Budget fitness operator Gym Group (LON:GYM) is a growth company in decent shape judging by its latest update. The low-cost gym operator insisted ‘positive trading momentum’ continued through H1 of 2026. As expected, like-for-like revenue grew by a solid 3% year on year.
Guided by CEO Will Orr, Gym Group remains on track to open ‘at least’ 20 gyms in 2026. While the company reported a half of solid revenue growth and market share gains, it failed to deliver another earnings upgrade. This explains why the stock traded slightly lower in early dealings.
Flexing its muscles
London-based Gym Group’s revenues bulked up 10% to £133.1 million in the half ended 30 June. Encouragingly, average members grew 5% to 1,002,000. And average revenue per member per month was also up 5% at £22.14, demonstrating that Gym Group has pricing power.
Gym Group closed H1 with 991,000 members compared with 923,000 at 31 December 2025 and 949,000 at 30 June 2025. During H1, the firm opened four new gyms, taking the total number of UK sites to 264.
Appealing proposition
Orr commented: ‘We are pleased with our trading performance year to date which reflects the continued appeal of our proposition and strength of customer demand. Reaching one million members during the period is an encouraging milestone for us in a UK fitness market that continues to grow.’
Orr added: ‘We remain focused on the disciplined execution of our growth strategy and confident in the full year outlook.’
We think Gym Group has an exciting white space and market share grab opportunity ahead of it in a UK fitness market with structural growth tailwinds.
In a show of confidence, the firm recently confirmed it will accelerate its expansion plan to 75 new sites over the coming three years. That expansion will be funded from free cashflow.
The company’s no contract memberships are clearly resonating with consumers who want to get in shape on a tight budget. And its gyms score highly on member satisfaction too.
One metric investors should monitor going forwards is net debt, which amounted to £58 million as of 30 June 2026. While this looks manageable for now, leverage is expected to increase by year end.
This reflects the second-half weighting to the firm’s new gym opening and refurbishment programmes as well as an ongoing share buyback programme. Gym Group generates the free cash flow to service this debt, but if leverage starts creeping up too high it could unnerve the market.
Read the press release here: https://www.tggplc.com/investors/
