Gym Group sales almost halve in 2020 after virus forces closures

The Gym Group has revealed that sales almost halved in 2020 after its venues were forced to shut for months during the pandemic.

It told investors that total revenues slid by 47.4% to £80.5 million after Government restrictions reduced its number of trading days by 45%.

All of the group’s 184 gyms are currently closed after health and leisure venues were forced to shut their doors by the Government as part of the latest national lockdown.

After the November lockdown ended the group reopened all of its sites, but was forced to close 163 of them later in December due to Tier 4 measures, before the latest lockdown was enforced.

Gym Group said it is burning through around £5 million each month through the current lockdown, although this is reduced from £6 million in the November lockdown due to Government grants.

It said it has “significant liquidity” available through its £100 million banking facilities and is in discussions with its lenders to review its covenant tests on the loans.

Chief executive Richard Darwin told the PA news agency that the company hopes the Government will extend the current business rates holiday and will cut VAT for health and leisure firms.

“It feels like it is general consensus that the rates holiday needs to be extended, because at the minute we are facing a cliff edge in April,” he said.

“We’d like some early visibility from Government on this so we can make decision accordingly.

“On VAT, we just are looking for a level playing with hospitality firms, who saw it cut to 5%.

“We have been closed for large parts of the year with no takeaway option, so we think it is only fair that this reduction is extended to the health and leisure sector.”

At the end of 2020, the company had 578,000 members, falling from 794,000 members at the end of 2019.

It said it continued with expansion plans in 2020, opening eight sites including its latest gym in Chichester.

The Gym Group said it believes there is now an “opportunity to access excellent new sites at attractive rents” as it continues to grow.

Mr Darwin said: “Through the outstanding work of our team, we provided a Covid-secure exercise environment for our members and demonstrated the resilience of our business model by trading profitably when gyms have been open.

“Our cash management during the pandemic has ensured we ended 2020 with manageable levels of debt and significant liquidity.

“At a time when health and fitness has never been more important to the nation, we are ready to emerge from the pandemic and take advantage of the many opportunities available us.”

Shares in the company were 0.7% higher at 219.5p in early trading.