Gym Group (GYM)

[dealtn]

Mainly historic given the Dec 31st Year End, and the hugely disruptive year due to Covid, but full year results out today.

https://www.investegate.co.uk/gym-group ... 00066896S/

It is more about what the future looks like, than the past, but pre-Covid history suggests a fast growing cash generative roll out model at the cheaper end of the gym offering market.

Over the medium-long term I would expect physical fitness importance to be more important than some people's current aversion to indoor, sweaty environments, from a Covid health perspective. With the price offering where it is recessionary concerns are probably lower than at mid-market fitness providers.

(Disclosure long - and have been since 2017)

[PinkDalek]

Thanks for creating a company specific topic on here.

Having been alerted to the RNS this morning, I was thinking about updating a topic over at "Share Ideas", I think it was, but can't find it now having only bumped into it the other day!

I was particularly interested in what they had to say about rent in the Financial Review Summary, which included:

In a further measure to protect cash during the first lockdown, we entered into rent deferral agreements with landlords, deferring a total of £9.4 million of rent payments in the first half, of which £5.6 million was repaid by the end of the year, with the remaining £3.8 million expected to be repaid in 2021.

I was expecting some rent holidays, as against deferrals, but didn't have a chance to search when I first looked but now see:

In addition, for a number of sites we have also been able to establish deals with landlords to extend the leases or take out a lease break in exchange for rent-free periods; the benefit of these rent-free periods will total approximately £2.1 million across 2020 and 2021 of which £1.4 million was a benefit in 2020.

As you'll have seen, there's plenty on Normalised Rent and other matters.

Disclosure, also long but only since June 2019 and only a relatively small holding.

[dealtn]

Pre-Covid they were ambitious in rolling out additional gyms, which was successful. They have already added to the estate, and have further plans of expansion in the pipeline.

Like many other companies (in a number of fields) they see the current situation of weak competitors, and landlords as an opportunity for a bigger and brighter future to be taken advantage of. Not without risk, of course, but currently priced I like the risk/reward trade off.

[dealtn]

Trading Update

https://www.investegate.co.uk/gym-group ... 00068190V/

In an industry that has taken some Covid pain over the last few weeks an in line with market expectations RNS is perhaps an overachievement. Plenty of new openings, and a pipeline for more, with marginal increases in average pricing.