FITNESS REGIME
Demand for budget gyms sees PureGym’s profits take a big leap
INVESTMENT IN technology and new site openings led to strong revenue growth and significant improvements in profits at PureGym.
The Leeds-based gym operator said revenues grew 24 per cent to £198m in 2017, up from £159m the year before. Its EBITDA grew £64m from £39m – which it said was driven by new site rollout and innovative membership propositions.
PureGym opened 20 new gyms in 2017, taking the year-end total to 192, and it grew membership by 13 per cent to 927,000.
The company, which was acquired by California-based investment firm Leonard Green & Partners in November 2017, invested £32m in its nationwide network during the period.
In a statement, PureGym said it benefitted from growth in its mature estate and the ramp-up of newer gyms including the 31 gyms acquired from LA Fitness in 2015, all of which have now been converted to the PureGym format.
The company, which invested £7m on existing gym maintenance and refurbishment over the year, said its popularity has been built on a member proposition that does not bind people into 12-month contractual obligations.
Humphrey Cobbold, chief executive of PureGym, said: “2017 was a landmark year for PureGym. We delivered on the full promise of the sites acquired or opened in 2015/2016; we continued to invest in technology that drives both better experiences for our members and delivers higher revenues and great profit growth to the business; and we managed a transition in ownership from CCMP to Leonard Green & Partners.
“Above all, however, we have benefitted from the truly extraordinary commitment of our colleagues in gyms and service centres across the country.
“These individuals – and the teams in which they work – stop at nothing to support our members’ efforts in the gym. They are the heartbeat of this business and I am particularly proud of how they have responded to the challenge to innovate and develop new ways of working.”
According to research conducted by Leisure DB, the UK is rapidly becoming a nation of gym-goers. The market intelligence company’s State of the UK Fitness Industry Report, published last year, found that the number of UK gym memberships has leapt by more than five per cent year on year to 9.7m.
The biggest area of growth in the UK’s fitness industry is lowcost gyms, which now account for an estimated 35 per cent of all gym memberships.
Mr Cobbold added: “We believe firmly that the positive structural trends in our market will continue to intensify and we’re confident that we have the right processes, systems, and capabilities in place, to remain at the forefront of our industry in the years to come.”
In January, the business refinanced its debt, successfully placing £360m of bonds in an offer that was heavily over-subscribed.
Looking forward, PureGym said the outlook remains ‘very positive’ with a strong pipeline of new sites. It plans to invest in marketing, technology and innovation to both reinforce its offer and drive growth.