Shares in The Gym Group PLC (LSE:GYM) were up 9% on Wednesday after the low-cost fitness chain reported a sharp rise in profits and said it was on track to deliver results at the top end of forecasts.
The company, which runs more than 240 sites across the UK, posted an 8% increase in revenue to £121 million for the six months to June. Average membership rose 4% while revenue per member also grew 4%, helping to lift like-for-like sales by 3%.
Adjusted profit before tax jumped to £4.9 million, compared with £0.5 million a year earlier.
Statutory profit after tax also improved to £3.3 million from just £0.2 million in the same period of 2024. Free cash flow rose 8% to £25.1 million, funding site openings and upgrades, as well as new technology to manage payments and members.
The group’s debt position improved, with non-property net debt reduced to £51.2 million. Leverage, a measure of debt compared with earnings, was cut to one times earnings, while its banking facilities were extended and expanded to £102 million.
Operationally, the company said both mature and newly opened gyms were performing well, reflecting its “Next Chapter” growth plan launched last year.
Three sites opened in the first half and a further eight are under development, keeping it on track to add 14 to 16 new gyms this year, funded entirely from cash generated by the business.
Chief executive Will Orr said: “This strong set of half-year results reflects continued progress against the strategic objectives set out in our Next Chapter growth plan 18 months ago.
"Our high-value, low-cost proposition continues to resonate, with members visiting the gym more often than ever.”
The group said trading momentum continued through July and August, underpinning confidence in its target of around 3% like-for-like revenue growth for the year. It now expects profits to come in at the top end of analysts’ forecasts.
The shares rose 12.05p to 148.65p.