The Gym Group’s H1 2025: revenue up 8% and profits moving the right way
The Gym Group has posted a strong first half. Revenue rose 8% to £121.0 million, powered by 4% growth in average members and a 4% uplift in average revenue per member per month (ARPMM) to £21.16. Cash generation was healthy, leverage fell, and guidance has nudged to the top end of expectations.
Management says the “Next Chapter” plan is doing what it said on the tin: improving mature site returns, sharpening pricing and rolling out new gyms funded from free cash flow.
| Key numbers (six months to 30 June 2025) | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | £121.0m | £112.1m | +8% |
| Group Adjusted EBITDA | £48.3m | £41.7m | +16% |
| Group Adjusted EBITDA less Normalised Rent | £27.4m | £22.1m | +24% |
| Adjusted profit before tax | £4.9m | £0.5m | +£4.4m |
| Statutory profit before tax | £3.3m | £0.2m | +£3.1m |
| Adjusted diluted EPS | 2.7p | 0.3p | +2.4p |
| Free cash flow | £25.1m | £23.3m | +8% |
| Non-Property Net Debt (period end) | £51.2m | £54.6m | Reduced by £3.4m |
| Adjusted Leverage | 1.0x | 1.3x | -0.3x |
| Members at period end | 949,000 | 905,000 | +5% |
| ARPMM | £21.16 | £20.44 | +4% |
What drove the growth: more members, better yield, tighter operations
Average membership rose to 953,000 in the period (up from 914,000), and the company squeezed more value from each member. The headline Standard price moved to £25.10 in June 2025 (June 2024: £23.94), with add-ons such as Guest Pass and Multi-site access proving popular. Ultimate membership remained a solid 30% of the base; Off-peak sat at 13%.
Like-for-like revenue climbed 3%. Crucially, cost discipline helped profits compound: Group Adjusted EBITDA less Normalised Rent jumped 24% as revenue growth outpaced cost inflation. Excluding new sites, site costs actually fell 1% thanks to normalising utilities and careful control of repairs and maintenance.
Member behaviour and satisfaction are trending positively
Habit formation matters in gyms. The proportion of members visiting 4+ times a month increased by 108bps to 55.7%. Satisfaction is high: 94% rate The Gym Group 4 or 5 out of 5. That’s the sort of engagement that underpins retention while management nudges pricing.
Cash flow, debt and banking: stronger footing with runway to invest
Free cash flow rose 8% to £25.1 million, funding new sites, refurbishments and technology. Non-Property Net Debt fell to £51.2 million, 1.0x Adjusted Leverage, well below the 3.0x covenant. Fixed Charge Cover improved to 2.1x.
The bank group extended and upsized facilities to £102 million, now maturing in June 2028. The average interest rate on drawn funds eased to 7.4% (H1 24: 8.5%). There was £52.3 million of headroom at period end. In short, plenty of flexibility to push on with self-funded expansion.
Rollout and refurbishments: 14-16 openings in 2025, with Gen Z in focus
Five new sites have opened year to date (three in H1), with eight more under construction. The full-year target of 14-16 new gyms is reiterated, all funded from free cash flow. The pipeline for 2026 is “well supplied”, with 18-22 openings planned. The estate stood at 247 gyms at period end and 249 by 10 September 2025.
New sites feature an evolved, more contemporary design that’s landing well, particularly with Gen Z – a cohort that values health spend and drives frequency. Refits are bringing those design elements into the existing estate within the usual maintenance budget. Property maintenance capex is expected to remain at 5-6% of revenue.
Technology upgrade: building capacity for new member features
The two-year programme to replace legacy member management and payments systems is underway. It is already a line item in non-underlying costs (£1.0 million so far in H1, with c.£3 million expected for 2025). The prize is faster innovation – think member-get-member, new payment options, and richer data to keep pushing yield and retention.
Outlook: guidance at the top end and like-for-like still growing
Trading momentum continued through July and August. The company now expects to deliver c.3% like-for-like revenue growth for the full year, with like-for-like cost growth of c.2%. Group Adjusted EBITDA less Normalised Rent is guided to the top end of the analysts’ range of £50.6 million-£52.8 million. There’s no interim dividend, with cash prioritised for high-return growth.
My take for investors: the good, the watch-outs, and why it matters
- Operationally better: A 24% jump in EBITDA after rent shows the model’s operating leverage when pricing and membership both tick up.
- Self-funded expansion: Free cash flow of £25.1 million is paying for new gyms and tech. That de-risks the rollout compared with equity-funded growth.
- Balance sheet comfort: Leverage at 1.0x with extended facilities to 2028 gives room to manoeuvre if the macro turns.
- Clear pricing headroom: Management’s analysis suggests mid-market gyms now price at a 57% premium to The Gym Group’s average, leaving scope to keep nudging yield without losing competitiveness.
What to keep an eye on
- Modest LFL growth: Like-for-like revenue is +3% – solid, but not spectacular. The heavy lifting still relies on rollout and yield management.
- Non-underlying spend: The systems upgrade is the right call, but it is a drag in 2025 (c.£3 million). Execution risk is being managed via a phased rollout.
- No dividend (yet): Sensible given the returns on new sites, but income investors will need to wait.
- Lease-heavy model: As ever with gyms, lease liabilities are significant, so maintaining high utilisation and retention remains vital.
Overall, this is an encouraging half year. The model is doing what a high-value, low-cost operator should do: grow members, lift yield, keep costs in check and compound cash. With guidance now at the top end and new sites outperforming early, the Next Chapter plan looks on track.
Useful definitions (quick refresher)
- ARPMM: Average revenue per member per month – here up 4% to £21.16.
- Like-for-like (LFL): Compares performance of sites open by 31 December 2022; revenue grew 3%.
- Group Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, excluding one-off items.
- Normalised Rent: Contractual rent recognised in the month to which it relates.
- Group Adjusted EBITDA less Normalised Rent: Management’s key profit metric after deducting rent – a proxy for cash generation at site level.
- Adjusted Leverage: Non-Property Net Debt divided by last-12-month Group Adjusted EBITDA less Normalised Rent – now 1.0x.
