The Gym Group (LON:GYM) outlined what it described as “strong progress” in its 2025 full-year results presentation, highlighting membership growth, higher revenue and improving profitability as it continued to invest in new sites and its “Next Chapter” growth plan.
Management said closing membership rose 4% in 2025, while revenue increased 8% to GBP 244.9 million, including 3% like-for-like growth. Average members were 945,000, up 4% year-over-year, and average revenue per member per month rose 4% to GBP 21.60.
EBITDA less normalized rent increased 19% to GBP 56.7 million, which the company said was GBP 1.2 million ahead of consensus. The EBITDA margin improved to 23%, up 2 percentage points from the prior year. Statutory profit before tax was GBP 7.4 million, up GBP 4.9 million year-over-year, while adjusted profit before tax was GBP 10.6 million, up GBP 7 million.
CFO Luke Tait said more than 70% of revenue growth was driven by new site openings, reflecting an accelerated rollout. He added that costs “came in slightly better than expectations,” including like-for-like site cost inflation of 1% for the full year, below prior guidance of 2%.
The company said yield improved through a mix of measured price increases and optimization at newer gyms, including moving members off introductory discounts. The average headline rate of a standard membership rose to GBP 25.64, up GBP 1.11 year-over-year. Like-for-like revenue rose 3%, with average membership flat and average yield up 3%.
On costs, management pointed to lower electricity commodity prices in 2025 and an energy optimization program as key offsets to inflationary pressures such as wage and National Insurance increases. Tait said like-for-like site costs fell 1% in the first half and rose 3% in the second half, resulting in a 1% increase for the full year. He noted a 44% increase in the non-commodity element of electricity costs in Q4, and said those increases will annualize through 2026, making first-half site cost inflation higher than the second half.
The company said it had installed 210 voltage optimization units across its estate and sees additional potential savings through air handling unit sensors and further rollout. It also said it launched a staff training academy to help resource gyms more efficiently and appealed 116 rating list valuations from 2023.
Central costs rose 5% year-over-year, reflecting inflationary salary increases and investment in growth initiatives, but improved as a percentage of revenue, falling 0.4% to 11.3%. Management guided central costs would drop below 11% of revenue in 2026, citing expected operating leverage.
Free cash flow rose 10% to GBP 38.3 million, supported by a GBP 5.3 million working capital inflow and maintenance capital expenditure of GBP 17.3 million (about 6% of revenue). Total cash CapEx in 2025 was GBP 51.2 million, including GBP 33.9 million of expansionary CapEx linked primarily to new site openings and investments in digital initiatives.
Net debt ended the year at GBP 59.3 million, down GBP 2 million from December 2024, and the net debt to EBITDA leverage ratio fell to 1x from 1.3x a year earlier. Tait said the company does not expect further net debt reduction by year-end 2026 due to accelerated site openings funded from free cash flow.
Management reiterated its capital allocation priorities, which include maintaining the estate, keeping leverage below 2x, funding organic new site openings, and returning excess capital to shareholders. The company began a 10 million share buyback in January and said it has purchased and canceled 1.1 million shares to date.
CEO Will Orr said the company continued to strengthen its core through pricing, acquisition and retention efforts, and pointed to new add-ons such as guest passes and multi-site options, as well as off-peak pricing changes. He also highlighted improvements in brand awareness and web conversion, noting the business had more than 10 million non-member website visitors start the buying journey in 2025 and that the company is running ongoing A/B tests to improve conversion.
On retention, Orr said average tenure increased again, supported by initiatives including:
16% growth in members taking long-term products (e.g., 9 or 12 months)
39% increase in early-life “kickstart” inductions
Further app enhancements, with 93% of new add-on sales made via the app
Orr also said customer satisfaction remained high, with 62% of members scoring the gyms 5 out of 5, and 92% scoring them 4 or 5 out of 5. In response to a question, he said the drivers behind satisfaction include “friendly, expert people,” strong equipment, and clean and safe facilities.
The company accelerated its rollout, opening 16 new sites in 2025, and said it expects to open at least 20 gyms in 2026, with guidance indicating 20-22 sites planned and openings again likely to be weighted toward the second half. In the Q&A, management said it had opened one new gym so far, was “on site” at a further three, and had exchanged on another eight, for 12 secured. It expects average site sizes to remain broadly consistent, around 14,000-15,000 sq ft, with a range from just under 10,000 up to nearly 20,000 sq ft. Management said London weighting in the pipeline is expected to be “a bit lower” than the prior two years, but “not hugely.”
The company said it has seen a strong start to 2026, with 9% revenue growth year-to-date at the end of February, driven by 4% average member growth and a 5% increase in average revenue per member per month. Like-for-like was 3%. Management cited a run-rate EBITDA (adjusted for gyms opened at the end of 2025 that are not yet mature) of about GBP 65 million.
For 2026, the company guided to like-for-like sales growth of about 3% and like-for-like site cost inflation of 3%-4%, weighted toward the first half. It also said electricity rates are fixed until October 2027, and reiterated expectations for central costs to drop below 11% of revenue.
Based on the current trajectory, Tait said the company expects 2026 EBITDA less normalized rent to be at the top end of analysts’ forecast range.
The Gym Group plc, together with its subsidiaries, operates a network of gym facilities under the Gym Group brand name in the United Kingdom. The company was founded in 2007 and is based in Croydon, the United Kingdom.
