Gym Group shares down on increased debt predictions after year of site openings

Gym Group shares were down five per cent this morning as it announced increased net debt in a trading update, despite growing profits and revenues.

The listed fitness chain said it expected year-end debt to be £46m, up 22.6 per cent year-on-year from £37.5m, after the £20.6m acquisition of Easy Gym and investment in 17 new site openings.

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But it also forecast profits of £37m for the year, up 32.1 per cent on £28m, and revenue growth of 35.6 per cent to £123.9m.

Membership was up 19.3 per cent to 724,000, while the company opened 17 new sites over the course of the year, as well as 13 acquired from the Easy Gym opening.

The company will announce its preliminary results on 19 March.

Richard Darwin, Gym Group chief executive, said: "The Gym Group continues to deliver strong, profitable growth whilst also establishing the platform for a bigger business in the future.

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“The pace of expansion was significant in 2018: we opened 17 new gyms, converted the acquired Lifestyle sites, acquired easyGym and over the last 30 months have doubled the number of gyms in our estate.

“Looking forward we have a good pipeline of new sites and expect to open a further 15-20 gyms in 2019. We are well placed to continue to generate high levels of growth whilst maintaining strong returns on capital."