The Group Group has 50 new locations in its sights as the company adjusts growth plans for the next chapter

The Gym Group wants to open twelve new locations this year as part of expansion plans as part of the new ‘next chapter’ strategy.

The group plans to open about 50 new locations over the next three years, it told shareholders on Wednesday, with an average return on invested capital of 30 percent.

The Gym Group cited an analysis by PwC showing there is room for 600 to 850 new gyms in the UK, but did not reveal locations for the proposed new gyms.

The average price of a standard membership at The Gym Group rose to £23.16 in December 2023, up from £21.49 in December 2022.

Prices for new members increased as more users signed up for the group’s premium membership offering during the period, demonstrating strong demand.

The Gym Group shares rose 5.29 percent or 5.8 cents to 115.40 cents on Wednesday, after a decline of more than 10 percent over the past year.

The group reported earnings before interest, tax, depreciation and amortization of £75.5 million for the year, up six percent year-on-year.

It reported a pre-tax statutory loss of £8.4m, an improvement on the £19.3m loss reported last year. The adjusted annual pre-tax loss was £5.5 million.

Turnover for the year was £204m, up 18 per cent on 2022’s £172.9m.

The group ended the year with 850,000 members, up 4 percent from 2022, while average membership for the year was 8 percent ahead of the previous year.

It added: ‘Average revenue per member per month increased by 9 per cent in the year to £19.50 as we continued to optimize our overall rate and drive penetration of our premium subscription product.’

Will Orr, group CEO, said: “We have maintained positive sales momentum throughout the second half of the year to deliver results that offset cost inflation, in line with our expectations.

“With a strong start to 2024 and clear signs that demand for health and fitness has never been stronger, this provides a solid foundation on which we can build our Next Chapter growth plan.

‘Over the next three years we want to strengthen the performance of our core activities and accelerate the rollout of The Gym Group location. There remains significant scope for low-cost gyms in the UK and we are fully focused on our goal of making high-quality, low-cost fitness even more accessible to everyone.”

Russell Pointon, consumer director at Edison Group, said: “CEO Will Orr spoke to the “solid fundamentals” reflected in the results, which will underpin the recently unveiled Next Chapter growth plan.

‘This initiative aims to optimize returns from existing assets, expand the footprint with the addition of 10 to 12 quality locations by 2024 and the potential to add many more thereafter, and explore new revenue streams.

“Looking ahead, 2024 has started promisingly, reflected in a 12 percent increase in LFL revenue and 7 percent growth in membership, to 909,000 in February.

“If The Gym Group effectively executes its growth plan, it will be able to drive sustainable profitability and cash generation, which will position itself for continued success in the competitive landscape of the fitness industry.”