Gym Group burning £5m a month in lockdown and holding talks with bankers over debt covenants Leave a comment


Fitness girl lifting dumbbell in the morning.
In the year to 31 December 2020, Gym Group saw total revenue drop £72.6m from £153.1m to £80.5m. Photo: Getty

The Gym Group (GYM.L) announced that its monthly cash burn during the current COVID-19 lockdown is £5m thanks to government support, while the November closures cost £6m.

In the year to 31 December 2020, Gym Group saw total revenue drop £72.6m from £153.1m to £80.5m, with 45% of trading days lost due to government restrictions.

Year-end non-property net debt was £47m, while the company was cash flow positive during post-lockdown trading periods with £3.8m of deferred rents outstanding at the end of 2020.

Gym Group also said that it has started talks with banks over debt covenants. The company said it has “significant” liquidity available under an existing £100m bank facility.

The company, which operates 184 venues across the UK, said that despite the lowered figures it is planning to continue with its expansion, opening three new sites “once there is greater visibility about a reopening date for gyms.”

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The company had all its gym open, under Tier 1-3 restrictions, then it was required to close 162 of its 183 sites when Tier 4 restrictions were introduced in December, then shuttered all its venues on 4 January when the UK government announced a nationwide lockdown.

Meanwhile, total year-end membership was 578,000, down from 794,000 in December 2019. The firm has frozen all membership subscriptions since the national lockdown so that members don’t pay whilst gyms are closed.

Richard Darwin, CEO of The Gym Group, said: “2020 has been a challenging year for our business, our members and our colleagues.

“Through the outstanding work of our team we provided a COVID-secure exercise environment for our members and demonstrated the resilience of our business model by trading profitably when gyms have been open.

“Our cash management during the pandemic has ensured we ended 2020 with manageable levels of debt and significant liquidity. At a time when health and fitness has never been more important to the nation, we are ready to emerge from the pandemic and take advantage of the many opportunities available to us.”

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