W13 Ken
11 May 2018
Close to an all-time high Great shareprice climb in the last month and we're just a shade away from an all-time of 274p hit in April 2016.All news is looking positive, there are 4 brokers who forecast a rise to 300p or above and any worries about staff employment contracts have been put to bed.There's a good interview with John Treharne in Health Club Management magazine where he talks in detail about staff contracts, high customer satisfaction, site selection and the future:[link]
W13 Ken
16 Jan 2018
Re: Set of strong figures Agreed, all looks good to me and I have topped up again today in my ISA. As a medium to long-term bet it looks sure to be a winner.I'm a happy customer too and can see how well-equipped and popular my local gym is and how well they are using smart technology to monitor equipment usage.I've also noticed more staff in the gym recently, which may be a result of them changing the Personal Trainer's contracts - no doubt influenced by a sniff of bad press about the previous setup. They've also introduced a permanent manager which is helping with little niggles like dead batteries in rowing machines etc so it's all positive.I'm laughing today at N+1 Singer's last year's forecast of 145p - some of these brokers are clueless!
NORFOLK IN CHANCE2
16 Jan 2018
Set of strong figures All reads positive to me, impressive numbers. the preliminary results in mid-March i except will be very positive as well. I am member of one of their gyms and value for money is excellent and that's what people are looking for these days
W13 Ken
15 Sep 2017
Re: Acquisition of 18 gyms from Lifestyl... Motley Fool give it the thumbs up:Investing in dividend stocks with a proven model for growth can be very rewarding. Even when the shares appear to be expensive, they can still offer good value due to the speed at which profits can build.One potential example is low-cost gym operator The Gym Group (LSE: GYM). The firm’s shares rose by 6% this morning after it announced the acquisition of a rival 18-gym chain, Lifestyle Fitness.The Gym Group currently has 97 sites and is rolling out new ones at a rate of 15-20 per year. So the addition of the Lifestyle Fitness locations should double its growth rate over the next year.Is the price right?Gym Group is paying £20.5m for the acquired sites. These generated earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.45m over the last 12 months. That prices the deal on around six times EBITDA, which seems reasonable to me.However, although the new sites have similar profit margins to Gym Group’s existing units, they do appear to need some work. The company is planning to spend £5.4m on updating and converting them. My calculations suggest that the total cost per site will be around £1.4m, roughly the same as the cost for the fit out of a new site.The advantage of this approach is that Gym Group will also acquire the membership of its new sites. So they should generate a return on investment more quickly than a newly-opened site.Time to buy?This company’s strong cash generation means that it’s able to fund most of its rollout without debt.Although the dividend yield is low at 0.5%, as sites mature I expect more cash to be available for shareholder returns. In the meantime, I think this business offers an exciting growth opportunity and remains attractive at current levels.
jimboyuk
15 Sep 2017
Re: Acquisition of 18 gyms from Lifestyle Fi... So let me see if I get this right, total expenditure for the acquisitions will be circa 28 million once refit costs are taken into account. Based on the current EBIT of 3.45m this will take 8 point something years to recoup. At first hand this seems a bit expensive to me, however the statement does go on to say that they expect the purchase to be earning enhancing by 2019. Is this based on the assumption (and am I assuming right), that the gym group plan on dropping their non contract prices for these gyms to sub £20 per month (in line with their other gyms nationwide) and as a result see a significant increase in membership?
NORFOLK IN CHANCE2
15 Sep 2017
Re: Acquisition of 18 gyms from Lifestyle Fi... Yes true, however the old model slow and steady seemed to be working. Certainly more of a risk. Have they bitten off more than they can chew? Are they getting into too much debt? However it seems they have bought quality, so overall looks like a good move. Share price should be a lot higher in my opinion.
W13 Ken
15 Sep 2017
Acquisition of 18 gyms from Lifestyle Fitness Well I didn't see this coming! Although it raises debt and risk I think it has to be a positive. The problem with strict adherence to the old model was that at a growth of just 15-20 gyms a year it was slow and predictable and did little to excite interest in the shares.Should be an interesting period to come.
NORFOLK IN CHANCE2
30 Aug 2017
Re: More good progress Couldn't agree more. Why these shares are not significantly higher is beyond me. Anyhow I am sure patience will be the key here . Plenty of growth opportunities in the long term.
jimboyuk
30 Aug 2017
More good progress EPS up, turnover up, margins slightly up, EBIT up, dividend up, store roll out up, net debt reduced.....all looking good so far.
NORFOLK IN CHANCE2
14 Jun 2017
A Stong Buy This share is very undervalued in my opinion. Interestingly I think if the UK economy does take a downturn then the Gym group are a good defensive stock. I am a member and very impressed with the gyms and the value for money . I can see a lot of people if funds become tight cancelling their expensive gym membership I.E David Lloyd and joining a cheaper alternative such as the GYM group.Also expansion seems to be going ahead smoothly . A good long term buy. I think share price will be circa £2.50 in a year or so, Also good membership numbers. Its all about Volume!Average membership for the five months is 498,000 up 18.6% versus H1 2016 (six months to June 2016: 420,000)
W13 Ken
12 Jun 2017
Trading update boost? This Wednesday the Gym Group's 2017 half-year Trading update should bring more good news on the positive momentum of new member sign-ups and additional facilities on the way.Last year's mid-year update was in early July and saw the share price rise from 190p to 240p within the next couple of weeks. A 26% jump may not be likely, given the instability in the UK economy at the moment, but I would not be surprised to see a boost to 200p+ levels again. Would be great to stay there.
