Specialist
Founder Director at The Gym Group plc
Agenda
- Membership growth outlook for PureGym from 2021-23, including new member acquisition, churn dynamics and pricing outlook
- Pricing and revenue recovery outlook and potential for monetisation of digital offerings
- Gym expansion outlook and strategy regarding big box vs small box formats
- Post-coronavirus unit economics, including CAPEX and OPEX
Questions
1.
Increasing membership is crucial to PureGym’s revenue growth. The company generated strong numbers post-lockdown. What is your membership recovery outlook?
2.
September-October is very important for acquiring student membership and January-February is also important. How do you think the membership base could grow in Q4 2021 and into early 2022 vs 2019 levels?
3.
What like-for-like growth figures are you expecting for 2022-23?
4.
How confident are you in PureGym’s ability to maintain or grow market share in the UK?
5.
What threat do the smaller operators present? Who might PureGym be most worried about?
6.
What is a typical churn rate for the budget sector during the winter period? Would it be higher or lower than normal? What’s the normal rate?
7.
How can PureGym limit churn numbers?
8.
What are your pricing expectations? What YoY increases are possible in the budget sector? Is it just inflation?
9.
Can a budget gym operator get away with introducing above-inflation price increases, given how competitive the market is?
10.
How can PureGym’s digital offerings push the top line? How much scope is there to monetise digital developments that happened during lockdown in 2022-23?
11.
Can you monetise virtual group non-equipment-related exercise?
12.
At the end of June 2021, PureGym had around 250 sites in England, 25 in Scotland, five in Wales and eight in Northern Ireland. What do you think is a realistic openings target?
13.
How many PureGym sites can there be in the UK? What is a potential saturation point?
14.
How might operators such as PureGym approach opening big- vs small-box sites? What proportion of a potential 40-50 openings per year would you expect to be small box vs big box?
15.
What are the fit-out costs for small box vs big box?
16.
You mentioned a change in usage for city centres vs suburban or rural locations. Do you think PureGym might have to reposition its city-centre locations further out of the city?
17.
What are your thoughts on the change in locations, given the number of high street locations coming to market? There are challenges within the high street and broader UK retail environment. What opportunities are there for budget gyms to move into these types of locations?
18.
What are you M&A expectations over the next few years? How big is PureGym’s expansion opportunity via brownfield sites, so acquiring pre-existing gyms?
19.
What is your outlook for rental rates post- vs pre-coronavirus?
20.
How material are typical rent costs relative to total sales?
21.
What are the challenges in the labour cost line? We’re hearing about inflation.
22.
How are budget operators likely to approach marketing?
23.
What is your EBITDA margin outlook for an operator such as PureGym over the next couple of years?
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