Investor confidence on UK share markets remains mixed in midweek business. The FTSE 250 has moved to within a whisker of the record peaks hit earlier in May. In contrast, the FTSE 100 has edged back below the 7,000-point marker. The Gym Group (LSE: GYM) share price, however, is having no problems gaining serious traction on Wednesday. It has shot higher following the release of some terrific trading news.
The fitness centre chain has shot 10% higher to 285p per share. The Gym Group’s share price is now up 75% from levels recorded a year ago. And the UK leisure share is now trading at its most expensive since the middle of February 2020.
The Gym Group thrives as facilities reopen
Investors piled out of The Gym Group last year as Covid-19 lockdowns forced its gyms to close. But the UK share has steadily risen in price thanks to the successful coronavirus vaccine programme and the subsequent reopening of the UK economy.
Financials released today show how strong trading at The Gym Group has been since it began reopening its gyms on 12 April. It said that business since re-opening has “outperformed the company’s expectations” thanks to “strong demand for the return to gyms”.
The Gym Group has seen membership numbers balloon from 547,000 in February to 729,000 by 24 May, it said. This is down from the 794,000 members the chain had on its books last December.
Meanwhile, the number of visits to its fitness facilities has been “strong”, The Gym Group said. The average number of visits per member per week has clocked in at 1.5 since re-opening, up from 1.1 in the comparative period in 2019. The company said that its whole estate is now up and running again, and that all of its members are paying following the removal of fee freezes upon re-opening.
Taking steps for future growth
Looking ahead, The Gym Group said that it expects to trade “more in line with seasonal norms” during the next three months. It noted that summer months are traditionally quieter for the industry. As a consequence limited net gains in overall membership levels tend to be small.
The Gym Group has also continued to expand and it opened four new gyms since 12 April. Its new centres in Chichester, York, Cambridge, and London Sydenham take the firm’s total estate to 187. The business said that it has begun talking with lenders with a view to accelerating its site expansion programme too.
Commenting on recent trading, chief executive Richard Darwin said “our members are delighted to be working out in the gym once more with visits per member and new joiner sign-up rates at record levels”.
He added that “with membership levels growing strongly, we are building our pipeline of new gyms to take advantage of what we see as a unique opportunity to extend affordable fitness to even more locations across the UK”.