The Gym Group PLC (LON:GYM) said it expects a cash burn of £6mln during this month’s closures.
The low-cost gym operator has closed its 167 gyms in England last week as part of the new lockdown announced by the UK Government.
READ: The Gym Group sees new joiners rise by a third after gyms reopen following lockdown
Its three gyms in Wales shuttered on October 26 following the ‘firebreak’ two-week lockdown implemented by the Welsh Assembly, while 13 gyms in Scotland remain open.
The company said it is minimising operating costs and using the government furlough scheme, while it is focusing on three new sites scheduled to open in the first quarter next year.
It has also signed leases for four additional sites with “several more” under negotiation.
Since reopening its sites on July 25 following the first lockdown, the firm had over 10mln visits with 658,000 members.
Of these, 574,000 of these were ongoing paying members, which excludes members who opted to freeze their subscription and students whose fixed term contracts had been extended to October/November after the first lockdown.
Membership grew from reopening until the second half of September, when the emergence of a second wave of COVID-19 dragged numbers down, with total membership of 639,000 on October 31.
However, over the three-month period ongoing paying members were up 2.4% at 588,000 compared to re-opening on July 25.
Since then, the gym operator has traded profitably and cash generatively, while it also invested £4mln to complete four new sites and redevelop the London Oxford Street site. It also paid £4.5mln of the £9.4mln of rent deferred.
As of October 31, net debt was £32mln.
“While there is still near-term earnings pressure due to on-going closures, we remain confidence in the longer-term outlook with proven resilience and growing demand for low-cost gyms, and declining competition,” analysts at Liberum commented.
Shares advanced 1% to 139p on Monday morning.