The Gym Group celebrates strong year-end results as Will Orr upgrades guidance

The stock market has reacted favourably to The Gym Group’s year-end results which reflect strong growth thanks to multiple marginal gains.

Higher yield, cost-effective promotion, targeted customer acquisition and progress on retention led to an 11 per cent increase in revenue to £226.3 million for 2024. Group adjusted EBITDA was £87.3 million, an increase of 16 per cent.

Profits grew by 24 per cent to £47.7 million, which converted into free cashflow of £37.5 million to fund expansion. The momentum has continued with like-for-like revenue up 3 per cent in the first two months of 2025.

Members increased by 5 per cent last year, to 891. The average tenure is 18 months and in that time they’re highly engaged, frequent visitors.

Twelve new sites opened last year, which was at the top end of guidance and in line with the ambition set out in CEO Will Orr's Next Chapterstrategy which involves opening 50 sites over three years. This year 14 to 16 new sites are planned, split evenly between London and other high density towns and cities.

The Gym Group had set a mid-term target of reaching 25 per cent ROIC (return on invested capital) on mature sites, but has managed to hit it in a year, while all new sites are hitting 30 per cent ROIC .

Orr told HCM: “This is a market with structural growth in it and the high value low cost part of the market seems to be doing particularly well. People are protecting their memberships in their discretionary spending: the RSM Consumer Outlook 2025 report shows that fitness and wellbeing spend is third behind only children and pets.

“Gen Z are 40 per cent of our member base and they’re a generation of gym goers. They’re super informed about the benefits from both a physical and mental health point of view and see gyms as part of their identity and social life.”

Investment in the estate has continued with enhancements at 100 sites, including significant changes in 15. The Gym Group is now the UK’s largest Hyrox training club, with sessions rolled out to 120 gyms.

Orr says investment in the estate will continue on a rolling basis, to retain the strong value for money perceptions. Brinkworth Design have been brought on board to do interior design on some of the sites to make sure they’re dynamic and appeal to the younger audience: “We will keep modernising and refreshing to make sure they’re as dynamic as possible in terms of interior design and appropriate for Gen Z. Elephant and Castle opened recently and that shows our direction of travel.”

Due to the inflationary backdrop of the last few years there have been some very modest price increases, of around £1.37 a month, which yield benefits across the whole estate.

The company is continuing to utilise data and technology to inform its expansion and operations. “The effectiveness of our marketing has improved,” says Orr. “The messaging is more clear and we’re using technology to make the ads more relevant and targeted. We’re also using data thoughtfully to select new sites.

“We feel very optimistic about 2025 and have upgraded our guidance today.”