LONDON (ShareCast) - (Sharecast News) - The Gym Group reported a rise in full-year profits and revenue on Tuesday as it opened new gyms and increased its membership numbers.
In the year to 31 December 2018, adjusted pre-tax profit was up 19.4% to £14.4m on revenue of £123.9m, up 35.6% from 2017. Analysts had pencilled in pre-tax profit of £13.5m.

The company proposed a final dividend of 0.95p a share, taking the full-year dividend to 1.30p, up from 1.20p the year before.

During the year, the group opened 17 new gyms and bought 13 from easyGym, increasing the total estate to 158.

Meanwhile, total year-end members stood at 724,000, up 19.3% from 2018, with average member numbers up 31.3% to 693,000.

The Gym Group said the new financial year has started well, with current trading in line with the board's expectations and member numbers up 9.5% since the year-end at 793,000 at the end of February.

The company said it expects to achieve its guidance range of 15 to 20 site openings this year. It added that the low-cost gym market is forecast to double in size over the next seven years.

Chief executive officer Richard Darwin said: "During 2018 we accelerated our growth to reach 158 gyms, delivering rapid increases in revenue and profits as well as important projects to support a business of scale in the longer term. Our purpose is to provide affordable access to everyone who wants to improve their wellbeing and we see every day the positive impact we achieve as The Gym continues to make health and fitness available and affordable to all. Independent research confirms the low cost gym market can at least double its number of sites supporting our ambition for further organic growth alongside the maturing of our current estate.

"January and February are peak months for new memberships. We have had a successful start to the year and our brand now serves over 800,000 members with 10 million visits already so far this year. We plan on opening 15-20 gyms in 2019 as we extend access to affordable fitness nationwide."

At 1020 GMT, the shares were up 6.2% at 215p.

Broker Liberum said: "We do not expect changes to consensus but would expect the reassurance on membership, price and expansion headroom to reassure and help the shares recover lost ground."

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