade and other receivables 9,037 5,814
Cash and cash equivalents 457 4,822
Total current assets 9,691 10,795
Total assets 205,944 158,952
------------ ------------
Current liabilities
Trade and other payables 43,662 34,123
Provisions 487 -
Income taxes payable 822 134
Total current liabilities 44,971 34,257
Non-current liabilities
Borrowings 8 37,113 9,178
Other financial liabilities 184 -
Provisions 700 544
Deferred tax liabilities 6 2,092 683
------------ ------------
Total non-current liabilities 40,089 10,405
Total liabilities 85,060 44,662
------------ ------------
Net assets 120,884 114,290
------------ ------------
Capital and reserves
Issued capital 12 12
Own shares held 48 48
Capital redemption reserve 4 4
Share premium 136,280 136,280
Retained deficit (15,460) (22,054)
Total equity shareholders'
funds 120,884 114,290
------------ ------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Own Capital
Issued shares redemption Share Retained
Capital held reserve Premium deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 12 48 4 136,280 (27,901) 108,443
Profit for
the year and
total comprehensive
income - - - - 5,703 5,703
Share based
payments 5 - - - - 465 465
Dividends paid - - - - (321) (321)
At 31 December
2016 12 48 4 136,280 (22,054) 114,290
Profit for
the year and
total comprehensive
income - - - - 7,171 7,171
Share based
payments 5 - - - - 655 655
Deferred tax
on share based
payments - - - - 115 115
Dividends paid - - - - (1,347) (1,347)
At 31 December
2017 12 48 4 136,280 (15,460) 120,884
--------- -------- ------------ --------- --------- --------
Consolidated Cash Flow Statement
For the year ended 31 December 2017
31 December 31 December
Note 2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Operating profit 9,942 7,716
Adjustments for:
Exceptional items 3 1,664 321
Depreciation of property, plant
and equipment 7 14,408 12,693
Amortisation of intangible assets 1,175 1,442
Long term employee incentive
costs 774 519
(Profit) / loss on disposal
of property, plant and equipment (5) 30
Increase in inventories (38) (37)
Increase in trade and other
receivables (3,334) (451)
Increase in trade and other
payables 6,358 5,622
------------ ------------
Cash generated from operations 30,944 27,855
Tax paid (1,050) (243)
Interest paid (771) (571)
------------ ------------
Net cash flows from operating
activities before exceptional
items 29,123 27,041
Exceptional costs (1,147) (944)
Net cash flow from operating
activities 27,976 26,097
------------ ------------
Cash flows from investing activities
Proceeds from disposals of property,
plant and equipment - 22
Purchase of available-for-sale
financial assets (316) -
Business Combinations (21,300) -
Purchase of property, plant
and equipment (35,411) (22,833)
Purchase of intangible assets (1,693) (1,022)
Interest received 12 19
Net cash flows used in investing
activities (58,708) (23,814)
------------ ------------
Cash flows from financing activities
Dividends paid (1,347) (321)
Drawdown of bank loans 28,000 -
Payment of financing fees (286) -
Net cash flows from / (used
in) financing activities 26,367 (321)
------------ ------------
Net (decrease) / increase in
cash and cash equivalents (4,365) 1,962
Cash and cash equivalents at
1 January 4,822 2,860
Cash and cash equivalents at
31 December 457 4,822
------------ ------------
Notes
1. General information
The financial information, comprising the Consolidated Statement
of Comprehensive Income, Consolidated Statement of Financial
Position, Consolidated Statement of Changes in Equity, Consolidated
Cash Flow Statement and related notes, has been extracted from the
Consolidated Financial Statements of The Gym Group plc ('the
Company') for the year ended 31 December 2017, which were approved
by the Board of Directors on 20 March 2018.
The financial information set out above does not constitute
statutory accounts for the years ended 31 December 2017 or 2016
within the meaning of sections 435(1) and (2) of the Companies Act
2006 or contain sufficient information to comply with the
disclosure requirements of International Financial Reporting
Standards ('IFRS'), but is derived from those accounts. An
unqualified report on the Consolidated Financial Statements for
each of the years ended 31 December 2017 and 2016 has been given by
the auditors Ernst & Young LLP. Each year's report did not
include reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and
did not contain any statement under section 498 (2) or (3) of the
Companies Act 2006.
The Consolidated Financial Statements for the year ended 31
December 2016 have been filed with the Registrar of Companies, and
those for 2017 will be delivered in due course subject to their
approval by the Company's shareholders at the Company's Annual
General Meeting on 4 June 2018.
2. Basis of preparation
The Consolidated Financial Statements for the year ended 31
December 2017, from which the financial information in this
announcement is derived, have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted for
use in the EU, International Financial Reporting Interpretations
Committee ('IFRIC') interpretations and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
The Consolidated Financial Statements have been prepared on a
going concern basis under the historical cost convention as
modified by the recognition of derivative financial instruments and
other financial liabilities at fair value. The Directors have made
appropriate enquiries and formed a judgement at the time of
approving the Financial Statements that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason
the Directors continue to adopt the going concern basis in
preparing the Financial Statements.
3. Exceptional items
2017 2016
GBP'000 GBP'000
Acquisition costs 548 -
Integration costs 525 -
Restructuring costs 543 -
Costs related to post IPO
reorganisation - 149
Costs associated with head
office relocation 48 172
1,664 321
-------- --------
Acquisition and integration costs relate to the acquisition of
the trade and assets from Lifestyle Fitness consisting of 18 sites
located in the Midlands, North of England and Scotland on the 29
September 2017. Restructuring costs relate to the cost associated
with changing the operating model in relation to the use of
Personal Trainers within the business.
4. Earnings per share
Basic earnings per share is calculated by dividing the profit or
loss attributable to equity shareholders by the weighted average
number of Ordinary shares outstanding during the year, excluding
unvested shares held pursuant to The Gym Group plc Share Incentive
Plan, The Gym Group plc Performance Share Plan, The Gym Group plc
Restricted Stock Plan and The Gym Group plc Long Service Award Plan
(see note 5).
2017 2016
Basic weighted average number
of shares 128,105,275 128,105,275
Adjustment for share awards 416,773 172,130
------------ ------------
Diluted weighted average number
of shares 128,522,048 128,277,405
Basic earnings per share (p) 5.6 4.5
Diluted earnings per share
(p) 5.6 4.4
------------ ------------
Diluted earnings per share is calculated by adjusting the
weighted average number of Ordinary shares outstanding to assume
conversion of all dilutive potential Ordinary shares. During the
year ended 31 December 2017, the Group had potentially dilutive
shares in the form of share options and unvested shares issued
pursuant to The Gym Group plc Share Incentive Plan,The Gym Group
plc Performance Share Plan, The Gym Group plc Restricted Stock Plan
and The Gym Group plc Long Service Award Plan (see note 5).
Adjusted earnings per share is based on profit for the year
before exceptional items, amortisation and their associated tax
effect.
2017 2016
GBP'000 GBP'000
Profit for the year 7,171 5,703
Amortisation of intangible
assets 1,175 1,442
Exceptional administration
expenses 1,664 321
Tax effect of above items (483) (313)
Adjusted earnings 9,527 7,153
-------- --------
Basic adjusted earnings per
share (p) 7.4 5.6
Diluted adjusted earnings per
share (p) 7.4 5.6
-------- --------
5. Share based payments
The Group had the following share-based payment arrangements in
operation during the year:
a) The Gym Group plc Performance Share Plan
b) The Gym Group plc Share Incentive Plan -
Free shares
c) The Gym Group plc Share Incentive Plan -
Matching shares
d) The Gym Group plc Restricted Stock Plan
e) The Gym Group plc Long Service Award Plan
In accordance with IFRS 2 Share Based Payments, the value of the
awards are measured at fair value at the date of the grant. The
fair value is expensed on a straight-line basis over the vesting
period, based on management's estimate of the number of shares that
will eventually vest.
The Group recognised a total charge of GBP655,000 (2016:
GBP465,000) in respect of the Group's share based payment
arrangements and related employer's national insurance of
GBP119,000 (2016: GBP54,000).
6. Taxation
The major components of taxation are:
(a) Tax on profit
2017 2016
GBP'000 GBP'000
Current income tax
Current tax on profits for the
year 1,712 426
Adjustments in respect of prior
years 24 (49)
-------- --------
Total current income tax 1,736 377
Deferred tax
Origination and reversal of
temporary differences 534 1,118
Change in tax rates (78) 18
Adjustments in respect of prior
years (172) (276)
-------- --------
Total deferred tax 284 860
Tax charge in the Consolidated
Statement of Comprehensive Income 2,020 1,237
-------- --------
(b) Reconciliation of tax charge
The tax on the Group's profit before tax differs from the
theoretical amount that would arise using the weighted average rate
applicable to profits of the Group as follows:
2017 2016
GBP'000 GBP'000
Profit before tax 9,191 6,940
Tax calculation at standard
rate of corporation tax of 19.25%
(2016: 20.00%) 1,769 1,388
Expenses not deductible for
tax purposes 329 156
Exceptional costs not deductible 148 -
Change in tax rates (78) 18
Adjustments in respect of prior
years (148) (325)
2,020 1,237
-------- --------
(c) Deferred tax
During the year the Group recognised the following deferred tax
assets and liabilities:
Accelerated
capital Intangible Share
allowances Losses assets schemes Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 (187) 1,006 (642) - 177
Prior year adjustment 276 - - - 276
Recognised in
income statement (564) (796) 217 25 (1,118)
Change in deferred
tax rate - (50) 32 - (18)
At 31 December
2016 (475) 160 (393) 25 (683)
Prior year adjustment 171 - - 1 172
Acquired in
business combination (921) - (319) - (1,240)
Recognised in
equity - - - 115 115
Recognised in
income statement (777) (20) 137 126 (534)
Change in deferred
tax rate 123 (15) 25 (55) 78
At 31 December
2017 (1,879) 125 (550) 212 (2,092)
------------ -------- ----------- --------- --------
7. Property, plant and equipment
Fixtures, Gym
Assets fittings and
under Leasehold and other Computer
Construction improvements equipment equipment equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January
2016 - 74,027 5,569 34,787 924 115,307
Additions - 16,729 1,178 8,257 381 26,545
Disposals - (100) - (244) - (344)
At 31 December
2016 - 90,656 6,747 42,800 1,305 141,508
Additions 2,368 21,875 2,505 10,608 647 38,003
Business
Combinations - 5,724 208 4,827 - 10,759
Disposals - (180) (8) (522) (2) (712)
At 31 December
2017 2,368 118,075 9,452 57,713 1,950 189,558
-------------- -------------- ----------- ----------- ----------- --------
Accumulated
depreciation
At 1 January
2016 - 12,309 2,321 14,948 492 30,070
Charge for
the year - 6,422 812 5,205 254 12,693
Disposals - (48) - (244) - (292)
At 31 December
2016 - 18,683 3,133 19,909 746 42,471
Charge for
the year - 7,429 1,034 5,575 370 14,408
Disposals - (168) (4) (503) (2) (677)
At 31 December
2017 - 25,944 4,163 24,981 1,114 56,202
-------------- -------------- ----------- ----------- ----------- --------
Net book
value
At 31 December
2016 - 71,973 3,614 22,891 559 99,037
At 31 December
2017 2,368 92,131 5,289 32,732 836 133,356
-------------- -------------- ----------- ----------- ----------- --------
8. Borrowings
2017 2016
GBP'000 GBP'000
Non-current
Facility A 10,000 10,000
Facility B 28,000 -
Loan arrangement fees (887) (822)
37,113 9,178
-------- --------
The Group's bank borrowings are secured by way of fixed and
floating charges over the Group's assets.
HSBC and Barclays bank facility
On 12 November 2015 the Group entered into a five year bullet
repayment facility with HSBC and Barclays. The facility comprises a
GBP10.0 million term loan ('facility A') for the purposes of
refinancing the Group's previous finance leases, a GBP25.0 million
term loan ('facility B') to fund acquisitions and capital
expenditure, and a GBP5.0 million revolving credit facility. On 14
September 2017 the Group agreed a facility amendment increasing
facility B commitment from GBP25.0 million to GBP35.0 million to
enable the acquisition of the Lifestyle Portfolio of gyms. Interest
is charged at LIBOR plus a 2.5% margin.
9. Business Combinations
On the 29 September 2017 the group acquired the trade and assets
of a portfolio of 18 gyms trading under the Lifestyle brand. The
property lease agreements in respect of ten of these gyms were
transferred to the Group and these gyms are being rebranded to
operate under The Gym brand. In respect of the eight other gyms,
the property leases were not transferred to the Group and these
gyms continue to be operated using the Lifestyle Fitness brand
under a concession agreement with the vendor whereby the Group will
pay a royalty based upon a percentage of revenue together with a
recharge equal to the vendor's lease rentals. The concession
agreement also includes an option fee totalling GBP1.25 million for
the Group to terminate the concession agreement in respect of each
gym and transfer the leasehold. In early 2018 the Board has taken
the decision to terminate the concession agreement and convert all
eight gyms to The Gym brand during 2018.
Further on the 24 November 2017 the Group also acquired the
trade and assets of a single gym based in the Aylesbury. The
consideration for the Aylesbury acquisitions includes an element of
contingent consideration which is payable upon the number of
members at the site reaching a predetermined level.
The details of both transactions, the purchase consideration,
the net assets acquired and goodwill are as follows:
Fair value
Lifestyle Aylesbury Total
Net assets
acquired GBP'000 GBP'000 GBP'000
Intangibles 1,880 72 1,952
Property, plant and equipment 10,283 476 10,759
Provisions (295) - (295)
Deferred
tax (1,242) - (1,242)
--------------------------------- ------------------- --------
Net Assets 10,626 548 11,174
-------------------------------- ------------------- ---------- --------
Goodwill 9,874 436 10,310
Total consideration 20,500 984 21,484
-------------------------------- ------------------- ---------- --------
Satisfied by
:
Cash 20,500 800 21,300
Contingent
consideration - 184 184
-------------------------------- ---------- --------
Total consideration 20,500 984 21,484
-------------------------------- ------------------- ---------- --------
Net cash outflow arising
on acquisition
Cash consideration 20,500 800 21,300
Net cash outflow 20,500 800 21,300
-------------------------------- ------------------- ---------- --------
Five year record
2017 2016 2015 2014 2013(1)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 91,377 73,539 59,979 45,480 35,734
Group Adjusted EBITDA 27,963 22,691 17,016 14,688 11,752
Group Adjusted EBITDA
before Pre-Opening
Costs 30,598 24,888 19,681 16,668 12,886
Group Operating Cash
Flow 24,677 24,944 18,616 16,514 14,751
Group Operating Cash
Flow Conversion 88.2% 109.9% 109.4% 112.4% 125.5%
Expansionary Capital
Expenditure 52,453 20,922 28,230 20,335 14,058
Net Debt 37,543 5,178 7,140 49,205 36,743
Net Debt to Group
Adjusted EBITDA 1.34x 0.23x 0.42x 3.35x 3.11x
Group Adjusted Earnings 9,527 7,153 (1,107) (4,452) (3,551)
Adjusted earnings
per share (p) 7.4 5.6 (1.8) (9.1) (13.3)
Total Number of Gyms
(number) 128 89 74 55 40
Total Number of Members
('000) 607 448 376 293 225
Average Revenue per
Member per Month
(GBP) 14.41 14.31 14.08 13.98 14.06
Number of Mature
Gyms in Operation
(number) 74 55 40 32 16
Mature Gym Site EBITDA 34,082 26,161 18,828 16,244 9,505
(1) The Gym Group plc acquired control of The Gym Limited on 13
June 2013. Before this date the Group did not constitute a single
legal group. Prior to the acquisition, combined financial
information has been prepared on a basis that aggregates the
results, cash flows, assets and liabilities of each the companies
constituting the Group.
Responsibilities statement
The following statement will be contained in the 2017 Annual
Report and Accounts:
We confirm that to the best of our knowledge:
-- the Group Financial Statements, which have
been prepared in accordance with IFRSs as
adopted by the EU, give a true and fair view
of the assets, liabilities, financial position
and results of the Group; and
-- the Strategic Report contained in this Annual
Report includes a fair review of the development
and performance of the business and the position
of the Company and the Group, together with
a description of the principal risks and uncertainties
that they face; and
-- the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Company's performance,
business model and strategy.
On behalf of the Board
Richard Darwin
Chief Financial Officer and Company Secretary
20 March 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFSTVSIALIT
(END) Dow Jones Newswires
March 20, 2018 03:00 ET (07:00 GMT)
The Gym (LSE:GYM)
Historical Stock Chart
From Jun 2024 to Jul 2024
The Gym (LSE:GYM)
Historical Stock Chart
From Jul 2023 to Jul 2024
