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I picked this up because of the long drawn out base, but having looked at the financials I don't think it has ever earned its cost of capital in the last 10 years.
The dividends it paid during the 4 "good" years are less than the dilution during that time.
The operating profit in the most recent results seems to be before rent, so doesn't sound like an operating profit as I know it.
The company appears to be entirely value destructive. The "recovery" from covid will take them back to not earning the cost of capital. Can anyone on this board explain how this story can work out?
Overhead supply from previous trading, within the past year at 110-120, is likely to limit, any rally. Also the travel sector chart, is still contained within the high/low range of beginning of 1/3/24, which is a time pivot, that is expected to show through a break of the high or the low, the direction for the month of March.
I am waiting for this to fall below 99p share price to get involved, still to much risk and not a-lot of upside from the current 114p share price.
The company is moving in the right direction in some aspects but its slower than expected.
The Gym Group plc posted interims for the HY ended 30th June this morning. Revenue grew 18.5% year-on-year to £99.8m, membership at 30 June 2023 was 867,000, up 9.7% year on year. Group adjusted EBITDA was up 4.8% to £35.1m, statutory loss after tax was a little wider at £6.1m. The business is not yet back to profitability or positive EPS following the Pandemic, but it is moving in the right direction. Net Debt lowered to £69.7m while guidance for FY 2023 was reiterated, namely that revenue growth will broadly be offset by cost inflation, while leverage is expected to remain within the range of 1.5 to 2.0x. Valuation looks average with PS ratio at 1.16x, the share price also lacks positive momentum. GYM is moving back in the right direction but remains a share to monitor for the time being...
...from WealthOracle
wealthoracle.co.uk/detailed-result-full/GYM/792
Stitching together the March 2023 trading statement and this most recent statement IMHO provides a less optimistic outlook than a rather flattering trading update that really just reports rebuilding revenue as a consequence of Covid closures. The March 2023 statement sets out that the performance at that time was “uneven….vs Board expectations”. The June update reports a reduction in membership from 890,000 at the end of February 2023 to 867,000. This 13th June trading statement also reports a small slowdown in revenue growth from 18.7% to 18.5%. Most tellingly the TS does not undo the March 2023 statement from the Board that additional year on year revenues would be offset by increased costs. I see the most recent share increase as a reflection of the sentiment that naturally arises when a company reports revenue alone without any cost update. I assume that the reports in March of a slowdown in new site openings is a nod to the increases in the cost of money which will curtail any aspirations to grow their way out of a tough revenue environment until the cost of borrowing reduces. Cups and handles aside.....Caveat emptor.
Chart formation looks like a cup and handle bullish pattern. also some characteristics of a coil formation , which means fast share movement. On basis of a coil pattern, sp, projection is 126.60. Bollinger bands are separating, showing fast movement.
Sensible stop would be below 94.00. Alternative watch lower Bollinger band, and if the lower band stops falling, expect a retracement, so take profit. When the retracement, ends and the sp, resumes , advance, the direction of the lower Bollinger band, no longer matters .
Why this sudden SP strength?
All IMHO DYOR
Happy
Its kind of a national trend that gyms tend to be busier over the January/February period. The challenge for the gym group is that members can leave at any point and so after the initial motivation fades members leave. Maybe look at other trends like the three year SP chart, the increase in shorts, the macro economic environment, or the current SP at a three year low to inform share buying decisions? Alternatively, yes, by all means do a head count at your local gym or the 210 others?????? All IMHO.
I have been a user of these gyms for the past 2 years and have noticed a massive increase in others using it in the past couple of months . Anyone seen this in their gyms ? If it’s a national trend good times could be ahead?
"the company reiterated that it expects energy costs to be around £10m higher in 2023 versus a year earlier." Looking at the positives, wholesale energy prices are dropping dramatically and the company will benefit from these with a lag. Next year there may well be a £15m drop in energy costs and that will obviously benefit the financials and share price. Onwards and upwards.
Been a tricky share this one for sure. I've been in and out of it 2 or 3 times, without ever really making or losing on it. A small part of my portfolio is highly speculative, where I think this belongs, and with others in that segment currently being underwhelming at the moment, can’t justify re-entering as yet, but I will monitor.
99p today after 15% drop on heating cost RNS warning .
Gym Group warns over rising costs, shares tumble
Thu, 16th Mar 2023 10:03
(Sharecast News) - Gym Group shares tumbled on Thursday as it cautioned that rising revenues would be broadly offset by higher costs.
In its results for the year to the end of December 2022, the company reiterated that it expects energy costs to be around £10m higher in 2023 versus a year earlier.
The group said it expects the current difficult macroeconomic environment and its impact on consumer demand to continue throughout the year. As a result, it now anticipates "full-year revenue increases from yield improvements and new site openings to be broadly offset by cost increases".
Shame about the financials.
These gyms are good. I use every day.
Cripes.
Where you seeing this at ?
Share rising on hopes of an offer to take this private IMHO. Not the first failed float of a leisure proposition and no badge of honour for the CEO to leave with a substantially larger estate than at the time of floating but with a reduced SP! Bringing the old CEO back, who has overseen this declining performance is not going to instil much market confidence either.
yes I read it it - just couldn't see where it indicates they're short unless it's the 'Securities Lending' instrument - genuinely interested going forward as I can never tell ... ?!
Did you read the RNS. There is a table that sets out their holdings before and after the RNS. The instruments are shorts. DYOR
how can you tell that from the RNS @Cripes ?
Lion Trust reduce their long and increase their short.
I keep reading back the Gym Board quote below. It refers to the proposition being more attractive in the CURRENT consumer environment? But their income is 7% down compared with pre covid levels. So in THIS consumer environment their proposition is worth 7% less in relation to turnover. So, each units cost are up, utilities et al, and income down by about £50,000 a unit. But they’re opening more?? I would have thought they should address the weaknesses in their proposition before pressing on with more openings? My own view is that the prime new sites have been taken and any new openings are likely in smaller catchments… Abingdon a recent new opening is one example of this. IMO DYOR
Cash call coming or an 0.80pps low ball offer?
DYOR
I remember the Carillion Board saying that.
We are cognisant of the macro environment and continue to monitor developments very carefully. However, the Board remains very confident in the long-term opportunities for The Gym Group; our value proposition has always been a competitive advantage and we believe that in the current consumer environment, our high quality, affordable offer will be even more compelling and attractive.'