Pure Gym strives to more than double U.K. size

8 May 2018

Pure Gym could more than double in size to explore its full potential in the British market, said its chief executive, Humphrey Cobbold, after the company reported ample gains in sales and profits for last year.

Pure Gym’s turnover soared by 24% to £198 million (€225.4m) in 2017, while it opened twenty extra gyms to end the year with 192 and its number of members jumped by 13% to 927,000. But the group’s EBITDA rose even more steeply to £64.4 million (€73.1m), up from £39.5 million in 2016, meaning that its operating profit margin moved up by 8 percentage points to 33%.

Some of the jump in profit margin is due to the fact that more sites opened in the two previous years reached maturity, particularly the 31 former LA Fitness gyms purchased in 2015, which have all been converted to Pure Gym. The group said that 69% of the estate was mature at the end of 2017, up from 49% the previous year.
But another part of the performance came from extra services – along the same lines as other budget clubs such as Basic-Fit and The Gym Group, which have held onto a cheap membership fee but raised revenues through premium services at a small fee.

“With 1.1 million members, you only need a few percent of people to buy something and that adds quite helpfully to the revenue and profit development of the business,” said Cobbold. “That means we have more resources to invest in the sites to make them better than before, so we like to turn that virtuous circle.”

Read the full analysis in FNE#55.

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