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Equity Bottom-Up

Gym Group has accompanied confirmation of FY23 profit resilience and continued buoyancy (like-for-like revenue up 12% in the first two months of 2024) with a clear commitment ‘to accelerate, not reinvent the wheel.’ The latter is telling with new senior management endorsing Gym Group’s sweet spot as a low-cost operator in the long-term growth market of health and fitness. Its confidence in material scope for enhanced pricing and member acquisition and retention is complemented by expansion targeted at sites with perceived 30% return on invested capital (ROIC) potential (10 to 12 openings in 2024 with c 50 over three years), although the typical two-year profit maturation profile means no quick earnings fix. Improving finances (1.7x leverage) should allow this as well as increasingly important technology investment.

Gym Group has accompanied confirmation of FY23 profit resilience and continued buoyancy (like-for-like revenue up 12% in the first two months of 2024) with a clear commitment ‘to accelerate, not reinvent the wheel.’ The latter is telling with new senior management endorsing Gym Group’s sweet spot as a low-cost operator in the long-term growth market of health and fitness. Its confidence in material scope for enhanced pricing and member acquisition and retention is complemented by expansion targeted at sites with perceived 30% return on invested capital (ROIC) potential (10 to 12 openings in 2024 with c 50 over three years), although the typical two-year profit maturation profile means no quick earnings fix. Improving finances (1.7x leverage) should allow this as well as increasingly important technology investment.

Podcast by Andrew Walker, a PM at Rangeley Capital, Yet Another Value Podcast

Yet Another Value Podcast

Podcast by Andrew Walker, a PM at Rangeley Capital

Yet Another Value Podcast is a new podcast from Andrew Walker, the founder of yetanothervalueblog.substack.com/. We interview top investors and dive deep into stocks and companies they are currently working on and investing in. While nothing on this channel is investing advice and everyone should do their own diligence, our goal is to frequently feature edgy and actionable value and/or event driven ideas. Please see our legal and disclaimer at: https://yetanothervalueblog.substack.com/p/legal-and-disclaimer

<ul><li>Gym Group is a low-cost gym chain based in the UK, with 230 gyms and trading at six times EBITDA.</li><li>The company hit a rough patch during COVID but is expected to improve with new management and the ramp up of new gyms.</li><li>Public markets may be mispricing the sector due to potential earnings, energy cost normalization, and growth opportunities in the European market.</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Gym Group is a low-cost gym chain based in the UK, with 230 gyms and trading at six times EBITDA.The company hit a rough patch during COVID but is expected to improve with new management and the ramp up of new gyms.Public markets may be mispricing the sector due to potential earnings, energy cost normalization, and growth opportunities in the European market.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Oxy Capital's Pedro Sousa Thesis on High Quality, Low Cost Gym Facilities in the UK $GYM.L

United Kingdom

The Gym Group PLC is a nationwide operator of low cost, 24/7 gyms. The Company's sites throughout the United Kingdom offer equipment for solo use, as well as a variety of classes to members.

The Gym Group PLC (GYM LN)

Gym Group - The power of marginal gains

Gym Group has accompanied confirmation of FY23 profit resilience and continued buoyancy (like-for-like revenue up 12% in the first two months of...

Edison Investment Research

Oxy Capital's Pedro Sousa Thesis on High Quality, Low Cost Gym Facilities in the UK $GYM.L

Gym Group is the second largest gym chain in the UK behind Pure Gym with 230 gyms, and the company trades at six times EBITDA with a $24-26 million...

Yet Another Value Podcast