Pure Gym's overseas clubs returned to pre-COVID-19 profit levels in the first month of trading after reopening, according to the company's Q2 2020 financial results, which are out today.
The UK-based budget operator said performance and results had, as expected, been significantly impacted by the pandemic.
However, its gyms in Denmark and Switzerland returned to profit immediately, resulting in total Group EBITDA trajectory recovering and "heading back into the black”.
The Europe-wide closures saw Pure Gym's revenues in the three months to 30 June plummet by 87 per cent, from £112m in 2019 to just £14m.
However, Looking to the positives, Pure Gym said there had been "excellent liquidity and cashflow management" during lockdown, with £147m of liquidity remaining after 14 weeks of lockdown – an £18m reduction since 23 March.
The company credited the liquidity to its quick reactions to the lockdowns and the financial help offered by governments in the regions it operates in.
"Net operational burn has effectively been reduced to zero as a result of swift management action to reduce underlying operational cash burn and through government mitigation (furlough, rates and fixed costs)," Pure Gym said in the financial report.
Encouragingly, the company also has had no confirmed reports of transmissions at its gyms after around 7 million visits since the reopenings.
Humphrey Cobbold, CEO of Pure Gym, said the results – while hit by the pandemic – show how the operator has benefited from its geographical diversification.
"As expected, our trading performance was severely impacted in the last two weeks of the first quarter and throughout the second quarter," Cobbold said.
"However, it has been extremely pleasing to see how rapidly our business units have returned to profitability, with both Switzerland and Denmark returning to profit in the month of reopening – a clear benefit of our membership model."
Cobbold added that the medium to long-term strategic potential remains "robust".
Pure Gym expects to open a further 10 gyms by the end of 2020 – eight in the UK and two Fitness Worlds abroad.
In 2021, the plan is to have between 15 and 30 organic openings.
"We have the option to pull back new site capex to preserve liquidity if a second wave occurs – or to accelerate if outlook is positive," Cobbold added.
Pure Gym currently operates 500 gyms and has around 1.7 million members under the PureGym brand in the UK, Basefit in Switzerland and Fitness World in Denmark and Poland.
In May 2020, the company revealed it’s
trialling a franchise offering to grow the brand globally.
• To access a full presentation of the Pure Gym results,
click here.
