Shares in The Gym Group PLC (LSE:GYM) plunged over 11% after the company said some of its gyms are still struggling with the shift to home working.
In a statement, the operator of 24/7 low-cost gyms said membership stood at 838,000 as of 31 October 2022, a rise of 16.7% from 31 December 2021.
Revenue for the 10 months to end-October 2022 was £143.2mln, up 78% versus the prior year.
October like-for-like revenue in the pre-Covid mature estate of 138 gyms was at 93% of the same period in pre-pandemic 2019.
However, performance in the 16 workforce-dependent sites was “significantly below these levels”, the company said.
The company said it is on track to achieve its target of 28 new openings in 2022 and 25-30 new sites in 2023.
It said it continues to manage its costs, with energy volumes 100% hedged up to the end of the first quarter of 2023 and 63% hedged for full-year 2023.
Utility costs are expected to rise by £8mln-£10mln in 2023.
Richard Darwin, CEO of The Gym Group, commented: “Working patterns have continued to evolve post the pandemic and while performance of our 16 workforce-dependent sites is disappointing, the rest of the estate continues to recover well and demonstrate the resilience of our business model.”
“We are cognisant of the macro environment and continue to monitor developments very carefully. However, the board remains very confident in the long-term opportunities for The Gym Group; our value proposition has always been a competitive advantage and we believe that in the current consumer environment, our high quality, affordable offer will be even more compelling and attractive."
The shares fell 11.65% to 109.20p in early trade.