PureGym’s annual results for 2017 saw another year of strong revenue growth and significant improvement in profits.
The business benefited 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 Group continued its expansion throughout the year, investing £32m to create an unrivalled nationwide network.
Over the year, membership grew by 13 per cent to 927,000, while the number of sites grew by 12 per cent to 192 across the UK. PureGym remains over 50 per cent larger than the number two operator in the market by number of sites.
As well as strong growth in revenues and profits, the company delivered an eight percentage point improvement in EBITDA margin from 25 per cent to 33 per cent, a result of the maturity of new site openings from 2015 and 2016 – especially former LA Fitness gyms.
At the end of 2017, 69 per cent of the gym portfolio was mature compared to 49 per cent in 2016. The 63 per cent increase in Group EBITDA was, in large part, due to the strong performance from the maturing sites and the successful launch of new commercial products such as multi-gym membership and off-peak membership.
PureGym’s popularity has been built on a member proposition that offers tremendous value, a great gym experience that is highly relevant to the modern consumer and that does not seek to bind people into 12-month contractual obligations.
A key part of this is a high-quality, well invested estate and over £7m was spent on existing gym maintenance and refurbishment over the year. In November, PureGym was acquired by Leonard Green & Partners, a leading private equity investment firm, who backed the management team’s plans for continued growth and development.
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 benefited 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.
“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. Everyone who works at PureGym is committed to helping the UK become a more active, healthier and happier nation.”
In January, the business refinanced its debt, successfully placing £360m of bonds in an offer that was heavily over-subscribed. Looking forward, the outlook remains very positive with a strong pipeline of new sites. The company will continue to invest in marketing, technology and innovation to both reinforce its offer and drive growth.
