Next
Chapter
growth plan
delivering
The Gym Group plc
Annual Report and Accounts 2024
For more information go to | tggplc.com
Overview
Who we are
The Gym Group is the original
provider of high quality, low
cost gym facilities in the UK.
We offer 24/7, no contract
gym memberships delivering
great value-for-money for
all our members.
The Gym Group plc | Annual Report and Accounts 2024
Overview
2024 highlights
Contents
Overview
01 2024 highlights
02 Introduction to our business
Strategic report
06 Market review
10 Chair of the Board’s statement
12 Chief Executive’s review
16 The Next Chapter growth plan
19 Progress against the Next
Chapter growth plan
24 Financial review
32 Key performance indicators
34 Sustainability report
46 Task Force on Climate-Related
Financial Disclosures report
50 Managing our risk
63 Non-financial and sustainability
information
Governance
64 Introduction from the
Chair of the Board
66 Board of Directors
68 Executive Committee
70 Corporate Governance report
75 Section 172 statement
80 Report of the
Nomination Committee
84 Report of the Audit
and Risk Committee
90 Report of the
Sustainability Committee
92 Report of the
Remuneration Committee
110 Directors’ report
113 Directors’ responsibility
statement
Financial statements
114 Independent auditor’s report
124 Consolidated statement
of comprehensive income
125 Consolidated statement
of financial position
126 Consolidated statement
of changes in equity
127 Consolidated cash flow
statement
128 Notes to the consolidated
financial statements
158 Company statement of
financial position
159 Company statement of
changes in equity
160 Notes to the Company
financial statements
Other information
166 Five year record
167 Definition of non-statutory
measures
168 Corporate information
Financial
Revenue
£226.3m
2023: £204.0m
Statutory profit for the year
£4.4m
2023: loss of £8.4m
Group Adjusted EBITDA
Less Normalised Rent
1
£47.7m
2023: £38.5m
Non-Property
Net Debt
1
£61.3m
2023: £66.4m
Business and operational
Next Chapter growth plan
driving up returns in mature
gym estate, through higher
yield, more cost-effective
promotion, better targeted
customer acquisition and early
progress on retention
High levels of member
engagement and satisfaction
sustained, with 93% of members
rating The Gym Group 4 or 5
out of 5 for overall satisfaction
(57% 5/5)
Proportion of members visiting
4+ times a month increased by
120bps
Continued investment in member
proposition with capital spend
in over 100 sites and significant
enhancements made in 15;
12 new sites opened in 2024
Employee engagement
score improved; now rank
in the top 5%
2
of consumer
services businesses for overall
engagement
1 See page 167 for definition and cross-reference
to reconciliation to statutory measure.
2 Based on companies included in the Peakon
benchmark. Peakon is software developed by
Workday that is designed to gather, analyse
and improve employee sentiment.
3 See footnote on page 13 for information on
what Social Value is and how it is calculated.
ROIC on mature sites
1
25%
2023: 21%
Investment in
>100
sites in 2024
Employee engagement
2
9 out of 10
2023: 8.5
Overall member
satisfaction
93%
scoring 4 or 5 out of 5
Social Value
3
generated in 2024
£962m
2023: £890m
See Progress against the Next Chapter growth plan on pages 19 to 23
Overview
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 01
Governance
report
Financial
statements
Other
information
Overview
Introduction to our business
Our Next Chapter growth plan
Drive like-for-
like revenue and
generatecash
Create funds
for future growth
options
Broaden
our
growth
Accelerate
rollout of
quality
sites
Strengthen
the core
Our purpose Our investment case
Breaking
down
barriers
to fitness
for all
See The Next Chapter growth plan on pages 16 to 18
Robust and
growing
market
Low cost
model taking
share
Winning
proposition
Multiple
growth drivers
Generating
higher free
cash flow
…to reinvest
in high quality
new site
expansion
Data-driven
and
tech-enabled
We have a simple, scalable proposition,
proven to deliver strong member
satisfaction scores, in the robust and
growing market for high value, low cost
fitness. By taking a data-driven and
tech-enabled approach to growth,
and leveraging the benefits of scale,
our strategy is to grow sustainably
from free cash flow and deliver strong
returns for shareholders.
The framework of our Next Chapter
growth plan is three components –
firstly to ‘Strengthen the core’ of our
business to increase returns from
the existing estate. This funds the
second part of the plan to ‘Accelerate
rollout of quality sites’, in turn creating
optionality to thirdly ‘Broaden our
growth’ as we develop our proposition
into new channels, new adjacencies
and/or new markets.
The Gym Group plc | Annual Report and Accounts 2024
02 |
Our key stakeholders
A successful working relationship with our stakeholders is key to our operating model.
What we deliver
We provide a market-leading, high
value, low cost gym experience to
drive growth in our membership base.
We have significant advantages
from our scale-efficient model:
optimising operations, technology,
brand and marketing.
We are accelerating new gym
openings from free cash flow, and
with scale, driving strong financial
returns to enable reinvestment
and drive further growth.
High value, low cost fitness
nationwide
245 high quality gyms affording
access to more than 50% of the
UK population
1
.
Social Value for communities
2
£3.4bn of Social Value created
through member exercise over
last 5 years.
Sustainable long term growth
New openings funded from free
cash flow and further headroom for
c.10 years of growth
3
.
Strong return on invested capital
4
25% delivered in 2024 (2023: 21%).
1 Over half of UK adults live within 15 minutes
of a local TGG gym.
2 Social Value is a measure of the value we
are creating through regular exercise in
the communities in which we operate. It is
derived using a model created by Sheffield
Hallam University and used extensively by
Sport England, local authorities, and the UK
Government.
3 Source: PwC market study, February 2024.
4 Return on invested capital of mature gym sites.
See page 167 for definition.
See the Sustainability report
on pages 34 to 45
Stakeholders Why they matter
Shareholders Our investors provide capital for growth, whilst providing challenge and feedback on our business
model and plans for the future.
Employees Our employees are the driving force behind our purpose and growth. We are a people-first
business and consider our unique team and culture to be a vital part of our strategy.
Members Satisfied members are what makes our gyms successful, and they inspire us every day with their
achievements. They are the best indicator that we are delivering on our purpose of breaking down
barriers to fitness for all.
Suppliers Our suppliers ensure we source the best value goods and services for the benefit of our members
and employees. High standards of ethics and business conduct are an important part of being a
responsible business.
Communities Being a valuable part of the communities in which we operate is hugely important to us.
Providing safe and affordable facilities to exercise creates Social Value for the communities
around our gyms.
Environment We are committed to finding new opportunities to improve our environmental performance,
including on our pathway to net zero carbon emissions. Sustainability has always been at the core
of our business.
Lending
banks
Our lending banks provide funds for growth and day-to-day working capital to enable us to
operate and grow our business to its full potential.
Overview
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 03
Governance
report
Financial
statements
Other
information
Overview
Introduction to our business continued
We focus on operating high value, low cost
gyms that have widespread appeal. We
score highly on member satisfaction and
have over 65 million gym visits per annum.
Member proposition
Free
group
exercise
classes
24/7
access
and unlimited
training
Friendly,
helpful staff
and access to
personal trainers
High
quality
gym equipment and
exercise facilities
Market-
leading
low price
membership
Highly rated app
with around
700,000 users
Convenient locations
+50% of UK population live
within 15 minutes’ drive of
at least one of our gyms
Flexible
membership options
with Ultimate, Standard,
Off-peak and Saver
No
contract
The Gym Group plc | Annual Report and Accounts 2024
04 |
2024 openings
Existing gyms
245
Number of gyms
891,000
Number of members
£24.53
Average headline price
per month in December
2024 – Standard
Membership
We operate 245 gyms across the UK.
In 2024, we opened 12 new gyms from
free cash flow, predominantly in urban
residential areas and Greater London.
Strong gym network
* Note: All figures correct as at 31 December 2024. Average monthly membership relates to
Standard rate. Standard membership is a monthly membership for one specific home gym.
Overview
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 05
Governance
report
Financial
statements
Other
information
Consumer demand
The Gym Group plc | Annual Report and Accounts 2024
06 |
The low cost gym segment continues to drive the growth of
the UK health and fitness market. Our position as a leading
operator means we are well placed to take advantage of
the long term structural growth within the sector.
Strategic report
Market review
Winning proposition
in a growing market
The macro consumer environment has improved
compared to recent years, driven by rising real wages
and disposable incomes, alongside a gradual recovery
in business and consumer confidence from the lows of
2022. However, the pace at which these improvements
will translate into sustained economic growth remains
uncertain. In the near term, cost-of-living pressures
continue to weigh on discretionary spending, leading
consumers to carefully evaluate their financial priorities.
Despite these challenges, health and fitness engagement
remains robust. Consumers increasingly view exercise
as essential for both physical and mental wellbeing,
positioning gym memberships as a necessity rather
than a discretionary expense. This has contributed to
increased gym participation on a macro level and resilient
demand for memberships. However, value-for-money
remains a critical factor in consumer decision-making –
an area where The Gym Group is in a leading position.
Social media continues to play a pivotal role in shaping
fitness trends, driving interest in strength training,
functional fitness, and group-based activities. The
evolving ‘Fit not Thin’ movement has reinforced a cultural
shift toward building strength, endurance, and holistic
health, further supporting the importance of gym access.
As a leading UK low cost, nationwide, 24/7 gym operator,
with an average headline rate of a Standard membership
of £24.53 in December 2024, The Gym Group is well-
positioned to attract and retain members. This includes
those transitioning from premium and mid-market fitness
clubs in search of greater value, as well as first-time
gym-goers drawn by affordability, accessibility, and the
increasing awareness of fitness as a cornerstone
of health.
UK gym market penetration
(% of population
1
)
1 Source: Leisure DB State of the UK Fitness Industry reports.
2023
2024
15.1%
15.9%
New UK high
UK gym market
The health and fitness market in the UK has
shown structural growth for over a decade and
continued to grow in 2024, reaching a market
size of £5.9bn and an estimated 10.7 million gym
members. This is a continuation of a consistent
long run growth trend, with market size growing
by 3.5% CAGR 2012-24, and members growing
by 2.9% across the same period.
A significant proportion of that growth has
been driven by low cost gyms, which now
account for 15% of the market value (up from
2% in 2012) and 28% of the membership
(up from 4% in 2012), according to data from
State of the UK Fitness Industry Report 2024
published by Leisure DB.
In recent years, the low cost sector has
continued to roll out at pace, though barriers
to organic entry into the low cost market
remain high, with the top two players
accounting for 81% of low cost members.
In this trading environment, the benefit of
economies of scale, competitive pricing and a
highly cost-efficient operating model enabled
us to strengthen our position further as a
market leader with 12 new sites opened in 2024.
Market size
Low cost gaining share,
from 2% in 2012, to
15%
in 2024
Gym members
Low cost gaining share,
from 4% in 2012, to
28%
in 2024
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
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Governance
report
Financial
statements
Other
informationOverview
Total members (m)
2
2012 2022 2023
Low cost
share
4% 26% 27%
2.8
10.3
2.6
9.9
0.3
7.6
2024
28%
3.0
10.7
Covid-19
Market value (£bn)
2
2012 2022
0.7
4.8
0.1
3.9
Low cost
share
2% 13%
2023
0.8
5.4
14%
2024
0.9
5.9
15%
Covid-19
2 Adjusted low cost sector: 2024 numbers as reported by Leisure DB. 2023 removes
Coach Gym, easyGym, Foundry Gym, Lifestyle Fitness, Revolution Fitness, Vitality
Health & Fitness, GymFit4Less and I-Motion Gym; 2022 removes these operators
plus énergie Fitness, TruGym and ActiveFitness; 2012 removes easyGym,
Fitness4Less, Lifestyle Fitness and TruGym.
Source: Leisure DB State of the UK Fitness Industry reports – as of 31 Mar each year.
Low cost
share
1%
Total gyms (number)
2
2012
5,900
84
9%
2022
7,063
625
10%
2023
6,998
702
11%
2024
7,009
743
Covid-19
Low cost
2
Key
Rest of market
Growing importance of Gen Z
1 Source: 2024 Strava report – ‘Year in Sport: The Trend Report’, based on a global survey of c.7,000 people.
2 Source: UK population data from Xplor Gym Membership Sales Report 2024 (taken from Statista)
- data from most recent year available (2022); and The Gym Group internal data.
Generation split
2
UK population and TGG members, %
3 Source: PwC market study, February 2024.
Total low cost market potential
3
Existing gyms Additional headroom
As at
Jan 13
1,350-1,600
1,200-1,400
900-1,000
600-750
159
301
654
756
As at
Feb 15
As at
Jan 19
As at
Jan 24
Additional
headroom
450-600
600-700 500-750 600-850
In summary
‘High value, low cost’ fitness is a winning proposition in
the growing part of a growing market. With this strong
foundation in place, we are executing a clear Next
Chapter plan to grow revenues, membership and quality
new sites, with significant white space in the UK.
We will take a disciplined, data-driven and returns-
focused approach to this growth, to grow sustainably
for the benefit of shareholders.
The Gym Group plc | Annual Report and Accounts 2024
08 |
Strategic report
Market review continued
UK population
11%
19%
21%
21%
20%
7%
TGG average
members 2024
42%
40%
15%
3%
Gen Alpha
(born 2013 onwards)
Gen Z
(born 1997-2012)
Millennial
(born 1981-1996)
Gen X
(born 1965-1980)
Baby Boomer
(born 1946-1964)
Silent Gen
(born 1928-1945)
Gradually, Gen Z is becoming a key driver of growth for
our business, fuelling positive trends for both the market
and our Company. In 2024, they accounted for 42% of
The Gym Group’s average members and over half of all
new members, underscoring their growing significance.
Gen Z’s unique preferences and behaviours make them the
most fitness-engaged generation to date. Highly informed
about the mental and physical benefits of exercise, they
prioritise fitness as an integral part of their lifestyle, often
allocating a larger share of their spending to it than other
categories. For this generation, gym membership holds
‘social currency’ value, with Gen Z being 29% more likely
than Millennials to exercise with others
1
. The gym has
become not only a space for physical activity but also a
hub for socialising and building connections, reinforcing
its role as a vital part of their daily lives and identity.
This high level of engagement is driving positive tailwinds
for the gym industry, particularly for value gyms, and
supports our view that there is significant growth potential
in the UK market. With gym penetration currently at 15.9%,
there is ample room for expansion as fitness continues to
gain prominence in Gen Z’s priorities and lifestyles.
Growth potential
A PwC market study, commissioned by The Gym Group
and published in February 2024, assesses the current
total market capacity for low cost gyms to be between
1,350 and 1,600 gyms, suggesting additional growth
potential in the market of 600–850 gyms.
This headroom assessment highlights the continued
expansion potential of the low cost market driven by a
combination of increased consumer demand, expansion
in the wider health and fitness market and low cost gyms
entering smaller catchment areas.
At recent rates of site expansion by all low cost gym
operators, the analysis suggests there is scope for
a decade or more of further growth.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
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Governance
report
Financial
statements
Other
informationOverview
,,
The Gym Group plc | Annual Report and Accounts 2024
10 |
Strategic report
Chair of the Board’s statement
A year of progress
2024 represented a year of good progress
for The Gym Group as the new leadership
team began to implement its strategy –
the Next Chapter growth plan –
with strong initial results.
“With strong
leadership and
a clear plan, we
are well placed
to expand within
a sector offering
significant long
term growth.”
John Treharne | Chair of the Board
,
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 11
Governance
report
Financial
statements
Other
informationOverview
Our members continue to value
The Gym Group proposition highly
We have continued to offer our
members great value for money and
an excellent in-gym experience.
As a result, customer satisfaction and
frequency of visit – both core KPIs
for us – have remained very strong.
Notwithstanding an uncertain UK
macroeconomic background, health
and wellbeing remains a core priority
for discretionary spending. This is a
key driver of long term growth in the
gym market, with the combination of
low cost and high value continuing to
drive market share gains.
Moderating cost inflation
combined with strong revenue
gains delivered excellent
profit growth
The Next Chapter growth plan has
delivered great results in 2024, ahead
of our original expectations. Total
revenue growth of 11% reflects both
strong like-for-like sales growth and an
acceleration of new site openings last
year. The new sites have performed
strongly, reflecting the clear focus on
high quality, high returning locations;
and we expect to pick up the pace
again in 2025.
With the energy-led pressure on
costs starting to abate, we saw
good operational leverage from our
like-for-like growth to deliver 24%
growth in Group Adjusted EBITDA
Less Normalised Rent and a return
to profit before tax.
Successful refinancing
completed
We strengthened our financial position
further in 2024, generating strong
positive cash flow even as we stepped
up both the rate of expansion and the
reinvestment in our existing gyms. It is a
mantra of our business to ensure that
we are offering our members the best
possible experience, with top quality
equipment, as well as making new
fitness industry trends, such as HYROX,
accessible in an attractive environment.
During the year, we continued to
reduce leverage further within our
guidance range and in June 2024,
we entered into a new three year £90
million bank facilities agreement with
our existing banking syndicate.
We continue to plan to fund our future
growth under the Next Chapter growth
plan from free cash flow.
Sustainability embedded
in our strategy
Sustainability is a founding principle
of The Gym Group. Last Summer,
we held a webinar for our investors
to demonstrate how our sustainable
approach to growth is embedded
within our Next Chapter growth plan.
The impact of regular exercise on
our members in improving both their
physical and mental wellbeing is clear.
Our Social Value measure – a model
used by government and key sector
stakeholders – shows continued
progress to record levels in 2024 as the
frequency with which our members visit
our gyms continues to increase. We are
delighted to have exceeded our target
of £900m of Social Value created a
year early.
Through our purpose of breaking
down barriers to fitness for all, we aim
to continue to lead our sector in ESG
and are proud to have entered a long
term partnership with NHS Charities
Together. It is an important motivator
for our people, who are proud to play
a part in their local communities in
fundraising and volunteering.
A strong and stable team
After some significant changes at
both Board and Executive Committee
level in 2022 and 2023, I am pleased
to say that 2024 has seen a period
of stability. There have been no
changes at Board level in the past 12
months and the Executive Committee
is developing well under Will Orr’s
leadership as they start to deliver the
Next Chapter growth plan. I’d like to thank
the current Board members for their help
and support to the management team
as they developed and refined the Next
Chapter growth plan.
We are in the process of recruiting an
additional independent Non-Executive
Director to replace Emma Woods and
David Kelly, who both stepped down
from the Board in 2023, to ensure that
we have adequate bandwidth as well as
the right balance of skills and expertise
on the Board. We look forward to
updating on this in due course.
Looking forward
The Board is confident that this team
and this plan will deliver further strong
progress in results. The Gym Group has
a great proposition; an accelerating
growth plan; and is well capitalised to
fund its expansion within a sector that
continues to offer the opportunity
of significant long term growth.
John Treharne
Chair of the Board
12 March 2025
The Gym Group plc | Annual Report and Accounts 2024
12 |
This strong set of results reflects good progress
against the strategic objectives set out in
our Next Chapter growth plan. We have seen
excellent momentum to date with increased
membership, revenue and profit; and our market-
leading proposition is more resonant than ever,
in a sector that is growing. We will continue to
execute on initiatives started in FY24 alongside
new initiatives in place for FY25, underpinned by
our investment in technology and data to drive
future growth.
Strategic report
Chief Executive’s review
Progress
and potential
“We have delivered
our mid term mature
site ROIC target early
and seen strong
performance in our
newest gyms. We believe
there is more to come,
giving us the confidence
to increase guidance
again to the top end
of the recently revised
analyst forecast range
for FY25.”
Will Orr | Chief Executive Officer
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 13
Governance
report
Financial
statements
Other
informationOverview
The Gym Group has a winning ‘high
value, low cost’ proposition and
operates in the fastest growing
part of a growing market for health,
fitness and gyms. With a clear plan
and a strong team in place, I’m
more confident than ever about our
prospects for sustained growth.
We have had a year of good progress
as we began to execute our Next
Chapter growth plan outlined at our
preliminary results presentation a
year ago. The first year of the plan has
resulted in strong growth in revenues
and EBITDA, translating into increased
free cash flow which we are continuing
to reinvest to generate further growth.
Next Chapter recap
Our Next Chapter growth plan is
focused on delivering sustained
growth from free cash flow in the
highly resilient and growing health
and fitness market, within which the
‘high value, low cost’ gym sector is
showing particularly strong growth.
This growth plan aims firstly to
‘Strengthen the core’ of our existing
business, increasing returns from
the existing estate. ‘Strengthen the
core’ includes pricing and revenue
management, cost-effective
member acquisition, and improving
member retention.
The second part of the plan is to
‘Accelerate rollout of quality sites’.
Here we set ourselves a target of
opening around 50 high quality,
high returning sites over three years,
funded from free cash flow.
Successful execution of these two
priorities is our current focus because
we see strong potential in both. That
said, we will periodically assess further
options to ‘Broaden our growth’ over
the longer term. Details of the Next
Chapter growth plan can be found
on pages 16 to 18.
A winning proposition
Underpinning our growth is our
focused, scalable proposition which
continues to deliver for our members.
As at the end of February 2025, we
have 951,000 members, up 7% since
last year end. Visits continued to
grow in 2024 and the proportion of
members visiting 4+ times per month
has increased by 120bps. This remains
a key target as more members visiting
more frequently improves retention,
revenue growth and the Social Value
2
we create. In 2024, we created £962m
of Social Value, up from £890m in 2023.
We invested £12.2m in our mature
gyms in 2024, upgrading facilities and
equipment in over 100 sites with more
comprehensive enhancement projects
in 15 of them. We have also rolled out
the popular HYROX training sessions
to more locations, and they are now
available in 120 of our gyms.
Customer satisfaction metrics show
continuing strength, with 93% of our
members rating The Gym Group 4 or
5 out of 5 for overall satisfaction (57%
5/5). According to Google reviews, we
have a significantly higher percentage
of 4/5 and 5/5 satisfaction scores
compared with our closest high value,
low cost competitors.
We were also proud to be named as
one of the Best Places to Work in the
UK in 2024’s Sunday Times survey,
while our employee engagement score
in the latest survey (carried out in Q4
of 2024) increased to 9/10 (8.5/10 in
FY23). Our highly engaged and high
performing teams are critical to our
winning proposition, delivering a
positive member experience, driving
frequency of visits and supporting our
growth plan.
891,000
members
at 31 Dec 2024; +5% YoY
(31 Dec 2023: 850,000)
25%
ROIC on mature
sites in 2024
(27% after excluding 13
workforce-dependent gyms
1
)
FY24 enhancement investment
in
>100
sites
High quality gym
equipment and
exercise facilities
1 Sites with a workforce index of more than 120 (workforce population / residential adult population *100), without car parking or a significant student population.
2 The Social Value Model created by Sheffield Hallam University focuses on member participation and the health benefits of regular exercise. It calculates the
financial value resulting from reduced GP visits, enhanced life satisfaction, personal development and the growth of social and community connections.
The Gym Group plc | Annual Report and Accounts 2024
14 |
1 Sites with a workforce index of more than 120 (workforce population / residential adult population *100),
without car parking or a significant student population.
Strategic report
Chief Executive’s review continued
Strengthen the core
As the key measure of success for
the ‘Strengthen the core’ programme,
we set a target to achieve an average
ROIC on our mature sites of 25% over
the medium term, compared with the
starting point of 21% in FY23. Thanks
to the rigour of our approach and
the efforts of our teams, we have
delivered a ROIC of 25% in the first year
(27% after excluding 13 workforce-
dependent gyms
1
), with active pricing
and revenue management delivering
a strong improvement in like-for-like
revenue and resulting in excellent
growth in site EBITDA.
Details of our progress in 2024 under
the Next Chapter growth plan can be
found on pages 19 to 23.
Yield improvement from reducing
thegap with competitors
We have targeted reducing the pricing
gap with our key ‘high value, low cost’
competitors and have made good
progress in 2024. Our average headline
price for a Standard membership in
December 2024 was £24.53, up 6%, or
£1.37, year on year. Like-for-like revenue
growth of 7% reflects a combination
of higher headline rates for new
members, re-pricing of the existing
member base, and more cost-effective
promotionalactivity. This approach to
yield improvement, as with all areas of
the Next Chapter growth plan, is based
on expert analysis of comprehensive
data sets and rigorous A/B testing.
We have achieved this increase in yield
without seeing an increase in the rate
of member churn and, as a result,
our like-for-like membership has been
maintained. Our strategy has been to
optimise the pricing opportunity, whilst
using our data management tools to
minimise volumeattrition.
The introduction of off-peak pricing
has supported this approach. Off-
peak provides members with a third,
particularly affordable membership
option, which strengthens our marketing
proposition and provides a ‘safety net’
to retain existing members who
otherwise might have left. We have
further refined off-peak pricing at
site level to minimise cannibalisation
and drive incremental volume.
Using data and technology to
support customer acquisition
andretention
When it comes to acquiring new
members, we have been very focused
on ensuring our marketing spend
delivers a strong return on investment.
To that end, we have increased A/B
testing to improve messaging, media
deployment and web conversion.
As we said in our March 2024 strategy
presentation, increasing member
retention and tenure has significant
potential revenue upside. The highest
rate of churn is in the first 45 days
of membership, before a habit has
formed. Therefore, a core part of our
retention plan is ‘early life’ engagement
with members. By utilising behavioural
science in our email engagement with
new members; upgrading our highly
rated and well used app; and improving
in-gym interaction with new members,
we have seen an improvement in the
average tenure of our membership
base in 2024.
Strategic
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| 15
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Financial
statements
Other
informationOverview
In 2025, we will commence a
programme of investment in our
major technology and data platforms.
This is focused on introducing a new
set of market-leading business and
member capabilities, accelerating the
pace of innovation and creating a step
change in operational performance,
scalability and efficiency when it
comes to delivering tech-enabled
strategic initiatives.
We will be implementing new member
management and payment systems,
with the implementation being staged
over the next two years to minimise
any risks as we make this transition.
We expect these developments to
accelerate the already strong progress
we are seeing from the Next Chapter
growth plan.
Accelerating rollout of quality sites
Our Next Chapter growth plan targets
an accelerating rollout of high quality
sites, delivering 30% ROIC and funded
from free cash flow.
We opened 12 new gyms in 2024,
at the top end of our guidance of
10-12 openings, eight of which opened
in the second half. These locations all
met the criteria of high population
density, good visibility and convenient
transport links – all being in Greater
London or other ‘Urban Residential’
locations. We have also refined our
approach to launching our new gyms,
resulting in a more rapid ramping up of
member volumes. Enhanced tailoring
of marketing and gym product to
local markets has resulted in all new
sites performing ahead of historical
maturity curves.
In addition, applying the ‘Strengthen
the core’ approach across our estate
has ensured that sites opened in
2022 and 2023 are also on track to
deliver our 30% ROIC target.
As well as supporting revenue in the
mature estate, we continue to drive
cost efficiency projects, enhancing
new site returns as well as improving
the performance of mature sites.
These include refining the operating
model, optimising energy usage and
innovating in-build cost management.
There is a strong site pipeline building
– helped by our appointment of
leading property agents, Savills – that
is expected to deliver 14-16 new gyms in
2025, in line with our three year target
of c.50 gyms, delivering an average
ROIC of 30%. We remain committed
to our ROIC target, which will continue
to take precedence over delivering a
specific number of site openings in any
given year.
See Progress against the Next Chapter
growth plan on pages 19 to 23.
Next Chapter summary
We have a clear Next Chapter growth
plan which is showing encouraging
early results. It has enabled us to
deliver our mid term returns target
for the mature estate in the first year
of the plan, and to open new sites
that are performing ahead of our
expectations.
We will continue to harness data
and A/B testing to increase yields,
while aiming to maintain like-for-like
membership volume through effective
marketing. This, alongside strong cost
management, is expected to support
like-for-like revenue growth ahead of
inflation and further improvements to
mature site ROIC. With our retention
programme gathering momentum, and
a major data study we commissioned
identifying clear member headroom in
clusters of our existing sites, we have
further initiatives to come on like-for-
like growth.
This strengthening of returns in our
core estate will, as outlined, in turn
underpin our organically funded
rollout of quality new sites, taking full
advantage of the significant white
space opportunity for low cost gyms
in the UK.
Management appointments
We welcomed two new arrivals to our
Executive Committee in 2024. Tina
Koehler joined us as Chief Commercial
Officer in September 2024. Tina
brings extensive commercial and
marketing experience from previous
roles at Deliveroo, Procter & Gamble,
Amazon and Audi. Hamish Latchem
joined us in December 2024 as Chief
Property Officer, having previously
been National Store Development
Director at Aldi UK. Hamish took over
the role from David Melhuish, who after
a decade at The Gym Group in senior
roles, retired at the end of the financial
year, with our thanks and best wishes.
Summary and outlook
The Gym Group has a winning high
value, low cost proposition that is well
placed to thrive in the growing health
and fitness market. Through our clear
Next Chapter growth plan, we have
identified multiple opportunities to
drive like-for-like revenue growth.
With significant white space
opportunity suggesting a decade of
rollout potential, we are accelerating
our self-funded rollout of c.50 sites
over three years that are expected
to deliver an average 30% ROIC.
We are building momentum, having
achieved a 24% increase in Group
Adjusted EBITDA Less Normalised
Rent in FY24 and delivered our target
of 25% ROIC in mature sites early.
Trading has remained strong through
our key member recruitment period
and our resilient business model is
well insulated from wider market cost
pressures. As a result, we now expect
that FY25 Group Adjusted EBITDA Less
Normalised Rent will be at the top end
of the recently revised analyst forecast
range of £49.0m-£50.8m
3
, driving
further progress in mature site ROIC
in FY25 and confidence in a return to
30% in the longer term.
Further details on the FY25 financial
guidance can be found in the Financial
review on page 31.
Finally, I would like to thank our
committed, expert people. We have a
fantastic team who have worked hard
to deliver a strong 2024, and a good
start to 2025.
Will Orr
Chief Executive Officer
12 March 2025
3 Current Company-compiled analyst forecast range.
The Gym Group plc | Annual Report and Accounts 2024
16 |
Strategic report
The Next Chapter growth plan
Drive like-for-
like revenue and
generatecash
Create funds
for future growth
options
Broaden
our
growth
Accelerate
rollout of
quality
sites
Strengthen
the core
Sustained growth from free cash flow
Strategic
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| 17
Governance
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informationOverview
Our investment case is to
deliver sustained growth from
free cash flow in the highly
resilient and growing health
and fitness market; and the
Next Chapter growth plan is
how we will deliver this.
This growth plan aims firstly to
‘Strengthen the core’ of our business,
increasing returns from the existing
estate and funding ‘Accelerate rollout of
quality sites’. In the longer term, this will
then create optionality to ‘Broaden our
growth’ as we develop our proposition
into new channels, new adjacencies and/
or new markets. All of this is underpinned
by data-driven decision-making utilising
ourtechnology platforms.
Strengthen the core
Under our plan to ‘Strengthen the core’, we have identified a
number of growth drivers that will deliver increased returns
in our existing estate and underpin the attractive returns
we continue to drive from our new sites.
The key initiatives under this plan fall into three categories:
Pricing and revenue management;
Member acquisition; and
Member retention.
Each of these categories will contribute to like-for-like
growth in our mature estate and provide an opportunity
to access some of the potential new members we have
identified. Further information about the initiatives under
each of these categories and the progress we have made
in2024 is set out on pages 19 to 21.
Accelerate rollout
ofqualitysites
As set out in the Market review section on pages 6 to 9, a
PwC market study commissioned by The Gym Group and
published in February 2024, suggests that there is the
potential capacity for between 600 and 850 additional
gyms in the low cost gym sector. At recent rates of site
expansion by all low cost gym operators, this suggests
there is scope for at least ten years of further growth.
We have identified the key characteristics of high-returning
sites, and it is clear that Greater London and ‘Urban
Residential’ locations deliver the best returns for us. This,
therefore, is where we are concentrating our site opening
programme for the time being. Disciplined rollout of high
quality and high-returning sites will deliver attractive
returns and create significant value for shareholders.
Retaining discipline in selecting the right sites – in terms
of location, footprint and local market – is critical to
maintaining the attractive 30% target Return on Invested
Capital (‘ROIC’) that the Group’s new site pipeline delivers.
Furtherinformation about the progress we have made in
2024 is set out on page 22.
Broaden our growth
The successful execution of the first two components of the
Next Chapter plan will create further options to ‘Broaden
our growth’ for the longer term. We continue to make a
strategic assessment of the longer term growth options
which may include further developments to our existing
proposition; format innovation; investigating new channels
to market; and introducing new adjacent revenue streams
to complement our existing business.
The Next Chapter growth plan aims
to create significant value over the
medium term.
Our initiatives under ‘Strengthen the core’ are already
delivering like-for-like revenue growth – underpinned
by both membership and yield increases. This growth
is expected to, at least, offset like-for-like cost
growth which, combined with tight control of Central
Support Office costs, will drive sustained profit and
cash generation, including sustaining maintenance
capex at 5-6% of revenue. Profit growth and free cash
flow generation will support and fund the disciplined
opening of c.50 new sites over three years.
The Gym Group plc | Annual Report and Accounts 2024
18 |
The principal risks relating to the Next Chapter growth plan are as follows:
Strategic report
The Next Chapter growth plan continued
As we look to continue to
narrow the pricing gap with
competitors, we risk impacting
the volume of members
per gym
The ongoing cost-of-living
squeeze and economic and
geopolitical uncertainty may
cause financial hardship for
our members
Our ability to enrol and
support members, carry out
online marketing activity,
process payments and
control gym access and other
services is dependent on the
performance of our IT systems
Principal risk Description and impact Mitigations and controls Strategic link
1
Operational
gearing
2
Trading
environment
5
IT
dependency
Regular monitoring of site performance
Active price and retention management
at site level
Off-peak pricing provides access to
a more affordable product
Monitoring of relative price positioning
versus competitors
Measures identified to reduce operating
costs and discretionary spend
Improved financial position with new
bank facility agreement and strong
cash generation
Primary data systems hosted by
specialist providers
Primary IT infrastructure fully managed
by specialist IT companies
Robust disaster recovery and business
continuity plans in place
Strong internal technology team
in place, supported by specialist IT
resource providers
Appropriate governance in place for
all major technology projects
Strengthen
the core
Accelerate
rollout of
quality sites
Strengthen
the core
Accelerate
rollout of
quality sites
Strengthen
the core
Accelerate
rollout of
quality sites
Broaden our
growth
See Principal risks and uncertainties
on pages 50 to 60
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Other
informationOverview
Strengthen
the core
Pricing and revenue
management
Strong gains from pricing and
promotional initiatives, supported
bythree tier membership.
We continued to deliver growth in yield as a result of our
data-driven pricing strategy and optimising promotions.
We have narrowed the gap with our key low cost
competitors on headline rates and joining fees, as well as
repricing existing members whilst maintaining member
volumes. The average difference to our primary low cost
competitor in directly competing locations reduced from
£2.06 in December 2023 to £1.45 in December 2024.
We continue to offer outstanding value for money, and
as a result have seen no increase in churn and continuing
strength in our customer satisfaction measures.
After a full year of offering Off-peak memberships across
the estate, we have made pricing more accessible and,
as planned, protected volume whilst optimising pricing
on our Standard and Ultimate memberships.
As at 31 December 2024, Off-peak accounted for 10.5% of our
member base, in line with our expectations. The appeal of our
Ultimate membership remained strong, and this accounted
for 29.6% of our member base at the same point in time
(31.3% at 30 June 2024 and 31.7% at 31 December 2023).
This area has been an important focus
for the management team in 2024.
By focusing on the following drivers,
we aim to deliver like-for-like growth in
our mature estate: pricing and revenue
management; improved member
acquisition; and driving retention. Each
of these represents a material revenue
opportunity and supports our intention to
drive up returns from our mature estate.
We set a mid term target to deliver ROIC
of 25% from our mature portfolio, from
a base of 21%. We have already delivered
this in the first year and see further
opportunity to build on this momentum.
Strategic report
Progress against The Next Chapter growth plan
New member pricing
Further narrowed the gap to competition in headline
rates and joining fees, supported by three tier
membership architecture
Price and promotions initiatives
Member repricing
Identified profitable new ways to close the gap between
new and existing members
Off-peak revenue
Off-peak pricing optimisation added volume and
increased incrementality
Promotions innovation
Mix shifted towards less costly promotions and
effectiveness significantly improved within existing
and new mechanics
The Gym Group plc | Annual Report and Accounts 2024
20 |
Strategic report
Progress against The Next Chapter growth plan continued
Marketing efficiency and effectiveness
Dynamic creative
Initial use of AdTech delivering benefits in marketing
effectiveness, volume and revenue through more
relevant content
Oct 23
Feb 24
Oct 24
39%
41%
44%
Likelihood to join
2
Marketing focus on ‘winning locally’
showing progress
Strengthen
the core
Value for money scores maintained
in 2024, despite increasing prices
Simon-Kucher Price/Value map
1
Value for money (0 to 10)
2023 2024
7.9 7.9
Continued opportunity to price ahead
of inflation
High
Low
Perceived price
Low HighPerceived value
Low cost
gym sector
Position on the chart
continues to indicate
room for all low cost
brands to increase prices
while still delivering
great value for money
Member acquisition
We are building momentum to drive
marketing efficiencies and effectiveness,
underpinned by digital testing and a focus
on local marketing.
We have increased A/B testing to improve our
understanding of customer acquisition costs vs member
lifetime value. With investment in AdTech allowing
us to tailor advertising to relevant geography and
demographics, we have delivered a 10.5% reduction in
the cost per acquisition as well as improvements in web
conversion rates in2024.
Website conversion programme
A/B testing programme established and delivering
revenue gains through conversion, product mix and
add-ons
Marketing return on investment
Up-weighting marketing investment towards sites
with higher lifetime value and continuing to test returns
on incremental marketing
Winning brand locally
Local focus in brand message and media strategy
driving brand performance and local social
(+102k Instagram reach H2 2024 YoY)
1 Simon-Kucher, 2024 customer survey
(updated August 2024).
2 Response to advertising creatives and campaigns across Sep/Oct 2023,
Jan/Feb 24 and Sep/Oct 24. Source: The Nursery – 16-49 year old potential
gym goers within 10 miles of a The Gym Group gym.
The Gym Group plc | Annual Report and Accounts 2024
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Other
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Strategic report
Progress against The Next Chapter growth plan continued
Member retention
The nature of our no contract membership means that
relatively high rates of churn are built into our model.
That said, increasing member retention and tenure has
the potential to drive significant revenue upside, and
a core part of our focus on retention is centred around
‘early life’ engagement with our members. The highest
rate of churn is in the first 45 days of membership,
before a habit has formed.
App upgrade
Range of new app features launched and gaining
traction (+159k more members engaged with our
Workouts Hub in H2 2024 YoY)
Acquire to retain
New promotions drive retention from the point of
acquisition. Growing ‘Saver’ membership from small base
(+2.3x 2024 YoY)
Initial retention initiatives gaining traction
Early life CRM
Built on H1 success in initial email engagement
with segmentation by member demographic
(+3.3% early life retention)
In-gym focus on new joiners
Increased staffing for new joiner peaks and
improvedavailability and quality of inductions
(+129% member inductions in 2024 YoY)
Sustainability
in action: Using
CRM to engage
and motivate our
members
“Our CRM team has been focusing on encouraging
member visits and engagement through behavioural
science-informed campaigns.
The messaging addresses common barriers to exercise
and feeds into potential motivators.
We have completely revamped member onboarding
and increased ‘nudges to action’ during the member
lifecycle. As a result, we have seen an increase in the
average tenure.”
Catherine Allan |
Head of CRM
The Gym Group plc | Annual Report and Accounts 2024
22 |
Accelerate rollout
of quality sites
New site openings by year
Proven site performance criteria
A winning proposition in more
locations nationwide.
We have refined our location analysis to
identify high returning sites, using the data
from our 100 best performing sites, with
the aim of achieving an average ROIC of
30% across our new site openings.
We doubled the rate of new openings in
2024 to 12 new gyms from six in 2023,
funded from free cash flow. Eight of these
were in Greater London.
Greater London and ‘Urban Residential’
Areas with high population density
Convenient access
Good visibility/signage opportunities
We have also refined our approach to launching our new
gyms, resulting in a more rapid ramping up of member
volumes. Enhanced tailoring of marketing and gym product
to local markets has resulted in all new sites performing
ahead of historical maturity curves.
In addition, applying the ‘Strengthen the core’ approach
across our estate has ensured that sites opened in 2022
and 2023 are also on track to deliver our 30% ROIC target.
As well as supporting revenue in the mature estate,
we continue to drive cost efficiency projects, enhancing
new site returns as well as improving the performance of
mature sites. These include refining the operating model,
optimising energy usage and innovating in-build cost
management.
As we continue to evolve our proposition in 2025, as well
as delivering enhanced value through the upgrading of
equipment and provision of additional products, we are
also starting some work to refresh the look and feel of our
gyms, within our existing capital expenditure budgets.
This aims to give them a more contemporary and dynamic
feel, increasing customer appeal.
We have a strong pipeline and plan to increase the number
of gym openings in 2025 to 14-16 new sites, with a further
acceleration in 2026, in line with our plan to open c.50 sites
over three years.
New gym at Gillingham
2024
2025
Target
2026
Target
12
14-16
18-22
Targeting c.50 new sites over 3 years
with an average 30% ROIC
Strategic report
Progress against The Next Chapter growth plan continued
Strategic
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informationOverview
The Gym Group plc | Annual Report and Accounts 2024
Looking
ahead
Our near term focus will continue to be
on delivering the first two components
of our Next Chapter growth plan as there
are significant opportunities remaining to
deliver our growth targets, some of which
will be unlocked by reinvestment in our
technology platform.
In 2025, we will commence a programme
of investment in our major technology
and data platforms. This is focused on
introducing a new set of market-leading
business and member capabilities,
accelerating the pace of innovation and
creating a step change in operational
performance, scalability and efficiency.
We will be introducing new member
management and payment capabilities
and the implementation will be staged
over the next two years to minimise any
risks as we transition to new systems.
We expect these developments to
accelerate the already strong progress
we are seeing from the Next Chapter
growth plan.
Sustainability in
action: Circular
economy –
Embodied
carbon strategy
“As part of our commitment
to decarbonisation across
the business with a particular
focus on Scope 3 activities and
greenhouse gas emissions, we are
developing a strategy to increase
retention of key building elements
along with the repurposing of
existing materials and re-use of
mechanical systems as part of
our fit-out of new sites.
We adopted this approach in some sites opened
in 2024: Welwyn Garden City (retention of
existing air conditioning units); Gillingham (part
retention of an existing steel framed mezzanine);
and Euston Road (furniture for members’ area
fabricated from repurposed timber).
We continue to explore opportunities for
driving circularity in both the fit-out and
operation of our gyms through carbon-
sensitive procurement in collaboration with
our suppliers, through such schemes as
Environmental Product Declarations (‘EPDs')
and closed-loop recycling.”
Jon Watts |
Project Manager
The Gym Group plc | Annual Report and Accounts 2024
24 |
Strong
performance
£22.9m
Operating profit
2023: £13.3m
£37.5m
Free cash flow
1
2023: £27.0m
£61.3m
Non-Property Net Debt
1
2023: £66.4m
1 See page 167 for definition and cross-reference to reconciliation to statutory measure.
Strategic report
Financial review
“We have delivered
a strong set of
financial results
in the year, with
improvements in all
key metrics.”
Luke Tait | Chief Financial Officer
Strategic
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informationOverview
Presentation of results
This Financial review uses a combination of statutory and non-statutory measures to discuss performance in the year.
The definitions of the non-statutory key performance indicators can be found in the ‘Definition of non-statutory measures’
section on page 167.
To assist stakeholders in understanding the financial performance of the Group, aid comparability between years
and provide a clearer link between the Financial review and the consolidated financial statements, we have adopted
a three-column format for presenting the Group income statement in which we separately disclose underlying trading
and non-underlying items.
Non-underlying items are income or expenses that are material by their size and/or nature and are not considered to
be incurred in the normal course of business. They are classified as non-underlying items on the face of the Group income
statement within their relevant category. Further information about what has been included in non-underlying items can
be found on page 28.
Summary financial information
1
Year ended
31 December
2024
Year ended
31 December
2023 Movement
Total number of gyms at year end 245 233 +5%
Total number of members at year end (‘000) 891 850 +5%
Revenue (£m) 226.3 204.0 +11%
Group Adjusted EBITDA (£m) 87.3 75.5 +16%
Group Adjusted EBITDA Less Normalised Rent (£m) 47.7 38.5 +24%
Adjusted Profit/(loss) before tax (£m) 3.6 (5.5) +£9.1m
Statutory Profit/(loss) before tax (£m) 2.5 (8.3) +£10.8m
Statutory Profit/(loss) after tax (£m) 4.4 (8.4) +£12.8m
Net cash inflow from operating activities (£m) 95.1 79.5 +20%
Free cash flow (£m) 37.5 27.0 +39%
Non-Property Net Debt (£m) (as at year end) (61.3) (66.4) Down by 8%
Adjusted Leverage 1.3 1.7 Down by 0.4x
Return on Invested Capital (‘ROIC’) on mature sites 25% 21% +4 ppts
1 Non-statutory measures are defined in the ‘Definition of non-statutory measures’ section on page 167.
Results for the year
Year ended 31 December 2024 Year ended 31 December 2023
Underlying
result
£m
Non-
underlying
items
£m
Total
£m
Underlying
result
£m
Non-
underlying
items
£m
Total
£m
Revenue 226.3 – 226.3 204.0 – 204.0
Cost of sales (2.9) – (2.9) (2.8) – (2.8)
Gross profit 223.4 – 223.4 201.2 – 201.2
Other income 0.1 – 0.1 0.3 – 0.3
Operating expenses (before depreciation,
amortisation and impairment) (139.6) (0.4) (140.0) (128.4) (1.5) (129.9)
Depreciation, amortisation and impairment (60.1) (0.5) (60.6) (57.5) (0.8) (58.3)
Operating profit 23.8 (0.9) 22.9 15.6 (2.3) 13.3
Finance costs (20.7) (0.2) (20.9) (21.4) (0.5) (21.9)
Finance income 0.5 – 0.5 0.3 – 0.3
Profit/(loss) before tax 3.6 (1.1) 2.5 (5.5) (2.8) (8.3)
Tax credit/(charge) 1.8 0.1 1.9 (0.6) 0.5 (0.1)
Profit/(loss) for the year attributable
to shareholders 5.4 (1.0) 4.4 (6.1) (2.3) (8.4)
Earnings/(loss) per share (p)
Basic 3.0 2.5 (3.4) (4.7)
Diluted 2.9 2.4 (3.4) (4.7)
The Gym Group plc | Annual Report and Accounts 2024
26 |
Strategic report
Financial review continued
Revenue
Trading in 2024 was strong despite the ongoing cost-of-living pressures on consumers, demonstrating the continued
resilience of the low cost gym model and the early success of the Next Chapter growth plan. Revenue increased by 11%
to £226.3m (2023: £204.0m), reflecting 4% higher average membership numbers throughout the year and a 7% increase
in yield.
The average membership number in the year was 906,000 compared with 872,000 in the prior year; and we closed the year
with 891,000 members which was up 5% on 31 December 2023.
The average headline price of a Standard membership increased to £24.53 in December 2024 compared with £23.16 in
December 2023, largely as a result of higher joining fees and price increases for new members. During the year, we also did
some selective repricing of the base membership. As a result, Average Revenue Per Member Per Month (‘ARPMM’) in 2024
was up 7% to £20.81 compared with £19.50 in 2023. The proportion of members taking our premium membership was 29.6%
in December 2024 compared with 31.7% in December 2023.
Like-for-like revenue (based on all sites open as at 31 December 2021) increased by 7% year on year.
Cost of sales
Cost of sales, which includes the costs associated with the generation of ancillary income as well as call centre costs and
payment processing costs, were broadly in line with the prior year at £2.9m (2023: £2.8m).
Underlying operating expenses (before depreciation, amortisation and impairment)
Underlying operating expenses (before depreciation, amortisation and impairment) are made up as follows:
Year ended
31 December 2024
£m
Year ended
31 December 2023
£m
Site costs before Normalised Rent 109.7 105.0
Site Normalised Rent 39.2 36.6
Site costs including Normalised Rent 148.9 141.6
Central Support Office costs 26.5 21.0
Central Support Office Normalised Rent 0.4 0.4
Central Support Office costs including Normalised Rent 26.9 21.4
Share based payments 3.4 2.4
179.2 165.4
Less: Normalised Rent (39.6) (37.0)
Underlying operating expenses (before depreciation, amortisation
and impairment) 139.6 128.4
Site costs including Normalised Rent
In 2024, site costs including Normalised Rent increased by 5% to £148.9m (2023: £141.6m).
The fixed costs associated with running the sites (predominantly building rates and service charges) decreased by £0.2m
year on year as one-off benefits and refunds from historic rates challenges more than offset the effect of the increased
estate size and the full year impact of inflationary increases in building rates costs (three year assessment period starting
April 2023).
Controllable site costs increased by £4.9m as the impact of inflationary pay increases (on both staff costs and cleaning),
and increased marketing spend to drive volume, were partially offset by the normalisation of utilities prices. Other increases
in controllable costs predominantly reflect the larger estate size and continued technology investment.
Site Normalised Rent, which is defined as the contractual rent payable, recognised in the monthly period to which it relates,
increased by £2.6m in the year, again reflecting the larger estate size.
Strategic
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informationOverview
Central Support Office costs including Normalised Rent
Central Support Office costs excluding Normalised Rent increased in the year by £5.5m to £26.5m (2023: £21.0m), reflecting
an increase in headcount to deliver the Next Chapter growth plan, pay inflation and increased variable pay accruals as
a result of the strong trading performance. Central Normalised Rent remained flat at £0.4m.
Share based payments
The charge for share based payments (including related employer’s national insurance) in the year amounted to £3.4m
(2023: £2.4m), reflecting the stronger trading performance and share price growth. In January 2024, the Group established
an Employee Benefit Trust (‘EBT’) to purchase shares in order to minimise dilution associated with the share based
payments. During the year, 2,834,928 shares were purchased at a cost of £3.5m.
Underlying depreciation and amortisation
Underlying depreciation and amortisation charges in the year amounted to £60.1m (2023: £57.5m), made up of £24.6m
(2023: £24.0m) on property, plant and equipment, £29.4m (2023: £28.0m) on right-of-use assets, and £6.1m (2023: £5.5m)
on intangible assets. The increases year on year reflect the larger estate and the continued investment in technology.
Group Adjusted EBITDA Less Normalised Rent
The Group’s key profit metric is Group Adjusted EBITDA Less Normalised Rent as the Directors believe that this measure best
reflects the underlying profitability of the business. Group Adjusted EBITDA Less Normalised Rent is reconciled to Operating
profit/(loss) as follows:
Year ended
31 December 2024
£m
Year ended
31 December 2023
£m
Operating profit 22.9 13.3
Non-underlying operating items (see page 28) 0.9 2.3
Share based payments 3.4 2.4
Underlying depreciation and amortisation 60.1 57.5
Group Adjusted EBITDA 87.3 75.5
Normalised Rent
2
(39.6) (37.0)
Group Adjusted EBITDA Less Normalised Rent 47.7 38.5
2 Normalised Rent is the contractual rent payable, recognised in the monthly period to which it relates.
Group Adjusted EBITDA Less Normalised Rent was 24% ahead of the prior year at £47.7m (2023: £38.5m), as the strong
trading and increased revenue was complemented by tight control of operating costs. This in turn drove a four percentage
point increase in the Return on Invested Capital (‘ROIC’) of mature sites, increasing from 21% in FY23 to 25% in FY24
(27% after excluding 13 workforce-dependent gyms
3
).
Underlying finance costs
Underlying finance costs decreased in the year by £0.7m to £20.7m (2023: £21.4m). The finance costs associated with our
bank borrowings (comprising interest payable and fee amortisation less capitalised interest) decreased by £0.7m to £5.2m
(2023: £5.9m), reflecting the lower average net debt throughout the year. The weighted average interest rate applicable
to the Group’s bank borrowings during 2024 was 8.2% (2023: 8.2%).
The implied interest relating to the lease liabilities was £15.5m (2023: £15.5m) as the impact of additional property leases due
to the increased estate was offset by a reduction in non-property leases.
3 Sites with a workforce index of more than 120 (workforce population / residential adult population *100), without car parking or a significant student population.
The Gym Group plc | Annual Report and Accounts 2024
28 |
Strategic report
Financial review continued
Non-underlying items
Non-underlying items are costs or income which the Directors believe, due to their size or nature, are not the result of normal
operating performance. They are therefore separately disclosed on the face of the income statement to allow a more
comparable view of underlying trading performance.
Year ended
31 December 2024
£m
Year ended
31 December 2023
£m
Affecting operating expenses (before depreciation, amortisation
and impairment)
Costs of major strategic projects and investments 0.2 0.9
Restructuring and reorganisation costs (including site closures) 0.2 0.6
0.4 1.5
Affecting depreciation, amortisation and impairment
Impairment of property, plant and equipment, right-of-use assets and
intangible assets 0.4 0.6
Amortisation of business combination intangible assets 0.1 0.2
0.5 0.8
Affecting finance costs
Refinancing costs and remeasurement of borrowings 0.2 0.5
0.2 0.5
Total all non-underlying items before tax 1.1 2.8
Tax on non-underlying items (0.1) (0.5)
Total non-underlying charge in income statement 1.0 2.3
Non-underlying items affecting operating expenses (before depreciation, amortisation and impairment) reduced in the
year to £0.4m (2023: £1.5m) and relate to costs incurred in the year on strategic technology projects, as well as a provision
for the closure costs of one gym in 2025.
Non-underlying costs affecting depreciation, amortisation and impairment in the year amounted to £0.5m (2023: £0.8m),
of which £0.4m (2023: £0.6m) relate to the impairment of one site (2023: two sites). The remaining £0.1m (2023: £0.2m) of non-
underlying costs affecting depreciation, amortisation and impairment relates to the amortisation of business combination
intangibles acquired as part of the Lifestyle, easyGym and Fitness First acquisitions.
Non-underlying items affecting finance costs amounted to £0.2m (2023: £0.5m) and relate to advisory and legal costs
incurred in agreeing the Group’s new banking facilities in June 2024.
Taxation
The tax credit for the year was £1.9m (2023: charge of £0.1m) and results from the recognition of additional deferred tax assets.
The net deferred tax asset recognised at 31 December 2024 was £18.2m (31 December 2023: £16.3m). Deferred tax assets are
recognised in respect of those tax losses and other temporary differences only to the extent it is considered probable that
the assets will be recoverable. This involves an assessment of when those assets are likely to be recovered, and a judgement
as to whether or not there will be sufficient taxable profits available to offset the assets.
A deferred tax asset of £12.1m (2023: £11.1m) has been recognised in respect of trading losses. The trading losses were
incurred as a result of the Covid-19 pandemic and the subsequent cost-of-living crisis, together with the introduction
in March 2021 of the temporary enhanced capital allowances regime (the ‘super-deduction tax break’).
Losses for which no deferred tax asset has been recognised amount to £16.1m (2023: £23.0m), resulting in an unrecognised
deferred tax asset of £4.0m (2023: £5.8m) using a 25% tax rate. There is no time limit for utilising trade losses in the UK.
Strategic
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The Gym Group plc | Annual Report and Accounts 2024
| 29
Governance
report
Financial
statements
Other
informationOverview
Earnings
As a result of the factors discussed above, the statutory profit before tax was £2.5m (2023: loss of £8.3m) and the statutory
profit after tax was £4.4m (2023: loss of £8.4m).
Adjusted profit/(loss) before tax is calculated by taking the statutory profit/(loss) before tax and adding back the non-
underlying items. Adjusted profit before tax in 2024 was £3.6m (2023: loss of £5.5m). Adjusted profit after tax was £5.4m
(2023: loss of £6.1m).
The basic and diluted earnings per share was 2.5p and 2.4p respectively (2023: basic and diluted loss per share of 4.7p), and
the adjusted basic and diluted earnings per share was 3.0p and 2.9p respectively (2023: adjusted basic and diluted loss per
share of 3.4p).
Dividend
We are a growth company, in a growth market, with a clear capital allocation policy. Whilst dividends and other returns of
capital to shareholders will be considered by the Directors in the future, we are not proposing a dividend for the current year
as we continue to see significant opportunities, with attractive returns, to invest our free cash flow in growing the business.
Cash flow
Year ended
31 December 2024
£m
Year ended
31 December 2023
£m
Group Adjusted EBITDA Less Normalised Rent 47.7 38.5
Movement in working capital 8.7 5.0
Maintenance and enhancement capital expenditure (12.2) (10.3)
Free cash flow before non-underlying items, interest and tax 44.2 33.2
Non-underlying items (0.9) (1.0)
Net interest paid (5.8) (5.2)
Taxation – –
Free cash flow
4
37.5 27.0
Expansionary capital expenditure (27.8) (16.4)
Refinancing fees (0.8) (1.0)
Purchase of own shares by EBT (3.5) –
Net cost of share schemes settlement (0.3) –
Cash flow before movement in debt 5.1 9.6
Net decrease in non-property lease indebtedness (5.6) (2.5)
Net drawdown/(repayment) of borrowings 2.0 (11.0)
Net cash flow 1.5 (3.9)
4 A reconciliation of net cash inflow from operating activities to free cash flow has been included in Note 23 to the consolidated financial statements.
Free cash flow generated in the year was £37. 5m (2023: £27.0m). The increase year on year is largely due to the strong
trading performance and higher working capital inflows, driven partly by short term timing differences on payments and
receipts. Maintenance and enhancement capital expenditure increased in the year by £1.9m to £12.2m, reflecting the larger
estate as well as expenditure on kit enhancements and refurbishments in a number of gyms.
Expansionary capital expenditure in the year amounted to £27.8m (2023: £16.4m) and relates to the fit-out of the 12 new
gyms we opened as well as continued investment in technology and data.
As noted earlier, in January 2024, the Group established an Employee Benefit Trust (‘EBT’) to purchase shares in order to
minimise dilution associated with the share based payments. During the year, the EBT purchased 2,834,928 shares at a cost
of £3.5m.
The Gym Group plc | Annual Report and Accounts 2024
30 |
Strategic report
Financial review continued
Balance sheet and net debt
At
31 December 2024
£m
At
31 December 2023
£m
Non-current assets 573.1 558.5
Current assets 12.5 13.0
Current liabilities (77.6) (72.3)
Net current liabilities (65.1) (59.3)
Non-current liabilities (376.4) (371.2)
Net assets 131.6 128.0
Net debt (61.3) (66.4)
At 31 December 2024, non-current assets increased by £14.6m as a result of software and property, plant and equipment
additions and an increase in the carrying value of deferred tax assets.
Net current liabilities at 31 December 2024 increased by £5.8m, reflecting higher trade and other payables.
Non-current liabilities increased by £5.2m, as the recognition of lease liabilities in relation to new sites more than offset
payments made in relation to existing leases.
As at 31 December 2024, the Group had Non-Property Net Debt of £61.3m (31 December 2023: £66.4m) comprising drawn
facilities of £61.0m and non-property leases of £3.3m, less cash of £3.0m. The Directors believe that this measure of net
debt best reflects the financial health of the business. In addition, it is a key constituent of the Adjusted Leverage covenant
included in the Group’s banking agreement. At 31 December 2024, Adjusted Leverage was 1.3 times (December 2023: 1.7
times), significantly below the banking covenant threshold of 3.0 times; and Fixed Charge Cover was 1.9 times (December
2023: 1.7 times).
New banking facilities agreement
In June 2024, the Group entered into a new facilities agreement with the same banking syndicate, which came into effect on
1July 2024. Under the new agreement, the Group has in place a combined £90m facility, consisting of £45m of Term Loan
and £45m of RCF. The new facility is due to mature in June 2027 but includes two one-year extension options.
Funds borrowed under the new facility agreement bear interest at a minimum annual rate of 2.75% (was 2.85%) above the
Sterling Overnight Index Average (‘SONIA’); and undrawn funds under the RCF bear interest at a minimum annual rate of 1.1%
(was 1.14%).
The new facilities agreement continues to be subject to quarterly financial covenant tests on Adjusted Leverage and Fixed
Charge Cover (both terms defined on page 167). Adjusted Leverage must not exceed 3.0 times and the Fixed Charge Cover
must be greater than 1.5 times.
Terms permit the distribution of surplus cash flow to shareholders in line with our capital allocation policy, which prioritises
organic growth.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 31
Governance
report
Financial
statements
Other
informationOverview
Going concern
The Board has reviewed the financial plan and downside scenarios of the Group and has a reasonable expectation that the
Group has adequate resources to continue in operational existence for the period to 30 June 2026. As a result, the Directors
continue to adopt the going concern basis in preparing the consolidated financial statements. In making this assessment,
consideration has been given to the current and future expected trading performance; the Group’s current and forecast
liquidity position; and the mitigating actions that can be deployed in the event of reasonable downside scenarios.
Further detail is provided in Note 2 to the consolidated financial statements.
Current trading and outlook
Trading in the first two months of the new financial year shows continued positive momentum. Revenue after two months
has grown by 8% year on year, reflecting a 4% increase in average members and 4% yield growth. Like-for-like revenue for
the two months was up 3%, driven largely by price increases implemented at the start of 2025. Membership at the end of
February 2025 was 951,000, up 7% versus the end of 2024.
We expect like-for-like revenue in 2025 to increase by c.3% overall. Like-for-like cost growth is expected to be c.2%, as higher
employee costs (from a combination of higher national insurance contributions and National Living Wage) are partially
offset by utility rate reductions and cost optimisation initiatives. As a result, we now expect that FY25 Group Adjusted
EBITDA Less Normalised Rent will be at the top end of the recently revised analyst forecast range of £49.0m-£50.8m
5
.
We also expect to incur c.£3m of non-underlying costs in 2025 in relation to the investment in the Group’s member
management and payments systems.
We plan to open 14-16 sites in 2025, with all new sites continuing to be financed from free cash flow. As a result,
Adjusted Leverage is expected to remain below 1.5 times.
Luke Tait
Chief Financial Officer
12 March 2025
5 Current Company-compiled analyst forecast range.
The Gym Group plc | Annual Report and Accounts 2024
32 |
2024
2023
2022
2021
2020
245
233
229
202
183
2024
2023
2022
2021
2020
53.5
52.3
48.8
35.5
25.3
2024
2023
2022
2021
2020
891
850
821
718
578
2024 9.0
2023
2022
2021
2020
8.5
8.4
2
7. 6
2
6.4
2
2024
2023
2022
2021
2020
20.81
19.50
17.82
17.60
17.20
Strategic report
Key performance indicators
Positive momentum continues
Non-financial
Total number of gyms
+12 sites
Definition
Number of gyms open at the end of the year.
Link to strategic goals
Accelerate rollout of quality sites
2024 performance
We opened 12 new gyms during 2024, taking the total number
of gyms at 31 December 2024 to 245. All the new gyms are located
in Greater London and urban residential areas where we have
historically seen the best returns.
Members that visit 4+ times in a month %
2
+120 bps
Definition
The percentage of total members that have visited the gym four or more
times in a month calculated as a rolling 12 month average. See footnote
2 below for more details.
Link to strategic goals
Strengthen the core – Member retention
2024 performance
The percentage of members visiting the gym 4+ times per month has
increased again in 2024, demonstrating that members continue to get
significant value from their gym membership. Research shows that people
who visit the gyms 4+ times per month are also more likely to continue
their membership and gain significant health benefits from it which,
in turn, drives increased Social Value. See the Sustainability report on
pages 34 to 45 for further details.
Total number of members (‘000)
+5%
Definition
Total gym memberships at the end of the year.
Link to strategic goals
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
We closed the year with 891,000 members, an increase of 5% year on
year. The increase reflects the full year impact of sites opened in 2023
as well as the incremental volume from new sites opened in 2024.
See the Financial review on pages 24 to 31 for further details.
Employee engagement score
3
+50 bps
Definition
A measure of how committed and enthusiastic employees are about
their work and the organisation.
We use four engagement categories (Engagement, Belief, Loyalty,
Satisfaction) to calculate a score on a 0-10 scale, and all responses
are averaged out to give a score out of 10.
Link to strategic goals
Strengthen the core
Accelerate rollout of quality sites
Broaden our growth
2024 performance
In 2024, we improved our employee engagement score to 9 out of 10,
with a 92% completion rate, meaning we now rank in the top 5% of
consumer services businesses included in the Peakon benchmark for
overall engagement. We improved across all 14 engagement drivers, with
our teams highlighting excellent management support, clear objectives
(goal setting), and peer relationships. Regular communications about
the Next Chapter growth plan also led to significant improvements in our
team alignment and understanding of the business strategy.
Average Revenue per Member per Month (‘ARPMM’) £
1
+7%
Definition
Revenue divided by the average number of members divided by the
number of months in the period.
Link to strategic goals
Strengthen the core – Price and revenue management
2024 performance
ARPMM increased by 7% in 2024, driven by an increase in the average
headline price of a Standard membership of £1.37 as well as some
selective repricing of the membership base. See the Financial review
on pages 24 to 31 for further details.
We use a number of non-financial and financial key performance indicators (‘KPIs') to measure our performance over time.
We select KPIs that demonstrate the operational and financial performance underpinning our strategic goals.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 33
Governance
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Financial
statements
Other
informationOverview
2024 226.3
2023
2022
2021
2020
204.0
172.9
106.0
80.5
2024 1.29
2023
2022
2021
2020
1.72
2.0
7.74
-4.64
2024 47.7
2023
2022
2021
2020
38.5
38.0
5.7
-1 0 . 2
2024
2023
2022
2021
2020
25
21
22
20
19
2024 37.5
2023
2022
2021
2020
27. 0
16.6
2.0
-16.6
Financial
Revenue £m
+11%
Definition
Revenue is generated from membership fees, non-refundable joining
fees, rental income from personal trainers and other ancillary services,
including the sale of goods through vending machines, advertising
through the use of media screens and the sale of day memberships.
Link to strategic goals
Strengthen the core – Price and revenue management
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
Revenue for the year increased by 11%, with average members up 4%
to 906,000 (2023: 872,000) and ARPMM up 7% to £20.81 (2023: £19.50).
Like-for-like revenue grew 7% year on year. See the Financial review on
pages 24 to 31 for further details.
Adjusted Leverage x
improved by 0.43x
Definition
Non-Property Net Debt as a proportion of Group Adjusted EBITDA Less
Normalised Rent.
Non-Property Net Debt is defined as bank and non-property lease debt
less cash and cash equivalents and is the leverage measure used in the
Group’s banking covenants.
Link to strategic goals
Strengthen the core – Price and revenue management
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
Adjusted Leverage improved in the year, reflecting the improved
trading performance. See the Financial review on pages 24 to 31 for
further details.
Group Adjusted EBITDA Less Normalised Rent £m
+24%
Definition
Operating profit before depreciation, amortisation, long term employee
incentive costs and non-underlying items and after deducting
Normalised Rent. Normalised Rent is the contractual rent payable,
recognised in the monthly period to which it relates.
See page 27 for a reconciliation to Operating profit.
Link to strategic goals
Strengthen the core – Price and revenue management
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
Group Adjusted EBITDA less Normalised Rent increased by 24% in the
year as the strong trading performance and increased revenue was
complemented by tight control of operating costs.
Return on Invested Capital (‘ROIC’) (%)
1, 4
+400 bps
Definition
Group Adjusted EBITDA Less Normalised Rent contributed by mature
sites, divided by total capital initially invested in the mature sites (after
capital contributions and rent free amounts). Mature sites are defined as
those sites that have been open for 24 months or more at the period end
and exclude acquisition sites.
See page 166 for the number of mature sites and Group Adjusted
EBITDA Less Normalised Rent contributed by mature sites.
Link to strategic goals
Strengthen the core – Price and revenue management
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
Return on Invested Capital of mature sites increased by 400 bps in
the year as a result of strong delivery against the ‘Strengthen the core’
element of our Next Chapter growth plan.
Free Cash Flow £m
+39%
Definition
Group Adjusted EBITDA Less Normalised Rent and movement in working
capital, less maintenance capital expenditure, cash non-underlying
items, bank and non-property lease interest and tax.
See Note 23 to the consolidated financial statements for a reconciliation
to Net Cash Inflow From Operating Activities.
Link to strategic goals
Strengthen the core – Price and revenue management
Strengthen the core – Member acquisition
Strengthen the core – Member retention
Accelerate rollout of quality sites
2024 performance
Free Cash Flow increased by 39% to £3 7.5m, reflecting the strong
trading performance and higher working capital inflows, offset partly
by increased maintenance and enhancement capital expenditure.
See the Financial review on pages 24 to 31 for further details.
1 In order to provide better year on year comparability for ARPMM and ROIC,
the figures presented for 2021 and 2020 have been adjusted to exclude
the impact of UK Government-enforced closure periods as a result of
the Covid-19 pandemic.
2 The figures for 4+ visits for 2023 and earlier have been restated to include
like-for-like sites only and to exclude Saver members, members on freeze
and members who have joined in a gym’s pre-opening period to ensure
comparability across periods. Further adjustments and restatements may
occur in 2025 as we continue to refine this KPI.
3 In 2023, we changed the way we measure employee engagement.
We partnered with Peakon, an engagement specialist, and adopted
a more accurate and comprehensive approach using a 0-10 scale rating
system, moving away from a percentage score. Due to the change in
methodology, a precise comparison to 2022 and prior cannot be made.
These are therefore included for indicative purposes only.
4 ROIC for 2023 and earlier has been restated to deduct the value of rent free
amounts from the capital initially invested.
See Financial review on pages 24 to 31
The Gym Group plc | Annual Report and Accounts 2024
34 |
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Strategic report
Sustainability report
Its five key pillars – identified through
our materiality assessment and
embodied in our strategic framework
– enable us to focus our efforts on
addressing the most significant
environmental, social and governance
impacts, ensuring alignment with
stakeholder priorities.
Progress in 2024
As a trailblazer in climate action,
Social Value and health and safety,
we take pride in leading the way
across the fitness industry. We are
honoured to be the first global gym
chain with a net zero target verified by
the Science Based Targets initiative
(‘SBTi’). Our dedication to Social Value
and health and safety is reflected in
our status as the UK’s first private gym
chain to report on Social Value and
achieve ISO 45001 certification – a
globally recognised health and safety
management benchmark.
Moreover, our 2024 attainment of Level
4 FITcert highlights our unwavering
commitment to excellence, continual
improvement and ensuring a secure
and welcoming environment for our
customers.
We recognise the importance
of gender equality and have set
ambitious targets for achieving gender
balance within our Company. Whilst
we acknowledge that we are currently
not on track to meet this objective as
planned, it is a critical component of
our broader sustainability goals, and
we are committed to taking meaningful
action to address this gap (page 40).
As members of ukactive and
EuropeActive, we support knowledge
sharing across the sector, using our
experience to ensure that effective
strategies to enhance sustainability
are available to more businesses.
Our mission is to provide everyone with
the opportunity to start their journey
towards a fitter, healthier and happier life.
John Treharne founded The Gym
Group with a mission to make
fitness accessible to everyone.
He envisaged a safe and inclusive
space for people to live happier,
healthier lives. Delivering on this
founding purpose of breaking
down barriers to fitness for
all is our passion. As a result,
sustainability is authentically built
into the DNA of The Gym Group,
with an understanding across the
business that strong execution
of all our sustainability plans
naturally supports our commercial
performance.
Our sustainability strategy is based
on the principle of supporting healthy
people, healthy communities and a
healthy planet.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 35
Governance
report
Financial
statements
Other
informationOverview
2023 2024 Progress Key actions
Good health
and wellbeing
Increasing the percentage
of members visiting our
gyms 4+ times per month¹
Delivering at least £900m
in Social Value
Partnered with behavioural scientists to launch a
campaign driving member visits.
Secured FITcert Level 4 certification, ensuring top
tier operational standards.
52.3%
£890m
53.5%
£962m
Data security
and privacy
100% GDPR and cyber
security training
completion rate
Rolled out new cyber security training module for
enhanced digital protection.
Hosted Compliance Week, driving mandatory
training completion rates.
no
data
98.8%
Good jobs, high
quality education
and lifelong
learning
Supporting 500 people to
gain Level 3 Personal Trainer
qualification by 2030
Achieving a minimum 60%
internal promotion rate
by end of 2025 amongst
operational staff
Established The Gym Group Academy to fuel
industry-leading talent development.
Expanded the ‘Fitness Trainer to Manager’
Emerging Talent Programme.
Developed 79 future fitness trainers through
the Accelerate PT initiative, boosting Level 3
qualifications.
38
44.0%
105
58.1%
Responsibility to
the environment
Near term targets
50% reduction in Scope 1
and 2 emissions by 2030
Reduce Scope 3 emissions
per gym by 55% by 2030
Deployed 95 voltage optimisation units to cut
energy use.
Developed a robust Scope 1 transition plan.
Tightened supplier contracts with stricter
environmental reporting standards.
-3.4%
-35.8%
-2.2%
-29.3%
Diversity and
equal opportunity
50/50 gender balance by
2030
40% female senior leaders
by 2025
20% leaders of ethnically
diverse origin by 2030
Accelerated female development with ‘Women in
Leadership’ and ‘Empower’ programmes.
Invested in employee networks and piloted
enhanced maternity coaching.
Delivered an ethnic reverse mentoring scheme,
elevating diverse voices across the business.
31.4%
12.5%
31.4%
13.8%
30.9% 29.9%
1 The figure for 4+ visits for 2023 has been restated to include like-for-like sites only and to exclude Saver members, members on freeze and members who have
joined in a gym’s pre-opening period.
Achieved
On track
Not on track
Missed target
Key:
The Gym Group plc | Annual Report and Accounts 2024
36 |
Strategic report
Sustainability report continued
Good health
and wellbeing
Physical exercise is fundamental to a healthy
lifestyle, offering significant physiological
benefits and a proven positive impact on mental
wellbeing and life satisfaction. According to
the World Health Organisation (‘WHO’), regular
exercise can reduce the risk of chronic diseases,
improve mental health and increase life
expectancy. In a world where stress and health
issues are rising, the importance of exercise
in promoting health and wellbeing has never
been clearer.
At our annual employee conference,
we celebrated a year of partnering
with NHS Charities Together, a
national charity with whom we share
a mission to support healthier and
fitter communities. In collaboration,
our teams and members exceeded
our £100,000 fundraising target, with
The Gym Group Games events and
in-gym fundraising activities providing
opportunities to spread awareness of
the charity’s work. Our gyms are paired
with 112 local NHS charities, creating
employee volunteering and fundraising
opportunities to drive national impact
at a local level.
Supporting and protecting the
health and wellbeing of our members
as they progress on their fitness
journey is central to our business and
our purpose. We demonstrate this
through our ISO 45001 occupational
health and safety management
system certification, innovative
digital solutions and strong crisis
management oversight. In 2024, we
achieved industry-leading milestones,
including receiving the Royal Society
for the Prevention of Accidents
(‘RoSPA’) Gold Award.
Measuring our social impact
The Social Value Model, created
by Sheffield Hallam University and
outlined on our website, focuses
on member participation and the
health benefits of regular exercise.
It calculates the financial value
resulting from reduced GP visits,
enhanced life satisfaction, personal
development, and the growth of
social and community connections.
We are delighted to have surpassed our
goal of generating £900 million in Social
Value by 2025, achieving this milestone
in 2024. Our contribution this year
equated to £556 per member, up from
£544 in 2023. This success is fuelled
by both rising membership numbers
and record engagement, with 53.5% of
members visiting our gyms at least four
times per month, compared to 52.3%¹ in
2023. Looking to 2025, we will continue
to drive value for our members and
communities through initiatives focused
on further supporting member activity
levels and engagement in our gyms.
See Progress against the Next Chapter
growth plan on pages 19 to 23
Link to
the SDG
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 37
Governance
report
Financial
statements
Other
informationOverview
Gym employees, Craig and Chloe,
quickly joined to assess the
situation. Realising Alan wasn’t
breathing, they called for help,
began CPR and used the on-site
defibrillator to treat Alan before
paramedics arrived. By the time
Alan was taken to hospital, he had
a pulse and was breathing again.
Reflecting on the experience, Alan
shared: “I had been going to the
gym at least 4-5 times a week. The
cardiac arrest could have happened
anywhere, but the fact that it
happened in the gym with required
equipment and support to hand
saved my life. The community spirit
at The Gym Group is fantastic,
and I realised that people do
actually care.”
Now fully recovered, Alan continues
to visit the gym frequently.
He says: “My swift recovery is
thanks to my regular workouts –
good heart health has never
been more important to me.
I have become more considered
in how I exercise, monitoring my
heart rate regularly.”
Alan |
Member of The Gym Group,
Hamilton
Alan joined The Gym Group
Hamilton over 10 years ago
with the goal of keeping fit,
considering a history of heart
conditions in his family.
In May 2024, while at the gym,
Alan became unwell and lay
down on the matted area. Two
fellow members noticed his
distress and rushed to assist.
Driving safety and operational
excellence at our gyms
Protecting the health and safety of
our members and employees is a
key priority for us. Our mature health
and safety management system is
built around digital solutions for risk
management and training. Moreover,
our robust strategic and operational
crisis management plans are overseen
by our Sustainability Committee,
ensuring strong oversight and
accountability.
In 2024, we elevated our position with
EuropeActive’s FITcert
®
scheme and
the new European standard for fitness
centres, EN 17229, by becoming the UK’s
first 24-hour gym chain to achieve Level 4
certification. This further demonstrates
our commitment to quality, safety and
overall member experience.
Our work on standardisation has had
a material impact on our accident
and incident rates. These successes
are driven by improved awareness
of health and safety standards and
enhanced processes across our gyms.
Notably, we upgraded our digital
learning product, Gym Safe, to include
additional safeguarding training.
We continued to maintain positive
relationships with local authorities
through our Primary Authority
partnerships with Wakefield Council
(health, safety and environmental)
and East Sussex Fire and Rescue (fire
safety). We proactively engaged with
both partners to standardise our
approach for key risk areas, ensuring
alignment with legislative frameworks
and industry best practice.
Social Value/member £
479
507
544
2019 2022 2023 2024
556
Sustainability
in action: Member
visits
“To ensure members visit our
gyms regularly and maximise the
benefits of their memberships,
we have reviewed the impact we can
have in the gym on member visits.
Encouraging and motivating our
new members has a positive impact
on developing exercise habits and
increasing gym attendance. Our
teams have therefore been working
on identifying and interacting with
new members, encouraging fitness
product participation and helping
to arrange their next workouts.
To support this initiative, we have
optimised staffing during peak
times and increased the capacity
of inductions and classes.”
Rob Neave |
Cluster General Manager
1 The figure for 4+ visits for 2023 has been restated to include like-for-like sites only and to exclude Saver members, members on freeze and members who have
joined in a gym’s pre-opening period.
Accident and incident rates per
million visits, 2021 to 2024
2021 2022 2023 2024
60
50
40
30
20
10
0
Accident Rate PMV Incident Rate PMV
The Gym Group plc | Annual Report and Accounts 2024
38 |
Strategic report
Sustainability report continued
Good jobs,
high quality
education
and lifelong
learning
We prioritise employee engagement
to drive business performance and,
alongside our career development
programmes, we deliver a range of
learning opportunities to enhance
our teams’ leadership capabilities,
professional skills and personal growth.
In 2024, we emphasised creating early
career pathways into fitness through
the ongoing rollout of our Accelerate
PT employability programme and the
launch of The Gym Group Academy.
Our Emerging Talent management
development programmes also
continued providing their participants
with career-building skills.
Creating career opportunities:
Accelerate PT
Our Accelerate PT framework supports
job seekers starting careers in fitness
by providing a Level 3 Personal Training
qualification alongside employability
skills such as interview techniques
and work experience. In 2024, in
partnership with the Department
for Work and Pensions, The Prince’s
Trust and Shaw Trust, we delivered
four cohorts of our Accelerate PT
programme. We offered opportunities
to 79 trainees, with 73% successfully
gaining their Level 3 qualification and
58% of those securing roles within our
gyms. Accelerate PT plays a key role
in our commitment to supporting 500
people to achieve a Level 3 Personal
Training qualification by 2030.
See Progress against the Next Chapter
growth plan on pages 19 to 23
Supporting our people into great jobs and
providing career opportunities through high
quality education is essential to our success and
the achievement of our strategic objectives.
We provide clear paths for career growth and
a nurturing environment enabling our teams
to reach their potential.
Link to
the SDGs
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 39
Governance
report
Financial
statements
Other
informationOverview
Training for gym members:
The Gym Group Academy
In partnership with two CIMSPA
enhanced status training providers,
we launched The Gym Group Academy
in 2024 to provide opportunities for
our gym members to become Level
3 qualified Personal Trainers. It was
introduced in September as a six-
month pilot to gauge the demand
among members.
Early indications suggest strong
interest, with 132 learners enrolling in
the programme to become qualified
Level 3 Personal Trainers. We are proud
that 85% of people who completed
their qualification have secured
permanent roles within our gyms.
We will review the pilot in 2025 to
assess its feasibility for a full rollout.
Career progression:
Emerging Talent
Throughout the year, we delivered
four cohorts of our Emerging
Talent management development
programmes. The programme gives
Assistant General Managers and
Fitness Trainers the essential skills
to advance their careers, covering
topics such as sales, stakeholder
management, member service and
practical people management.
Although lower than in 2023, we
continue to achieve good employee
promotion rates among our
programme graduates, supporting
our internal progression rate target.
We expect these figures to grow as
new opportunities arise.
47%
promotion rate –
Emerging Talent
management development
programme
30%
promotion rate –
Emerging Talent Fitness
Trainer programme
Sustainability
in action: The Gym
Group Academy
“Having previously qualified as an
electronics engineer, I decided to
turn my passion for fitness into
a meaningful career. Fitness has
played a huge role in improving my
mental and physical health, and I
feel passionately about building
confidence in others to achieve their
goals. The Gym Group has been
instrumental in making this a reality.
Enrolling in The Gym Group
Academy has been incredibly
positive and insightful, and my TGG
Personal Training Mentor provided
me with valuable knowledge and
guidance, helping me build a client
base and career in fitness.
The supportive environment and
relationships I’ve built through the
programme, have encouraged me
to reach my goals and grow my
confidence. As a single parent of
two, I’m thrilled to work in a role
that offers flexibility to balance
my career with family life.”
Kristal Johnson |
The Gym Group Academy,
2024 graduate
Alongside these core programmes,
we continued to deliver various
learning opportunities to upskill our
teams. For operational managers,
we delivered Discovery Insights profiling
and workshops on conflict resolution
and the Chimp Paradox framework
to improve self-awareness, coaching,
and leadership skills. For senior
leaders, we focused on sessions to
drive performance, commerciality and
accountability. We also implemented
core skills training in areas such as
PowerPoint, Excel and data analysis
to enhance our Gym Support teams’
confidence and capabilities.
Lastly, we digitalised our ‘Coaching
for Performance’ framework, driving
improvements in our talent mapping
and reporting capabilities. This has
enabled us to target development
for our high performing employees
and identify our talent pipelines and
succession pools.
Leaders in employee
engagement
In 2023, we launched our new employee
engagement survey, enhancing
our employee feedback channels,
insights into their experiences and
benchmarking capabilities. We are
thrilled that employee engagement
has increased from 8.5/10 to 9/10
between October 2023 and December
2024. This places us within the top 5%
of benchmark dataset for consumer
services (hotels, restaurants and
leisure). Survey feedback has guided
our implementation of new initiatives
such as improved employee health
benefits.
We also launched our ‘Workforce
Engagement with the Board’ initiative
in 2024, led by our Chair of the
Board John Treharne, to bridge
communication between Board
members and the wider workforce.
This initiative ensures employees’ views
are heard and considered in decision-
making and evaluated for their impact
on workforce culture during Board and
Committee meetings.
The Gym Group plc | Annual Report and Accounts 2024
40 |
Strategic report
Sustainability report continued
Diversity
and equal
opportunity
Fostering an inclusive culture with equitable
opportunities to succeed remained a
fundamental focus of our equality, diversity
and inclusion (‘EDI’) strategy in 2024.
To deliver this, we prioritised our
efforts on:
improving employee wellbeing support;
driving a culture of inclusion and belonging;
and
providing equitable development
opportunities.
Using data and insights, we continue
to evaluate and monitor progress to
ensure the right support is in place to
enable our teams to reach their full
potential.
We continue to work towards the EDI
targets outlined in our sustainability
strategy – focused on gender and
ethnicity – and report progress
regularly to the Sustainability
Committee to ensure transparency
and accountability, and drive
meaningful action to promote diversity.
Progression towards
gender equality
Whilst female representation has
reduced in our senior leadership team
by 1ppt to 29.9% since 2023, we are
pleased to see areas of improvement,
particularly increases in women
occupying ‘Head of’ positions.
We are also pleased to see a decrease
in female turnover though gender
balance across The Gym Group as
a whole remained stable at 31.4%.
We remained focused on development
and retention strategies, with various
initiatives tailored to women. These
included our Women in Leadership and
Empower programmes; the delivery
of an additional four cohorts of our
Female Health First initiative; and
the piloting of enhanced maternity
support through Spring Back Returnity
Coaching™, providing comprehensive
coaching for women during their
maternity leave and transition back
into work.
We are confident that these female-
centric initiatives – alongside
improvements to our employee talent
mapping and monitoring – will support
the progression of women within our
talent pipeline.
Gender pay gap
We reported an increase in our mean
gender pay gap as of April 2024, which
stands at +9.4% (8.8ppts increase from
2023), largely impacted by changes
within our senior leadership team.
Our median pay gap remains at 0%.
Link to
the SDGs
See Progress against the Next Chapter
growth plan on pages 19 to 23
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 41
Governance
report
Financial
statements
Other
informationOverview
Enhancing ethnic diversity
In 2023, we introduced a new pledge
to drive positive action to support
Black, Asian, Mixed and other ethnic
representation within our senior
leadership, with an ambition of
improving this to 20% by 2030. We are
pleased to report a 1.3 ppts increase
to 13.8% diverse representation within
the first year of this pledge.
Our first reverse mentoring scheme
concluded in March 2024, pairing
eight culturally diverse mentors with
senior leadership team members.
The programme successfully opened
discussions around race and led to
leadership sponsorship of our Cultural
Diversity network group; participation
in the WiHTL Ethnic Future Leaders
development programme; and the
planned rollout of additional reverse
mentoring cohorts and inclusive
leadership workshops in 2025.
Ethnicity pay gap
As of April 2024, our mean ethnicity
pay gap reduced by 6.2ppts to +16.5%
(+22.7% in 2023). Our median ethnicity
pay gap remains at 0%.
The Gym Group’s 2024 Gender and
Ethnicity Pay Gap report provides full
details of our pay gaps and the actions
we are taking to drive progress.
Sustainability
in action:
Employee
network groups
“As leads of the LGBTQI+ employee
network group, we aim to break
down barriers, challenge the norm
and lead the fitness industry to
become an inclusive space for all.
This year we were proud to put that
into action, leading The Gym Group
in our first Pride events. Taking
part in three different celebrations
across the country, our gym teams
and members came together to
celebrate, engage with our local
communities and demonstrate our
unity with the LGBTQI+ community.
We have seen the positive impact
this has had on our teams and
member engagement and hope
to continue to demonstrate
the inclusiveness of our gyms
throughout 2025.”
Emily Carter & Jordan Flaste |
LGBTQI+ employee network leads
Employee inclusion
and belonging
We continued aligning wellbeing with
our commitment to an inclusive and
supportive workplace in 2024. Twelve
of our Employee Relations Champions
were upskilled in partnership with
Mental Health First Aid England,
strengthening our managers’ wellbeing
skills. We also launched a suite of
digital mental health and wellbeing
learning modules, hosted webinars and
workshops on various topics such as
fertility and men’s mental health, and
introduced two new health benefits,
providing employees with 24/7 free
access to GP appointments and virtual
dental care.
Creating a welcoming and respectful
environment free from harassment
remains a key focus. Throughout
2024, we strengthened our approach
to Dignity at The Gym Group by
implementing mandatory ‘Gymclusive’,
anti-harassment, bullying and
bystander intervention training,
and enhanced internal policies and
practices. We are delighted to report
an overall 94% completion rate for this
learning. To further our commitment,
we proudly joined ukactive’s Safer
Spaces to Move taskforce, which aims
to reduce physical activity barriers for
women and girls.
Our employee network groups
continue to play an integral role in
advocating inclusion and driving
positive change. They have hosted
events such as our Menopause Allies’
workshop and Age Inclusion podcast;
participated in local Pride events;
and led initiatives like our inclusive
traineeship, providing employability
skills and work experience to
individuals with disabilities or special
educational needs.
We remain committed to participating
in the ‘Inclusion in EDI Maturity Curve
Assessment’ as an external benchmark
for progress and best practices across
our industry. We are proud to have
maintained our silver award in 2024,
based on the latest assessment, and
track improvements in several areas,
particularly the employee journey.
The Gym Group plc | Annual Report and Accounts 2024
42 |
Strategic report
Sustainability report continued
Responsibility
to the
environment
The Gym Group is dedicated to fostering
environmental stewardship through transparent,
accountable and impactful actions. Our 2024
sustainability efforts reflect a comprehensive
approach to reducing energy consumption and
greenhouse gas emissions, conserving water and
minimising waste. By embedding sustainability
throughout our operations and value chain, we
contribute to a healthier planet and a resilient
future, ensuring accountability to our members,
communities and stakeholders.
Our climate transition plan
The Gym Group is proud to be the first
fitness operator globally to have our
net zero emissions target validated by
the Science Based Targets Initiative
(‘SBTi’), aligning our targets to the Paris
Agreement’s pledge to limit global
warming to 1.5°C above pre-industrial
levels. We know achieving our targets
will require strategic planning, funding
and steady progress across our
emissions reduction initiatives. That’s
why, in 2024, we further developed
our climate transition plan. Following
the best practice framework of the
Transition Plan Taskforce, we advanced
our progress across its three principles
of Ambition, Action and Accountability.
Ambition
Our science-based net zero targets
are the foundation of our commitment
to ambitious carbon reduction
goals and our leadership in driving
sustainable transformation within
the fitness industry. By 2030, we are
committed to:
reducing absolute Scope 1
and 2 greenhouse gas (‘GHG')
emissions by 50% compared to our
2019baseline; and
achieving a 55% per-gym reduction
in Scope 3 GHG emissions,
encompassing purchased goods
and services, capital goods,
energy-related activities, upstream
transportation, waste generated
in operations, business travel and
employee commuting.
Furthermore, we are committed to
ensuring that 25% of our suppliers,
by spend, establish science-based
emission reduction targets by 2028.
Looking ahead to 2045, we are
committed to:
achieving a 90% reduction in
absolute Scope 1 and 2 GHG
emissions from our 2019 base year;
and
reducing Scope 3 GHG emissions
by 97% per gym.
Link to
the SDGs
See Progress against the Next Chapter
growth plan on pages 19 to 23
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 43
Governance
report
Financial
statements
Other
informationOverview
To support us in achieving our
headline targets, we are focused
on four key commitments driving
carbon reduction.
Sustainability in
action: Supplier
Engagement
“When partnering with Origin
Fitness, we’ve shared our
sustainability targets and objectives
from the outset, highlighting the
importance of our net zero target
by 2045.
Origin’s response to our joint
commitment has been incredibly
positive, accelerating some of their
initiatives across their business,
from product to packaging and
beyond.
Examples include the removal of
single use plastic from packaging
and the introduction of 100%
recyclable rubber crumb weight
plates and sprint tracks. These
in turn, have also created a cost
saving whilst elevating the member
experience and product quality.
We are committed to continuing
to collaborate with our suppliers
to innovate and reduce carbon
emissions.”
Fraser Kennedy |
Equipment Development Manager
These targets and initiatives reflect our
commitment to addressing emissions
across our operations, supply chains
and stakeholder communities, ensuring
meaningful progress towards net zero.
Action
In 2024, we continued to take action
to help us achieve our emissions
reduction targets. Our activities
included the following:
Progress in transitioning to
low carbon hot water heating
Decarbonising hot water systems
is key to The Gym Group’s goal of
reducing Scope 1 emissions by 50%
by 2030. By the end of 2024, 54 gyms
used Air Source Heat Pumps (‘ASHP'),
with 14 gyms using electric or district
heating systems and 177 still reliant on
gas boilers.
Suppliers:
We will actively collaborate
with key suppliers, fostering
alignment across our value chain.
Members:
By the end of 2025, we will
launch a comprehensive member
engagement plan to inspire and
empower our community
to support and advance our
net zero objectives.
Renewable energy:
We remain committed to
sourcing 100% renewable
electricity annually across all
sites where energy procurement
is within our control, achieving
and sustaining this target by
the end of 2025.
Carbon abatement:
We are developing a robust
strategy to remove and store
carbon from the atmosphere,
addressing the residual 10%
of emissions that will persist
once we achieve our 2045
net zero target.
We have replaced gas-fired boilers
with ASHPs primarily during end-of-
life replacements or system failures,
leveraging these opportunities to
minimise incremental costs. Seven
more ASHP installations are planned
for 2025.
Lighting control trials
In 2024, advanced lighting control
systems were tested at two gyms,
reducing energy use by 30–36%.
Financial performance was variable
however, and refinements in 2025 will
focus on consistent performance
across sites, targeting locations with
higher energy use and greater cost
recovery potential.
Remote air conditioning
management
A trial of the MELCloud remote
management system for air
conditioning provided real-time
insights, enabling energy-efficient
adjustments and fault detection.
Results indicate significant savings
potential, with scalability across the
estate under review.
Voltage optimisation
In 2024, 95 voltage optimisation units
were installed to enhance energy
efficiency, with more planned for 2025.
Savings data will inform the initiative’s
role in meeting our net zero targets.
Enhancing responsible sourcing
Through our Supplier Code of
Conduct, we set clear environmental
expectations and embed
environmental accountability
into supplier reviews and tenders,
encouraging shared responsibility
across our supply chain.
We strengthened supplier contracts
with stricter environmental
requirements, including deadlines for
reporting Scope 1, 2 and 3 emissions.
This helps us identify high impact
operations and collaborate on
emissions reduction. By requiring
emissions reporting, we can assess
procurement impacts, target
mitigation strategies and engage
suppliers to set reduction goals in line
with our SBTi targets.
The Gym Group plc | Annual Report and Accounts 2024
44 |
Accountability
Driving accountability and
transparency: metrics to meet
our sustainability goals
The Gym Group’s sustainability
strategy is underpinned by
transparent reporting of material ESG
performance data, including energy
consumption, GHG emissions, water
consumption and waste production.
By adhering to the Greenhouse Gas
Protocol Corporate Accounting
and Reporting Standard, we ensure
that our Scope 1, 2 and 3 emissions
are calculated consistently and
accurately. This approach reinforces
our accountability and commitment
to reducing our environmental impact.
To support our journey to net zero,
we continue to offset Scope 1, 2 and
operational Scope 3 emissions through
carbon credits purchased from
Climate Impact Partners. These offsets
are verified against global carbon
standards, incentivising emissions
reductions across our operations
and investments while contributing to
impactful projects worldwide. However,
we prioritise direct carbon abatement
initiatives, ensuring meaningful, long
term reductions above reliance on
carbon offsets.
The metrics and actions outlined
demonstrate The Gym Group’s
unwavering commitment to
transparency and accountability.
They keep us on track to meet our
ambitious sustainability targets,
guide our progress and reinforce
trust with stakeholders.
2024 carbon emissions
For 2024, our Scope 1 direct emissions
amounted to 1,700 tCO
2
e. Natural gas
related emissions dropped by 12.9%,
largely due to the replacement of
gas boilers with ASHP across various
locations. This contributed to an overall
9.8% reduction in Scope 1 emissions.
However, Scope 2 emissions for the
year increased by 3.6% relative to
2023, due to the addition of new
sites in the portfolio. These emissions
totalled 9,017 tCO
2
e, stemming from
the consumption of 42,473 MWh of
electricity, 1,240 MWh of direct heat
and 13 MWh of self-generated energy.
Scope 2 emissions have been
calculated using location based
emission factors published by DEFRA.
However, under the market based
approach – factoring in our renewable
electricity procurement contract in
place since 2019 – emissions would
equate to 1,748 tCO
2
e.
Scope 3 emissions increased by
15.2% in 2024, totalling 24,978 tCO
2
e.
This is largely due to increased capital
expenditure across the organisation
in response to 12 new gym openings in
comparison to 6 in 2023.
Operational intensity metrics for the
reporting period (Scopes 1, 2 and 3)
stand at 146 tCO
2
e per gym and 548
tCo2e per million visits, These values
have increased since 2023 but reflect
intensity reductions of 29% and 30%
from the 2019 base year respectively.
Strategic report
Sustainability report continued
100%
renewable energy
for all sites where we control the purchase of energy
“2econd Chance is a computer
recycling charity that provides
work-based training for individuals
who are furthest from the job
market and supplies refurbished
computers to those in need.
The charity supports people with
physical disabilities, learning
difficulties, or social, emotional
and mental health needs.
In 2024, The Gym Group supplied
the charity with 109 devices which,
instead of becoming electronic
waste, were repurposed and either
sold or donated to struggling
families.
We also donated £8,000 to the
charity, the saving made possible
by not disposing of the devices in
the usual way. This provided for
an additional 80 computers.
The relationship with 2econd
Chance strengthened further
when members of the Facilities
Management Team used their
volunteering days to paint the
charity’s offices, adding much-
needed colour.
We are looking forward to
continuing our work with
2econd Chance in2025.”
Ash Challen |
Head of Facilities
Sustainability
in action: Waste
management
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 45
Governance
report
Financial
statements
Other
informationOverview
Emissions year ended 31 December 2024
Total emissions (tCO
2
e) 2019 2023 2024
Direct emissions from operation (Scope 1) 2,157 1,884 1,700
Purchased electricity and heat (Scope 2) 8,797 8,701 9,017
Indirect emissions in value chain (Scope 3) 25,660 21,657 24,978
Total emissions (tCO
2
e) 36,614 32,242 35,695
% change from base year Scope 1 and 2 -3% -2%
% change from base year Scope 1, 2 and 3 -12% -3%
Intensity metric (tCO
2
e per gym) 206 138 146
% change from base year -33% -29%
Intensity metric (tCO
2
e per million member visit) 785 519 548
% change from base year -34% -30%
Total consumption (kWh) 2019 2023 2024
Scope 1 (Gas) 11,071,196 10,137,976 8,828,082
Scope 2 (Electricity) 34,409,373 41,154,605 42,472,816
Scope 2 (Heat) 10,907 995,005 1,240,050
Scope 2 (Self-generation) – – 12,550
Total (kWh) 45,491,476 52,287,586 52,553,498
Scope 3 Category Emissions (tCO
2
e)
2019 2023 2024 vs base % of Scope 3.
Capital goods 17,544 7,948 13,908 -21% 55.7%
Business travel 272 224 415 53% 1.6%
Employee commuting andhomeworking 402 423 316 -21% 1.3%
Fuel and energy related 2,343 3,140 3,217 37% 12.9%
Purchased goods and services 4,488 9,501 6,811 52% 27.3%
Upstream transport 375 184 125 -67% 0.5%
Water and Waste
236 237 186 -21% 0.7%
Total 25,660 21,657 24,978 -3%
Waste 2019 2023 2024
Total weight (in tonnes) 750 816 783
Average tonnes/gym 4.3 4.4 4.0
Recycled Not tracked 48% 49%
Diverted from landfill 90% 97% 100%
Reducing our water consumption
With increasing pressure on water
resources, effective management is
important for The Gym Group. As we
don’t operate pools, our main water
use is in shower and toilet facilities.
We have implemented measures
to monitor, reduce and optimise
consumption to address this. Following
a 2023 trial, we rolled out remote meter
reading systems to 60 sites, enabling
real-time insights and site-specific
benchmarks to drive improvements.
This rollout enabled us to create league
tables to identify and effectively
address high consumption sites.
We are planning to install the system
in a further 40 sites in 2025.
Other initiatives include recovering
condensate water from our air
conditioning to flush toilets and
replacing older shower heads with
more efficient models. The latter has
the potential to save more than half
a million litres of water weekly. These
initiatives showcase our commitment
to reducing water waste while
enhancing operational efficiency.
Enhancing waste management
In 2024, The Gym Group continued
to build on its waste management
achievements, reinforcing our
commitment to sustainability.
Over the year, we generated 782 tonnes
of general and mixed recycling waste,
marking a 4% decrease compared
to 2023, despite a growing estate and
membership. This improvement reflects
our focus on minimising resource
use and enhancing operational
efficiency. Key to this success was
the implementation of initiatives to
reduce non-recyclable materials, such
as further decreasing blue-roll waste.
This contributed significantly to a lower
average waste per gym of 4.0 tonnes.
A milestone this year was our
partnership with a new waste-
handling provider to enhance our
waste management strategy. Through
this partnership, we are shifting our
focus from waste-to-landfill targets to
setting ambitious recycling rate goals
to drive better resource recovery and
a circular economy ethos.
The Gym Group plc | Annual Report and Accounts 2024
46 |
Strategic report
Task Force on Climate-Related
Financial Disclosures report
The Task Force on Climate-related Financial
Disclosures (‘TCFD’) recommendations
continue to guide our identification
and assessment of climate-related risks
and opportunities. They shape how we
approach the physical impacts of climate
change, and the transition risks linked to the
UK’s shift towards a low carbon economy.
This is our fourth TCFD report, providing disclosures aligned with
its four core pillars of governance, strategy, risk management
and metrics and targets. We remain fully compliant with
the Listing Rules (Disclosure of Climate-related Financial
Information) (No 2) Instrument 2021.
While our 2024 TCFD analysis reaffirms that climate-related
risks and opportunities do not yet impact our financial
performance or position, we consider their growing potential
to influence our business in the future. Climate change therefore
remains an emerging risk to the business (see Emerging Risks
page 60). Through our ongoing commitment to proactive
climate risk management, we will continue to refine our
approach, enhancing our understanding of, and response to, the
financial implications of climate-related risks and opportunities.
Governance
Our Sustainability Committee (the ‘Committee’) is
the Board Committee that oversees key climate-
related responsibilities. In close collaboration
with the Committee, the Sustainability Working
Group, supported by the ESG workstreams,
ensures senior management oversight and robust
governance across the business to drive the
effective implementation of our sustainability
strategy and transition plan. Climate-related risk
and opportunity management remains integral
to the ESG workstreams’ remit.
The Chief Development and Sustainability Officer
led The Gym Group’s sustainability strategy in
2024 and was responsible for monitoring and
advancing our climate-related progress. The
Business Development and Sustainability Director
drives the integration of sustainability into our
business strategy, oversees the monitoring
of our net zero targets, and collaborates with
leaders across functions – including Finance,
Procurement and Facilities Management – to
tackle climate-related risks and opportunities.
Further information on our governance approach
to climate and sustainability can be found in our
Report of the Sustainability Committee on pages
90 to 91 and on our website.
Strategy
In 2023, we conducted a comprehensive climate
scenario analysis to examine how climate change
and the transition to a lower carbon economy
might impact The Gym Group’s operations.
This analysis included a review of climate and
weather projections, socioeconomic trends and
operating environment predictions. In 2024,
we revisited this analysis to confirm its relevance
and the applicability of the identified risks and
opportunities, ensuring our understanding
remains aligned with emerging developments.
Our approach considered existing and potential
future regulations to assess the risks they may
pose to our business. By analysing a range of
divergent scenarios, we evaluated the resilience
of our strategy under various potential futures,
enabling us to prepare to respond to a range
of uncertain climate impacts.
We based our physical scenario analysis on the
Intergovernmental Panel on Climate Change’s
Sixth Assessment Report (2023), supplemented
by data from the Met Office’s UK Climate
Projections 2018.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 47
Governance
report
Financial
statements
Other
informationOverview
SSP1-2.6
Low emissions
A low GHG emissions scenario with global net zero
emissions achieved by 2070, with projected warming
of 1.3–2.4°C by 2100.
SSP2-4.5
Medium emissions
An intermediate GHG emissions scenario with global
emissions stabilising at current levels until 2050, with
projected warming of 2.1–3.5°C by 2100.
SSP5-8.5
High emissions
A very high GHG emissions scenario where emissions
double by 2050, with projected warming of 3.3–5.7°C
by 2100.
We utilised three scenarios to complete transition scenario analysis taken from
the International Energy Agency’s World Energy Outlook (2022):
We assessed three physical climate scenarios – Shared Socioeconomic Pathways
(‘SSPs') – as follows:
Net zero emissions
by 2050 scenario
(‘NZE’)
A pathway to limit global warming to 1.5°C,
achieving universal energy access by 2030.
Announced pledges
scenario (‘APS’)
A pathway that assumes that all aspirational targets
announced by governments are met on time and in
full, including net zero and energy access goals.
Stated policies
scenario (‘STEPS’)
A pragmatic scenario reflecting current policy
settings and their likely outcomes.
The scenario analysis covered all our UK operations, documenting regional
vulnerabilities where applicable, based on the climate projections. The most
significant risks and opportunities are detailed on pages 48 to 49. SSP5-8.5 is
the scenario in which physical risks are most pronounced for The Gym Group,
whereas transition risks and opportunities are most significant under the
NZE scenario.
Through this iterative process, we continue to enhance our understanding of
climate-related risks and opportunities, ensuring our strategy remains resilient
and adaptable.
Short term (to
2039, with a 2030
milestone)
Aligned with our near term emissions reduction
targets and current business strategy.
Medium term (2040–
2059, with a 2050
milestone)
Corresponding to the UK government’s
net zero target.
Long term (2060–
2079, with a 2070
milestone)
Capturing longer term impacts where scenarios
diverge significantly and aligning with the long
lifespan of built-environment assets.
Risk management
The insights generated through
scenario analysis informed
updates to our climate-related
risks and opportunities register.
We held a collaborative workshop
to evaluate the potential business
and financial impacts of these risks
and opportunities. Senior leaders
and key stakeholders from across
the organisation participated,
providing valuable insights to ensure a
comprehensive assessment of climate-
related risks and opportunities across
all relevant business areas.
The workshops reviewed existing
control measures and highlighted
areas requiring further analysis to
deepen our understanding of risk
exposures. The assessment considered
potential impacts on financial position
and performance for each risk and
opportunity. This relative financial
impact evaluation helped prioritise our
most material risks and opportunities,
guiding our management and
reporting efforts towards those with
the highest potential for financial
significance. We directly integrated
the insights and priorities identified
into our proactive risk management
approach, supported by our transition
plan, summarised on pages 48 to 49.
This plan outlines specific actions
for mitigating risks, capitalising
on opportunities and aligning our
operations with a low carbon future.
We assessed risks using our corporate
risk methodology. The climate-related
risks and opportunities register
evaluates the likelihood and impact of
each climate-related risk alongside an
outline of current and planned control
measures. Gross risk scores were
calculated by multiplying the ratings
for impact and likelihood, each scored
on a scale of 1 to 4.
Control effectiveness was also
considered, reducing the net risk
score relative to the gross risk score
where applicable. More details on
our approach to risk management
can be found in the ‘Principal risks
and uncertainties’ section of the
Strategic report.
The consolidated findings from the
TCFD risks and opportunities register
were shared with the Audit and Risk
Committee and the Board.
The Finance Director oversees
the Company-wide risk register,
assigning responsibility for specific
risks and opportunities to relevant
senior managers.
We assessed these impacts across three time horizons:
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48 |
Strategic report
Task Force on Climate-Related
Financial Disclosures report continued
This review, conducted semi-annually
with input from the Executive
Committee, ensures that actual and
potential climate-related impacts
are effectively controlled, mitigated
or transferred and fully integrated
into business decision-making. By
embedding these findings into our
transition plan, we take a proactive
approach to risk management,
ensuring that we remain well prepared
for current and future climate-related
challenges.
Climate-related risks and opportunities
Risk
Potential financial
impact Control measures
Emissions
scenario Materialisation
Flooding:
Increased frequency and intensity
of extreme rainfall may lead
to increased river and surface
water flood events. Surface water
flooding is projected to pose the
highest risk in the urban areas
where The Gym Group operates.
Flooding may also occur due
to sea level rise, putting gyms
in some coastal regions at risk
of flooding. This is most likely
to impact gyms in Southeast
England.
Revenue:
Decreased revenue
due to business
disruption and/or
closure of premises.
Expenditures:
Increased insurance
costs; increased costs
for flood mitigation
updates.
Assets and liabilities:
Decreased asset value
or write-offs due to
water damage.
We lease our premises,
providing flexibility to exit
leases in flood-prone areas.
Our corporate insurance includes
flood coverage, and flood risk
mapping is assessed at policy
renewal. During the acquisition
of new sites, it is standard due
diligence practice to determine
any potential physical risks,
including flood risks.
Our nationwide network allows
members to use alternative
locations should their primary
gym be closed.
Medium
emissions
High
emissions
Short term
Short term
Physical climate-related risks:
Prolonged water stress:
Changing precipitation patterns
may lead to prolonged drought
conditions in Summer months.
This could lead to potential water
restrictions impacting The Gym
Group’s ability to provide shower
facilities to customers and is
most likely to impact gyms in
Southeast England.
Revenue:
Decreased
revenue due to
water restrictions
impacting demand.
Expenditures:
Increased water costs.
Our approach to water
management and current
initiatives are detailed on
page 45.
High
emissions
Short term
High temperatures:
Sustained increase in median
temperature, leading to increased
cooling requirements at gyms and
offices and a potential decline in
appetite for fitness.
This risk is most likely to impact
gyms in Southeast England.
Expenditures:
Increased costs
associated with the
installation and/or
additional repair of air
conditioning/cooling
mechanisms.
Assets and liabilities:
Reduced lifetime
of air conditioning
equipment.
Our ‘20 is Plenty’ model ensures
gyms operate at no lower than
20 °C, reducing energy used by
air conditioning.
Building insulation also
minimises the cooling demand.
The Gym Group is also working
to attain a minimum EPC rating
of ‘C’ across our gyms by 2025.
Currently, 82% of gyms with EPC
have ratings of ‘C' or above.
High
emissions
Medium term
Metrics and targets
Metrics and targets are integral
to managing climate-related risks
and opportunities, enabling data-
driven decision-making, stakeholder
communication and the measurement
of climate impacts on business
strategy, financial planning and risk
exposure. Through our sustainability
strategy, we collect and analyse
material ESG performance data
to enhance our understanding of
transition risk exposure and track the
effectiveness of the climate-related
initiatives outlined in the ‘Strategy’
section above. Central to this approach
is our commitment to achieving net
zero emissions by 2045, validated by
the SBTi. Further details on our climate-
related metrics and targets can be
found on pages 42 to 45. Looking
ahead, we will continue to refine and
expand our suite of climate-related
metrics, deepening our understanding
and management of climate-related
risks and opportunities.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
| 49
Governance
report
Financial
statements
Other
informationOverview
Risk
Potential financial
impact Control measures
Emissions
scenario Materialisation
Legislative requirements:
Increased legislative requirements
related to the energy efficiency
of buildings and office spaces,
resulting in retro-fitting costs
or new lease costs for aged
building services.
Expenditures:
Increased costs for
building leases to
meet evolving criteria
and increased costs
for retro-fitting.
We are actively investing to
improve energy efficiency
across our site portfolio and
outline our approach on pages
42 to 45. We are also working to
achieve a minimum EPC rating
of ‘C’ across our gyms by 2025.
As a tenant in leased buildings,
The Gym Group retains the
flexibility to transition out of
less energy-efficient sites
if upgrades are not viable,
ensuring our operations align
with our sustainability goals.
Net zero
emissions
Low
emissions
Short term
Short term
Transition climate-related risks:
Decarbonising estate:
Investment to purchase gym
equipment with lower embodied
carbon, improved energy
efficiency, and phase out fossil
fuels, including natural gas.
Expenditures:
Increased capital
costs to retire and
replace existing
equipment, facilitate
transition and
implement energy
efficiency measures.
We outline our approach to
decarbonising our operations
on pages 42 to 45.
As part of our sustainability
efforts, we are investing in
plans to remanufacture and
repurpose used equipment and
building elements, extending
their lifespan and minimising
waste. Our approach, detailed
further on page 45, enables us
to manage costs over time while
aligning with our commitment
to a circular economy.
Net zero
emissions
Low
emissions
Short term
Short term
On-site energy generation:
Implementing on-site energy
generation (e.g., solar panels)
at gyms may reduce grid
dependency and lower exposure
to fluctuating fossil fuel prices.
Expenditures:
Reduced operating
costs (e.g., through
efficiency gains and
cost reductions).
On-site energy generation has
the potential to lower operating
costs associated with purchased
electricity. We have trialled solar
PV installations at select sites
and are evaluating the business
case for future investments.
Net zero
emissions
Low
emissions
Medium
emissions
Short term
Short term
Short term
Climate-related opportunities:
Indoor exercise demand:
Demand for climate-controlled
gyms may increase during
extreme heat events, whether
short term (acute) or persistent
(chronic).
Revenue: Increased
revenue from gym
memberships.
Capital and
financing: Increased
investment from
shareholders and
higher share price.
Storms, heat waves, hotter
summers and wetter winters
may make outdoor workouts
less viable. Thus, there is an
opportunity to attract more
customers who previously
exercised outdoors.
High
emissions
Medium term
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50 |
Strategic report
Managing our risk
Principal risks
and uncertainties
Key roles and responsibilities
The roles and responsibilities for designing, monitoring and operating the system of risk management are set out below.
Functions
and employees
First line
of defence
Executive Committee
Second line
of defence
Overall responsibility
for managing the Group
to ensure it achieves its
strategic objectives
Promotes and supports
the embedding of risk
management throughout
the business.
Ensures there is active
management of identified
and emerging risks.
Formally reviews the
functional risk registers
and the strategic risks
twice yearly.
Reports to the Audit and
Risk Committee on the
internal control environment
and principal and emerging
risks identified.
Develops the Group strategy
in line with the Board risk
appetite.
Responsible for ensuring the
Group’s objectives are met
and business activities are
conducted in accordance with
Group policies and standards
Manage day-to-day risk in
their own areas guided by
Group policies, procedures
and control frameworks.
Identify and report on
functional risks to the
Executive Committee and
ensure mitigations are
in place.
Deliver the actions associated
with managing risk.
Audit and Risk
Committee
Board
Third line
of defence
Delegated responsibility
from the Board to review the
effectiveness of the Group’s
risk management and internal
control frameworks
Reviews the output from the
Executive Committee’s twice
yearly review of functional
and strategic risks.
Assesses annually the
effectiveness of the Group’s
internal control and risk
management frameworks.
Makes recommendations to
the Board for improvements
or developments to the
Group’s internal control
and risk management
frameworks.
Reviews viability scenarios
assessment.
Oversees the external audit.
Overall responsibility for the
Group’s internal control and
risk management frameworks,
and the strategic direction
of the Group
Sets the tone and
culture for managing
risk and embedding risk
management controls,
providing strategic direction
on the appropriate balance
between risk and reward.
Defines and reviews the
Group’s risk appetite.
Reviews the Group’s
principal risks at least
annually.
Approves the viability
statement.
Evaluates the risk
implications of planned
investments.
Our risk management framework is
designed to effectively identify, assess
and mitigate risks whilst enabling us
to deliver the Group’s strategic and
operational objectives.
Approach to risk management
The Board and senior management take very seriously their
responsibility for risk management and internal controls,
and for reviewing their effectiveness at least annually.
The Board has overall responsibility for ensuring there is
an effective risk management process in place which is
designed to identify the principal risks that the business
faces and to provide reasonable assurance that they are
fully understood and managed.
The Audit and Risk Committee provides oversight and
challenge on the effectiveness of risk management
and mitigating controls.
Risk appetite
The UK Corporate Governance Code requires companies
to determine their risk appetite. This is an expression of the
amount and types of risk that the Group is willing to take
in order to achieve its strategic and operational objectives.
A risk that can seriously affect the performance, prospects
or reputation of a company is deemed to be a principal
risk. The Group’s risk management process aims to strike
a balance between identifying, monitoring and mitigating
risks whilst maximising potential opportunities and returns
to ensure we deliver against our strategy. For each of the
Group’s principal risks set out on the following pages,
we have included a risk appetite statement which indicates
the level of risk the Board is willing to accept to achieve
our strategic objectives.
Strategic
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Governance
report
Financial
statements
Other
informationOverview
Low Medium High
Risk heat map (before mitigations)
1
Operational gearing
2
Member experience
3
Trading environment
4
Our people
5
IT dependency
6
Cyber and data security
7
Reputation, brand and trust
8
Relationships with key suppliers
Low HighMedium
Probability
Impact
1
6
4
5
3
2
8
7
Key
Principal risks
Through its 2024 reviews, the Board
and Executive Committee have
identified eight principal risks which
are set out on the following pages.
These are the risks which we believe to
be the most material to our business
model, which could adversely affect
the operations, revenue, profit, cash
flow or assets of the Group, and which
may prevent us from achieving our
strategic objectives. Additional risks
and uncertainties currently unknown
to us, or which we currently believe are
immaterial, may also have an adverse
effect on the Group.
The eight principal risks identified in
2024 are the same eight risks that
were also identified and included in
the 2023 Annual Report and Accounts.
For each of the risks, we have included
a link to the Group’s strategic priorities,
an explanation for any movement in
risk trend compared to the prior year
and examples of relevant controls or
mitigations that have been developed.
Those principal risks which have been
included in the assessment of the
Group’s long term viability have also
been highlighted.
Risk management process
The Group’s risk management process is designed to
measure, evaluate, document and monitor risks within
all areas of the business.
Functional risks review
Each area of the business maintains a functional risk
register in which functional leads identify and document
the risks that their business area faces. Areas covered
include: People; Operations; Marketing and Commercial;
Property Acquisition; Property Maintenance and Facilities;
Finance; Technology; Data; and Sustainability. A review of
the functional risk registers is performed twice yearly by
theExecutive Committee.
Strategic and emerging risks review
The Executive Committee also considers and identifies
strategic and emerging risks twice yearly. Strategic risks
are defined as those risks that management believes would
have a significant impact on the Group’s ability to achieve
its strategic goals over the time horizon covered by our
strategic planning process.
Emerging risks are defined as those risks that management
believes do not currently pose a significant threat to the
Group’s ability to achieve its strategic goals over the time
horizon covered by our strategic planning process but could
do so in the future. More details on the Group’s emerging
risks are provided on page 60.
Group principal risks review
The Group’s principal risk register is made up of those
strategic risks (top down) and functional risks (bottom up)
that are believed to pose the greatest threat to our business
model, future performance, solvency or liquidity,
and reputation.
Risk scores
All risks identified (functional, strategic and emerging) are
evaluated using a consistent scoring mechanism. Each
risk is given a gross risk score (before consideration of any
controls or mitigations in place) which reflects the likelihood
of occurrence and the severity of the financial impact.
In assessing the risks, consideration is given to ‘what can
go wrong’, i.e. what could result in the risk being realised.
To arrive at a net risk score, existing controls and mitigations
are documented and their effectiveness assessed.
Where the net risk score is deemed to be higher than our
risk appetite allows, additional controls and mitigations
are developed.
Audit and Risk Committee review
The output of the above reviews is discussed with the
Audit and Risk Committee (on behalf of the Board).
The Gym Group plc | Annual Report and Accounts 2024
52 |
The high operational gearing of the business, as a result of the largely fixed cost base, limits the number of corrective actions
that could be made to mitigate any under-performance in membership numbers, which could adversely impact profitability.
In addition, the current macroeconomic and geopolitical environment has led to significant wage and cost inflation.
An increase in the frequency of extreme weather events, leading to flooding and extreme heat events could also impact
on our operations with damage to gyms and equipment and potential increased costs for repair or replacement.
The Group may be unable to attract sufficient members and/or increase prices to sufficiently cover the cost increases,
leading to reduced margins.
Strategic report
Managing our risk continued
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We accept that the Group’s
business model is one
where there is a high level
of fixed costs. However, all
new gyms are expected to
attain a ROIC of at least 30%
to ensure the risk can be
appropriately managed.
Regular monitoring and reforecasting of business
performance at site level
Active yield and retention management on a
gym-by-gym basis
Ongoing financial management by the Executive Committee
and the Board and continuous review of the low cost
operating model
Measures identified to reduce operating costs, preserve
cash and reduce discretionary spend where necessary
Option to slow down new site openings to preserve cash
Energy-efficient investment into our sites
Energy contracts in place to provide line of sight for
future utility costs
Bank agreement signed in June 2024 providing access
to £90m of facilities until at least June 2027
Insurance policies in place to mitigate any costs or
business interruption from extreme weather events
The Board
believes this
risk is trending
downwards due
to a number of
enhancements
to existing
controls, the
improved
financial and
operational
performance,
and the
introduction
of a new bank
facilities
agreement.
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
1
Operational gearing
V
Strengthen
the core
Accelerate
rollout of
quality sites
Strategic
report
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| 53
Governance
report
Financial
statements
Other
informationOverview
Failure to provide members with a high quality product and service due to internal or external factors could result in a loss of
membership and reputational damage.
A decrease in membership numbers, as a result of a fall in actual or perceived customer service or confidence, would adversely impact
revenue and profitability..
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
Whilst we are committed
to delivering a compelling
member experience and
operational excellence,
this will not be delivered
at the expense of price
competitiveness.
Tracking of gym utilisation, cleanliness and member
satisfaction scores through enhanced monitoring and
feedback processes
Dynamic pricing and the introduction of an Off-peak
product help manage capacity levels
Ongoing review of equipment usage and appropriate
investment in repairs and maintenance to ensure we meet
member requirements
Significant investment programme to enhance and
upgrade gym equipment and kit mix and refurbish
older sites
Gym staffing model allows control over staffing
deployment to ensure peak periods are
adequately covered
Fitness product innovation to enhance the member
experience e.g. HYROX and small group training classes
Strong member communication plan in place
Crisis and incident management plans developed
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
2
Member experience
V
Strengthen
the core
Accelerate
rollout of
quality sites
The Gym Group plc | Annual Report and Accounts 2024
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Strategic report
Managing our risk continued
Macro-economic/consumer.
The UK continues to experience a cost-of-living squeeze and there remains significant economic and geopolitical uncertainty.
We need to respond appropriately to external market conditions while maintaining focus on delivering on our strategic objectives.
Members may choose to cancel their membership due to financial hardship.
Competition
Existing competitors may make decisions around capital deployment, location and/or pricing which could impact the ability of the
Group to achieve membership and EBITDA targets.
New competitors could enter the fitness market offering an alternative to the low cost gym model e.g. digital fitness out-of-home
offerings and/or aggregators.
This could lead to sub-optimal membership levels, an increase in the number of under-performing sites and substantially lower
revenue/profitability.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We accept the inherent risks
associated with the external
trading environment as we
seek to deliver our strategic
objectives. However, all
significant trading decisions
are supported by business
cases which include an
understanding of both the
potential risks and rewards.
Well placed to operate successfully in a challenging
economic environment as we are one of the lowest price
gym operators in the UK market with prices that are
significantly lower than those charged by mid-market
and premium operators
Active yield and retention management on a gym-by-
gym basis, with Off-peak and Saver membership options
offering flexibility to existing and new members
Highly experienced management team in place
Fitness product innovation to ensure we continue to meet
the evolving needs of members and prospective members
e.g. HYROX and small group training classes
Enhancements to the app to develop the digital
fitnessoffering
Competition monitoring and defence process in place
Rigorous site selection process
Bank agreement signed in June 2024 providing access
to £90m of facilities until at least June 2027
Strong free cash flow generation before investment
ingrowth
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
3
Trading environment
V
Strengthen
the core
Accelerate
rollout of
quality sites
Strategic
report
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Governance
report
Financial
statements
Other
informationOverview
The success of the business is dependent on talent attraction, development and retention, as well as maintaining a good culture, high
team engagement and supporting our team’s wellbeing. A lack of experienced and motivated staff could have a detrimental impact
in all areas of the business, across Operations and Gym Support. It is important to retain key talent to retain business knowledge and
understanding as well as maintaining stability in teams.
Increased demand and competition for staff could impact on our ability to support the gyms, deliver a good member experience
and execute on our strategy. Stretched resources could see staff distracted from performing their core roles or failing to deliver on
keyprojects.
Lack of adequate succession planning and dependency on a small number of key staff could also weaken supplier relationships,
which in turn could impact operational performance.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We seek to provide a great
place to work, and balance
costs and risks to ensure our
colleagues are engaged and
have the capability to deliver
our strategy. We have no
tolerance for harm (physical
or mental) to individuals and
actively promote equality,
diversity and inclusion.
Use a variety of tools to attract, retain and motivate staff
at all levels of the business, including:
– Competitive remuneration and benefits packages
– Opportunity to own shares in the Company
– Opportunities for training and progression
– Short, clear reporting lines
– Succession planning
– Engagement surveys carried out every six months with
detailed analysis and action plans produced
– e-learning platform, internal communication and
recognition platform, CORE
Wellbeing programmes, Employee Diversity and Inclusion
Group and other employee forums
Employee assistance programme providing 24/7
telephone counselling service
Development of the Gym Group Academy and changes
to the operating and recruitment models to increase the
talent pool for gym staff recruitment
24/7 Doctor Line service available to all employees
Growth of Gym Support and cross-training to reduce
dependencies on key individuals
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
4
Our people
V
Strengthen
the core
Accelerate
rollout of
quality sites
Broaden our
growth
The Gym Group plc | Annual Report and Accounts 2024
56 |
Strategic report
Managing our risk continued
Our ability to enrol and support members, carry out online marketing activity, process payments and control gym access and other
services is dependent on the performance of our IT systems.
By increasing the level of sophistication and breadth of our products and developing new innovations, we create more opportunities
for growth in the longer term. However, this also means that we have to manage and deal with greater technology and process
complexity and increasing platform load.
Upcoming initiatives to replace the Group’s member management and payment systems will temporarily impact on our ability to
innovate at pace and increase the risk of disruption to our critical IT systems which could adversely impact member experience and/or
our ability to collect revenue and grow the business.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We accept that the Group
has a heavy reliance on
technology and that we
need to innovate and evolve
that technology in order
to achieve our strategic
objectives. However, all
major projects are subject
to rigorous programme
governance and oversight
and must, where possible, be
delivered on time, to budget,
to expected quality and in
a way that safeguards the
wellbeing of our colleagues
working on the project. Cost
overruns and delays will
sometimes be tolerated to
achieve the desired outcome.
Primary data systems hosted by specialist hosting
providers in suitable data centres
Primary IT infrastructure fully managed by specialist
IT companies which provide best-practice architecture
andsupport
All membership and business information backed up
regularly using third-party locations
Robust disaster recovery and business continuity plans
inplace
Additional capacity added to our infrastructure to cope
with large spikes in usage and regular programme of load
testing on critical member-facing platforms
Strong internal technology team in place, supported by
specialist IT resource providers
Appropriate governance in place for all major technology
projects with Executive Committee and Board oversight
The Board
believes this
risk is trending
upwards as
the work being
undertaken to
replace member
management
and pricing
systems will
likely impact on
the delivery of
BAU and other
technology
projects in
the short
term. However,
the Board is
confident that
the changes we
are making will
help us achieve
our strategic
goals and
improve the
member offering
in the long term.
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
5
IT dependency
V
Strengthen
the core
Accelerate
rollout of
quality sites
Broaden our
growth
Strategic
report
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Governance
report
Financial
statements
Other
informationOverview
The Group holds business critical and confidential information electronically. A breach of security or data protection controls due to
unauthorised access, loss or disclosure of this information could lead to legal claims, regulatory penalties, disruption of operations
and/or reputational damage.
The level of overall cyber risk remains high due to the current geopolitical instability and an increased number of threat actors and
attack vectors (including AI); and over time, we believe our increased brand recognition will increase our vulnerability to such attacks.
Data protection legislation brings potentially wide-reaching effects and consequences for all businesses, with penalties for breaches
attracting fines of up to 4% of annual turnover, or £17.5m – whichever is the higher.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We have no appetite for
the loss of, or otherwise
unauthorised or accidental
disclosure of, member or
other sensitive data.
Networks and systems protected by firewalls, industry-
leading authentication management and security
software and strong passwords
All sensitive data is captured and presented using SSL
encryption and access restricted by role
Two-factor authentication enabled on most critical systems
PCI Level 2 compliance maintained
All customer payment data is stored externally on systems
that are PCI-DSS and/or BACS certified
Ongoing programme of security review and upgrades for
key platforms
Continuous assessment of new and innovative products
for security
Mandatory cyber security and data protection training
for all employees
Data Protection Manager in place to oversee and optimise
our control environment in this area
GDPR audit carried out every two years (last audit
completed in August 2024)
Senior leadership briefs the Board on information security
matters at least annually when the CTO presents the
Group’s IT strategy
Cyber security insurance in place
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
6
Cyber and data security
Strengthen
the core
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Strategic report
Managing our risk continued
The Gym Group brand is built on trust, inclusion and strong sustainability credentials. As the business, estate and workforce grow,
brand recognition increases which, in turn, brings additional media coverage of The Gym Group.
A health and safety or other serious incident in any of our gyms could result in injury or harm to one or more of our members,
as well asreputational damage.
There is also a risk that an inappropriate social media post by either a member of staff or an external party could have a
wide-reaching impact on our brand and reputation, leading to loss of membership.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We have no appetite to
knowingly breach the spirit
or letter of the laws that
apply to us. In areas of
uncertainty, we will have a
robust justification and clear
rationale for the choices
wemake.
We seek to provide a great
place to work and workout.
We have no tolerance for
harm (physical or mental)
to individuals and actively
promote equality, diversity
andinclusion.
Group policies and procedures set out the expectations
and behaviours that enable all colleagues to make the
right decisions and communicate appropriately
Communication and engagement programmes are in
place to listen to our members and stakeholders to help
ensure we reflect their needs in our plans, which include
health, community, climate and sustainability initiatives
Promotion of our values and high standards of doing
business should ensure we become a trusted brand which
boosts our reputation
Clear, documented procedures in place for managing
health and safety incidents; staff regularly trained to
ensure all incidents are effectively managed
Out of hours monitoring services in place
Third party health and safety specialist retained to
provide advice and audit services
Robust business response plan in place to deal with brand
and reputational issues, including the retention of a
specialist PR agency and media training for keyexecutives
Central control of social media posts
The Board
believes this
risk is trending
upwards as
the business,
estate and
workforce grow,
bringing with it
an increased
media presence.
The use of social
media as a form
of unregulated
free speech is
also increasing.
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
7
Reputation, brand and trust
Strengthen
the core
Accelerate
rollout of
quality sites
Broaden our
growth
Strategic
report
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Governance
report
Financial
statements
Other
informationOverview
Where possible, we employ a policy of using multiple suppliers to minimise business interruption should one supplier fail. However,
standardising equipment, materials and processes across our estate, allows us to benefit from economies of scale, reducing initial site
fit-out costs and ongoing maintenance and other controllable costs. At the same time, we provide consistency of member experience.
As a result, we have key supplier dependencies in areas such as equipment provision, gym access and payment processing.
With the continuing macroeconomic challenges in the UK economy and the wider geopolitical conflicts, there remains a risk of critical
supplier failure caused by financial exposure and/or cyber attacks.
In addition, as our business grows, there is a risk that key suppliers’ processes and procedures do not keep pace with our requirements.
Key
Risk movement in 2024:
Risk increase No change Risk decrease Included in Viability assessment, see page 62
We are willing to accept the
risk of partnering with third
parties to deliver our core
business activities. However,
contracts and relationships
with critical suppliers must
be well monitored, value-
for-money and regularly
reviewed. In addition, third
parties must comply with
appropriate regulatory and
ethical standards.
The Gym Group maintains good relationships with its
key suppliers and seeks to treat all suppliers ethically
andprofessionally
Solid procurement process in place to assess the quality
of suppliers
Business continuity plans for critical suppliers are in place
and reviewed regularly
Stronger supplier assessments added as part of PCI
Level2
Key supplier contracts updated and renewed in 2023 with
additional data protection and other provisions included
Our main gym equipment supplier has a number of
manufacturing facilities around the world to ensure supply
should geopolitical tensions threaten production and
availability of kit
Risk appetite statement Mitigations and controls Strategic link
Risk direction
vs prior year
Description and impact
8
Reliance on key suppliers
Strengthen
the core
Accelerate
rollout of
quality sites
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Strategic report
Managing our risk continued
Emerging risks
In addition to the principal risks set out on the
previous pages, the Executive Committee and
Board also consider emerging risks as part of
their reviews. These are risks that, whilst not
currently believed to be principal risks to the
Group, are clearly important to us and could have
a significant impact on the ability of the business
to fulfil its strategic objectives in the future.
Climate change
Extreme weather events are increasing in frequency
in the UK, and flooding and extreme heat events could
impact on our operations, leading to damage to gyms
and equipment (resulting in increased costs for repair
or replacement) and poor customer experience.
However, the geographic distribution of our gyms
means that, over the time horizon covered by
our strategic planning and Group principal risks
assessment (three years), these are expected to impact
only a small number of sites and do not threaten closure
of a substantial part of the estate for a prolonged
period of time. In addition, insurance policies are in
place to mitigate any costs or business interruption,
although it is acknowledged that such policies will
become more expensive and less available over the
longer term. Therefore, the Board has concluded that
climate change is not a principal risk, but it can and
does impact other principal risks such as ‘Operational
gearing’ and ‘Member experience’.
Our TCFD report on pages 46 to 49 contains a
comprehensive discussion about the climate-related
physical and transition risks that the Group faces and
the measures we are taking to address these risks both
now and in the future. The report includes a range of
scenarios and mitigating actions.
Artificial intelligence (‘AI’)
The Board added Artificial intelligence (‘AI’) to its
emerging risks register in 2023. Management continues
to evaluate how the business could benefit from the
use of AI as well as what risk AI could potentially pose
in relation to possible data and/or system breaches,
or loss of competitive advantage should existing or new
competitors use AI to innovate or reduce operating costs.
In order to mitigate the potential risks from the use
of AI, an AI policy was drafted in Q1 of 2024 and an
employee training plan was launched in the second half
of the year. We continue to develop our AI approach,
partnerships and strategy.
Weight loss drugs
The Board believes that the increased availability of
weight loss drugs on the NHS poses both an emerging
risk and an opportunity for The Gym Group. There is
a potential risk that individuals choose to move away
from using exercise as a way of managing their weight
in exchange for what they perceive to be an easier
option. However, when GPs are prescribing weight loss
drugs, they are advised to recommend that the drugs
should be taken alongside a reduced-calorie diet and
increased physical activity. We continue to evaluate
both the risks and opportunities presented.
See TCFD report on pages 46 to 49
Strategic
report
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Governance
report
Financial
statements
Other
informationOverview
Going concern and
viability statement
Going concern
In assessing the going concern position of the Group for
the year ended 31 December 2024, the Directors have
considered the following:
the Group’s trading performance in 2024 and throughout
the traditional January and February 2025 peak period;
future expected trading performance to 30 June 2026
(the going concern period), including membership
levels and behaviours in light of the continued difficult
macroeconomic environment; and
the Group’s financing arrangements and relationship
with its lenders and shareholders.
Trading in 2024 was strong, with membership at the end of
December 2024 reaching 891,000, an increase of 5% from
the end of December 2023. Average revenue per member per
month (‘ARPMM’) for the year was £20.81, up 7% from £19.50
in the prior year. Ultimate, the premium price product, ended
the year at 29.6% of total membership compared with 31.7%
in December 2023. As a result, revenue increased by 11% to
£226.3m (2023: £204.0m), and Group Adjusted EBITDA Less
Normalised Rent at £47.7m was 24% better than in 2023.
The Group also reported strong cash generation in the
year, with free cash flow of £37.5m (see Note 23 to the
consolidated financial statements for a reconciliation to
Net cash inflow from operating activities) being generated
and used to fund 12 new site openings and a number
of major refurbishments and enhancements, as well as
significant investment in technology.
On 28 June 2024, the Group agreed a new facilities
agreement with its existing banking syndicate, which came
into effect on 1 July 2024. Under the new agreement, the
Group has in place a combined £90m facility, consisting of
£45m of Term Loan and £45m of RCF. The new facility is due to
mature in June 2027. Drawings under the facilities continue to
be subject to quarterly financial covenant tests on Adjusted
Leverage (Non-property Net Debt divided by Group Adjusted
EBITDA Less Normalised Rent must not exceed 3.0 times)
and Fixed Charge Cover (Adjusted EBITDAR to Net Finance
Charges plus Normalised Rent must be greater than 1.5 times).
As at 31 December 2024, the Group had Non-Property Net
Debt (including non-property leases) of £61.3m, consisting
of £61.0m drawn debt under the RCF, £3.3m of non-property
leases and £3.0m of cash. The Directors believe that this
measure of net debt best reflects the financial health of
thebusiness.
In addition, it is a key constituent of the Adjusted Leverage
covenant included in the Group’s banking agreement
as noted above. Headroom under the bank facilities at
31 December 2024 (drawn debt less cash) was £32.0m.
Adjusted Leverage was 1.3 times and Fixed Charge Cover
was 1.9 times.
Following the January and February 2025 peak trading
period, closing membership at 28 February 2025 was 951,000,
an increase of 7% on the position at 31 December 2024,
demonstrating that the low cost gym model remains resilient
and spend on gym membership continues to beprioritised.
Despite the continued strong trading performance, the
Directors have continued to take a cautious approach to
planning. The base case forecast for the period to 30 June
2026 anticipates some growth in yields across the whole
estate as a result of pricing optimisation actions identified
as part of the Next Chapter growth plan. Modest increases
in membership levels are driven largely by the sites opened
in 2023 and 2024, and not by growth in the mature estate.
In addition, the Directors have continued to take a measured
approach to new site openings throughout the plan period,
with all new sites assumed to be self-financed. Under
this scenario, the financial covenants are passed with
headroom, and the Group can operate comfortably within
its financingfacilities.
The Directors have also considered a severe downside
scenario in which membership numbers in the mature estate
decline by approximately 4%. Yields continue to grow, but
at a much more modest rate than in the base case. In this
scenario, the number of new site openings is reduced to
conserve cash, expenditure on maintenance and marketing
is reduced slightly, and discretionary performance-related
bonuses and share based payment funding are removed.
Under this scenario, the financial covenants continue to
be passed, and the Group continues to operate within its
financing facilities.
The Directors have also considered a reverse stress test
scenario to ascertain the extent of the downturn in trading
that would be required to breach the Group’s banking
covenants or liquidity requirements. Mitigating actions
assumed in this scenario include moving to a minimum level
of maintenance and technology capital expenditure; further
reducing controllable operating costs and marketing
expenditure; and pausing the new site opening programme
in order to preserve cash.
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62 |
Strategic report
Managing our risk continued
In this scenario, the closing membership would need to
decline by 23% from April 2025 before the Fixed Charge
Cover covenant would be breached in June 2026. The Group
would, however, continue to operate within its current level
of debt capacity and the Adjusted Leverage ratio would
not be breached.
In the event of a reverse stress test scenario, the Directors
would introduce additional measures to mitigate the
impact on the Group’s covenants and liquidity, including:
(i) even greater reductions in controllable operating costs,
marketing and capital expenditure; (ii) discussions with
lenders to secure a covenant waiver; and (iii) deferral of,
or reductions in, rent payments to landlords. The Directors
consider the reverse stress test scenario to be highlyunlikely.
Conclusion
The Board has reviewed the financial plan and downside
scenarios of the Group and has a reasonable expectation
that the Group has adequate resources to continue in
operational existence for the period to 30 June 2026. As a
result, the Directors continue to adopt the going concern
basis in preparing the consolidated financial statements.
In making this assessment, consideration has been given
to the current and future expected trading performance;
the Group’s current and forecast liquidity position and the
support received to date from our lenders and shareholders;
and the mitigating actions that can be deployed in the
event of reasonable downside scenarios.
Viability statement
As stated in the going concern assessment, the Directors
have a reasonable expectation that the Group has
adequate resources to continue in operational existence
for the period to 30 June 2026. However, in accordance with
provision 31 of the UK Corporate Governance Code 2018,
the Directors have also assessed the longer term viability of
the Group, taking into account the Group’s current position
and the potential impact of the principal and emerging
risks documented earlier in this report (including climate
change risk) that would threaten its business model,
future performance, solvency or liquidity.
The Directors have determined that the three year period
to 31 December 2027 is an appropriate period over which
to assess the Group’s viability as:
the Directors review a three year financial plan with
management each year as part of an annual strategy
review and the viability analysis is based primarily on
this plan; and
the period is sufficient to reflect the maturation of new
sites opened in 2023 and 2024.
Whilst the viability review has considered all the principal
risks identified by the Group, the Directors have concluded
that the risks that would most materially threaten the
Group’s growth drivers, future performance, solvency or
liquidity were operational gearing, member experience,
the trading environment, our people, IT dependency and
reliance on key suppliers.
Severe but plausible downside scenarios based on these
risks were therefore created against which liquidity
and debt covenant headroom analysis was performed.
The Directors considered the fact that the Group’s banking
facilities of £90m are currently expected to expire in June
2027 and concluded that, based on regular discussions
with participating banks and financial advisors, there is
a realistic prospect that this will be extended to cover the
whole of the viability assessment period.
The downside scenarios included modelling a severe but
plausible decline in membership numbers compared with
the base case plan and a significant increase in costs over
and above that included in the base case plan. The Directors
have also considered a reverse stress test scenario to
ascertain the extent of the downturn in trading that would
be required to breach the Group’s banking covenants or
liquidity requirements.
In the downside scenarios, the number of new site openings
is reduced to conserve cash, expenditure on maintenance
and marketing is reduced slightly, and discretionary
performance-related bonuses and share based payment
funding are removed to ensure that all financial covenants
continue to be passed and the Group continues to operate
within its financing facilities.
In the reverse stress test scenario, additional mitigating
actions assumed include moving to a minimum level of
maintenance and technology capital expenditure; further
reducing controllable operating costs and marketing
expenditure; and pausing the new site opening programme
in order to preserve cash.
Having completed the above assessment, the Directors have
concluded that the Group remains viable.
Strategic
report
The Gym Group plc | Annual Report and Accounts 2024
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Governance
report
Financial
statements
Other
informationOverview
Strategic report
Non-financial and sustainability information
Environmental
matters
Sustainability report 34 to 45 Our environmental strategy is set out on
page 46.
Climate-related
financial
disclosures
Task Force on Climate-
Related Financial
Disclosures report (‘TCFD')
46 to 49 Our updated disclosures with regard to TCFD
can be found on pages 46 to 49.
Employees Sustainability report
Chief Executive’s review
Principal risks and
uncertainties – Our
people
34 to 45
12 to 15
55
The Group has relevant training for all employees
which is served via a training portal. Our
employee-related policies and procedures which
include our privacy notice, family-friendly and
inclusivity policies and all work-related policies,
are available to employees on the intranet.
Human rights Sustainability report
Modern slavery statement
34 to 45 It is prohibited for any employee or person working on
our behalf to offer, give, request or accept any bribe.
The Group has an Anti-Bribery and Anti-Corruption
policy which sets out the relevant procedures. A copy
can be found on our website at www.tggplc.com.
The Company also has a Whistleblowing policy
also available on our website.
Social matters Sustainability report 34 to 45 Our approach to diversity, equal opportunities and
promoting wellbeing are set out on pages 36 to 41.
Our Diversity and Inclusion manifesto can be
found on our website at www.tggplc.com.
Business model Introduction to our
business – Our investment
case
02 An explanation of the Group’s business model
can be found on page 2.
Principal risks Principal risks and
uncertainties
50 to 60 The Board has a process for considering the
principal risks as set out on pages 50 to 51.
Financial and
non-financial KPIs
Key performance
indicators (‘KPIs)
32 to 33 The Board approves relevant KPIs for use as
set out in the Strategic report on pages 32 to 33.
Relationships
with suppliers,
members and
others
Section 172 statement 75 to 79 The Group has a number of policies and
procedures underpinning its commitment to
high standards of business conduct, which are
available to all employees on the intranet.
The table below sets out where stakeholders can find information in our Strategic
report that relates to non-financial and sustainability matters detailed under section
414CB of the Companies Act 2006.
On behalf of the Board
Will Orr
Chief Executive Officer
12 March 2025
Reporting requirement
Where to find further
information
Pages Summary of relevant policies if applicable
64 |
The Gym Group plc | Annual Report and Accounts 2024
Governance report
Introduction from the Chair of the Board
“It is imperative that we have
the right balance of skills,
experience, knowledge and
perspectives around the table
to ensure robust debate,
constructive challenge and
positive engagement
on strategy.”
John Treharne | Chair of the Board
Purpose and culture
The Gym Group’s purpose is to break down barriers to fitness
for all, and the Board fully supports and promotes this by
conducting its business according to our core values: take the
first step, realness, friendliness and challenging our limits. Our
purpose and values are reinforced by our people-first culture
as a business and the Board and management consider
the interests of the Company’s stakeholders when making
decisions to ensure that the Group remains focused on our
stated purpose and values.
The Board is responsible for ensuring that our culture is
aligned with our strategy through monitoring and providing
constructive challenge. The Board discharges this duty by
reviewing the relevant policies, practices and behaviours
adopted throughout the business, including its own conduct
as a Board and the conduct of its individual Directors.
During 2024, the Board had oversight of the Group’s culture
and how it is being embedded across the business, through
various formal updates, including those on employee
engagement survey results; stakeholder engagement as
set out in the Section 172 statement on pages 75 to 79;
diversity and inclusion at Board level and across the wider
business; effectiveness of the Group’s talent management
process; risk management, internal control, anti-bribery
and whistleblowing arrangements; mandatory employee
training completion rates; strategy, operations, health
and safety, investor relations, ESG and sustainability,
governance and technology from our Executive Committee
and senior leadership team; independent feedback from
our external advisors; and Board and Director performance
reviews as described in the Report of the Nomination
Committee on pages 80 to 83.
We held our annual conference in November 2024 where I,
along with colleagues at managerial level and above from
across the UK, came together for updates and an opportunity
to provide feedback on our strategy, operations and employee
benefits. It was also an opportunity to celebrate our successes,
our people and our values as a business. Positive feedback on
the event was received from colleagues and we look forward
to coming together again in 2025.
Board composition
It is imperative that we have the right balance of skills,
experience, knowledge and perspectives around the
table to foster robust debate, constructive challenge and
positive engagement on strategy. An internal review of the
performance of the Board, its Committees and individual
Directors was conducted in respect of 2024.. The Board is also
in the process of recruiting an additional independent Non-
Executive Director to replace Emma Woods and David Kelly,
who both stepped down from the Board in 2023, to ensure that
we have adequate bandwidth as well as the right balance
of skills and expertise on the Board.
Dear Shareholder
I am pleased to introduce the 2024 Governance
report on behalf of the Board. The Governance
report forms part of the Directors’ report.
The Gym Group plc | Annual Report and Accounts 2024
| 65
Financial
statements
Other
informationOverview
Governance
report
Strategic
report
UK Corporate Governance Code compliance statement
It is important that all Board members receive a full, formal
and tailored induction and receive the information and
access to resources they need to carry out their duties
and responsibilities. These and other activities are the
responsibility of the Nomination Committee. Further details
may be found in its report on pages 80 to 83.
Independence and responsibilities
The independence status of the Directors is set out on page
73. The roles and key responsibilities of the members of the
Board are explained in the Corporate Governance report
on pages 71 to 72.
Shareholder and workforce engagement
Myself and other members of the Board engaged with
shareholders throughout the year to understand their
views on the Company’s strategy, financial performance
and governance matters, namely remuneration, audit and
Board composition.
During 2024, I was also appointed by the Board as the
Workforce Engagement Director and worked with the Chief
People Officer and Company Secretary to determine the
most effective ways to engage with our colleagues and
better understand their views and interests. Anonymous
feedback was provided to the Board from our first cycle
of employee listening sessions at the end of 2024. Further
sessions will be held in 2025 followed by a full review of the
feedback received with outcomes to be disclosed in the
2025 Annual Report and Accounts. Our engagement with
shareholders, colleagues and other key stakeholders in
2024 may be found in the Section 172 statement on pages
75 to 79.
Talent, diversity and succession
In 2024, we continued to focus on succession and talent
management for the Board, Executive Committee and
throughout the business by conducting robust talent sessions
centred on performance, critical talent, development,
diversity and succession planning. We also formalised our
Board Diversity and Inclusion Policy, which has been published
on the policy section of our corporate website.
Progress on encouraging strong performance and retention
of the best possible talent and resource within the business
can be found in the Sustainability report on pages 34 to 45.
Sustainability
We continue to improve and enhance our sustainability
reporting. The Sustainability Committee oversees our
sustainability strategy, ensuring that such matters are
supported by robust governance streams and that they
continue to be a focal point for the Board in its decision-
making. In 2024, we continued to make further progress on
measuring the Social Value of our gyms. See further details
in the Sustainability report on pages 34 to 45.
AGM
Our AGM is planned for 8 May 2025, and I look forward
to meeting shareholders there.
John Treharne
Chair of the Board
12 March 2025
The UK Corporate Governance
Code 2018 (the ‘Code’) was the key
governance measure for the financial
year ended 31 December 2024
(the Code can be found at
www.frc.org.uk). Throughout the
reporting period, the Company
complied with the principles and
provisions of the Code, except for
the following:
Provision 9
John Treharne, was not considered
independent on appointment as
Chair of the Board in July 2022 as he
is the founder of The Gym Group and
formerly held the positions of CEO
until September 2018 and Founder
Director until July 2022.
During 2024, the Senior Independent
Director consulted with other members
of the Board and separately with the
Company’s major shareholders,
on John Treharne’s continuation
as Chair of the Board for the short
to medium term. It was agreed that
this arrangement continued to be
appropriate, subject to ongoing review.
In February 2025, this support was
further bolstered by the results of
the Chair of the Board’s internal
performance review, which concluded
that John continues to be effective
in role. Further details may be found
in the Report of the Nomination
Committee on pages 80 to 83.
Code compliance in 2024
Our governance reporting follows
the order set out in the Code:
Board leadership and
Company purpose and division of
responsibilities – see pages 70 and 71
of the Corporate Governance report,
respectively.
Composition, succession
and evaluation – see pages 80 to
83 of the Report of the Nomination
Committee.
Audit, risk and internal control –
see pages 84 to 89 of the Report
of the Audit and Risk Committee.
Remuneration – see pages 92 to 109
of the Report of the Remuneration
Committee.
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Governance report
Board of Directors
John Treharne
Chair of the Board
Committees
Career
John was appointed Chair of
the Board and Nomination
Committee in July 2022. John
founded The Gym Group in
2007 and has over 30 years’
experience in the health and
fitness industry including the
launch of Dragons Health Club
plc in 1991, before its flotation
on AIM in 1997 and sale to
Crown Sports plc in 2000.
He is currently a member
of the ukactive and Europe
Active boards and chair of
The Padel Club.
Board skills and experience
John’s wealth of operational
and leadership experience
and knowledge of industry
trends offers the Board
valuable context to develop
its strategy and inform its
decisions. As founder of
The Gym Group, John has an
unmatched network of industry
connections and corporate
knowledge used to support
the business and the Board’s
evolution. As Board Chair,
John provides stability and
continuity in leadership.
Other appointments
ukactive
Board member
EuropeActive
Board member
The Padel Club
Chair
Will Orr
Chief Executive Officer
Committees
Career
Will joined The Gym Group as
Chief Executive Officer (‘CEO’)
in September 2023. Will was
formerly managing director of
Times Media Limited, publisher
of the Times and Sunday Times,
and previously held managing
director roles for RAC and
British Gas (Centrica Plc). Will
is a Fellow of the Marketing
Society and has an MBA from
London University.
Board skills and experience
Will brings significant experience
developing and delivering
sustainable customer growth
strategies (including pricing,
proposition, digital marketing
and retention strategies) as
well as operational expertise
in businesses where customer
experience is critical.
Other appointments
None
Luke Tait
Chief Financial Officer
Committees
Career
Luke joined The Gym Group
as Chief Financial Officer
(‘CFO’) in October 2022. Luke
is a chartered management
accountant and was formerly
Group CFO of Nando’s Group
Holdings Limited, the global
restaurant business, which
he joined in 2017. Prior to this,
he held various finance roles
at SSP plc, including CFO of
the UK and US businesses
and group corporate finance
director, finishing his time as
group financial controller.
Board skills and experience
Luke brings broad experience
to the Board from global
leisure businesses to lead the
finance function. Luke has
worked with the leadership and
stakeholders across The Gym
Group to ensure it is well placed
to capitalise on the significant
market opportunities ahead.
Other appointments
None
Elaine O’Donnell
Senior Independent
Director
Committees
Career
Elaine joined The Gym Group
in August 2022 and is Senior
Independent Director and
Chair of the Audit and Risk
Committee. She is also chair
of the Audit Committee and
senior independent director
of On the Beach Group plc,
and chair of the Audit and
Risk Committee of SThree
plc. She was formerly chair
of Games Workshop plc until
31 December 2022, having
served in various roles on that
Board since 2013. Elaine was
previously a partner at Ernst
& Young and is a chartered
accountant.
Board skills and experience
Elaine brings to the Board
extensive experience as a non-
executive director, plc chair
and committee member of a
diverse range of businesses.
Elaine’s financial knowledge
and expertise in addition
to her online retail industry
experience, supports the Board
in its oversight of the Group’s
financial reporting and related
controls and provides valuable
insight on strategic and
commercial matters.
Other appointments
On the Beach plc
Senior Independent Director
and Chair of the Audit
Committee
SThree plc
Chair of the Audit
& Risk Committee
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Financial
statements
Other
informationOverview
Governance
report
Strategic
report
Committees
Nomination Committee
Audit and Risk Committee
Remuneration Committee
Sustainability Committee
Chair
On 31 January 2024, Ann-
marie Murphy, formerly
COO, stood down from the
Board.
Wais Shaifta
Non-Executive Director
Committees
Career
Wais joined The Gym Group
in February 2021 and is the
Chair of the Remuneration and
Sustainability Committees.
He is also an independent
non-executive director at The
Co-operative Group, Reach plc
and Snappy Shopper, as well
as the senior independent
trustee at the Football
Foundation and an operating
partner to Samaipata.
Previously, Wais held executive
and other leadership positions
in group operations, digital
technology, product, business
development, M&A and
international expansion at
both Just Eat and Treatwell.
Following that he was the CEO
of Push Doctor and PrivateDoc.
Board skills and experience
Wais is an expert in digital
growth and transformation.
His background in leading
technology businesses gives
him a strong understanding of
the vital role technology plays
in our drive to remain relevant
to members. Wais’s experience
of healthcare businesses also
means he is well aligned with
our purpose to provide access
to affordable fitness for all.
Other appointments
The Co-operative Group
Non-Executive Director
Reach plc
Non-Executive Director
Snappy Group
Non-Executive Director
Football Foundation
Senior Independent Trustee
Samaipata
Operating Partner
Richard Stables
Non-Executive Director
Committees
Career
Richard joined The Gym
Group in August 2022 and is
a chartered accountant and
an experienced corporate
financier, having spent 32 years
at Lazard. Currently, Richard is
a partner at Fulcrum Advisory
Partners LLP, an independent
advisory firm, a senior advisor
to Blantyre Capital and a non-
executive director at Archer.
Board skills and experience
Richard brings his strong
experience of corporate
finance and understanding
of the UK financial markets
to support the Board in
its strategic direction and
decision-making, deepening
the Board’s skillset for the
future.
Other appointments
Fulcrum Advisory
Partners LLP
Partner
Blantyre Capital
Senior Advisor
Archer Ltd
Non-Executive Director
Simon Jones
Non-Executive Director
Committees
Career
Simon joined The Gym Group in
February 2023 and is currently
the CEO of Away Resorts. Prior
to this role he was managing
director for Premier Inn and
Restaurants and UK and
global commercial director
at Whitbread, leading the
UK business for Premier Inn
and Whitbread’s portfolio of
restaurant brands since 2016.
Simon was also marketing
and strategy director at
Premier Inn and, before joining
Whitbread in 2012, had over 15
years’ experience as a strategy
consultant, working with a
variety of clients across the
retail and hospitality space,
latterly as a partner at OC&C
Strategy Consultants.
Board skills and experience
Simon has extensive
commercial and operational
experience in building UK-wide
businesses whose customer
proposition is based on value
and quality, which is invaluable
to the Board’s discussions and
future growth plans.
Other appointments
Away Resorts
CEO
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68 |
Milan Juza
Chief Technology Officer
Career
Milan joined The Gym Group
in March 2023 to lead the
Tech and Product function.
Prior to joining TGG, Milan
led a global e-commerce
technology team at TUI
Group and also brings
a wealth of technology
leadership and digital
product delivery experience
from several industries
including telecoms, media
and financial services.
During his career, Milan
has led and successfully
delivered several large-scale
technology and business
transformation initiatives,
as well as numerous market-
leading innovations and
services. Milan is passionate
about building and growing
high performing teams and
organisations, creating real
business advantage through
technology, and helping
organisations to grow
business agility.
Ruth Jackson
Chief People Officer
Career
Ruth joined The Gym Group
as People and Development
Director in October 2022
and was promoted to Chief
People Officer in December
2023. Prior to joining
The Gym Group, Ruth held
a number of senior HR
positions in leading leisure
and hospitality businesses,
including people director for
Zizzi Restaurants (Azzurri
Group) and at Cote Brasserie,
and spent over 11 years at
Whitbread in a variety of
HR roles.
Ruth has extensive HR and
operational experience
in driving employee
engagement and fostering
positive team culture to
support business growth.
During her time at The Gym
Group, Ruth has realigned
the People team to deliver
high value support to all
areas of the business,
focusing on creating high
performing teams through
talent performance,
development and retention.
Jon Baker
Operations Director
Career
Jon joined The Gym Group in
2012 as a Regional Manager,
undertaking a number of
operational leadership roles
before becoming Operations
Director in 2022. Jon brings
25 years’ experience in the
fitness sector, and prior to
joining The Gym Group, held
operational roles at Total
Fitness and Life Leisure.
Jon has been at The Gym
Group for 13 years and
brings valuable experience
to deliver operational
excellence as the Company
has grown to over 240 gyms.
Jon also provides effective
operational leadership
to support the business
growth plans.
Catherine Ferma
Operations Director
Career
Catherine joined The Gym
Group in 2021 in a project
lead role as Head of
Operations Transformation,
before becoming Operations
Director in 2022. Catherine
has over 25 years’ experience
in operational roles from the
fitness and beauty sectors,
including The Club Company
and PlayFootball.
Catherine brings valuable
operational leadership
experience to deliver
sector-leading member
rated experiences in all of
our gyms. Catherine also
leads on several operational
initiatives to drive the
business growth plans.
Governance report
Executive Committee
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Other
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Nick Shelmerdine
Director of Strategy and
Corporate Development
Career
Nick joined The Gym Group
in November 2021 and
was formerly associate
partner at OC&C Strategy
Consultants and managing
director of delivery at The
Restaurant Group plc,
focused on building a food
delivery business and major
transformation projects.
Nick brings his expertise
in growth strategy, M&A,
business development and
change in the consumer
and leisure space to the
Executive Committee.
During his time at The Gym
Group, Nick has been crucial
in the development of the
strategic direction of the
business and delivers a more
forward-looking approach to
decision-making to evaluate
and seize new growth
opportunities.
Tina Koehler
Chief Commercial Officer
Career
Tina joined The Gym Group
as Chief Commercial Officer
in September 2024, leading
the Commercial Marketing
Team, and with lead
responsibility for member
and revenue growth. Tina has
over 20 years of experience,
including senior commercial
and marketing roles at
Procter & Gamble, Amazon
and Audi. Prior to joining
The Gym Group, Tina was
chief marketing officer
at Deliveroo.
Tina has extensive marketing
and commercial experience
to help drive business growth.
At The Gym Group, Tina is
responsible for marketing
and brand proposition,
pricing and promotion,
commercial proposition and
portfolio, as well as PR and
communications.
Hamish Latchem
Chief Property Officer
Career
Hamish joined The Gym
Group as Chief Property
Officer in December 2024, to
lead the property, facilities,
and gym format teams.
Hamish joined The Gym
Group from ALDI, where he
spent the previous 13 years,
and was National Store
Development Director.
Hamish brings valuable
property and operational
experience to deliver on
the Company’s accelerated
strategic growth plans.
At The Gym Group, Hamish
is responsible for property
acquisition, facilities and
estate management,
sustainability, as well as
gym format and design.
How the Board and Executive Committee work together
The Board and Executive Committee work together to ensure the robust governance of the business and successful
execution of our strategy. Over the year, the Board and Executive Committee continued to work closely on delivering
transformational change projects in strategy and the consumer proposition with a focus on ensuring that the Group
is well resourced, motivated and driven by our purpose to break down barriers to fitness for all.
Will Orr, CEO and Luke Tait, CFO are also members of our Executive Committee and their biographies are
on page 66.
During the year, Catherine
Ferma and Jon Baker were
appointed to the Executive
Committee following Ann-
marie Murphy’s resignation
as COO in January 2024.
Tina Koehler also joined
as Chief Commercial
Officer in September 2024
and Hamish Latchem
was appointed as Chief
Property Officer following
David Melhuish’s retirement
in December 2024.
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Governance report
Corporate Governance report
Governance structures as at 31 December 2024
Nomination
Committee
See report on
pages 80 to 83
Audit and Risk
Committee
See report on
pages 84 to 89
Sustainability
Committee
See report on
pages 90 to 91
Remuneration
Committee
See report on
pages 92 to 109
Board leadership and
Company purpose
Governance
Role of the Board
The Board is the principal decision-making body in the
Group. It is collectively responsible for promoting the
long term success of the business for the benefit of its
shareholders, achieving this through the creation and
delivery of sustainable shareholder value.
The Board also carefully considers its wider stakeholders,
including colleagues, members and suppliers, when making
decisions. Further information can be found in our Section
172 statement on pages 75 to 79.
In addition to setting the strategy of the business and
overseeing its implementation by management, the
Board provides leadership to the business on purpose,
culture, values and ethics, sustainability, monitoring overall
financial performance of the business, and ensuring
effective corporate governance, succession planning and
stakeholder engagement. The Board is also responsible
for ensuring that effective internal control and risk
management systems are in place. The matters reserved
for the Board can be found on our website.
Board Committees
The Board has formally delegated certain governance
activities to its Board Committees to assist with fulfilling
its responsibilities, as outlined in the table below.
The Board
The schedule of matters reserved for the Board includes the consideration and approval of:
the Group’s strategic aims,
objectives and commercial
strategy;
review of performance relative
to the Group’s business plans
and budgets;
major changes to the Group’s
corporate structure, including
acquisitions and disposals;
material capital expenditure;
the financial statements,
Group dividend policy and
interim results;
major changes to the capital
structure, including tax
and treasury management;
major changes to accounting
policies or practices;
the system of internal control
and risk management;
the Group’s overall risk appetite;
and
the Group’s corporate
governance and compliance
arrangements.
Board Committees
The Board formally delegates certain matters to the Committees set out below.
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Division of responsibilities
The Board and its Committees have a scheduled
programme of meetings aligned to the updated strategy, to
ensure that sufficient time is allocated to each key area and
the Board’s time is used effectively. As at 31 December 2024,
our Board comprised three independent Non-Executive
Directors, of which one acts as Senior Independent
Director, one non-independent Non-Executive Director,
two Executive Directors and the Chair of the Board. Each
of their responsibilities is listed on pages 71 to 72 and more
information on their specific contributions to the business
can be found in their biographies on pages 66 to 67.
The Chair of the Board and the Non-Executive Directors also
met without the Executive Directors being present, and the
Senior Independent Director held discussions with the
Non-Executive Directors without the Executive Directors
or the Chair of the Board being present.
Directors were made aware of the key discussions and
decisions made at each of the four principal Committees,
this included the Chair of each Committee providing
summaries of the key matters discussed at each of their
respective meetings at the next Board meeting.
On the occasion that a Director is unavoidably unable to
attend a scheduled meeting, they receive a briefing from the
respective Chair, so that their comments and input may be
taken into account at the relevant meeting, and the Chair
provides an update to them after the meeting.
There is sufficient flexibility for items to be added to the
agenda, which enables the Board to focus on key matters
relating to the business at the right time.
Roles and key responsibilities
Chair of the Board
John Treharne was appointed
Chair of the Board in July 2022.
His responsibilities include:
The leadership, effectiveness and governance of the Board.
Setting the agenda, style and tone of Board discussions with a particular
focus on strategic matters.
Ensuring each Non-Executive Director makes an effective contribution
to the Board.
Ensuring that the Directors receive accurate, timely and clear information.
Chairing the Nomination Committee.
Promoting a culture of openness and debate.
Facilitating constructive Board relations.
Chief Executive Officer (‘CEO’)
Will Orr’s responsibilities as
Chief Executive Officer include:
Proposing the strategic objectives of the Group for approval by the Board
and delivering the strategic and financial objectives in line with the agreed
purpose and strategy.
Leading the Executive Committee and senior management in managing the
operational requirements of the business.
Providing clear and visible leadership of our shared values.
Responsibility for the effective and ongoing communication with colleagues
and shareholders.
Chief Financial Officer (‘CFO’)
Luke Tait’s responsibilities as
Chief Financial Officer include:
Working with the CEO and Executive Committee to develop and implement
the Group’s strategic and financial objectives in line with the agreed purpose
and strategy.
Ensuring that the Group remains appropriately funded to pursue the
strategic objectives.
Investor relations activities and communications with shareholders.
Monitoring the financial performance of the Group.
Financial reporting including the preparation of the Annual Report
and Accounts.
The Gym Group plc | Annual Report and Accounts 2024
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Senior Independent Director (‘SID’)
Elaine O’Donnell became the
SID in January 2024. Elaine’s
responsibilities include:
Acting as a sounding board for the Chair of the Board and serving as an
intermediary for the other Directors as necessary.
Acting as lead independent Non-Executive Director.
Leading the Non-Executive Directors in the performance evaluation of the
Chair of the Board, with input from the Executive Directors.
Meeting with shareholders in the event that the Chair of the Board or the
Executive Directors are unavailable and where otherwise appropriate.
Non-Executive Directors
Responsibilities of the Non-
Executive Directors include:
Constructively challenging management proposals and providing advice
in line with their respective skills and experience.
Helping develop proposals on strategy.
Having a prime role in appointing and, where necessary, removing
Executive Directors.
Contributing to succession planning at Board and senior management levels.
Company Secretary
The Company Secretary’s
responsibilities include:
Supporting the Chair of the Board and the Non-Executive Directors with
their responsibilities.
Advising on regulatory, compliance and corporate governance matters.
Facilitating individual induction programmes for Directors and assisting with
their development as required.
Communications with shareholders and organisation of the AGM.
Keeping a record of Board and Committee discussions and tracking actions.
Board meetings
The Board’s programme of meetings allows key areas of focus to be established and reviewed on a regular basis. Scheduled
Board meetings are predominantly held in person, with additional virtual and hybrid meetings facilitated where required.
Management teams and colleagues attend to support the Board’s assessment of performance, discuss progress and agree
key priorities.
The below table shows the attendance of Directors at scheduled Board meetings in 2024.
Board
Nomination
Committee
Audit and Risk
Committee
Sustainability
Committee
Remuneration
Committee
John Treharne 8/8 3/3 N/a 3/3 N/a
Will Orr 8/8 N/a N/a 3/3 N/a
Luke Tait 8/8 N/a N/a N/a N/a
Wais Shaifta
1
7/8 2/3 5/5 3/3 3/3
Ann-marie Murphy
2
0/8 N/a N/a N/a N/a
Elaine O’Donnell 8/8 3/3 5/5 3/3 3/3
Richard Stables
3
8/8 2/3 N/a N/a N/a
Simon Jones 8/8 3/3 5/5 3/3 3/3
1 Due to illness, Wais Shaifta was unable to attend meetings of the Board and the Nomination Committee on 8 February 2024. He attended all other meetings
during the year.
2 Ann-marie Murphy stood down from the Board on 31 January 2024.
3 Due to an administrative error, Richard Stables did not attend a meeting of the Nomination Committee. He attended all other meetings during the year.
Roles and key responsibilities continued
Governance report
Corporate Governance report continued
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Director independence
In line with the Code, John Treharne, Chair of the Board,
was not deemed independent on appointment given he
is the founder of The Gym Group and having previously
been an Executive Director of the Company. Non-Executive
Directors Wais Shaifta, Elaine O’Donnell and Simon Jones all
of whom served during the year, were deemed independent
on, and during, their appointments. As a result of his
connections with one of the Company’s major shareholders,
Richard Stables was not considered independent on
appointment to the Board.
The independence of the Non-Executive Directors is closely
monitored by the Board on an ongoing basis.
How the Board spent its time
The Board measures the time spent on strategy, financial,
governance and operational performance at each
meeting. The biggest part of the Board’s time was spent on
strategy, followed by financial, governance and operational
performance, which the Board considers to be appropriate.
Minutes of all Board and Committee meetings are taken by
the Company Secretary and circulated for comments and
approval. Any concerns raised, or challenges made, by a
Director are recorded in the minutes.
The following sets out the key areas of focus for the Board
during the year:
Strategy
Strategy review and approval
Site approvals and pipeline reviews
Consideration of ESG and sustainability matters
Performance management and talent review
of executive management
Functional reports including People, Operations
and Health and Safety
Trading environment reviews and consideration
of market conditions
Stakeholder engagement including feedback
received from investors, employees and other
key stakeholders
Pricing and member plan reviews
Financial
Business performance, including trading updates
and the market’s response to announcements
Preparation of the Annual Report and Accounts,
including full and half year announcements
Engagement with the Group’s banks
Updates on capital markets activities
Budget and financial planning
Technology
Improved app and mobile web experience
Technology investment and improvements
Governance
Approval of the Annual Report and Accounts
Onboarding and development of Directors
Succession planning and review of Board
performance and composition
Diversity and inclusion matters
Risk management and internal control
Remuneration policy considerations
Board skills and composition
Information and support
An agenda and accompanying papers are circulated to
the Directors prior to the relevant meeting, usually a week in
advance, via a secure digital platform. Given the fast-paced
nature of the business, certain relevant information, such
as the latest trading data up to the prior day, is shared
with Directors at Board meetings. These include reports
from Executive Directors on their areas of responsibility
and additional reports from other members of senior
management and external advisers. Members of senior
management are often invited to present relevant matters
to the Board. All Directors have direct access to senior
management should they require additional information
on any of the items to be discussed, and the Company
Secretary, should they wish to discuss governance,
procedural or administrative matters. The Board and the
Audit and Risk Committee also receive regular and specific
reports to allow the monitoring of the adequacy of the
Group’s system of risk management and internal control
(further details may be found in the Report of the Audit and
Risk Committee on pages 84 to 89).
The information supplied to the Board and its Committees
is kept under review and is formally assessed on an annual
basis as part of the Board performance review to ensure
it remains relevant and enables sound decision-making.
Further details on the 2024 internal Board performance
review may be found in the Report of the Nomination
Committee on pages 80 to 83.
Training and development
The Group has developed an induction programme to
provide new Directors with a formal and tailored orientation
that includes visiting several operational locations. The
Board and Committees’ agenda items include the briefing
of Directors on a wide range of topics, such as corporate
governance, legal and regulatory requirements.
Additionally, Directors have access to the advice and
services of the Company Secretary and independent,
and professional external advice at the Group’s expense,
should they determine that this is necessary to discharge
their duties.
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Election and re-election of Directors
The Board considers all Directors to be effective, committed
to their roles and to have sufficient time to perform their
duties. In accordance with the Articles of Association, all
Directors will offer themselves up for re-election at the
Company’s AGM in May 2025 (‘2025 AGM’).
All of the Directors have service agreements or letters of
appointment in place and the details of their terms are
set out in the Report of the Remuneration Committee.
The service agreements and letters of appointment will be
available for inspection at the Company’s registered office
during normal business hours from the date of the Notice
of the 2025 AGM until the conclusion of that meeting.
On the date of the 2025 AGM, they will also be available
at the meeting venue for inspection.
Directors’ conflicts of interest
No Directors took on additional significant commitments
during the year, which impacted their ability to carry out
their duties to the Company. All Directors acted in line with
the Group’s Conflicts Policy.
As at 31 December 2024 and the date of this report, none
of the Directors held a material interest in any contracts
that the Company, or any subsidiary undertaking of the
Company, is a party to.
Relationship with shareholders
Ensuring a satisfactory dialogue with shareholders and
receiving reports on the views of shareholders is a key
matter reserved for the Board.
The Board is committed to maintaining good communications
with existing and potential shareholders. During the year,
there was regular dialogue with institutional shareholders
in order to develop an understanding of their views, which
were communicated back to, and discussed with, the Board.
These discussions were primarily led on separate occasions
by the Chair of the Board, the Senior Independent Director,
the Remuneration Committee Chair and the Executive
Directors and covered strategy, Board composition,
business performance, results (at the year end and half
year), audit and remuneration matters.
Presentations were delivered to analysts and investors as
part of the annual and interim results roadshows by the
CEO and CFO. These presentations and further information
may be found in the investors’ section of the Group’s website
at www.tggplc.com. Management also conducted meetings
with institutions that focused on the retail shareholder base.
Additionally, the Board receives regular investor feedback
through our joint brokers, Deutsche Numis and Peel Hunt,
both in-person at Board meetings and from written
updates, as well as from our remuneration consultants,
PricewaterhouseCoopers, who provides updates to the
Remuneration Committee on institutional shareholders’ views.
A timetable for press engagements on commercial and
corporate matters is managed through our public relations
adviser, Instinctif Partners.
Governance report
Corporate Governance report continued
The Gym Group plc | Annual Report and Accounts 2024
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Other
informationOverview
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report
Strategic
report
Governance report
Section 172 statement
Section 172 (‘s172’) of the Companies Act 2006 imposes, on the Company’s Directors, a duty to act in
the interests of a broad range of stakeholders. A summary of how the Board complied with this duty
is set out below and in the Directors’ report on page 112.
Who they are and
why they matter
How we engaged
during 2024
Outcomes of that
engagement
Impact on Board
decision-making
Shareholders
Our shareholders
provide capital
for growth, as well
as challenge and
feedback on our
business model and
strategic plans. In
exchange we aim to
provide long term
capital growth and
a fair, balanced and
understandable
representation
of the Company’s
and the Group’s
strategy and
performance.
Regular calls and meetings
with our current and
prospective shareholders
on strategy, financial
performance and
governance matters.
Consultation with major
shareholders on the
revision of the Directors’
Remuneration Policy.
Annual General Meeting.
Presentations given to
shareholders on the release
of annual and interim results,
the Group’s revised strategy
and ESG plans and targets.
Radio presentations
and news articles on the
Company’s operations,
promotions and results.
Site visits with current and
prospective shareholders, as
well as for broker education.
Feedback from our joint
brokers following investor
engagement and reports
on market trends.
Reporting to the Board as a
whole on investor matters.
Our shareholders are
better informed about
our business and long
term strategy and
we gain insight into
their views.
Increased analyst
coverage, which aids
investors’ understanding
of the strategy and
performance.
The approval and
implementation of a
Directors’ Remuneration
Policy that is better
aligned to the Company’s
Next Chapter growth
plan. It is noted that
more than 20% of
shareholders’ votes
were received against
the relevant resolutions
at the 2024 AGM. A
statement has been
published on the
Company’s website
disclosing our follow
up actions.
Shareholders’ views were
taken into consideration,
alongside other relevant
factors, in the Board’s
decisions:
On the Group’s Next
Chapter growth plan,
see page 16 of the
Strategic report.
Not to recommend a
dividend in respect of
the financial year 2024,
see page 29 of the
Strategic report.
On succession planning
for the Chair of the
Board, as disclosed
in the Report of the
Nomination Committee
on page 81.
On changes to the
Directors’ Remuneration
Policy and TGG
Incentive Plan as
reported in the 2023
Annual Report and
Accounts.
To appoint a new
external auditor, see
the Report of the Audit
and Risk Committee on
pages 87 to 88.
The Gym Group plc | Annual Report and Accounts 2024
76 |
Governance report
Section 172 statement continued
Who they are and
why they matter
How we engaged
during 2024
Outcomes of that
engagement
Impact on Board
decision-making
Employees
Our employees
define our culture
and values.
Fostering an
engaged workforce
is central to our
strategy, enabling
us to continue
our delivery of
exceptional service
that keeps us at
the forefront of our
sector. Our friendly,
inclusive and
people-centred
culture continues
to be a key part
of our success.
Employee engagement
surveys.
Annual and half year
performance reviews
and objective setting.
Employee listening
sessions with the Workforce
Engagement Director.
Annual conference for gym
support and gym managers
to share information about
the Company’s future plans
and engage with, energise
and recognise our teams.
Monthly all staff hybrid
business updates.
Learning and development
training modules and self-
improvement seminars.
Reports from the Executive
Committee and senior
leadership team to Board.
Through our Accelerate
PT and Emerging Talent
Programmes and The Gym
Group Academy. Further
details on employee
engagement can be found
in the Sustainability report
on pages 34 to 45.
Our ‘people first’
approach contributed
to our high engagement
scores (96% response
rate and a high employee
engagement score
placing us in the top 5%
of consumer services
benchmarking).
We continue to have
successful outcomes
from our Accelerate PT
and Emerging Talent
programmes and The
Gym Group Academy.
The Gym Group was
named in The Sunday
Times’ Best Places to
Work 2024 in the big
organisation category,
scoring highly on
diversity and inclusion,
wellbeing and job
satisfaction.
Employees’ views were
taken into consideration,
alongside other relevant
factors, in the Board’s
decisions on:
The relocation of
our head office to
Clapham Junction.
Revisions to our
employee talent
management and
performance review
processes.
Appropriate workforce
engagement plans for
the year.
Employee benefits,
including the recent
implementation of
doctorline, where our
employees now have
access to a general
practitioner 24/7,
over the phone.
The Gym Group plc | Annual Report and Accounts 2024
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Strategic
report
Who they are and
why they matter
How we engaged
during 2024
Outcomes of that
engagement
Impact on Board
decision-making
Members
Our members
help to create
and grow demand
for our services.
Their feedback is
invaluable in our
ongoing efforts to
evolve the quality
of our offering,
so it remains
safe, accessible,
affordable and
highly desirable,
delivering on
our purpose of
breaking down
barriers to fitness
for all.
Members’ overall satisfaction
(‘OSAT’) scores.
Customer satisfaction
(‘CSAT') scores, which relate
to feedback on the quality
of our customer service
channels.
Gym induction reviews logged
through The Gym Group app.
Google reviews.
We now offer HYROX
training classes in 120
of our gyms, which are
included as part of those
membership packages.
We have and continue to
review the interior design
of our gyms to create
an optimal workout
space our members can
enjoy. This is visible in
our new gym sites and is
gradually being rolled
out in our existing estate.
We revamped our
student product so
that membership is now
available on a 6, 9 or 12
month basis in addition
to our usual membership
packages.
We’ve improved our
customer response times
including automated
responses where
beneficial.
We regularly review
OSAT and CSAT scores
at Board meetings and
use this feedback to
identify ways in which
our member experience
can be improved.
The Gym Group plc | Annual Report and Accounts 2024
78 |
Governance report
Section 172 statement continued
Who they are and
why they matter
How we engaged
during 2024
Outcomes of that
engagement
Impact on Board
decision-making
Suppliers
Our partnerships
with our suppliers
ensure we source
the best value
goods and services
for the benefit of
our members.
High standards of
ethics and business
conduct is an
important part of
being a responsible
member of the
communities in
which we operate.
We publish our Payment
Practices reports twice a
year, which are available
on the government website.
Engagement by the
Board and Audit and
Risk Committee with our
corporate brokers and
external auditor, respectively.
The external audit tender
process.
Meetings between members
of the Board, Executive
Committee and key suppliers
such as our corporate
advisors, main equipment
suppliers and property
management companies.
Regular meetings between
the Company Secretary,
payroll and our share plans
administrator.
We maintain helpful and
positive relationships with
our suppliers including our
property management
companies. We take care
of our properties to a high
standard and undertake
our tenancy obligations
responsibly.
We contracted a new
vending machine supplier,
which we expect to provide
an improved service to our
members and better value
for the Company.
The appointment of Grant
Thornton UK LLP as our
new external auditor for
the financial year ending
31 December 2025, see the
Report of the Audit and
Risk Committee on pages
84 to 89 for more details.
The Board and its
Committees benefit
from the specialised
knowledge and services
of its suppliers, especially
corporate advisers, which
helps them make better
informed decisions.
Communities
Being a valuable
part of the
communities in
which we operate is
hugely important
to us. Providing
safe, inclusive and
affordable facilities
is the foundation
of fulfilling our
purpose. We
are proud that
members exercising
in our gyms
creates Social
Value for their local
communities.
Our low price model makes
fitness more affordable and
accessible, enabling a larger
proportion of the population
to benefit from exercise.
We have a national charity
partnership with NHS
Charities Together to raise
funds for NHS charities
around the UK. Our employees
have two paid volunteer days
per year which we encourage
them to use either with
local NHS charities or other
community-based projects.
We work closely with local
authorities to ensure our
gyms are safe places
for communities to visit,
partnering with two primary
authorities for health, safety
and environmental matters
and fire safety.
Recruiting from a diverse
pool of candidates to ensure
our workforce is reflective
of the communities in which
we operate including our
leadership, where currently
13.8% are from Black, Asian,
Mixed and other ethnic
communities.
Outcomes of our
engagement can
be found in the
Sustainability report
on pages 34 to 45.
The Board recognises
the importance of
contributing to wider
society and considers it
a vital part of achieving
our purpose.
The Board considers the
long term impact of its
operations as part of its
sustainability strategy
and has set up a
Sustainability Committee
that meets at least
three times per year
and reports directly
to the Board.
The Board considers
diversity to be a focus
for succession planning.
See the Board’s position
on diversity on pages
81 to 83.
The Gym Group plc | Annual Report and Accounts 2024
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Strategic
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Who they are and
why they matter
How we engaged
during 2024
Outcomes of that
engagement
Impact on Board
decision-making
Environment
The quality of
our environment
is central to
society’s health
and wellbeing.
Protecting the
environment
and minimising
climate change
is a collective
responsibility and
we recognise that
we have to play
our part in their
achievement.
Our SBTi targets have been
validated and we are working
towards decarbonising our
Scope 1 and 2 emissions by
2035 and achieving net zero
by 2045. We have set out
our environmental strategy,
activities and initiatives.
During the year, we reviewed
the risks and opportunities
relating to climate change
and expanded our 2024
TCFD report.
See the Sustainability report
on pages 34 to 45
See the TCFD report
on pages 46 to 49
We are proud to be the
first gym chain in the
world with a validated
SBTi target. As part of
our net zero commitment
to SBTi we have also
committed to:
reducing Scope 3 GHG
emissions covering
purchased goods and
services, capital goods,
fuel and energy-related
activities, upstream
transportation
and distribution,
waste generated in
operations, business
travel, and employee
commuting by 55% per
gym by 2030 (from the
2019 base year); and
ensuring that 25% of
our suppliers by spend,
covering purchased
goods and services and
capital goods, will have
science-based targets
by 2028.
Through these
engagement methods
the Board and Executive
Committee become
better informed and
capable of identifying
and addressing the
immediate and longer
term climate-related
impacts on the business.
Having clear targets
means the Board and the
Sustainability Committee
are able to determine
suitable methods of
achievement and to
effectively monitor
progress.
Lending banks
Our lending banks
provide funds for
growth and day-to-
day working capital
to enable us to
operate and grow
our business to its
full potential.
Management held a number
of meetings with the lending
banks in early 2024, to
discuss the Group’s Next
Chapter growth plan, three
year financial plan and
current trading performance,
with a view to agreeing new
banking facilities.
During the year, we provided
regular updates on the
Group’s financial and trading
performance, including
performance against agreed
debt covenants.
Representatives from the
lending banks are invited to
our half year and full year
results presentations.
On 28 June 2024, the
Group agreed a new
facilities agreement
with the same banking
syndicate, which came
into effect on 1 July
2024. Under the new
agreement, the Group
has in place a combined
£90m facility, consisting
of £45m of Term Loan
and £45m of RCF. The
new facility is due to
mature in June 2027.
See the Financial
review on pages 24
to 31
See the Report
of the Audit and
Risk Committee on
pages 84 to 89
In financial plans
discussed by the Board,
analysis is presented on
how these plans would
impact debt covenants in
order to ensure that the
interests of the lending
banks are protected.
The Board’s annual going
concern and viability
assessment is performed
with specific reference to
the level of borrowings
required under different
scenarios and the impact
of such scenarios on
debt covenants.
80 |
The Gym Group plc | Annual Report and Accounts 2024
Governance report
Report of the Nomination Committee
Committee members
Chair of the Committee John Treharne
Committee
members
Wais Shaifta
Elaine O’Donnell
Richard Stables
Simon Jones
Number of meetings
held in 2024 3
“We are confident that the
Board is well placed to foster
strategic growth and will
continue to strengthen our
position for the future.”
John Treharne | Chair of the Nomination Committee
Dear Shareholder
I am pleased to present the Report of the
Nomination Committee (the ‘Committee’),
and to report on developments since last year.
Role and responsibilities
The role of the Committee is to develop and maintain a
formal, rigorous and transparent procedure for making
recommendations on appointments and reappointments
to the Board. In addition, it is responsible for reviewing the
succession plans for Executive and Non-Executive Directors
and senior management. This involves:
keeping under review the leadership needs of the Group,
both Executive and Non-Executive, with a view to ensuring
the continued ability of the Group to compete effectively
in the marketplace;
regularly reviewing the performance, structure, size
and composition of the Board to ensure it has an
appropriate balance of skills, diversity, experience,
knowledge and independence, and reporting and
making recommendations to the Board with regard
to any changes; and
regularly assessing the knowledge, skills and experience
of individual Board members and reporting those results
to the Board.
Committee areas of focus in 2024
Leading the search for a new independent Non-
Executive Director of the Board. As at the date of
this report the search is ongoing and is expected
to conclude before the upcoming AGM.
Reviewed the performance and composition of the
Board and its Committees and discussed succession
plans for the Chair of the Board, the Executive
Committee and the senior management team.
Reviewed progress on diversity and inclusion initiatives,
including the formalisation of a Board Diversity and
Inclusion Policy (available on the Group’s website),
which was approved by the Board on the Committee’s
recommendation.
Reviewed the strategies in place to develop and retain
talent, in particular, a newly created reverse mentoring
and coaching programme.
Reviewed and implemented changes for the
Non-Executive Directors’ appraisal process.
The Gym Group plc | Annual Report and Accounts 2024
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Succession planning at Board level
The Committee has put in place orderly succession plans
for both Executive and Non-Executive Directors taking
into account short, medium and long term considerations,
governance requirements and the balance of skills,
knowledge and experience required on the Board.
The Committee will keep this process under regular review.
During 2024, the Senior Independent Director held
discussions with other members of the Board and major
shareholders on tenure and succession plans for my role
as Chair of the Board, and led discussions on the matter
at Committee level. Directors and the Committee are
unanimous in their support of my continuation as Chair
of the Board for the short to medium term and concluded
that “(1) John brought stability to the Board, in his capacity
as Chair of the Board, during significant strategic and
managerial changes in 2023; (2) the existing Board dynamic
remains effective; and (3) John’s unrivalled knowledge of
TGG and the fitness industry continues to be of significant
value to the Board and the business.” The matter will be kept
under regular review by the Committee. Shareholders were
supportive subject to ongoing development of a robust
Board Chair succession plan.
We are in the process of recruiting an additional
independent Non-Executive Director to replace Emma
Woods and David Kelly, who both stepped down from the
Board in 2023, to ensure that we have adequate bandwidth
as well as the right balance of skills and expertise on the
Board. The appointment will be disclosed through the
appropriate channels, once approved, and will be subject
to shareholder approval at the next AGM.
Succession planning beyond the Board
The Committee regularly reviews the composition and
succession plans in place for members of the Executive
Committee and their direct reports. The Committee received
a report on the future model, capability and succession
planning for key roles within the wider business, focusing on
the Executive Committee and the senior management team
with ongoing resource requirements in mind.
In addition, the CEO regularly briefs the Board about the
performance of individual Executive Committee members
and any changes that he proposes to make to this team.
Whilst this activity does not take place formally within the
meetings of the Committee, it does form part of its work in
overseeing Executive Committee development, the overall
succession process and the pipeline of talent available for
succession to the Board.
Board members have regular contact with members of the
Executive Committee and the wider senior management
team, through formal Board presentations, attendance at
annual strategy days, and regular visits to the head office
and other Group sites, when Non-Executive Directors meet
the team on a less formal basis. Non-Executive Directors
also mentor and provide guidance to members of the
Executive Committee and the senior management team,
subject to the specific requirements of the mentee.
During the year, Alison Sagar left the business and was
succeeded by Tina Koehler who joined as Chief Commercial
Officer in September 2024. David Melhuish retired at the end
of December 2024 and was succeeded by Hamish Latchem
who joined the business as Chief Property Officer on
9 December 2024. Jon Baker and Catherine Ferma also
joined as acting members of the Executive Committee in
their roles as Operations Directors in early 2024 to replace
Ann-marie Murphy, who resigned in January 2024.
Their appointments were made official with effect from
January 2025. Further details on the new members of the
Executive Committee may be found in their biographies
on pages 68 to 69.
Diversity and inclusion
Our Group Diversity and Inclusion Policy states that no
individual should be discriminated against on the grounds
of age, disability, gender reassignment, marriage and civil
partnership, pregnancy and maternity, race (which includes
colour, nationality and ethnic or national origins), religion
or belief, sex or sexual orientation. Our policy is reflected in
our approach to recruitment at all levels and is stated in our
employee handbook which forms part of our employees’
service contracts.
During the year we also formalised our Board Diversity
and Inclusion Policy, which was approved by the Board and
will be reviewed on an annual basis. The objectives set out
in the policy are aligned with the FCA’s Listing Rules and
governance best practice, progress against which is set out
overleaf. The policy can be found on the Group’s website.
We will be publishing our annual Gender Pay Gap report
on our website in March 2025. Our mean gender pay gap
is 9.4% (versus 0.6% in 2023). Our median pay gap remains
consistent with 2023 reporting as most of our employees
undertake the same role and are therefore on the same
pay-rate, regardless of whether they are male or female.
Our Gender and Ethnicity Pay Gap reports, will provide
further details on our figures and the actions we are taking
to address these gaps.
The Gym Group plc | Annual Report and Accounts 2024
82 |
Governance report
Report of the Nomination Committee continued
Board diversity objectives Progress
To continue to adopt a formal, rigorous and transparent
process, taking into account diversity and inclusion, when
considering the appointment of Directors. The Board is
committed to using search firms that access talent from
wide and diverse pools and whose values and approach
in identifying and proposing suitable candidates, are
aligned with the policy.
The Committee’s terms of reference codifies its existing
procedures for the appointment of new Directors, which
are in line with best practice guidance. Board succession
plans from a short, medium and long term view were also
reviewed by the Committee.
To achieve and maintain, with respect to gender and
ethnic diversity at Board and Committee levels, any legal
and regulatory requirements particularly under the FCA’s
Listing Rules, recognising that unexpected changes in
Board composition may result in temporary periods when
this balance is not achieved.
At 31 December 2024:
14% of the Directors on the Board were female and 86%
were male.
A female held a senior position on the Board as Senior
Independent Director.
One Director on the Board was from a culturally diverse
background.
33% of the Executive Leadership team were female and
67% were male.
To monitor progress in ensuring that a suitable number of
roles are held by women and persons from ethnic minority
backgrounds, at the Executive Committee level and below.
As is the annual practice, the Chief People Officer presented
a report setting out its analysis of employee positions held
by women and persons from an ethnic minority, as well as
gender and ethnicity pay gaps across all levels of the Group.
To continue to facilitate a culture of inclusivity among
Board and Committee members and to encourage active
contributions from all Directors, recognising that a clear
tone and example must be set at Board level.
Following the internal Board performance review conducted
earlier in the year, it was found that the culture and dynamics
of the Board, Directors’ individual performance and meeting
discussions continued to be effective and were in line with
the Company’s core values. These and other related matters
will continue to be reviewed on an annual basis.
The Committee recognises that we did not meet the
recommendations in Listing Rule 6.6.6 (9) (a) (i) – the
requirement to have at least 40% of Board appointments
held by women. As previously mentioned, the search for a
new independent Non-Executive Director is underway, with
diversity, merit based criteria and other relevant factors
at the forefront of those deliberations. The Committee
acknowledges that the composition of the Board is a matter
that needs to be kept under review, especially in light of the
diversity element, and will continue to evaluate the size and
balance of the Board throughout 2025.
As at 31 December 2024, we had a total of 31% (582) and
69% (1,269) female and male employees, respectively.
The Executive Committee’s direct reports, comprising our
senior leadership team and certain heads of departments,
have 38% (eight) female and 62% (thirteen) male members.
We believe we are making progress towards a more diverse
leadership in all areas, including gender and cultural
diversity, and are working towards a more representative,
diverse Board to reflect our workforce. We continue our
commitment to diversity and inclusion by reviewing progress
against our equality, diversity and inclusion pledges and
projects, which are aligned with our purpose of breaking
down barriers. Details of relevant initiatives can be found
on pages 40 to 41.
The demographic data sets (including special categories
of data) collected from employee and candidates for the
purpose of equal opportunities monitoring and reporting,
are built into our HR information system (Workday) and
processes. Information on why we collect this data and how
we process it is outlined in our Privacy Notices and is made
available at the point of disclosure along with a request for
consent and agreement to the terms and conditions. Within
the candidate/employee onboarding journey, individuals
are asked to complete a diversity and inclusion form within
Workday. Disclosures within this form are voluntary, with
all data categories having the option of ‘prefer not to say’
(with the exception of gender). Data is stored securely
against the employees’ personal records with visibility
restricted to select members of the People team. Custom
dashboards and reports have been built within Workday
to collate employee data and enable real time reporting.
Through collecting data in this way, we are also able to
build notifications within Workday enabling us to carry
out periodic data drives to employees with incomplete
data sets, requesting them to complete the diversity and
inclusion form.
The Gym Group plc | Annual Report and Accounts 2024
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statements
Other
informationOverview
Governance
report
Strategic
report
The Group has collected the following data on the composition of the Board and Executive management relating to gender
identity, sex and ethnic background, as at 31 December 2024, as set out in the following tables:
Gender identity or sex of Board and Executive Committee members
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and Chair
of the Board)
Number in
Executive
Committee
Percentage
of Executive
Committee
Men 6 86% 3 6 67%
Women 1 14% 1 3 33%
Ethnic background of Board and Executive Committee members
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and Chair
of the Board)
Number in
Executive
Committee
Percentage
of Executive
Committee
White British or other White
(including minority-white groups) 6 86% 4 9 100%
Asian/Asian British 1 14% – – –
Governance processes
The Committee meets at least twice a year and at such
other times as the Chair or any member of the Committee
may request. In 2024, the Committee met on three
occasions and attendance at those meetings is shown
in the table on page 72.
The Committee has formal terms of reference: which can be
viewed on the Group’s website: www.tggplc.com. During the
year, the Committee reviewed these terms of reference and
made minor updates in line with the Code and best practice.
Board effectiveness review
The key recommendation arising from the 2023 internal
Board performance review was for the Board to assess the
effectiveness of our workforce engagement arrangements.
Given the recent and ongoing implementation of colleague
listening sessions between myself, as the Workforce
Engagement Director, and various cohorts across the UK,
the review has been deferred to 2025.
During 2024, an internal Board performance review was
conducted by anonymous questionnaire and the process
facilitated by the Company Secretary. Actions were
identified and discussed at the February 2025 Committee
meeting and reported at Board level. The review focused
on the Board and its Committees’ composition, skills and
behaviours, governance processes and support, activities
undertaken during 2024 and short and medium term
strategic priorities. For the Board, the questionnaire also
focused on matters relating to strategy, risk, governance
and investor and stakeholder engagement.
The key action arising from the 2024 internal performance
review was for the Board to review its approach to medium
and long term strategy discussions. This action is currently
underway and an update will be disclosed in the 2025
Annual Report and Accounts.
Individual appraisals of the performance of the Non-
Executive Directors were also conducted and reviewed
by the Chair of the Board, with feedback from the CEO
and CFO.
Additionally, in January 2025, the other members of the
Board, led by the Senior Independent Director, completed
a review of my performance as Chair of the Board with
respect to the reporting period, and concluded that I
remained effective in that capacity.
Based on the outcome of the review and that the Directors
continue to make valuable contributions, exercise
independent judgement and dedicate adequate time to
their responsibilities, the Board, on the recommendation
of the Committee, has proposed the re-election of the
Directors at the 2025 AGM. We are confident that the Board
is well placed to foster strategic growth and will continue to
strengthen our position for the future.
All Directors are submitted for annual re-election subject
to continued satisfactory performance, which is assessed
each year.
John Treharne
Chair of the Nomination Committee
12 March 2025
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The Gym Group plc | Annual Report and Accounts 2024
Governance report
Report of the Audit and Risk Committee
Committee members
Chair of the Committee Elaine O’Donnell
Committee
members
Wais Shaifta
Simon Jones
Number of meetings
held in 2024 5
“I am pleased to continue the
Committee’s work to ensure
the effectiveness of the
Group’s systems and controls,
supporting the Company in
its next phase of strategic
ambition and growth.”
Elaine O’Donnell | Chair of the Audit and Risk Committee
Dear Shareholder
As Chair of the Audit and Risk Committee
(the ‘Committee’) I am pleased to present this
report for the year ended 31 December 2024.
This report is intended to provide shareholders
with insight into how key topics were considered
during the year, the activities of the Committee
and how the Committee discharged its
responsibilities in 2024.
The Committee fulfils a vital role in the Group’s governance
framework, providing valuable independent challenge
and oversight across the Group’s financial reporting,
risk management and internal control procedures.
The business performed strongly during the year, despite
the continuing challenging economic backdrop and
geopolitical instability, reporting strong financial results
and a robust year end balance sheet. Management has also
continued to make improvements to the internal controls
throughout the year and has undertaken a review of the
requirements of the revised Provision 29 in the 2024 UK
Corporate Governance Code (the ‘Code’), the findings of
which were presented to the Committee in November 2024.
A number of enhancements to the Group’s risk management
framework were also implemented during the year, details of
which can be found in the Principal risks and uncertainties
section of this Annual Report and Accounts.
I am pleased to report that the full year audit process has
been conducted according to plan and on time, and I would
like to thank the Finance team and Ernst & Young LLP (‘EY’)
for the planning and commitment that contributed to this.
As required by law, our external audit was put out to tender
at the end of 2024. Following a formal and competitive
tender process, the Board, on the recommendation of the
Committee, appointed Grant Thornton UK LLP (‘Grant
Thornton’ or ‘GT') as the Company’s new external auditor
for the financial year ending 31 December 2025.
Further details on the process may be found later in this
report. The Committee would like to thank EY for their
diligent service over the past ten years.
Composition and Governance of the Committee
The Committee currently comprises three independent
Non-Executive Directors who bring a wide range of
financial and commercial expertise relevant to our market.
Biographies for each Committee member are included on
pages 66 to 67.
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The Board is satisfied that as Chair, I have extensive, recent
and relevant financial experience and that the Committee
as a whole has a wide range of experience and competence
relevant to the sector in which the Group operates through
current and previous roles.
Whilst the management team and Chair of the Board
are not members of the Committee, a positive working
relationship is critical to the Committee’s proper function.
Only members of the Committee are entitled to attend
meetings, however standing invitations are extended
to the Chief Financial Officer, Chief Executive Officer,
Chair of the Board, the external auditor and other
Non-Executive Directors. In addition, the Committee also
invites other senior finance and business managers to
attend certain meetings where it is deemed appropriate.
The Company Secretary to the Board is also the Secretary
to the Committee.
Luke Tait, as Chief Financial Officer, has responsibility for
all aspects of financial reporting, internal control and
risk management. At the request of the Committee,
Luke has attended all Committee meetings and updated
the Committee on key matters.
In 2024, the Committee met on five occasions. Attendance
at those meetings is shown in the table on page 72. In March
2024 and 2025, the Committee held a private session with
the external auditor, EY, without members of management
being present.
The Committee has formal terms of reference which can
be viewed on the Company’s website: www.tggplc.com.
Role and responsibilities of the Committee
The Committee’s role is to assist the Board with the
discharge of its responsibilities in relation to financial
reporting, risk management and internal control.
This includes:
Reviewing the Group’s annual and half year financial
statements and accounting policies.
Monitoring the integrity of the Group’s financial
statements and related announcements, including
reviewing and challenging any significant financial
reporting judgements contained therein.
As requested by the Board, assessing whether the
Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the
information necessary for shareholders to assess
the Group’s position and performance, business model
and strategy.
Reviewing the Group’s risk management framework,
including principles, policies, methodologies, systems,
processes, procedures and people.
Advising on the Group’s risk appetite.
Monitoring compliance with internal control systems,
reviewing the overall effectiveness of the Group’s system
of internal control and risk management and making
recommendations to the Board for improvements
or developments.
Regularly reviewing the need for an internal audit
function to help evaluate the robustness of current
internal control systems.
Agreeing the external auditor’s engagement terms,
scope and fees, monitoring and reviewing the
effectiveness and independence of the external auditor,
and ensuring appropriate policies are in place to
protect independence.
Managing the audit tender process and advising on the
appointment of the external auditor and the extent and
fees for any non-audit services provided.
Reviewing the effectiveness of the Group’s whistleblowing,
anti-bribery and fraud prevention processes.
Committee areas of focus in 2024
The principal activities since the last report were as follows:
Review and recommendation for approval by the Board
of the 2024 half year results including the investor
presentation.
Review and recommendation for approval by the
Board of the 2023 full year results including the
investor presentation.
Consideration of significant accounting matters and
judgements in relation to the financial statements.
This included consideration of management’s approach
and the related comments of the external auditor.
Consideration and recommendation of the Group’s
going concern and viability statements.
Consideration of the Code requirements concerning fair,
balanced and understandable reporting.
Review of the 2024 Code requirements concerning
the revised provisions on risk management and
internal controls.
Consideration of the Group’s risk management review,
including assessment of the principal risks and risk
appetite statements, and approval of the Principal risks
and uncertainties report.
Assessment of the effectiveness of the Group’s risk
management and internal control systems.
Review of compliance with, and continuing suitability of,
the Committee’s terms of reference, approving minor
updates.
Oversight of the operation of the Group’s Whistleblowing,
Anti-Bribery and Anti-Corruption policies.
Review and recommendation for approval by the Board
of the Group’s Non-Audit Services Policy.
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Conduct of the external audit tender and
recommendation for approval by the Board of the
appointment of Grant Thornton as the Group’s new
external auditor for 2025.
Verification of the independence of the existing external
auditor, EY, and approving the scope of the audit plan
and the audit fees.
Discussions with the external auditor, without
management present.
Oversight of the biennial audit of our compliance with
the UK General Data Protection Regulations (‘GDPR').
Significant issues and judgements relating to the
financial statements
The Committee has the responsibility to monitor the
integrity of the Annual Report and Accounts and the
Interim Results, including a review of the significant financial
reporting matters and judgements contained in them.
At its meeting in September 2024, the Committee reviewed
a comprehensive paper prepared by the Finance Director,
which analysed the Group’s results for the half year and
highlighted any significant issues and judgements arising
in the preparation of the Group’s half year financial
statements. In early 2025, an updated paper was prepared
and reviewed, which supported the preparation of the
Group’s Annual Report and Accounts 2024. It also provided
information to support the Directors’ viability and going
concern statements. The Committee also considered a
paper prepared by the external auditor, which included
their findings in respect of the audit of the full year financial
statements and significant reporting and accounting
matters therein.
The most significant issues and judgements considered
by the Committee were as follows:
Annual impairment testing
Consistent with prior years, as part of the year end
procedures, management has tested goodwill for
impairment. In addition, it has assessed whether there are
any indicators of impairment in relation to tangible assets,
right-of-use assets and intangible assets, and where such
indicators are present, tested those assets for impairment.
The cash flow forecasts used in the assessment were based
on the Group’s three year financial plan, together with
assumed growth rates thereafter. A number of significant
judgements have been made by management in relation
to the impairment review process, the most judgemental
of which are considered to be the determination of cash
generating units (‘CGUs’) and the determination of the
discount rates to apply to the future cash flows generated
by each CGU.
The CGUs identified by management for both goodwill and
other asset impairment testing in 2024 are consistent with
those identified in the prior year and discussed in detail in
the Committee report that was included in the 2023 Annual
Report and Accounts. Nothing has come to light in the year,
or fundamentally changed in the way the business operates,
to suggest this would no longer be appropriate.
The discount rate applied to the CGU cash flows was
calculated by management using internal and external
data points and assumptions. As a result of changes
in the external rates of interest and the Group’s share
price performance, the pre-tax discount rate applied
has increased to 11.0% (2023: 10.4%).
As part of their audit procedures, EY reperformed
management’s impairment modelling, including the
key assumptions and inputs, and concurred with
management’s assessment.
The impairment testing methodology and key assumptions,
including CGU determination and discount rates, were
reviewed and considered by the Committee and the
Committee is satisfied that the impairment loss of £0.4m that
has been recognised in the Group’s financial statements
for 2024 is appropriate. Please refer to Notes 13 and 14 to
the financial statements for further information.
Going concern and viability
The Committee reviewed and considered the paper
prepared by management to support the going concern
assumption and longer term viability statement in the
financial statements. Consideration was given to the
assumptions made in both the base case and severe,
but plausible downside case, as well as additional risk-
based scenarios and reverse stress tests. The assessment
included a review of the principal risks facing the Group,
their financial impact and how they are managed, as well
as the adequacy and timing of renewal of the Group’s
bank facilities. Following a detailed review and discussion,
the Committee concluded that the Group has adequate
resources to continue in operational existence for the
period to 30 June 2026 (the going concern assessment
period) and that the Group remains viable.
Bank refinancing
On 28 June 2024, the Group agreed a new bank facilities
agreement with the same banking syndicate, which came
into effect on 1 July 2024. Under the new agreement, the
Group has in place a combined £90m facility, consisting of
£45m of Term Loan and £45m of RCF. The new facility is due
to mature in June 2027.
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As a result of the changes, the refinancing was assessed by
management to determine the accounting treatment based
on IFRS 9 requirements. The outcome from that assessment
was that the changes constituted a repayment of the old
loan and the establishment of a new facility at ‘arm’s length’.
The financial statements for 2024 reflect that outcome.
EY reperformed management’s calculations and concurred
with the treatment adopted.
As well as the key judgements noted above, the Committee
also reviewed and considered other accounting matters,
including the presentation of the non-underlying items
identified by management, the capitalisation of staff
costs, the accounting for the newly established Employee
Benefit Trust and the recognition of deferred tax assets.
In all instances, EY and the Committee were satisfied that
the accounting treatment adopted, and the classification
and disclosure in the financial statements were appropriate.
Please refer to Note 8 to the consolidated financial
statements for further information on non-underlying items.
There were no material matters requiring the Committee to
make amendments to the consolidated financial statements.
Fair, balanced and understandable
The Board recognises its duty to ensure that the Annual
Report and Accounts 2024, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the position,
performance, strategy and business model of the Group.
The Board has placed reliance on the following to form this
opinion:
The process by which the Annual Report and Accounts
2024 was prepared, including detailed project planning
and a comprehensive review process.
The review of the Annual Report and Accounts 2024 by
the Committee, placing reliance on the experience of the
Committee members.
Reports prepared by senior management regarding
critical accounting judgements and significant
accounting policies.
Discussions with, and reports prepared by, the external
auditor.
Regular financial information received throughout the
year, including monthly KPIs.
As detailed in the Directors’ responsibility statement on
page 113, each of the Directors has confirmed that, to the
best of each person’s knowledge and belief, the Annual
Report and Accounts 2024, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position,
performance, business model and strategy.
External auditor independence and effectiveness
The appointment of EY in 2015 was made having
considered their capabilities and experience. As part of
the annual reporting process, the Committee reviewed the
effectiveness and independence of the auditor by:
Reviewing the 2024 audit plan.
Discussing the results of the audit, including their views
on material accounting issues and key judgements
and estimates.
Meeting the auditor without management present
and understanding the extent to which the auditor
challenged management.
Considering the robustness of the audit process.
Meeting without the auditor present to consider
their performance.
Confirming the independence and objectivity of the
auditor through a review of formal reports presented
to the Committee and considering whether any
other conflicts of interest exist which might impact
independence.
Confirming that no non-audit work was undertaken.
Based on its review, the Committee concluded that EY
remained effective and independent.
External auditor rotation
EY was appointed as auditor on 28 July 2015. By law, the
external audit must be put to tender at least every ten
years. As a result, a formal and competitive tender process
was conducted towards the end of 2024 at the conclusion
of which the Board, on the Committee’s recommendation,
approved the appointment of GT as the Group’s external
auditor for the financial year ending 31 December 2025.
The process
A longlist of approximately ten audit firms was considered
by a working group established by the Committee to provide
support with the audit tender process. The group consisted
of the Committee Chair, CFO and other senior members of
the Finance team. The full Committee was kept apprised at
every stage of the process by the Committee Chair.
Having reviewed the existing auditor relationship, current
market regulations, best practice guidelines and completed
fee benchmarking, potential candidates were identified
and a Request for Proposal (‘RFP') document was prepared.
Interested and qualified audit firms were invited to submit
proposals (two large and two challenger firms, including
EY). Candidates met with the working group and relevant
members of the wider management and Finance teams.
Candidate’s proposals were then assessed against a
weighted scorecard and two audit firms shortlisted
by the working group to make formal presentations to
the Committee.
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Senior members of the Finance team and members of the
wider Board were invited to the Committee presentations.
Scorecards were used to assess the presentations.
Criteria included team experience and culture, industry
and business understanding, proactivity and innovation,
transition plans and quality assurance and independence.
The decision
Following extensive discussion, the Committee presented
both audit firms to the Board for consideration,
recommending the appointment of GT, given their strong
performance against the evaluation criteria. The Board
approved GT's appointment as the Group’s external auditor
for the financial year ending 31 December 2025, subject
to shareholders’ approval at the May 2025 AGM. GT's
onboarding is in process and includes shadowing EY during
the 2024 year end audit.
I can confirm that the Company has complied with
‘The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014’ during the financial year.
External auditor fees
During 2024, management agreed an increase in the audit
fees for the Group and subsidiary companies to £400,000
for the year ended 31 December 2024 (2023: £350,000).
The increase reflected additional regulatory demands and
a marginal increase due to inflation.
Non-audit services
In 2024, EY did not provide any non-audit services to the
Company or its subsidiaries.
In line with UK Independence Rules, the Committee is
responsible for approving all non-audit services provided
by the auditor. The Committee has a formal policy on the
supply of non-audit services by the Company’s auditor,
which was reviewed during the year to ensure its alignment
with the requirements of the UK Financial Reporting
Council’s Ethical Standards (2024). All non-audit
services carried out by the Company’s auditor are
to be pre-approved by the Committee.
Risk management
Our risk management process and the risks which are
considered to be the principal risks of the Group, are
detailed in the Principal risks and uncertainties section
on pages 50 to 60.
During the year, the Committee reviewed the Group’s risk
management process and methodology and considered
the principal and emerging risks identified by management,
together with the adequacy of any mitigating actions put
in place to reduce each risk. In addition, the Committee
reviewed and approved the risk appetite statements
included in the Annual Report and Accounts 2024, which are
linked to our corporate purpose and strategic ambitions
and embedded into the Group’s risk management process.
The Committee discussed the risk in relation to IT
dependency and agreed with management’s view that
this had temporarily increased as a result of the major
technology projects that are underway. Similarly, it
concurred that the risk around reputation, brand and
trust had increased, given the larger estate size and social
media presence. The Committee agreed that the risk in
relation to operational gearing had reduced, given the
enhancements made to existing controls, the improving
financial and operational performance of the business and
the introduction of a new bank facilities agreement.
The Committee also discussed the continued high likelihood
for cyber attacks in light of ongoing geopolitical events.
The Committee was satisfied with the mitigations in place
to manage cyber risk, which include: the completion of a
biennial GDPR audit (last audit held in August 2024); the
retention of PCI Level 2 compliance; the Chief Technology
Officer (‘CTO’) briefing the Board on information security
matters at least annually; all employees being required
to complete online training courses for data protection
and cyber security at least once a year; and an ongoing
programme of assessments and accreditations testing
the information security environment. There have been no
material information security breaches in the last five years.
The Group’s emerging risks of Climate change and AI
were discussed by the Committee as well as the increased
availability of weight loss drugs on the NHS, which has been
identified as both an emerging risk and an opportunity.
These will continue to be monitored.
Internal control
The Committee has delegated responsibility from the Board
for reviewing the effectiveness of the Group’s system of
internal control, which includes financial, operational and
compliance controls and the risk management process.
The Group’s system of internal control is underpinned by
the following:
A robust system of financial controls, including
appropriate segregation of duties within the Finance
team, clear delegation of authority rules, an established
balance sheet reconciliations and review process, and a
detailed monthly meeting with the Finance Director and
CFO to review the monthly management accounts.
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The Group’s Code of Conduct and suite of policies
underpinned by procedures, operating standards
and employee training for each of our key functional
areas as appropriate. These cover areas ranging from
financial reporting, corporate compliance, information
security, and health and safety in gyms. Relevant
business areas and functions own these underlying
components of our internal controls environment and
are responsible for ensuring control processes and
activities are maintained and operate effectively.
Regular meetings of various groups, including business
functions, senior management, sub-Committees and the
Board to discuss key operational and financial matters.
A thorough budget and three year planning process with
outputs reviewed by the Board.
Circulation of monthly reports to the Board containing
detailed information regarding financial and operational
performance and financial and non-financial KPIs,
as well as whistleblowing and compliance matters.
During the year, the Committee discussed developments in
the Group’s internal control environment with management
and the auditors and considers that it has complied with
its obligations under the 2018 Code in relation to the
assessment of risk and monitoring and the review of the
effectiveness of internal controls and risk management.
The Committee also reviewed the timetable and workplan
set out by management to ensure compliance with the
recommendations under the refreshed UK Corporate
Governance Code published in January 2024. We are
fully committed to ensuring that the Group’s audit and
governance arrangements reflect best practice in the
context of a business of our size and structure and address
any new requirements within the expected timeframes.
Internal audit
The Committee reviewed the requirement for an internal
audit function during the year, as it does annually, and has
concluded that an internal audit function is not necessary
at this time given the relatively straightforward nature of
the Group’s operations and the low levels of portable assets
such as cash in hand and inventory. The internal controls
currently in place in the Group are believed sufficient to
provide internal assurance and the external audit is not
materially affected by the lack of an internal audit function.
This will be kept under review as the Group continues to grow.
Whistleblowing
The Group encourages staff to report concerns which they
believe need to be brought to management’s attention
concerning any financial or other impropriety. All colleagues
are required to read our Group Whistleblowing Policy and
complete related mandatory training, both of which contain
details of our whistleblowing arrangements and procedures
should a member of staff wish to, anonymously or otherwise,
raise concerns in confidence in respect of suspicions of
wrongdoing or unethical conduct.
These concerns may be raised by colleagues to their line
manager or on an online portal, accessible through a
hyperlink on our staff intranet and in the Policy. The Policy
also prohibits bullying, harassment or other detrimental
treatment of colleagues who choose to speak up.
The Committee last reviewed the policy in August 2024
and receives a report, at least annually, relating to any
whistleblowing matters raised and considers responses
where appropriate. No instances of whistleblowing were
reported in 2024.
Elaine O’Donnell
Chair of the Audit and Risk Committee
12 March 2025
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The Gym Group plc | Annual Report and Accounts 2024
Governance report
Report of the Sustainability Committee
Committee members
Chair of the Committee Wais Shaifta
Committee
members
John Treharne
Will Orr
Elaine O’Donnell
Simon Jones
Cornelia Woschek
Number of meetings
held in 2024 3
“The Committee is delighted
that The Gym Group has been
awarded the prestigious Royal
Society for the Prevention of
Accidents (‘RoSPA’) gold award
as a result of becoming the
first 24/7 operator to have
achieved Level 4 certification
with the FITcert scheme and
ISO 45001 accreditation.”
Wais Shaifta | Chair of the Sustainability Committee
Dear Shareholder
I am pleased to present the Report of the
Sustainability Committee (the ‘Committee’)
and to highlight some of the developments
since 2023.
Environmental, Social and Governance (‘ESG’) and
sustainability matters are crucial to our ability to deliver
on our purpose of breaking down barriers to fitness for all.
Our sustainability strategy centres on ‘healthy people,
healthy communities and a healthy planet’. It has been
developed to advance our purpose and build a resilient
business environment.
Delivering positive health and wellbeing benefits to our
members is at the heart of our business. By making high
quality exercise facilities more accessible to a larger part of
the population, we support our members in achieving their
goals. Measuring the positive impact exercise has on society
aligns with our purpose and drives commercial success.
The Committee is pleased to note the increase in Social
Value of 8% in 2024, driven by more members working out
more frequently.
The global challenge of climate change presents local
impacts for our business, and we remain proactive in
addressing these by strengthening our sustainable business
model. Building on our 2023 Task Force on Climate-Related
Financial Disclosures (‘TCFD’) report, we have made further
progress in embedding climate change management
across our operations and have enhanced our disclosures
in alignment with the TCFD’s recommendations. As outlined
in our TCFD report on pages 46 to 49, we believe our
current business strategy is resilient to various potential
climate futures.
We remain fully committed to achieving our validated
science-based net zero targets and are engaging our
suppliers and customers to collaborate on this journey.
Reducing our own carbon footprint is a critical part of our
role in transitioning to a lower carbon economy, and we
will continue to drive the decarbonisation of our estate
by introducing innovative technology and processes.
The Committee is pleased with the progress made in 2024,
especially regarding the installation of further air source
heat pumps across our estate and trialling advanced
lighting controls and remote air conditioning management
systems. These developments help inform and advance our
net zero transition plan, an essential element that will help
build resilience into our business model.
Governance
The Committee supports the Group in continually improving
its ESG and sustainability performance and reporting.
These matters are regularly discussed and reviewed by
the Board and its Committees, with the Group always
striving to exceed the expectations of our stakeholders.
The Committee holds meetings at least three times per
year, escalating relevant matters to the next scheduled
Board meeting. In between Committee meetings, the Board
receives related reports directly, where appropriate.
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Climate-related risks and opportunities are a standing
agenda item for the Committee, which provides Board-level
governance of climate-related issues. As outlined within the
Committee’s terms of reference (which may be found on the
Group’s website), this includes (but is not limited to) reviewing
progress against our goals and targets to achieve our
science-based net zero emissions targets and managing
physical and transition risks through our identified control
measures. The Board also has final sign-off on annual
budget allocations and strategic aims, including the
planned expenditures for carbon-related initiatives.
The sustainability working group, consisting of
representatives from the (1) ESG, (2) equality, diversity and
inclusion and (3) health, safety and wellbeing workstreams,
convenes at least three times per year. It provides reports
to the Committee and Board on sustainability-related
matters. It also supports the Committee and Board in
their responsibility to oversee and ensure an effective
governance structure across the business, and the
successful execution of the sustainability strategy.
Key responsibilities
Assisting the Board in overseeing corporate responsibility,
climate, sustainability and reputational matters
considering the Group’s purpose, strategy and culture.
Developing, upholding and promoting the Group’s
sustainability strategy, including evaluating materiality
and reviewing sustainability targets.
Monitoring sustainability KPIs to measure delivery
against the Group’s strategy and targets relating to
carbon emissions and the Group’s environmental impact.
Advising on managing the sustainability and climate-
related risks and opportunities for the Group, and
helping to facilitate their integration into decision-
making and strategy development.
Liaising with members of the Board to agree capital
allocation towards climate risk and opportunity
management, including innovations to reduce
greenhouse gas emissions, energy consumption,
water consumption and waste generation.
Reviewing, and recommending for approval, the external
statements and disclosures made by the Group
concerning sustainability and ESG matters.
Strategy
Sustainability, including the management of climate-related
issues, is fully integrated into our business strategy.
The environment is recognised as a critical stakeholder that
must be considered when reviewing and guiding strategy,
major plans of action, risk management policies and annual
budgets. One of the Committee’s responsibilities is to
assist the Board in articulating and developing the Group’s
sustainability strategy.
For more information on our strategy, please visit our
website at www.tggplc.com/sustainability/our-strategy/.
Our Sustainability report on pages 34 to 45 explains our
progress and performance against our sustainability
strategy in the areas identified in our materiality assessment.
Risks and opportunities
Our Board has overall responsibility for managing the
business risks and opportunities, including those presented
by climate change. Alongside the Executive Committee and
the relevant Board Committees, the Board remains fully
committed to managing risks and opportunities that have
the potential to influence the business.
The Committee supports the Board in developing its
understanding of climate and sustainability-related risks
and opportunities for the Group. Climate change has been
identified as an emerging risk for the business. This reflects
our understanding that managing climate-related risks
and opportunities will increasingly influence our financial
position and performance in the years to come. We outline
our full process for assessing risks in the principal risks and
uncertainties section on pages 50 to 60.
Activities in the year
Monitoring gender and cultural diversity across
the Group at different levels of the workforce,
and understanding how these populations reflect
our member population.
Considering reports from the sustainability
workstreams: health and safety; governance; equality,
diversity and inclusion; environment; and climate action
and social impact.
Evaluating targets relating to The Gym Group’s material
topics and monitoring progress against them.
Reviewing the Company’s partnership with NHS Charities
Together and related objectives for 2025.
Building knowledge of TCFD requirements with a
bespoke training course for Board members.
Focus in 2025
The Committee will continue to support the sustainability
governance streams to uphold the Group’s sustainability
strategy and keep its objectives and targets at the heart
of the Board’s agenda. We will also continue to develop
our understanding of the impact of climate change on our
business, proactively managing its risks and opportunities.
Further information on our sustainability governance
framework and other related matters can be found on the
Company’s website at www.tggplc.com.
Wais Shaifta
Chair of the Sustainability Committee
12 March 2025
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The Gym Group plc | Annual Report and Accounts 2024
Governance report
Report of the Remuneration Committee
Committee members
Chair of the Committee Wais Shaifta
Committee
members
Elaine O'Donnell
Simon Jones
Number of meetings
held in 2024 3
“Financial performance has
been very strong this year,
with both Group Adjusted
EBITDA Less Normalised Rent
at £47.7m and Mature Site
ROIC at 25.3% either meeting
or exceeding the stretch level
performance targets set by
the Committee at the start
of the year.”
Wais Shaifta | Chair of the Remuneration Committee
Dear Shareholder
I am pleased to present the Report of the
Remuneration Committee (the ‘Committee’)
for the financial year ended 31 December 2024.
Directors’ Remuneration Policy
The previous Directors’ Remuneration Policy (the ‘previous
Policy’) would have ordinarily applied until the 2025
AGM. However, as highlighted in the 2023 Report of the
Remuneration Committee, the Committee recognised that
there had been significant leadership changes, with the
appointment of Will Orr as CEO in September 2023 as well
as the appointment of Luke Tait as CFO in October 2022
and other changes within the senior team. In light of these
leadership changes and a review of the Company’s strategy,
as well as the macroeconomic environment, the Committee
felt it was appropriate and necessary to undertake a review
of remuneration arrangements to ensure they remained
aligned with the Company’s long term strategy. Following
this review, the Committee put forward a new Directors’
Remuneration Policy for shareholder approval at the 2024
AGM (the ‘new Policy’).
The main change under the new Policy was the introduction
of a new variable remuneration scheme, The Gym Group
Incentive Plan (the ‘TGG Incentive Plan’), which takes the
form of a combined short and long term incentive scheme,
with part of the award delivered in cash following a one
year performance period and the remainder deferred for
a further two years and subject to a performance underpin.
The Committee was pleased that the majority of
shareholders voted in favour of the new Policy, with 77.3% of
votes in favour. Nevertheless, the Committee acknowledges
that over 20% of shareholders voted against the new
Policy. Further details on this outcome and the Committee’s
engagement with shareholders is set out in the Section 172
statement on pages 75 to 79. A summary of the new Policy
and its application for 2024 are set out on pages 94 to 95.
Performance and remuneration in 2024
The Group continued to build on strong trading momentum,
with revenue growth for the year up 11%, average members
up 4%, average revenue per member per month up 7% and
like for like revenue growth of 7%. Great progress was also
made on our Next Chapter growth plan resulting in Group
Adjusted EBITDA Less Normalised Rent at £47.7m, ahead
of the top end of the 2024 forecast range. Further details
on our performance in 2024 can be found in the Strategic
report on pages 6 to 63.
2024 TGG Incentive Plan outcome
The maximum opportunity for Executive Directors under the
TGG Incentive Plan is 275% of salary, with 35% of awards
delivered in cash and the remaining 65% delivered in shares.
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The deferred share element was granted on 10 July 2024
and vests on the third anniversary of grant, subject to the
2024 performance outcome, continued employment and a
performance underpin, as well as a two year post-vesting
holding period.
The performance targets for the 2024 TGG Incentive Plan
were based on Group Adjusted EBITDA Less Normalised
Rent (50%), Mature Site ROIC (30%), percentage of
customers visiting 4+ times per month (10%) and our
employee engagement score (10%).
Financial performance has been very strong this year,
with both Group Adjusted EBITDA Less Normalised Rent at
£47.7m and Mature Site ROIC at 25.3% exceeding the stretch
level performance targets set by the Committee at the
start of the year, leading to a full payout in respect of these
elements. Performance against the non-financial measures
has also been strong, with 53.5% of members visiting at
least four times per month being between the target and
maximum performance levels and our Peakon employee
engagement score (9.0) meeting the maximum level.
The overall outcome for 2024 was 98% of maximum.
The share element will vest in July 2027 subject to continued
employment and a performance underpin such that,
if Group Adjusted EBITDA Less Normalised Rent in 2025 or
2026 falls below the 2024 performance (£47.7m), 25% of the
shares will lapse.
The Committee is confident that this outcome reflects the
exceptional performance delivered in 2024 as we continue
working towards our strategic ambitions, and therefore did
not exercise any discretion. Further details are set out on
page 97.
2022 PSP outcome
Following his appointment to the Board, Luke Tait was
granted an award under the Performance Share Plan
on 17 October 2022, subject to performance conditions
based on Absolute TSR (50% weighting), ROIC in mature
estate (25% weighting), and Cumulative Adjusted Group
Operating Cash Flow (25% weighting). The ROIC and cash
flow metrics were based on performance for the year
ending 31 December 2024. ROIC performance (25.3%) is
just above the threshold performance level, but the Cash
Flow performance did not meet the minimum performance
level. The performance period for the TSR condition is
the three year period from the date of grant, which is not
yet complete. However, based on performance up to
31 December 2024, our current estimate is that this element
will not meet the threshold performance level.
The overall estimated vesting level for the 2022 PSP for
Luke Tait is therefore 6.2% of maximum, subject to the final
outcome of the TSR metric.
Application of discretion for 2024
The Committee carefully considered the performance
outcomes under variable pay schemes for 2024.
The Committee strongly believes that the TGG Incentive
outcome appropriately reflects the exceptional
performance delivered in 2024 as we continue working
towards our strategic ambitions, whilst the estimated 2022
LTIP outcome reflects the improvement in ROIC performance
over the period since grant which has also been reflected in
the Company’s share price over the last 12 months (although
this is not expected to meet the stretching absolute
TSR threshold level set in 2022). Overall, the Committee
concluded that the outcomes were appropriate and did
not apply discretion to adjust remuneration outcomes.
Implementation of our Remuneration Policy in 2025
Base salary
A 3% increase to Will Orr’s and Luke Tait’s base salaries was
applied from 1 January 2025, to £437,750 and £324,450
respectively. This is below the average increase for the wider
workforce of 6.7%.
TGG Incentive Plan
The maximum opportunity for Executive Directors will
be 275% of salary, with 35% of awards delivered in cash
and the remaining 65% delivered in shares. The deferred
share element is expected to be granted in March 2025
and vest on the third anniversary of grant, subject to the
2025 performance outcome, continued employment and a
performance underpin, as well as a two year post-vesting
holding period.
No changes are proposed to the performance measures and
weightings for 2025 and these will therefore remain as Group
Adjusted EBITDA Less Normalised Rent (50%), Mature Site
ROIC (30%), percentage of customers visiting 4+ times per
month (10%) and our employee engagement score (10%).
Chair of the Board and Non-Executive Director Fees
The fee for the Chair of the Board and the base fee for the
Non-Executive Directors (‘NEDs') were increased by 3% with
effect from 1 February 2025.
Closing remarks
I would like to thank those shareholders who continued to
engage with us during 2024, particularly in relation to the
new Policy. Should you have any queries or comments on
this report, or more generally in relation to remuneration,
then please do not hesitate to contact me via the
Company Secretary.
I hope that you find the information in this report helpful and
informative, and I look forward to your continued support at
the 2025 AGM.
Wais Shaifta
Chair of the Remuneration Committee
12 March 2025
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At a glance: Remuneration policy and implementation
Overview of current Policy Remuneration in 2024 Implementation for 2025
Base
salary
Reviewed annually.
Consideration given to
performance of the Group and
the individual, responsibilities
or scope of the role, as well
as pay practices in relevant
comparator companies.
Will Orr: £425,000
Luke Tait: £315,000
Ann-marie Murphy: £231,000
(to 31 January 2024)
With effect from 1 January 2025:
Will Orr: £437,750 (+3%)
Luke Tait: £324,450 (+3%)
This is below the average
increase for the wider workforce
of 6.7%.
Pension
and
benefits
Pension – maximum
contribution of 4% of salary,
aligned with the majority of
the workforce.
Benefits – currently consist of
private medical cover and a
car allowance. The Committee
reserves the discretion
to introduce new benefits
where appropriate.
Executive Director pension
levels in line with the majority
of the workforce (4%).
No change.
TGG
Incentive
Plan
Maximum of 275% of salary.
Subject to achievement of
relevant performance conditions.
Up to 35% of any award is paid
in cash. The balance (at least
65%) is delivered in shares which
are normally granted at the
start of the performance period
(or shortly thereafter) and will
be reduced following the end of
the year to the extent that the
relevant performance targets
are not met in full.
The resulting shares vest after a
further two years (i.e. three years
after the date of grant) subject
to continued employment and
the satisfaction of one or more
performance underpins. The
vested shares are then subject
to a two year post-vesting
holding period.
Subject to malus and clawback
provisions.
Maximum: 275% of salary
Performance measures for 2024:
Group Adjusted EBITDA Less
Normalised Rent (50%)
Mature Site ROIC (30%)
Percentage of customers visiting
4+ times per month (10%)
Employee engagement score
(10%)
Outcome was 98% of maximum
Shares are subject to an
underpin such that 25% will
lapse if 2025 and/or 2026
Group Adjusted EBITDA Less
Normalised Rent is less than
£47.7m.
Maximum: 275% of salary
Performance measures
for 2025:
Group Adjusted EBITDA Less
Normalised Rent (50%)
Mature Site ROIC (30%)
Percentage of customers visiting
4+ times per month (10%)
Employee engagement
score (10%)
The performance targets
are considered commercially
sensitive at this time and will be
disclosed in next year’s report.
Shares will be subject to a
further underpin such that 25%
will lapse if 2026 and/or 2027
Group Adjusted EBITDA Less
Normalised Rent is less than
the 2025 level.
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Overview of current Policy Remuneration in 2024 Implementation for 2025
Share
ownership
guidelines
Executive Directors are expected
to build up a prescribed level of
shareholding equal to 200% of
salary. The Committee has the
discretion to amend, but not
reduce, this level in future years.
A two year post-employment
shareholding guideline of
200% of salary (or actual
shareholding at leaving, if lower)
applies from leaving.
As at 31 December 2024,
the Executive Directors were
working towards meeting their
shareholding requirement,
noting that:
Will Orr joined the Board on
1 September 2023
Luke Tait joined the Board on
17 October 2022
No change.
NED fees The fees for the Non-Executive
Directors may include a basic
fee and additional fees for
further responsibilities (for
example, when chairing Board
Committees or holding the
office of Senior Independent
Director).
No benefits are envisaged for
the Non-Executive Directors,
although the Company reserves
the right to provide benefits,
such as travel and office
support. As Founder, John
Treharne currently receives
certain benefits in line with his
legacy provision.
With effect from 1 January
2024:
John Treharne (Chair of the
Board): £144,900
Base NED fee: £57,750
Additional fee for:
Senior Independent Director:
£5,250
Chair of the Audit and Risk
Committee: £8,400
Chair of the Remuneration
Committee: £8,400
With effect from 1 February
2025:
John Treharne (Chair of the
Board): £149,247 (+3%)
Base NED fee: £59,483 (+3%)
Additional fee for:
Senior Independent Director:
£5,250 (no change)
Chair of the Audit and Risk
Committee: £8,400 (no change)
Chair of the Remuneration
Committee: £8,400 (no change)
The increase in the fee for
the Chair of the Board and
NED base fee is in line with the
Executive Directors and below
the average increase for the
wider workforce of 6.7%.
As disclosed in the Group’s announcement made on 30 August 2022, Richard Stables is currently a Partner at Fulcrum
Advisory Partners LLP (‘Fulcrum Partners’), an independent advisory firm, and a Senior Advisor to Blantyre Capital
(‘Blantyre’), which held c.11.8% of the Company’s shares as at 31 December 2024. While Richard has not been appointed
as a representative of Blantyre or any other shareholder and Fulcrum Partners has ceased to provide advisory services
to Blantyre in relation to the Company, Fulcrum Partners is party to an incentive arrangement with Blantyre pursuant to
which Fulcrum Partners is entitled to certain cash payments contingent on the share price of the Company achieving
various price levels up to 600p per share, with a maximum cash value at those price levels equivalent to 305,641 shares
in the Company. For the avoidance of doubt, no payments under this incentive have been made up to the date of this
report and the cost of any such payments are met in full by Blantyre i.e. there is no cost to the Company.
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Introduction
This report contains the material required to be set out in accordance with The Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 (the ‘DRR Regulations’), as amended in 2013, 2018 and 2019.
Single total figure table (audited)
The remuneration for Directors of the Company who performed qualifying services during 2024 is detailed below, with prior
year information provided for comparison purposes.
(£’000s)
Salary/fees
Taxable
benefits
1
Pension
Total fixed
remuneration
Bonus/TGG
Incentive Plan
Long term
incentives
3,4
Other
5
Total variable
remuneration
Total
remuneration
2023 2024 2023 2024 2023 2024 2023 2024 2023 2024
2
2023 2024 2023 2024 2023 2024 2023 2024
Executive Directors
Will Orr
6
142 425 8 15 6 17 156 457 118 1,153 – – 300 – 418 1,153 574 1,610
Luke Tait 300 315 10 15 12 13 322 342 246 855 – 34 – – 246 889 568 1,231
Ann-marie
Murphy
7
262 19 13 1 8 1 283 21 – – – – – – – – 283 21
Chair of the Board and Non-Executive Directors
John Treharne 138 145 12 16 – – 150 161 – – – – – – – – 150 161
Elaine O’Donnell 63 71 – – – – 63 71 – – – – – – – – 63 71
Wais Shaifta 55 66 – – – – 55 66 – – – – – – – – 55 66
Richard Stables
55 58 – – – – 55 58 – – – – – – – – 55 58
Simon Jones
6
50 58 – – – – 50 58 – – – – – – – – 50 58
1 Taxable benefits for the Executive Directors comprise a car allowance (£8,000 per annum) and private medical cover. Will Orr’s benefits for 2023 also include
upgraded internet installation and £3,500 (excluding VAT) for legal advice associated with his appointment. Legacy benefits are provided to John Treharne
which include private medical and dental cover.
2 The 2024 TGG Incentive Plan figures represent the cash element of the award plus the value of the share element which is not impacted by the performance
underpin (based on the share price of £1.49 as at 31 December 2024). The value of the share element which may be impacted by the performance underpin will
be disclosed in the 2026 report to the extent that the underpin is met.
3 The 2022 PSP awards were subject to Absolute TSR (50% weighting), ROIC in mature estate (25% weighting), and Cumulative Adjusted Group Operating Cash
Flow (25% weighting). The ROIC and cash flow metrics were based on performance for the year ending 31 December 2024 but the performance period for the
TSR condition is the three year period from the date of grant, which ends in October 2025 for Luke Tait. However, based on performance up to 31 December 2024,
the estimated overall vesting outcome is 6.2%. The final outcome will be disclosed in next year’s annual report.
4 The performance period for the 2021 PSP awards did not end until March 2024 and was therefore not complete at the time of finalising last year’s report.
Based on performance up to 31 December 2023, we estimated that this award would lapse in full. The Committee confirmed this assessment following the end
of the performance period.
5 Will Orr was granted a buy-out award in respect of awards from a previous employer that were forfeited on his joining the Group. Further details are set out in
last year’s report.
6 Will Orr and Simon Jones joined the Board on 1 September 2023 and 6 February 2023 respectively, and therefore 2023 figures reflect remuneration for services
from these dates onwards.
7 Ann-marie Murphy stepped down from the Board on 31 January 2024 and therefore the 2024 figures reflect remuneration for services up to this date.
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2024 TGG Incentive Plan
For 2024, the overall TGG Incentive Plan maximum for Executive Directors was 275% of salary. In accordance with the
Directors’ Remuneration Policy, 35% of awards are delivered in cash following the end of the performance period, and
the remaining 65% is delivered in shares which vest on the third anniversary of grant, subject to the 2024 performance
outcome, continued employment and a performance underpin, as well as a two year post-vesting holding period.
For 2024, the share element of the award was granted to Will Orr and Luke Tait on 10 July 2024, following shareholder
approval of the new Policy at the 2024 AGM. Awards were granted in the form of nominal value (0.01p) options.
Executive Date of grant Award level
1
Face value of award
Share price
used for grant
2
Number of
shares awarded
Will Orr 10 July 2024 178.75% of salary (65% of award) £759,687.50 £1.106 686,878
Luke Tait 10 July 2024 178.75% of salary (65% of award) £563,062.50 £1.106 509,098
1 Reflects the proportion of the maximum award amount that may be delivered in shares. The number of shares is reduced following the end of the 2024
performance period to the extent that the relevant performance targets are not met in full.
2 Based on the five day average share price up to the date of the 2024 AGM.
For 2024, performance was based on four metrics, with 80% based on financial targets (Group Adjusted EBITDA Less
Normalised Rent and Mature Site ROIC), and the remaining 20% based on strategic objectives (membership visits and
employee engagement).
Measure Weighting
Threshold
(20%)
Target
(60%)
Maximum
(100%)
2024
performance
Outcome
(% of max)
Weighted
outcome
(% of max)
Group Adjusted EBITDA Less
Normalised Rent 50% £40.4m £43.4m £46.4m £47.7m 100% 50%
Mature Site ROIC 30% 22% 23% 24% 25.3% 100% 30%
% of members visiting 4+
times per month 10% 52% 53% 54% 53.5% 80% 8%
Employee engagement score 10% 7.9 8.4 8.7 9.0 100% 10%
Overall 100% 98%
The table below sets out the 2024 TGG Incentive Plan awards for the Executive Directors:
2024 opportunity
2024 outcome
(% of max)
2024 outcome
(face value)
Will Orr
Cash 96.25% of salary
(35% of award)
98%
£400,881
(94.3% of salary)
Shares 686,878 shares
(65% of award)
673,140 shares*
Luke Tait
Cash 96.25% of salary
(35% of award)
98%
£297,124
(94.3% of salary)
Shares 509,098 shares
(65% of award)
498,916 shares*
* The share element of the award is subject to an underpin, such that 25% of the shares will lapse if Group Adjusted EBITDA Less Normalised Rent in 2025 and/or
2026 falls below the level achieved in 2024 (£47.7m).
In accordance with the DRR Regulations, the value included in the 2024 single figure table is the cash element of the award,
plus the value of the share element which is subject to continued employment only (75% of the shares). This equates to
£1,153,115 for Will Orr and £854,662 for Luke Tait (based on the share price of £1.49 as at 31 December 2024).
As at 31 December 2024, the remainder of the share element (25% of the shares) is worth £250,745 for Will Orr and £185,846
for Luke Tait. The outcome of the performance underpin will be disclosed in the 2026 report, including the vesting value of
these shares (to the extent that the underpin is met).
The Gym Group plc | Annual Report and Accounts 2024
98 |
Vesting outcome of 2021 and 2022 PSP awards
Final vesting outcome for 2021 PSP awards
Former Executive Directors Richard Darwin and Mark George were granted LTIP awards on 25 March 2021 based on relative
TSR and absolute TSR targets assessed over a three year period from this date. The performance period was not complete
at the time of preparation of the 2023 Annual Report and Accounts, but the vesting outcome was estimated at 0% based
on performance up to 31 December 2023. Following the end of the performance period, the final outcome was confirmed
as 0% vesting, as outlined in the table below.
Performance measure Weighting
Threshold
(20% vests)
Maximum
(100% vests) Actual
Outcome
(% of max)
Outcome
(% of award
vesting)
Relative TSR vs FTSE Small Cap
(excluding Investment Trusts) 66.7% Median
Upper
quintile
Below
median 0% 0%
Absolute TSR
(share price adjusted for dividends) 33.3% 285p 335p 108.9p 0% 0%
Total 100% 0%
Estimated vesting outcomes for 2022 PSP awards
Following his appointment to the Board, Luke Tait was granted an award under the Performance Share Plan on 17 October
2022 based on Absolute TSR, ROIC in Mature Estate, and Cumulative Adjusted Group Operating Cash Flow. The ROIC and
cash flow metrics were based on performance for the year ending 31 December 2024 and performance outcomes are set
out below. The performance period for the TSR condition is the three year period from the date of grant, which is not yet
complete. However, based on performance up to 31 December 2024, our current estimate is that this element will not meet
the threshold performance level.
Performance measure Weighting
Threshold
(20% vests)
Maximum
(100% vests) Actual
Outcome
(% of max)
Outcome
(% of award
vesting)
Absolute TSR 50% 300p 375p
156.7p
(estimated)
0%
(estimated)
0%
(estimated)
ROIC in Mature Estate 25% 25% 30% 25.3% 24.8% 6.2%
Cumulative Adjusted Group
operating Cash Flow 25% £135m £150m £110.2m 0% 0%
Total 100% 6.2%
The estimated vesting outcome is therefore 6.2% of maximum:
Executive
Number of
shares granted
Vesting outcome
(estimate)
Number of shares
vesting (estimate)
Value of estimated
shares vesting
1
Luke Tait 352,136 6.2% 21,832 £34,211
1 Based on the average share price over the three month period up to 31 December 2024 (£1.567).
Grant of 2023 Deferred Bonus Share Plan (‘DBSP’) awards
In accordance with the previous Policy, any bonus outcome in excess of 75% of salary was deferred in shares which vest
after two years subject to continued employment. The Committee applied the deferral approach on a pro-rata basis for
Will Orr (who joined the Board on 1 September 2023). Awards were granted in the form of nominal value (0.01p) options.
Executive Date of grant Face value of award
Share price
used for grant
1
Number of
shares awarded
Will Orr 10 July 2024 £11,063 £1.166 9,488
Luke Tait 10 July 2024 £23,430 £1.166 20,094
1 Based on the 3 month average share price up to the day prior to the grant date.
As outlined in last year’s report, Richard Darwin was also granted a deferred bonus in respect of the portion of his 2023
bonus. An award of 5,919 shares was granted to him on 10 July 2024 on the same terms as outlined above (face value: £7,012).
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Statement of Directors’ shareholding and share interests (audited)
The table below details, for each Director who served during the year, the total number of Directors’ interests in shares
at 31 December 2024 or the date the departing Director left the Board:
Director
Ordinary
shares
1
Awards subject to continued employment
Awards subject to
performance conditions
Vested but
unexercised
options
Total
shareholding
and share
interests
Shareholding
requirement
met?
Matching
shares
awarded
under SIP
(shares)
Sharesave
awards
(options)
PSP/DSBP
awards
(nominal
cost
options)
TGG
Incentive
Plan
PSP
awards
(nominal
cost
options)
TGG
Incentive
Plan
Executive Directors
Will Orr – – – 255,555 – 717,697 686,878 – 1,660,130 No
3
Luke Tait 64,210 – 19,526 263,181 – 775,933 509,098 – 1,631,948 No
3
Ann-marie
Murphy
2
71 71 – – – – – – 142 No
3
Chair of the Board and Non-Executive Directors
John
Treharne 1,629,053 1,764 – – – – – 170,553 1,801,370
Wais
Shaifta – – – – – – – – –
Elaine
O’Donnell 45,000 – – – – – – – 45,000
Richard
Stables 200,000 – – – – – – – 200,000
Simon
Jones – – – – – – – – –
1 Includes shares held by connected persons.
2 Ann-marie Murphy stepped down from the Board on 31 January 2024 and her figures are presented as at this date.
3 Executive Directors are required to build up a shareholding of at least 200% of salary. For this purpose, the shareholding includes all beneficial shareholdings,
vested but unexercised options (on a net of tax basis) and unvested shares subject to continued employment only (on a net of tax basis). As at 31 December 2024,
Will Orr and Luke Tait were still working towards this requirement. As at 31 March 2024, Ann-marie Murphy had not met her shareholding requirement.
No Directors exercised share options during the year.
Between 31 December 2024 and the date of this report, Richard Stables purchased 25,000 shares on 23 January 2025.
There were no further changes in the Directors’ shareholdings and share interests during this time.
Departure of Ann-marie Murphy (audited)
As outlined in last year’s report, Ann-marie Murphy stepped down from the Board and ceased employment with the
Company on 31 January 2024. Payments in connection with her services as a Director during 2024 are included in the single
figure table of remuneration on page 96. She then received two months’ payment in lieu of notice in respect of her salary
(£38,500), car allowance (£1,333) and pension (£1,353), and a payment in respect of accrued but untaken annual leave
(£9,138). In addition, Ann-marie’s private medical coverage continued until 30 June 2024 (£2,597).
Ann-marie was not eligible for the 2023 annual bonus and was not eligible for any variable remuneration in respect of 2024.
All unvested PSP awards lapsed on cessation of her employment with the Company.
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Performance graph and CEO remuneration table
The graph below shows the total shareholder return (‘TSR’) performance of an investment of £100 in The Gym Group plc’s
shares from its listing in November 2015 to the end of the period, compared with a £100 investment in the FTSE SmallCap
Index over the same period. The FTSE SmallCap Index was chosen as a comparator because it represents a broad equity
market index of which the Company is a constituent. The TSR was calculated in accordance with the DRR Regulations.
31 Dec
2021
31 Dec
2022
31 Dec
2024
31 Dec
2023
06 Nov
2015
31 Dec
2017
31 Dec
2015
31 Dec
2016
31 Dec
2018
31 Dec
2019
31 Dec
2020
200
175
150
125
100
75
50
25
0
FTSE Small Cap IndexThe Gym Group plc
Total Shareholder Return (TSR)
The table below details certain elements of the CEO’s remuneration over the same period as presented in the TSR graph:
CEO
Single figure of total
remuneration (£’000)
Annual bonus/
TGG Incentive Plan
outcome (% of
maximum)
Long term incentive
outcome (% of
maximum)
2015 John Treharne 288 £60,000
2
n/a
2016 John Treharne 314 27.2% n/a
2017 John Treharne 431 74.3% n/a
2018
1
John Treharne 273 16.0% 41.7%
2018
1
Richard Darwin 97 16.0% 41.7%
2019 Richard Darwin 537 35.1% 72.5%
2020 Richard Darwin 336 0% 0%
2021 Richard Darwin 484 44.7% 0%
2022 Richard Darwin 382 0% 0%
2023
1
Richard Darwin 150 84% 0%
2023
1
Will Orr 574 83% n/a
2024 Will Orr 1,610 98% n/a
1 The 2018 figures represent the single figure of total remuneration for John Treharne for the period to 17 September 2018, and for Richard Darwin from that date.
The 2023 figures represent the single figure of total remuneration for Richard Darwin for the period to 24 March 2023, and for Will Orr from 1 September 2023.
2 The actual bonus paid has been inserted for 2015 as this related to the year of Admission when an uncapped discretionary bonus plan was in operation.
No long term incentive awards vested in 2015, 2016 or 2017.
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Annual percentage change in remuneration of Directors and employees
The percentage change in remuneration of the Directors and employees of the business over the last 5 years were as follows:
Element Employees
Executive Directors Chair of the Board and Non-Executive Directors
Will Orr Luke Tait
Ann-marie
Murphy
John
Treharne
Wais
Shaifta
Elaine
O’Donnell
Richard
Stables
Simon
Jones
% change from 2019 to 2020
Salary/fees 5% N/A N/A N/A (27)% N/A N/A N/A N/A
Benefits (11)% N/A N/A N/A (48)% N/A N/A N/A N/A
Bonus (100)% N/A N/A N/A N/A N/A N/A N/A N/A
% change from 2020 to 2021
Salary/fees 6% N/A N/A N/A 36% N/A N/A N/A N/A
Benefits 29% N/A N/A N/A 42% N/A N/A N/A N/A
Bonus 100% N/A N/A N/A N/A N/A N/A N/A N/A
% change from 2021 to 2022
Salary/fees 11% N/A N/A N/A (40)% 0% N/A N/A N/A
Benefits 4% N/A N/A N/A 23% N/A N/A N/A N/A
Bonus 720% N/A N/A N/A N/A N/A N/A N/A N/A
% change from 2022 to 2023
Salary/fees 9% N/A 0% 5% 19% 0% 0% 0% N/A
Benefits 19% N/A 25% 9% 20% N/A N/A N/A N/A
Bonus (29)% N/A 171% (100)% N/A N/A N/A N/A N/A
% change from 2023 to 2024
Salary/fees 9% 0% 5% 0% 5% 5% 5% 5% 5%
Benefits 27% (11)% 48% 11% 27% N/A N/A N/A N/A
Bonus 53% 227% 247% 0% N/A N/A N/A N/A N/A
1 The strict legal requirement is to only provide details of employees of The Gym Group plc. As the listed entity has very few employees, we have decided to
voluntarily disclose in respect of all The Gym Group employees.
2 The average percentage change in employee remuneration was calculated using the movement in mean values (in respect of each element of remuneration)
between the relevant years. The relevant mean values were calculated by dividing the aggregate total of each element of remuneration for all Group employees
during the year (calculated on an FTE basis) by the total number of Group employees.
3 Ann-marie Murphy, Luke Tait and Will Orr joined the Board on 11 April 2022, 17 October 2022 and 1 September 2023 respectively. Ann-marie Murphy stepped
down from the Board on 31 January 2024. Figures have been calculated on an annualised basis.
4 Wais Shaifta joined the Board on 1 February 2021, Elaine O’Donnell and Richard Stables joined the Board on 30 August 2022 and Simon Jones joined the Board
on 6 February 2023. Figures have been calculated on an annualised basis.
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CEO to employee pay ratio
The table below shows how the CEO’s total remuneration compares to the full-time equivalent total remuneration of UK
employees ranked at the 25th, 50th and 75th percentile.
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2019 Option C 30:1 27:1 14:1
2020 Option C 19:1 19:1 13:1
2021 Option C 26:1 25:1 24:1
2022 Option C 20:1 19:1 16:1
2023 Option C 34:1 33:1 27:1
2024 Option C 69:1 66:1 50:1
As the hourly rates for gender pay gap purposes for significant numbers of employees are the same, it is not possible
to identify appropriate representative quartile employees from this data alone and therefore Option C is used. The lower
quartile, median and upper quartile employees were initially identified using the approximate full-time equivalent total
actual pay of all employees for the financial year (based on employees of the Group as at 31 December 2024).
A full-time equivalent total pay and benefits figure for the financial year to 31 December 2024 was then calculated for each
of those employees. This was also sense checked against a sample of employees with full-time equivalent total actual pay
on either side of the identified individuals to ensure that the appropriate representative employee is selected.
Each employee’s pay and benefits were calculated using each element of employee remuneration on a full-time basis,
consistent with the CEO. Where required, remuneration was approximately adjusted to be full-time and full-year equivalent
based on the employee’s average full-time equivalent hours for the year and the proportion of the year they were employed.
No other adjustments were made.
The salary and total pay and benefits of the employees at the 25th percentile, the median and the 75th percentile for 2024
are shown below:
25th percentile Median 75th percentile
Salary £23,334 £24,259 £26,338
Total pay and benefits £23,334 £24,259 £31,962
The 2024 ratios are higher than 2023, primarily due to the strong business performance in 2024 being reflected in the
outcome under the TGG Incentive Plan (98% of maximum). In comparison, the 2023 ratios were based on the sum of the
total single figures of remuneration for Richard Darwin and Will Orr, with the outcomes under the annual bonus and 2021
PSP being 83% and 0% of maximum, respectively (Will Orr was not a participant in the 2021 PSP having joined the Board
in September 2023).
Base salaries of all employees, including our Executive Directors, are set with reference to a range of factors including
market practice, experience, and performance in role. The Committee also notes that the CEO’s remuneration package
is weighted more heavily towards variable pay (namely the TGG Incentive Plan) than those of the wider workforce due to
the nature of the role, consistent with our reward policies. This means the ratios are likely to fluctuate depending on the
performance of the business and associated outcomes of incentive plans in each year. Furthermore, the Committee is
satisfied that our pay and broader people policies drive the right behaviours and reinforce the Group’s values which in turn
drive our culture. For these reasons, the Committee believes that the ratios are consistent with these policies.
Governance report
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Relative importance of spend on pay
The table below details the change in total staff pay between 2023 and 2024 compared with distributions to shareholders
by way of dividend, share buy backs or any other significant distributions or payments:
2024
(£’000)
2023
(£’000) % change
Total gross staff pay 40,536 35,348 14.7%
Dividends/share buy back(s) – – 0%
Summary of shareholder voting
The following table shows the results of the advisory vote on the 2024 Directors’ remuneration report and the binding vote
on the Directors’ Remuneration Policy at the 2024 AGM:
Approval of the 2024
Directors’ remuneration report (2024 AGM)
Approval of the
Directors’ Remuneration Policy (2024 AGM)
Total number of votes % of votes cast Total number of votes % of votes cast
For (including discretionary) 111,345,847 97.78% 88,041,742 77.32%
Against 2,527,697 2.22% 25,820,467 22.68%
Votes withheld 3,942,289 – 3,953,624 –
Whilst the majority of shareholders voted for the proposal at the 2024 AGM, we recognise that more than 20% of shareholders
voted against the new Policy (and associated plan rules). Prior to the AGM, we engaged with our major shareholders and made
amendments to the proposals based on their feedback, including an increase to the proportion of awards deferred in shares
and the inclusion of Mature Site Return on Invested Capital (‘ROIC') in the performance metrics.
However, based on our engagement, as well as publicly disclosed voting rationale, we understand that some shareholders
had outstanding concerns with the proposals, in particular relating to the plan being a non-standard structure in the UK
market, the length of the performance period and alignment with the Company’s share price.
The Committee recognised that developing a new remuneration approach that meets the requirements of all shareholders
is challenging, but is of the view that the new Policy, which includes the TGG Incentive Plan, represents further alignment
with shareholders and supports the retention of key talent during a critical period for the Company and therefore does not
intend to make any changes at this time.
Remuneration Committee in 2024
The Committee’s principal responsibilities are to recommend the Group’s policy on Executive remuneration, determine the
levels of remuneration for Executive Directors and the Chair of the Board and prepare the Directors’ remuneration report for
approval by the shareholders at the AGM.
The Chair of the Board, CEO and other senior management team members as necessary are invited to attend meetings
of the Committee, except when their own remuneration is being directly discussed. The Committee met three times during
the year.
The Committee has formal terms of reference which can be viewed on the Company’s website: www.tggplc.com.
Engagement with employees
In May 2024, the CEO, CFO and Chief People Officer held briefing sessions to launch the new TGG Incentive Plan to
participants, explaining how the new scheme operates and the associated performance targets, how it compares
to the previous remuneration structure and the alignment with the remuneration structure for Executive Directors.
The sessions also gave participants the opportunity to ask questions, during which there was a particular focus on
explaining the performance measures and how employees could support the delivery of the stretching targets.
We also provided accompanying explanatory materials and personal award documentation.
Outcomes of the 2024 pay review and 2023 bonus were communicated privately to employees via formal letters from
the CEO, which were distributed by their respective line managers.
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During the year, the Committee’s key activities included:
Consulting with shareholders on the new Policy and approving the final version of the Policy.
Assessing the final vesting outcome under the 2021 performance share plan awards.
Assessing the outturn of the 2023 annual bonus.
Setting the performance measures, weightings and targets for the 2024 TGG Incentive Plan.
Approving a grant of options under the Save As You Earn scheme.
Reviewing and approving a Company wide pay review for 2025.
Receiving updates on shareholder views on remuneration.
Advisers to the Remuneration Committee
The Committee appointed PricewaterhouseCoopers LLP (‘PwC’) as external independent remuneration advisers to
the Committee following a competitive tender process in early 2023. PwC advised the Company on all aspects of the
remuneration for Executive Directors and the senior management team. PwC received fees of £144,378 plus VAT for their
advice during the year to 31 December 2024, partly on a fixed fee and partly on a time and materials basis.
PwC is a member of the Remuneration Consultants Group and the voluntary code of conduct of that body is designed to
ensure objective and independent advice is given to remuneration committees. There are processes in place to ensure the
advice received by the Committee is independent of any support provided to management. The Committee is therefore of
the view that PwC provided independent remuneration advice to the Committee and does not have any connections with
the Group or any Director that may impair their independence.
Directors Remuneration Policy
The Directors’ Remuneration Policy was approved at the AGM on 9 May 2024 and took effect from that date. A summary
of the key elements of the Policy are set out below, and the full version can be found within the Notice of 2024 AGM which
is available on our website at: www.tggplc.com/investors.
Governance report
Report of the Remuneration Committee continued
Element, purpose and
link to strategy Operation Maximum opportunity Performance measures
Base salary
This is the core
element of pay
and reflects the
individual’s role
and position within
the Group with
some adjustment
to reflect their
capability and
contribution.
Base salaries will typically be reviewed
annually, with consideration given to
the performance of the Company
and the individual, any changes in
responsibilities or scope of the role, as well
as pay practices in relevant comparator
companies of a broadly similar size and
complexity with due account taken of
both market capitalisation and turnover.
The Committee does not strictly follow
benchmark pay data but instead uses it
as one of a number of reference points
when considering, in its judgement, the
appropriate level of salary. Base salary
is paid monthly in cash.
It is anticipated
that increases will
generally be in line
with percentage
increases awarded
to salaried staff.
However, in certain
circumstances
(including, but
not limited to,
changes in role and
responsibilities,
market levels,
individual and
Company
performance), the
Committee may
make larger salary
increases to ensure
they are market
competitive. The
rationale for any
such increase will
be disclosed in the
relevant Annual
Report and Accounts.
n/a
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Element, purpose and
link to strategy Operation Maximum opportunity Performance measures
Benefits
To provide a
comprehensive
and competitive
benefits package
which is valued by
recipients.
The Executive Directors currently receive
private medical cover, a car or travel
allowance and a car parking space.
The Committee reserves the discretion to
introduce new benefits where it concludes
that it is appropriate to do so, having
regard to the particular circumstances
and to market practice.
Where appropriate, the Company will
meet certain costs relating to Executive
Director relocations.
The costs of benefits
provided may
fluctuate from year
to year, even if the
level of provision has
remained unchanged.
Relocation expenses
are subject to a
maximum limit of
100% of base salary,
provided that such
expenses may be
paid only in the year
of appointment and
for a further two
financial years.
The Committee will
monitor the costs of
benefits in practice
and will ensure that
the overall costs
do not increase
by more than the
Committee considers
appropriate in all the
circumstances.
n/a
Pension
To provide a
competitive
remuneration
package and
to encourage
retirement
planning and
retain flexibility for
individuals.
Executive Directors can receive pension
contributions to personal pension
arrangements or, if a Director is impacted
by annual or lifetime limits on contribution
levels to qualifying pension plans, the
balance (or all) can be paid as a cash
supplement.
The maximum
employer’s
contribution is
aligned to the
contribution levels for
the majority of the
workforce (currently
4% of base salary).
n/a
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Governance report
Report of the Remuneration Committee continued
Element, purpose and
link to strategy Operation Maximum opportunity Performance measures
TGG Incentive
Plan
To incentivise the
delivery of financial
and strategic
priorities and
directly align the
Directors’ interests
with those of
shareholders.
Awards will be subject to performance
measures measured over a one year
period with measures reviewed annually
to ensure that they remain fit for purpose.
Up to 35% of any award is paid in cash
following the end of the performance
period.
The balance (at least 65%) is delivered
in shares (in the form of a conditional
share award or option). The shares
will normally be granted at the start
of the performance period (or shortly
thereafter) and will be reduced following
the end of the one year performance
period to the extent that the relevant
performance targets are not met in full.
The resulting shares will then vest after
a further two years (i.e. three years after
the date of grant) subject to continued
employment and the satisfaction of one
or more performance underpins.
Vested shares will be subject to a further
two year post-vesting holding period,
during which time the Executive Directors
are not permitted to sell the vested shares
(or exercise the option).
During the vesting period (and the
additional holding period) the value of any
dividends on vested shares will be credited
as reinvested in further award shares.
Awards are subject to malus and clawback
provisions. In respect of the cash element
of awards, malus provisions apply for
the duration of the performance period
and clawback provisions apply for two
years following payment. In respect of
the shares element of awards, malus
provisions apply during the vesting period
and clawback provisions apply for two
years after vesting.
Up to 275% of salary Performance
measures may be
based on financial
and non-financial
metrics (including
corporate,
divisional or
performance
measures), but
at least 50% of
awards will be
based on financial
measures.
Where a sliding
scale of targets
is used, attaining
the threshold level
of performance
for any measure
will not typically
produce a payout
of more than 20%
of the maximum
portion of overall
annual bonus
attributable to
that measure, with
a sliding scale
to full payout
for maximum
performance.
The performance
underpin(s) may be
based on financial
and/or non-
financial metrics.
In accordance
with the Code, the
Remuneration
Committee will
retain overall
discretion to adjust
awards if they
are not believed
to be in line with
overall Company
performance.
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link to strategy Operation Maximum opportunity Performance measures
Share ownership
guidelines
To further align
the interests of
Executive Directors
with those of
shareholders.
Executive Directors are expected to build
up a prescribed level of shareholding equal
to 200% of salary. The Committee has the
discretion to amend, but not reduce, this
level in future years.
To the extent that the prescribed level has
not been reached, Executive Directors
will be expected to retain a proportion of
the shares vesting under the Company’s
share plans until the guideline is met.
For the purpose of assessing the
shareholder versus the prescribed level,
any vested awards subject to a holding
period and unvested awards not subject
to performance conditions will be included
(discounted for anticipated tax liabilities).
In addition to the shareholding guideline
above, Executive Directors will be expected
to retain the lower of actual shares held
at cessation and shares equal to 200%
of salary for two years post-cessation.
The Committee may disapply this
requirement and/or permit earlier sale
of shares in exceptional circumstances.
This guideline applies in respect of any
vested shares which vest from PSP and
DSBP awards granted after the 2022 AGM.
n/a n/a
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Governance report
Report of the Remuneration Committee continued
Element, purpose and
link to strategy Operation Maximum opportunity Performance measures
Chair of the
Board and Non-
Executive Director
remuneration
To enable the
Company to
recruit and retain
Company Chairs
and Non-Executive
Directors of the
highest calibre, at
the appropriate
cost.
The fees paid to the Chair of the Board and
Non-Executive Directors are intended to be
competitive with other fully listed companies
of equivalent size and complexity. The
fees for the Chair of the Board and
Non-Executive Directors may include a
basic fee and additional fees for further
responsibilities (for example, when chairing
Board Committees or holding the office of
Senior Independent Director).
The fees payable to the Non-Executive
Directors are determined by the Board. The
fee for the Chair of the Board is determined
by the Remuneration Committee.
Directors do not participate in decisions
regarding their own fees.
No benefits are envisaged for the Non-
Executive Directors, although the Company
reserves the right to provide benefits, such
as travel and office support. As Founder,
John Treharne currently receives certain
benefits in line with his legacy provision.
The aggregate fees
and any benefits
of the Chair of the
Board and Non-
Executive Directors
will not exceed the
limit from time to time
prescribed within the
Company’s Articles
of Association for
such fees (currently
£1,000,000 p.a. in
aggregate).
Any increases
actually made will
be appropriately
disclosed.
n/a
All-staff share
plans
To encourage
share ownership
by staff, thereby
allowing them to
share in the long
term success of
the Group and
align their interests
with those of
shareholders.
The Company operates an all-staff Share
Incentive Plan (under which an award
of ‘free shares’ can be made, as well as
‘partnership shares’ and ‘matching shares’).
The Company also operates a Sharesave
scheme.
These all-staff share plans are established
under HMRC tax advantaged regimes and
follow the usual form for such plans.
Executive Directors are eligible to
participate in each of the all-employee
share plans on the same terms as other
Group staff.
The maximum
participation levels
for all-staff share
plans will be the
limits for such plans
set by HMRC from
time to time.
n/a
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In addition, the Committee has ensured that the Directors’
Remuneration Policy and practices are consistent with
the six factors set out in Provision 40 of the UK Corporate
Governance Code:
Clarity – Our Directors’ Remuneration Policy is well
understood by our senior management team and has been
clearly articulated to our shareholders and representative
bodies (both on an ongoing basis and during consultation
when changes are being made).
Simplicity – The Committee is mindful of the need to
avoid overly complex remuneration structures which can
be misunderstood and deliver unintended outcomes.
Therefore, a key objective of the Committee is to ensure
that our Directors’ Remuneration Policy and practices are
straightforward to communicate and operate.
Risk – Our Directors’ Remuneration Policy has been
designed to ensure that inappropriate risk-taking is
discouraged and will not be rewarded via (i) the balanced
use of performance measures in the TGG incentive plan
which employs a blend of financial and non-financial
measures and is subject to an underpin such that a
proportion of the award will not vest if the level of Group
Adjusted EBITDA Less Normalised Rent is not maintained
during the deferral period (ii) the significant role played by
shares in our incentive plans (together with shareholding
requirements during, and after, employment), and (iii) malus/
clawback provisions within all our incentive plans.
Predictability – Our incentive plan is subject to individual
caps, with our share plans also subject to market standard
dilution limits. At the time of approving the Policy,
full information on the potential values of the annual
TGG Incentive Plan are provided, with strict maximum
opportunities and minimum, target and maximum
performance scenarios.
Proportionality – There is a clear link between individual
awards, delivery of strategy and our long term performance.
In addition, the significant role played by incentive/‘at-risk’
pay, together with the structure of the Executive Directors’
service contracts, ensures that poor performance is
not rewarded.
Alignment to culture – Our Executive pay policies are
fully aligned to The Gym Group’s culture through the use
of metrics in the TGG Incentive Plan that measures how we
perform against key aspects of our strategy, which has the
objective of delivering sustainable growth. The Committee
oversees consistent workforce reward principles and is
satisfied that these policies drive the right behaviours and
reinforce the Group’s values, which in turn promote an
appropriate culture. The use of deferral in shares under the
TGG Incentive Plan, holding periods and our shareholding
requirements strengthen the focus on our strategic aims
and ensure alignment with the interests and experiences
of shareholders, both during and after employment.
On behalf of the Board
Wais Shaifta
Chair of the Remuneration Committee
12 March 2025
110 |
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Governance report
Directors’ report continued
Governance report
Directors’ report
The Directors present their report together with the audited
financial statements for the period ended 31 December 2024.
There are references in this section to other areas of the
Annual Report and Accounts 2024, which form part of
this report. A summary statement of non-financial and
sustainability information can also be found on page 63.
Corporate structure
The Gym Group plc is a public company limited by shares,
incorporated in England and Wales, and its shares are
traded on the Main Market of the London Stock Exchange.
The Company number is 08528493.
The Board
The Directors who served during the year were:
John Treharne
Will Orr
Luke Tait
Elaine O’Donnell
Wais Shaifta
Richard Stables
Simon Jones
Ann-marie Murphy
(resigned with effect from 31 January 2024)
The roles and biographies of the Directors as at the date of
this report are on pages 66 to 67. The general powers of the
Directors are set out in Articles 64 to 68 of the Company’s
Articles of Association (the ‘Articles’). These provide that the
Board may exercise all the powers of the Company, subject
to applicable legislation, the Articles and any special
resolution of the Company.
Appointment and replacement of Directors
The appointment and replacement of Directors is governed
by the Articles. These state that the number of Directors
shall not be less than two nor exceed 12 and that:
The shareholders may, by ordinary resolution, elect any
person willing to act as a Director.
The Board may, by ordinary resolution, appoint any
person willing to be a Director.
Every Director shall retire at each AGM and be eligible
for election or re-election, as appropriate.
The Company may, by special resolution, or ordinary
resolution of which special notice has been given
according to applicable legislation, remove any Director
before the expiration of his or her period of office.
There are a number of other grounds on which
a Director’s office may cease, namely: voluntary
resignation; if they are absent without special leave of
absence for a period of more than six months; they are
physically or mentally incapable of acting as a Director;
or they become bankrupt or prohibited by law from
being a Director.
Directors’ indemnity insurance
The Company has granted an indemnity by way of deed poll
to its Directors against any liability which attaches to them
in defending proceedings brought against them, to the
extent permitted by English law. In addition, Directors and
Officers of the Company and its subsidiaries are covered by
Directors’ and Officers’ liability insurance.
Compensation for loss of office
The Company does not have arrangements with any
Director which would provide compensation for loss of
office or employment resulting from a takeover, except that
provisions of the Company’s share plans may cause options
and awards granted under such plans to vest on a takeover.
Dividend
As noted on page 29, the Directors are not proposing a
final dividend for the year ended 31 December 2024.
Whilst dividends and other returns of capital to shareholders
will be considered by the Directors in the future, we are
not currently proposing a dividend as we continue to see
significant opportunities, with attractive returns, to invest
our free cash flow.
Going concern
As noted on pages 61 to 62, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the period to 30 June
2026. As a result, they continue to adopt the going concern
basis in preparing the consolidated financial statements.
Future developments in the business
The likely future developments in respect of the business
can be found in the Strategic report on pages 6 to 63 and
forms part of this report.
Corporate governance
A report on corporate governance and compliance with
the Code is set out on pages 64 to 79, and forms part of
this report.
Health and safety
An overview of health and safety is provided in the Sustainability
report on page 36 and forms part of this report.
Greenhouse gas emissions
Information on the Group’s greenhouse gas emissions is set
out in the Sustainability report on pages 42 to 45 and forms
part of this report.
Human rights, anti-bribery and anti-corruption
We conduct our business honestly and ethically wherever
we operate. Our Human Rights and Anti-Bribery and Anti-
Corruption Policy Statements can be found on our website.
We also have a detailed Anti-Bribery and Anti-Corruption
Policy and conduct related mandatory training for all
employees via our intranet.
We comply with the Modern Slavery Act and our Modern
Slavery Act Statement, including further information on
our activity to mitigate related risks, can be found on our
website: www.tggplc.com/modern-slavery.
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Charitable and political donations
During 2024, the Company donated £18,000 to charitable
organisations and, with the help of our colleagues and
members, fundraised over £100,000 for NHS Charities
Together (see the Sustainability report on page 36).
The Company made no political donations in 2024
(2023: £nil).
Employee involvement and policy regarding
disabled persons
At The Gym Group, we’re committed to breaking down
barriers to fitness for individuals with disabilities.
As a Disability Confident employer, we embrace equal
opportunities and ensure fair treatment for all, regardless
of sex, race, ethnic origin, or disability. Our initiatives
include accessible recruitment, tailored onboarding, and
dedicated training for both staff and members. We also
offer a targeted traineeship programme to help people
with disabilities enter the workforce. To better support our
community, we collect disability data, helping us identify
needs, improve inclusivity and measure our progress. We are
committed to the career development and promotion of
employees with disabilities, ensuring equal opportunities for
growth and progression within the Company. If an employee
becomes disabled during their time with us, we’re dedicated
to supporting them through workplace adjustments or
retraining to ensure they thrive in a new role. Together,
we’re creating an inclusive, supportive environment where
everyone can reach their potential.
Directors’ interests
The beneficial interests of the Directors and their connected
persons in the Company’s issued Ordinary shares at
31 December 2024, are provided on page 99 of the Report
of the Remuneration Committee.
Share capital
As at 31 December 2024, the Company had a total of
179,287,837 Ordinary shares in issue, with a nominal value
of £0.0001 each with one vote per share.
Ordinary shares
The Company’s Ordinary shares rank pari passu in all
respects including for voting, dividend and other distribution
purposes. Each Ordinary share ranks equally in the right
to receive a relative proportion of shares in case of a
capitalisation of reserves. Except in relation to dividends
which have been declared and rights on a liquidation of the
Company, the shareholders have no rights to share in the
profits of the Company.
The Ordinary shares are not redeemable. However, the
Company may purchase or contract to purchase any of the
Ordinary shares on or off market, subject to the Companies
Act 2006 and the requirements of the Listing Rules.
Major interests in shares
As at 31 December 2024, the Company was aware of the
following interests representing 3% or more of the issued
share capital of the Company (see table opposite).
It should be noted that these holdings may have changed
since notified to the Company. However, notification of any
change is not required until the next applicable threshold
is crossed.
Institution
Number of
shares Percentage
Blantyre Capital 21,059,643 11.75%
Liontrust Sustainable
Investments 17,822,922 9.94%
Goldman Sachs Collateral
Account 16,344,543 9.12%
Royal Bank of Canada
(previously BlueBay Asset
Management) 13,609,154 7.59%
Forum Family Office 12,579,567 7.02%
Fidelity International 10,841,141 6.05%
Invesco 8,736,061 4.87%
Gresham House Asset
Management 7,228,566 4.03%
Columbia Threadneedle
Investments 6,739,798 3.76%
Since 31 December 2024 until 12 March 2025, the Company
has not been notified of any further interests representing
over 3% of the issued share capital or any changes in the
aforementioned holdings that would warrant disclosure.
There are no restrictions on transfers of Ordinary shares
other than:
certain restrictions which may from time to time be
imposed by laws or regulations such as those relating
to insider dealing;
some of the Company’s employee share plans include
restrictions on transfer of shares while the shares are
held within the plan;
pursuant to the Group’s Share Dealing Code whereby the
Directors and designated employees require approval to
deal in the Company’s shares; and
where a person with an interest in the Company’s shares
has been served with a disclosure notice and has failed
to provide the Company with information concerning
interests in those shares.
The Company is not aware of any arrangements between
shareholders which may result in restrictions on the transfer
of securities or voting rights.
The Gym Group plc | Annual Report and Accounts 2024
112 |
Governance report
Directors’ report continued
Amendment to the Company’s Articles
of Association
The Company may alter its Articles of Association
by special resolution passed at a general meeting
of shareholders.
Authority for the Company to purchase its
own shares
At the 2024 AGM, shareholders approved an authority
for the Company to make market purchases of its own
shares up to a maximum of 17,911,737 shares (being
approximately 10% of the issued share capital at that time)
at prices not less than the nominal value of each share
(being £0.0001 each). No use was made of this authority
during 2024. The Company intends to renew this authority
at its 2025 AGM.
Authority to allot shares
At the 2024 AGM, authority was given to the Directors to
allot new Ordinary shares up to a nominal value of £5,970.57,
equivalent to 33.33% of the issued share capital of the
Company at that time. In addition, authority was given to
the Directors to allot further new Ordinary shares up to
a nominal value of £11,941.16, equivalent to 66.67% of the
authorised share capital of the Company at that time,
in connection with a rights issue or other pre-emptive offer
to Ordinary shareholders. The Company intends to renew
this authority at its 2025 AGM.
Significant agreements
The Company is not a party to any significant agreements
which would take effect, alter or terminate upon a change
of control of the Company.
Financial risk management
The Group’s financial risk management objectives and
policies, including its use of financial instruments, are set
out in Note 22 to the consolidated financial statements.
Information presented in other sections
Certain information must be included in the Annual
Financial Report under Listing Rule 6.6. The table below
provides references to where this information can be
found. If a requirement is not shown, it is not applicable
to the Company.
Stakeholder engagement
In their decision-making, the Directors have regard to their
duties under the Companies Act 2006 including Section 172,
which focuses on their responsibility to promote the long
term success of the Company for the benefit of its collective
shareholder base. In doing so, a number of matters must
be considered, including fostering relationships with the
Company’s key stakeholders. These key stakeholders include
shareholders, employees, members and suppliers. A detailed
report on the Board’s engagement with key stakeholders
and how those stakeholders’ interests were considered
during the reporting period are set out in our Section
172 statement on pages 75 to 79 and in the Corporate
governance report on page 74.
Auditor
Each Director in office at the date of approval of the Annual
Report and Accounts 2024 confirms that: a) so far as the
Director is aware, there is no relevant audit information of
which the Group’s auditor is unaware; and b) the Director
has taken all the steps which they ought to have taken as a
Director in order to make themselves aware of any relevant
audit information and to establish that the Group’s auditor
is aware of that information.
Following a formal tender process, Grant Thornton UK LLP
has been appointed by the Board on the recommendation
of the Audit and Risk Committee, to conduct the audit of
the Company’s financial statements for the year ending
31 December 2025 and a resolution for their appointment
will be proposed at the forthcoming AGM. Further details
on the tender process may be found in the Report of the
Audit and Risk Committee on pages 87 to 88.
AGM
The Notice convening the 2025 AGM will be circulated to
shareholders separately with details of the meeting.
We will ensure that shareholders are kept informed using
the Notice of Meeting, our website, and relevant regulatory
announcements in due course.
On behalf of the Board
Camille Skerritt
Company Secretary
12 March 2025
Section Listing Rule requirement Location
1 A statement of the amount of interest capitalised
by the Group during the period under review with
an indication of the amount and treatment of any
related tax relief
Note 9 Finance costs (page 141)
4 Details of long term incentive schemes Report of the Remuneration Committee
(pages 92 to 109)
10 Details of contracts of significance Corporate Governance report (page 74
Directors’ conflicts of interest)
| 113
The Gym Group plc | Annual Report and Accounts 2024
Financial
statements
Other
informationOverview
Governance
report
Strategic
report
Governance report
Directors’ responsibility statement
The Directors are responsible for preparing the Annual
Report and Accounts 2024 in accordance with applicable
United Kingdom law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors have elected to prepare the Group financial
statements in accordance with UK-adopted international
accounting standards (‘IFRS’), and the Parent Company
financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law), including
Financial Reporting Standard 101 Reduced Disclosure
Framework (‘FRS 101’). Under company law, the Directors
must not approve the Group and Company financial
statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the
Company and of the profit or loss of the Group and the
Company for that period.
In preparing the financial statements, the Directors are
required to:
select suitable accounting policies and then apply
them consistently;
make judgements and estimates that are reasonable
and prudent;
present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
provide additional disclosures when compliance with
the specific requirements in IFRSs (or in respect of
the Parent Company financial statements, FRS 101) is
insufficient to enable users to understand the impact
of particular transactions, other events and conditions
on the Group’s financial position and performance;
in respect of the Group financial statements, state
whether applicable UK-adopted IFRSs have been
followed, subject to any material departures disclosed
and explained in the financial statements;
in respect of the Parent Company financial statements,
state whether applicable UK accounting standards
including FRS 101 have been followed, subject to any
material departures disclosed and explained in the
financial statements; and
prepare the financial statements on a going concern
basis, unless it is appropriate to presume that the
Company and/or Group will not continue in business.
The Directors confirm that the financial statements comply
with the above requirements.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s and Group’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and the Group and enable them to ensure
that the Company and Group financial statements comply
with the relevant financial reporting framework. They are
also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable laws and regulations, the Directors
are also responsible for preparing a Strategic report,
Directors’ report, Report of the Remuneration Committee
and Corporate Governance report that comply with those
laws and regulations. The Directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the Group’s website. Legislation
in the UK governing the preparation and dissemination of
accounts may differ from legislation in other jurisdictions.
Responsibility statement
The Directors confirm, to the best of their knowledge:
that the consolidated financial statements, prepared in
accordance with UK-adopted international accounting
standards, give a true and fair view of the assets,
liabilities, financial position and results of the Parent
Company and subsidiary undertakings included in the
consolidation taken as a whole;
that the Annual Report and Accounts 2024, including
the Strategic report, includes a fair review of the
development and performance of the business and the
position of the Company and subsidiary undertakings
included in the consolidation taken as a whole,
together with a description of the principal risks
and uncertainties that they face; and
that they consider the Annual Report and Accounts
2024, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the position, performance,
business model and strategy of the Company and
subsidiary undertakings included in the consolidation
taken as a whole.
On behalf of the Board
Will Orr
Chief Executive Officer
12 March 2025
Financial statements
Independent auditor’s report
to the members of The Gym Group plc
Opinion
In our opinion:
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024 and of
the Group’s profit for the year then ended;
Standards;
Accepted Accounting Practice; and
We have audited the financial statements of The Gym Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2024 which comprise:
Group Parent Company
Consolidated statement of financial position as at
31 December 2024
Company statement of financial position as at
31 December 2024
Consolidated statement of comprehensive income for the
year then ended
Statement of changes in equity for the year then ended
Consolidated statement of changes in equity for the year
then ended
Related notes 1 to 8 to the financial statements including
material accounting policy information
Consolidated cash flow statement for the year then ended
Related notes 1 to 27 to the financial statements, including
material accounting policy information
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable
law and UK adopted International Accounting Standards. The financial reporting framework that has been applied in the
preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards,
including FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We are independent of the Group and Parent in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company
and we remain independent of the Group and the Parent Company in conducting the audit.
The Gym Group plc | Annual Report and Accounts 2024
114 |
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and
Parent Company’s ability to continue to adopt the going concern basis of accounting included:
We confirmed our understanding of management’s going concern assessment process and also engaged with
management early to ensure all key factors were considered in their assessment;
We obtained management’s going concern assessment, including the forecast cash flows and covenant calculations
covering the period from the date of signing to 30 June 2026 and we agreed these to the Group’s three year financial
plan;
We considered the appropriateness of the going concern assessment period, taking into consideration events after the
going concern period which may have an impact;
We tested the mathematical accuracy of the cash flows, as well as the calculation of the forecast covenants;
We assessed, against historic and current membership levels and independently sought evidence from sector forecasts,
the sensitivity of the reduction in membership numbers that would lead to a covenant breach under the reverse stress
test scenario, and the impact this would have on liquidity;
We corroborated lease costs to agreements; rate forecasts to published rate increases; and benchmarked costs
against external industry forecasts;
We further corroborated the membership impact of the timing/number of new gym openings with management’s
expansion plans;
We understood and considered the Board’s controllable mitigation plans, including reduced gym openings, lower
marketing spend, deferral of projects and the forecast impact on the ability of the business to operate within its
financial covenants. We obtained supporting documentation to evaluate the plausibility of management’s mitigation
plans considering actions delivered to date;
We compared forecast future cash flows to historical data, ensuring variations are in line with our expectations and
understanding of the business to consider the reliability of past forecasts;
We considered the results of other audit procedures and other knowledge obtained in the audit and whether it was
consistent with or contradicted management’s assumptions;
We performed our own sensitivity analysis on management’s forecast cash flows (including their reverse stress tested
model);
We agreed available banking facilities to underlying agreements and the extent of drawings thereunder to external
confirmations at 31 December 2024;
We enquired with management in respect of any events beyond the going concern period; and
We assessed the adequacy of disclosures within the Annual Report and Accounts.
Going concern has not been determined to be a key audit matter. We observed that membership rose 5% to 891,000 in the
year. Under the reverse stress test, a reduction in members of 23% from April 2025 would be required to create a breach of
the fixed charge cover covenant in June 2026 (after applying available controllable mitigations) with no liquidity issues.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a
going concern for a period of 15 months from when the financial statements are authorised for issue.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements
about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report. However, because not all future events or conditions can be predicted, this statement is not a
guarantee as to the Group’s ability to continue as a going concern.
The Gym Group plc | Annual Report and Accounts 2024
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Financial
statements
Other
informationOverview
Strategic
report
Governance
report
Financial statements
Independent auditor’s report continued
to the members of The Gym Group plc
Overview of our audit approach
Audit scope We performed an audit of the complete financial information of two components.
Key audit matters Deferral of membership income.
Property, plant and equipment and Right-of-use assets impairment testing, including cash
flow and discount rate assumptions.
Materiality Overall Group materiality of £1,668,000 which represents 2% of Group EBITDA.
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
In the current year, our audit scoping has been updated to reflect the new requirements of ISA (UK) 600 (Revised). We have
followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit evidence
on which to base our audit opinion. We performed risk assessment procedures to identify and assess risks of material
misstatement of the Group financial statements and identified significant accounts and disclosures. When identifying
components at which audit work needed to be performed to respond to the identified risks of material misstatement of
the Group financial statements, we considered our understanding of the Group and its business environment, the potential
impact of climate change, the applicable financial framework, the Group’s system of internal control at the entity level, and
the existence of centralised processes and applications.
We determined that there are no centralised audit procedures applicable to the components. Consequently, all audit
procedures were conducted at the component level.
We then identified two components as individually relevant to the Group due to materiality, significant risk and financial size of
the components relative to the Group.
For those individually relevant components, we identified the significant accounts where audit work needed to be performed
at these components by applying professional judgement, the reasons for identifying the financial reporting component
as an individually relevant component and the size of the component’s account balance relative to the Group significant
financial statement account balance.
We then considered whether the remaining Group significant account balances not yet subject to audit procedures, in
aggregate, could give rise to a risk of material misstatement of the Group financial statements. We have not selected any
additional component of the Group to be included in our audit scope as the remaining balance was not material at the
Group level.
Having identified the components for which work will be performed, we determined the scope to assign to each component.
We designed and performed audit procedures on the entire financial information of the two components selected
(‘full scope components’). No component was identified as specific scope or component requiring specified procedures.
Our scoping to address the risk of material misstatement for each key audit matter is set out in the Key audit matters
section of our report.
Involvement with component teams
All audit work performed for the purposes of the audit was undertaken by the Group audit team.
The Gym Group plc | Annual Report and Accounts 2024
116 |
Climate change
Stakeholders are increasingly interested in how climate change will impact the Group. The Group has determined that
the most significant future impacts from climate change on their operations will be from reputational risk of not meeting
net zero targets and physical risks regarding heatwaves and temperature increases. These are explained on pages
46 to 49 in the required Task Force on Climate-Related Financial Disclosures and on pages 50 to 60 in the Principal
risks and uncertainties. They have also explained their climate commitments on pages 42 to 45. All of these disclosures
form part of the ‘Other information’, rather than the audited financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our
responsibilities on ‘Other information’.
In planning and performing our audit, we assessed the potential impacts of climate change on the Group’s business and
any consequential material impact on its financial statements.
The Group has explained in their Summary of material accounting policies, how they have reflected the impact of climate
change in their financial statements, including how this aligns with their commitment to the aspirations of the Paris
Agreement to achieve net zero emissions by 2050. There are no significant judgements and estimates relating to climate
change impacting the financial statements.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating
management’s assessment of the impact of climate risk, physical and transition, their climate commitments, and the
effects of material climate risks disclosed on pages 48 and 49. As part of this evaluation, we performed our own risk
assessment, supported by our climate change internal specialists, to determine the risks of material misstatement in the
financial statements from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability
and associated disclosures. Where considerations of climate change were relevant to our assessment of going concern,
these are described above.
Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter
or to impact a key audit matter.
The Gym Group plc | Annual Report and Accounts 2024
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Financial
statements
Other
informationOverview
Strategic
report
Governance
report
Financial statements
Independent auditor’s report continued
to the members of The Gym Group plc
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not
provide a separate opinion on these matters.
Risk
Deferral of membership income – total revenue for the year ended 31 December 2024: £226.3m
(31 December 2023: £204.0m), of which £15.8m was deferred at 31 December 2024 (31 December 2023: £14.4m)
and presented in the Consolidated statement of financial position as contract liabilities.
Refer to the Report of the Audit and Risk Committee (pages 84 to 89); Accounting policies (page 130); and Note 5 of the
Consolidated financial statements (page 139).
In preparing the Consolidated financial statements, management needs to calculate the amount of joining and
subscription payments collected which relate to membership after the year end date and for which the related revenue
should be deferred and presented as a contract liability under IFRS 15 ‘Revenue from Contracts with Customers’ (‘IFRS 15’).
Although the calculation of deferred membership fees does not involve significant judgement or estimation, there are
a number of inputs including large numbers of members, varying subscription rates and the reliance on outsourced
processes which could be open to manipulation. The deferred revenue calculation is automated, driven by manually
input reports. There is an increased risk of material error and management override in the inputs to this calculation.
Further, consistent with Auditing Standards, the recognition of revenue is assessed as a material fraud risk on every
audit engagement with only rare exceptions.
Our response to the risk
We reconfirmed our understanding of the Group’s revenue recognition and deferred membership fee income
calculation processes and related controls and performed walkthrough procedures. In addition to making enquiries of
management, we also made enquiries of the outsourced membership management service provider (Xplor) to obtain
an understanding of the outsourced elements of the membership income process.
We tested the completeness of the members included in the deferred membership fee income calculation.
We agreed a sample of the data used in management’s deferred revenue calculation (for example the membership ID,
joining/direct debit date, and headline rate) to the members database and the December 2024 membership income
reports used to post revenue to test the accuracy of the data.
We also tested completeness and accuracy of the membership data held by the Group and used to recognise revenue,
by comparing the daily income files provided to us from management to the daily income files provided directly from the
outsourced membership management service provider.
We involved our IT audit team to test the related automated control supporting the deferred revenue calculation
automatically performed by the Workday system.
We performed substantive analytical procedures on the deferred revenue balance by setting detailed expectations
and comparing these with actual results.
We tested the appropriateness of material journal entries recorded in the general ledger in relation to revenue and,
in particular, those related to deferred income.
We considered the risk of management override in the revenue process, including the deferred membership income
calculation, by performing journal entry testing on material journals, and assessing management’s methods and inputs
used to calculate deferred income.
Key observations communicated to the Audit and Risk Committee
Based on our procedures, deferral of membership income for the year ended 31 December 2024 is appropriately
recognised and presented as contract liabilities as at that date.
How we scoped our audit to respond to the risk
We performed full scope audit procedures over this risk, which covered 100% of the risk amount. All audit work
performed to address this risk was undertaken by the Group audit team.
The Gym Group plc | Annual Report and Accounts 2024
118 |
Risk
Property, plant and equipment (‘PPE’) impairment testing – 31 December 2024: £181.2m (31 December 2023:
£171.7m); Right-of-use (‘ROU’) assets 31 December 2024: £280.5m (31 December 2023: £278.1m).
Refer to the Report of the Audit and Risk Committee (pages 84 to 89); Accounting policies (page 133); and Notes 13 and 14
of the Consolidated financial statements (pages 145 to 148)
As disclosed in Notes 13 and 14 to the Consolidated financial statements, PPE including ROU assets of £461.7m is recognised.
Management has undertaken an annual impairment review in respect of PPE and ROU assets and has recognised
an impairment of £0.4m in the current year.
We focused on this area due to both the significance of the carrying value of PPE and ROU assets; and the inherent
uncertainty involved in an impairment review, which requires management to make significant judgements and
estimations as to future outcomes and assumptions of cash flows (for example customer acquisition and retention,
changes in subscription rates, operating costs etc), along with the discount rate to be applied to those cash flows and
the determination of CGUs. In addition, such judgements and estimates could be influenced by management bias.
The significant assumptions are disclosed in Note 13 for PPE and Note 14 for ROU assets.
Our response to the risk
We performed a walkthrough of the process and controls to gain an understanding of the Group’s impairment process,
including the calculation methodology, selection of and sources of key assumptions, oversight and sensitivities applied.
In the current year, management refined their indicators of impairment and focused their impairment testing on those
sites meeting the criteria set. We evaluated management’s indicators to determine if they were sufficiently sensitive and
appropriate for use. We tested the application of those indicators against the three year plan and impairment models.
Where impairment indicators were present, we discussed with management the basis of the key assumptions used for the
particular CGU:
• In the value in use impairment model used to determine the recoverable amount of the CGU, being the pre-tax
discount rate, long term growth rate and assumptions relating to revenue and cost cash flows;
• Where an impairment loss was identified, in the model for determining fair value less costs of disposal of ROU assets,
being the pre-tax discount rate and assumptions relating to the sublease of sites.
We assessed management’s membership assumptions and supporting data in relation to Ultimate membership that
underpin the clustering of certain gyms as one CGU.
We obtained management’s three year plan for 2025 to 2027 and assessed assumptions within this. We challenged the
reasonableness of assumptions by reference to historical data, analysis by our own valuation experts, external benchmarks,
corroborative but also contradictory sources of information, and the risk of management bias.
We sought contradictory evidence through other areas of our audit, internal and external information on industry and other
macroeconomic factors and assessed the appropriateness of significant assumptions and cost mitigations used in the
impairment calculation.
We conducted a review specifically targeting those gyms that exhibited signs of potential impairment. This consideration
included performing our own sensitivity analysis by reference to the results of our assessment of assumptions referred
to above.
We deployed data analytics tools to allow for dashboard analysis and testing of key assumptions underlying the model
in a more streamlined and visual manner.
We considered management’s sensitivity analysis showing the impact of a reasonably possible change in key impairment
assumptions to determine whether an impairment charge would be required. This consideration included performing
our own sensitivity analysis by reference to the results of our assessment of assumptions referred to above.
As part of our work, we utilised EY valuations specialists to assist in our assessment of the discount rate and long term
growth rate assumptions used in the impairment models.
We assessed the financial statements disclosures, particularly those in Note 13 for PPE and 14 for ROU assets to the
Consolidated financial statements, against the requirements of IAS 36 ‘Impairment of assets’ and IAS 1 ‘Presentation
of financial statements’ (‘IAS 1’), particularly those related to judgements, estimation uncertainty and sensitivities.
The Gym Group plc | Annual Report and Accounts 2024
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Financial
statements
Other
informationOverview
Strategic
report
Governance
report
Financial statements
Independent auditor’s report continued
to the members of The Gym Group plc
Key observations communicated to the Audit and Risk Committee
Based on our procedures, we consider management’s assessment and the impairment charges which have been
recorded in the current year as reasonable. The financial statements disclosures, particularly those in Notes 13 and 14
to the Consolidated financial statements, materially comply with the applicable requirements of IAS 36 and IAS 1.
How we scoped our audit to respond to the risk
We performed full scope audit procedures over this risk in all identified individually relevant components, which covered
100% of the risk amount. All audit work performed to address this risk was undertaken by the Group audit team.
The same items were identified as key audit matters in both the current and prior year auditor’s reports.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining
the nature and extent of our audit procedures.
We determined materiality for the Group to be £1,668,000 (2023: £1,480,000), which is 2% (2023: 2%) of Group EBITDA.
We believe that Group EBITDA would be the most appropriate basis given the focus on Group EBITDA as the Group’s results
continue to normalise.
We determined materiality for the Parent Company to be £2,364,092 (2023: £3,022,000), which is 1% (2023: 1%) of net
assets. Being a holding entity, and non-trading, an earning or activity based basis for planning materiality is not applicable,
therefore we have applied an equity-based approach and have selected assets.
During the course of our audit, we reassessed initial materiality and there was no change in our final materiality from our
original assessment at planning.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment,
our judgement was that performance materiality was 75% (2023: 75%) of our planning materiality, namely £1,251,000
(2023: £1,111,500). We have set performance materiality at this percentage due to experience with the Group demonstrating
an effective control environment and low incidence of misstatements.
Audit work was undertaken at component locations for the purpose of responding to the assessed risks of material
misstatement of the Group financial statements. The performance materiality set for each component is based on the
relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that
component. In the current year, the performance materiality allocated to components was £1,251,000, both components
selected being full-scope (2023: £222,300 to £1,111,500).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess
of £83,400 (2023: £74,100), which is set at 5% of planning materiality, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and
in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the Annual Report and Accounts 2024 set out on pages 1 to 113,
other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information
contained within the Annual Report and Accounts.
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Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Report of the Remuneration Committee to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements;
the information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2. 5 and 7.2.6 in the Disclosure Rules and Transparency
Rules sourcebook made by the Financial Conduct Authority (the ‘FCA rules’), is consistent with the financial statements
and has been prepared in accordance with applicable legal requirements; and
information about the Company’s corporate governance statement and practices and about its administrative,
management and supervisory bodies and their Committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the
course of the audit, we have not identified material misstatements in:
the Strategic report or the Directors’ report; or
the information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2. 5 and 7.2.6 of the FCA rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
the Parent Company financial statements and the part of the Report of the Remuneration Committee to be audited are
not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
a Corporate Governance statement has not been prepared by the Company.
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to the members of The Gym Group plc
Corporate Governance statement
We have reviewed the Directors’ statement in relation to going concern, longer term viability and that part of the Corporate
Governance statement relating to the Group and Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance statement is materially consistent with the financial statements or our knowledge obtained during the audit:
Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on pages 61 to 62;
Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the
period is appropriate set out on pages 61 to 62;
Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation and
meets its liabilities set out on pages 61 to 62;
Directors’ statement on fair, balanced and understandable set out on page 113;
Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages
50 to 60;
The section of the Annual Report and Accounts that describes the review of effectiveness of risk management and
internal control systems set out on pages 50 to 60; and
The section describing the work of the Audit and Risk Committee set out on pages 84 to 89.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 113, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the Company and management.
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We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and
determined that the most significant are the Companies Act 2006; UK Listing Rules; UK Listing Authority – Disclosure
and Transparency Rules; The Companies (Miscellaneous Reporting Regulation) 2018; The Large and Medium-sized
Companies and Group’s (Accounts and Reports (Amendment)) Regulations 2013, in particular in respect of the Report
of the Remuneration Committee; UK Tax Legislation; and the UK Corporate Governance Code 2018.
We understood how The Gym Group plc is complying with those frameworks by making enquiries of senior management
and those charged with governance; attendance at Audit and Risk Committee meetings; obtaining an understanding
of entity-level controls and considering the influence of the control environment; obtaining an understanding of policies
and procedures in place regarding compliance with laws and regulations, including how compliance with such policies is
monitored and enforced; obtaining an understanding of management’s process for identifying and responding to fraud
risks, including programmes and controls established to address risks identified, or otherwise prevent, deter and detect
fraud, as well as reviewing the risk register and how senior management monitors those programmes and controls;
and reviewing correspondence with relevant regulatory authorities.
We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud
might occur by discussing within the audit team; performing client continuance procedures; reviewing interim financial
information; identifying related parties; and considering the nature of the account and our assessment of inherent risk
for relevant assertions of significant accounts.
Based on this understanding, we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved testing of journal entries, with focus on material journals, large or unusual
transactions, or journals meeting our defined risk criteria based on our understanding of the business; enquiring of
members of senior management and those charged with governance regarding their knowledge of any non-compliance
or potential non-compliance with laws and regulations that could affect the financial statements; inspecting Board
meeting minutes in the period and up to date of signing; enquiring about the policies that have been established to
prevent non-compliance with laws and regulations by officers and employees, and whether such policies are formalised in
a code of conduct, conflict of interests statement or similar standard; enquiring about the entity’s methods of enforcing
and monitoring compliance with such policies, if any; and inspecting correspondence, if any, with regulatory authorities.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
Following the recommendation from the Audit and Risk Committee, we were appointed by the Company on 29 July 2015
to audit the financial statements for the year ending 31 December 2015 and subsequent financial periods. The period
of total uninterrupted engagement including previous renewals and reappointments is ten years, covering the years
ending 31 December 2015 to 31 December 2024.
The audit opinion is consistent with the additional report to the Audit and Risk Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
for and on behalf of Ernst & Young LLP , Statutory Auditor
Belfast
12 March 2025
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| 31 December 2024 | 31 December 2023 | ||||||
| £m | £m | ||||||
| Non- | Non- | ||||||
| underlying | underlying | ||||||
| Note | Underlying | (Note 8) | Total | Underlying | (Note 8) | Total | |
Revenue | 5 | ||||||
Cost of sales | ( | ( | ( | ( | |||
Gross profit | |||||||
Other income | |||||||
Operating expenses (before depreciation, amortisation and impairment) | 6 | ( | ( | ( | ( | ( | ( |
Depreciation, amortisation and impairment | 12, 13, 14 | ( | ( | ( | ( | ( | ( |
Operating profit | ( | ( | |||||
Finance costs | 9 | ( | ( | ( | ( | ( | ( |
Finance income | |||||||
Profit/(loss) before tax | ( | ( | ( | ( | |||
Tax credit/(charge) | 10 | ( | ( | ||||
Profit/(loss) for the year attributable to equity shareholders | ( | ( | ( | ( | |||
Other comprehensive income for the year | |||||||
| Total comprehensive income/(expense) | |||||||
attributable to equity shareholders | ( | ( | ( | ( | |||
Earnings/(loss) per share (p) | 11 | ||||||
Basic | ( | ( | |||||
Diluted | ( | ( | |||||
Reconciliation of Operating profit to Group Adjusted EBITDA Less Normalised Rent
1
| 31 December 2024 | 31 December 2023 | |||
| Note | £m | £m | ||
Operating profit | ||||
Add back: | Non-underlying operating items | 8 | ||
| Share based payments | ||||
(included in Operating expenses) | 7, 25 | |||
Underlying depreciation and amortisation | 12, 13, 14 | |||
Group Adjusted EBITDA | ||||
Less: | Normalised Rent 2 | ( | ( | |
Group Adjusted EBITDA Less Normalised Rent 1 |
1 Group Adjusted EBITDA Less Normalised Rent is a non-statutory metric used internally by management and externally by investors. It is calculated as operating
profit before depreciation, amortisation, share based payments and non-underlying items, and after deducting Normalised Rent. Refer to the KPIs on pages 32
to 33 for further information.
2 Normalised Rent is the contractual rent payable, recognised in the monthly period to which it relates.
The Notes on pages 128 to 157 form an integral part of the financial statements.
Financial statements
Consolidated statement of comprehensive income
for the year ended 31 December 2024
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Financial statements
Consolidated statement of financial position
as at 31 December 2024
| 31 December 2024 | 31 December 2023 | ||
| Note | £m | £m | |
| Non-current assets | |||
Intangible assets | 12 | ||
Property, plant and equipment | 13 | ||
Right-of-use assets | 14 | ||
Investments in financial assets | 15 | ||
Deferred tax assets | 10 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | |||
Trade and other receivables | 16 | ||
Cash and cash equivalents | 17 | ||
Total current assets | |||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 18 | ||
Lease liabilities | 14 | ||
Provisions | 21 | ||
Total current liabilities | |||
| Non-current liabilities | |||
Borrowings | 19 | ||
Lease liabilities | 14 | ||
Provisions | 21 | ||
Total non-current liabilities | |||
Total liabilities | |||
Net assets | |||
| Capital and reserves | |||
Own shares held | 24 | ||
Share premium | 24 | ||
Own shares reserve – EBT | 24 | ( | |
Merger reserve | 24 | ||
Retained deficit | 24 | ( | ( |
Total equity shareholders’ funds |
The Notes on pages 128 to 157 form an integral part of the financial statements.
Company Registration Number 08528493
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| Own shares | Share | Own shares | Merger | Retained | |||
| held | premium | reserve – EBT | reserve | deficit | Total | ||
| Note | £m | £m | £m | £m | £m | £m | |
At 1 January 2023 | ( | ||||||
Loss for the year | ( | ( | |||||
| Other comprehensive income | |||||||
for the year | |||||||
| Loss for the year and total | |||||||
comprehensive expense | ( | ( | |||||
Share based payments | 25 | ||||||
At 31 December 2023 | ( | ||||||
Profit for the year | |||||||
| Other comprehensive income | |||||||
for the year | |||||||
| Profit for the year and total | |||||||
comprehensive income | |||||||
Share based payments | 25 | ||||||
Issue of Ordinary share capital | |||||||
Purchase of own shares by EBT | ( | ( | |||||
Exercise of share options | ( | ( | |||||
At | ( | ( |
The Notes on pages 128 to 157 form an integral part of the financial statements.
Financial statements
Consolidated statement of changes in equity
for the year ended 31 December 2024
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Financial statements
Consolidated cash flow statement
for the year ended 31 December 2024
| 31 December 2024 | 31 December 2023 | ||
| Note | £m | £m | |
| Cash flows from operating activities | |||
Profit/(loss) before tax | ( | ||
| Adjustments for: | |||
Finance costs | 9 | ||
Finance income | ( | ( | |
Non-underlying operating items | 8 | ||
Underlying depreciation of property, plant and equipment | 13 | ||
Underlying depreciation of right-of-use assets | 14 | ||
Underlying amortisation of intangible assets | 12 | ||
Share based payments and associated NICs | 25 | ||
Decrease in inventories | |||
Decrease/(increase) in trade and other receivables | ( | ||
Increase in trade and other payables | |||
Increase/(decrease) in provisions | ( | ||
Cash generated from operations | |||
Tax (paid)/received | |||
Net cash inflow from operating activities before non-underlying items | |||
Non-underlying operating items | 8 | ( | ( |
Net cash inflow from operating activities | 23 | ||
| Cash flows from investing activities | |||
Purchase of property, plant and equipment | ( | ( | |
Purchase of intangible assets | ( | ( | |
Bank interest received | |||
Net cash outflow used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Repayment of lease liability principal | 20 | ( | ( |
Lease interest paid | 20 | ( | ( |
Bank interest paid | 20 | ( | ( |
Payment of financing fees | ( | ( | |
Drawdown of bank loans | 20 | ||
Repayments of bank loans | 20 | ( | ( |
Purchase of own shares by EBT | 24 | ( | |
Settlement of share based payments through EBT | 25 | ( | |
Proceeds from issue of Ordinary shares | |||
Net cash outflow from financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at the start of the year | |||
Cash and cash equivalents at the end of the year | 17 |
The Notes on pages 128 to 157 form an integral part of the financial statements.
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Notes to the consolidated financial statements
for the year ended 31 December 2024
1. General information
The Company is a public limited company whose shares are publicly traded on the London Stock Exchange and is
incorporated and domiciled in the United Kingdom
The registered address of the Company is 5th Floor, OneCroydon, 12-16 Addiscombe Road, Croydon, CR0 0XT, United Kingdom .
2. Summary of material accounting policies
A summary of the material accounting policies is set out below. These have been applied consistently in the financial statements.
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
2. Summary of material accounting policies continued
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
2. Summary of material accounting policies continued
Property, plant and equipment continued
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
2. Summary of material accounting policies continued
Impairment of non-financial assets continued
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
2. Summary of material accounting policies continued
Taxation continued
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4. New and amended IFRS standards
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
4. New and amended IFRS standards continued
New and amended IFRS standards that are effective for the current year continued
Amendments to IAS 21 | Lack of Exchangeability |
IFRS 18 | Presentation and Disclosures in Financial Statements |
IFRS 19 | Subsidiaries without Public Accountability: Disclosures |
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| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
| Major products/service lines | ||
Membership income | 214.9 | 193.1 |
| Rental income from personal trainers | 8.2 | 7.7 |
Ancillary income | 3.2 | 3.2 |
226.3 | 204.0 | |
| Timing of revenue recognition | ||
Products transferred at a point in time | 3.7 | 3.5 |
Products and services transferred over time | 222.6 | 200.5 |
226.3 | 204.0 | |
| Liabilities relating to contracts with customers | ||
Contract liabilities (Note 18) | (15.8) | (14.4) |
| Revenue recognised that was included in contract liabilities in the prior year | ||
Membership income | 14.4 | 11.0 |
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Underlying employee costs (Note 7) | 49.8 | 43.7 |
Site costs (excluding employee costs) 1 | 80.6 | 78.1 |
Central support office costs (excluding employee costs) 2 | 8.7 | 6.2 |
| Auditor’s remuneration costs: | ||
Fees payable for the audit of the Group’s annual accounts | 0.4 | 0.3 |
Audit of the Group’s subsidiaries pursuant to legislation | 0.1 | 0.1 |
| Underlying operating expenses (before depreciation, amortisation | ||
and impairment) | 139.6 | 128.4 |
Non-underlying operating expenses (before depreciation, amortisation and impairment) (Note 8) | 0.4 | 1.5 |
Operating expenses (before depreciation, amortisation and impairment) | 140.0 | 129.9 |
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for the year ended 31 December 2024
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Wages and salaries | 42.8 | 37.9 |
Social security costs | 3.4 | 3.1 |
Employers’ pension costs | 0.8 | 0.7 |
Share based payments (Note 25) | 3.4 | 2.4 |
Underlying employee costs | 50.4 | 44.1 |
Non-underlying employee costs | 0.1 | 0.5 |
Employee costs | 50.5 | 44.6 |
The average number of employees, including Directors, during the year was:
| 31 December 2024 | 31 December 2023 | |
| Number | Number | |
Operational | 1,621 | 1,644 |
Administrative | 216 | 193 |
1,837 |
8. Non-underlying items
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
| Affecting operating expenses (before depreciation, amortisation | ||
| and impairment) | ||
Costs of major strategic projects and investments | 0.2 | 0.9 |
Restructuring and reorganisation costs (including site closures) | 0.2 | 0.6 |
Total affecting operating expenses (before depreciation, amortisation and impairment) | 0.4 | 1.5 |
| Affecting depreciation, amortisation and impairment | ||
| Impairment of property, plant and equipment, right-of-use assets | ||
and intangible assets | 0.4 | 0.6 |
Amortisation of business combination intangible assets | 0.1 | 0.2 |
Total affecting depreciation, amortisation and impairment | 0.5 | 0.8 |
Total affecting operating expenses | 0.9 | 2.3 |
| Affecting finance costs | ||
Refinancing costs and remeasurement of borrowings | 0.2 | 0.5 |
Total affecting finance costs | 0.2 | 0.5 |
Total all non-underlying items before tax | 1.1 | 2.8 |
Tax on non-underlying items | (0.1) | (0.5) |
Total non-underlying charge in income statement | 1.0 | 2.3 |
Non-underlying items affecting operating expenses (before depreciation, amortisation and impairment) of £0.4m (2023:
£1.5m) relate to costs incurred in the year on strategic technology projects, as well as a provision for the closure costs of one
gym in 2025.
Non-underlying costs affecting depreciation, amortisation and impairment in the year amounted to £0.5m (2023: £0.8m),
of which £0.4m (2023: £0.6m) relates to the impairment of one site (2023: two sites). The remaining £0.1m (2023: £0.2m) of
non-underlying costs affecting depreciation, amortisation and impairment relates to the amortisation of business
combination intangibles acquired as part of the Lifestyle, easyGym and Fitness First acquisitions.
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Non-underlying items affecting finance costs amounted to £0.2m (2023: £0.5m) and relate to advisory and legal costs incurred
in agreeing the Group’s new banking facilities in June 2024. Further information about the Group’s bank facilities can be found
in Note 19.
Tax on non-underlying items represents the tax charge or credit arising on the Group’s non-underlying items calculated at the
current tax rate.
Reconciliation of non-underlying operating items to cash flow
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Non-underlying items affecting operating expenses | 0.9 | 2.3 |
Less: Non-underlying items affecting depreciation, amortisation and impairment | (0.5) | (0.8) |
Add: opening accruals | 0.5 | – |
Less: closing accruals | – | (0.5) |
Cash outflow from non-underlying operating items | 0.9 | 1.0 |
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Bank loans and overdraft interest including amortisation of financing fees | 5.6 | 6.0 |
Lease interest | 15.5 | 15.5 |
21.1 | 21.5 | |
Less: Capitalised interest | (0.4) | (0.1) |
Underlying finance costs | 20.7 | 21.4 |
Non-underlying finance costs | 0.2 | 0.5 |
Finance costs | 20.9 | 21.9 |
10. Taxation
Tax on profit/(loss)
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
| Current income tax | ||
Current tax on profits/losses in the year | – | (0.1) |
Total current income tax | – | (0.1) |
| Deferred tax | ||
Origination and reversal of temporary differences | 1.9 | – |
Total deferred tax | 1.9 | – |
Tax credit/(charge) | 1.9 | (0.1) |
The standard rate of corporation tax applied to reported profits/losses is 25% (2023: 23.5%).
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
10. Taxation continued
Reconciliation of tax credit/(charge)
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Profit/(loss) before tax | 2.5 | (8.3) |
Tax calculation at standard rate of corporation tax of 25% (2023: 23.5%) | (0.6) | 2.0 |
Expenses not deductible for tax purposes | (0.4) | (0.7) |
Unrecognised tax losses | 2.9 | (1.4) |
Tax credit/(charge) | 1.9 | (0.1) |
| Accelerated | ||||||
| capital | Intangible | |||||
| allowances | Losses | assets | Share schemes | Other | Total | |
| £m | £m | £m | £m | £m | £m | |
At 1 January 2023 | 1.8 | 11.1 | (0.4) | 0.7 | 3.1 | 16.3 |
Adjustments in respect of prior years | (1.5) | 2.4 | (0.2) | – | (0.2) | 0.5 |
Recognised in income statement | 1.8 | (2.4) | 0.3 | 0.2 | (0.4) | (0.5) |
At 31 December 2023 | 2.1 | 11.1 | (0.3) | 0.9 | 2.5 | 16.3 |
Adjustments in respect of prior years | – | – | – | – | – | – |
Recognised in income statement | 1.0 | 1.0 | 0.3 | – | (0.4) | 1.9 |
At 31 December 2024 | 3.1 | 12.1 | – | 0.9 | 2.1 | 18.2 |
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11. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted
average number of Ordinary shares outstanding during the year, excluding unvested shares held pursuant to The Gym Group
plc’s share based long term incentive schemes (see Note 25).
Diluted earnings/(loss) per share is calculated by adjusting the weighted average number of Ordinary shares outstanding
to assume conversion of all dilutive potential Ordinary shares. During the year ended 31 December 2024, the Group had
potentially dilutive shares in the form of share options and unvested shares issued pursuant to The Gym Group plc’s share
based long term incentive schemes (see Note 25).
31 December 2024 | 31 December 2023 | |
| Profit/(loss) (£m) | ||
Profit/(loss) for the year attributable to equity shareholders | 4.4 | (8.4) |
Adjustment for non-underlying items | 1.0 | 2.3 |
Adjusted profit/(loss) for the year attributable to equity shareholders | 5.4 | (6.1) |
Weighted average number of Ordinary shares for basic earnings/(loss) per share 1 | 177,153,298 | 178,512,563 |
Effect of dilution from share options | 7,503,376 | – |
| Weighted average number of Ordinary shares adjusted | ||
for the effect of dilution | 184,656,674 | 178,512,563 |
| Earnings/(loss) per share (p) | ||
Basic earnings/(loss) per share | 2.5 | (4.7) |
Diluted earnings/(loss) per share | 2.4 | (4.7) |
Adjusted basic earnings/(loss) per share | 3.0 | (3.4) |
Adjusted diluted earnings/(loss) per share | 2.9 | (3.4) |
1 The weighted average number of Ordinary shares excludes the shares that are held by the EBT (see Note 24) as these are classified as Own shares reserve – EBT.
In the prior year, 7,164,017 share awards were excluded from the diluted weighted average number of Ordinary shares
calculation because their effect would be anti-dilutive.
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
| Computer | |||||
| software and | |||||
| Goodwill | Customer list | Contract | licences | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
At 1 January 2023 | 81.8 | 3.0 | 1.1 | 20.3 | 106.2 |
Additions | – | – | – | 4.4 | 4.4 |
Disposals | – | – | (0.2) | – | (0.2) |
At 31 December 2023 | 81.8 | 3.0 | 0.9 | 24.7 | 110.4 |
Additions | – | – | – | 6.7 | 6.7 |
Transfers | – | – | – | 0.3 | 0.3 |
At 31 December 2024 | 81.8 | 3.0 | 0.9 | 31.7 | 117.4 |
| Accumulated amortisation | |||||
At 1 January 2023 | – | (2.7) | (0.5) | (10.3) | (13.5) |
Charge for the year | – | (0.1) | (0.1) | (5.5) | (5.7) |
Disposals | – | – | 0.2 | – | 0.2 |
At 31 December 2023 | – | (2.8) | (0.4) | (15.8) | (19.0) |
Charge for the year | – | (0.1) | – | (6.1) | (6.2) |
At 31 December 2024 | – | (2.9) | (0.4) | (21.9) | (25.2) |
| Net book value | |||||
At 31 December 2023 | 81.8 | 0.2 | 0.5 | 8.9 | 91.4 |
At 31 December 2024 | 81.8 | 0.1 | 0.5 | 9.8 | 92.2 |
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| Fixtures, | ||||||
| Assets under | Leasehold | fittings and | Gym and other | Computer | ||
| construction | improvements | equipment | equipment | equipment | Total | |
| £m | £m | £m | £m | £m | £m | |
| Cost | ||||||
At 1 January 2023 | 2.3 | 240.8 | 11.6 | 90.0 | 5.6 | 350.3 |
Additions | 1.4 | 8.9 | 0.3 | 4.2 | 0.7 | 15.5 |
Disposals | (0.3) | – | – | – | – | (0.3) |
Transfers | (1.6) | 1.5 | – | 0.1 | – | – |
At 31 December 2023 | 1.8 | 251.2 | 11.9 | 94.3 | 6.3 | 365.5 |
Additions | 0.9 | 23.4 | 0.3 | 9.0 | 1.5 | 35.1 |
Disposals | (0.2) | (1.8) | (0.1) | (11.7) | – | (13.8) |
Transfers | (1.6) | 0.7 | – | 0.6 | – | (0.3) |
At 31 December 2024 | 0.9 | 273.5 | 12.1 | 92.2 | 7.8 | 386.5 |
| Accumulated depreciation | ||||||
At 1 January 2023 | – | (95.2) | (9.6) | (60.5) | (4.0) | (169.3) |
Charge for the year | – | (15.8) | (0.5) | (6.9) | (0.8) | (24.0) |
Impairment | – | (0.4) | – | (0.1) | – | (0.5) |
At 31 December 2023 | – | (111.4) | (10.1) | (67.5) | (4.8) | (193.8) |
Charge for the year | – | (16.5) | (0.4) | (6.7) | (1.0) | (24.6) |
Disposals | – | 1.6 | 0.1 | 11.7 | – | 13.4 |
Transfers | – | – | – | 0.1 | – | 0.1 |
Impairment | – | (0.4) | – | – | – | (0.4) |
At 31 December 2024 | – | (126.7) | (10.4) | (62.4) | (5.8) | (205.3) |
| Net book value | ||||||
At 31 December 2023 | 1.8 | 139.8 | 1.8 | 26.8 | 1.5 | 171.7 |
At 31 December 2024 | 0.9 | 146.8 | 1.7 | 29.8 | 2.0 | 181.2 |
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13. Property, plant and equipment continued
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14. Right-of-use assets and leases
The Group leases gym sites and its head office (‘Property leases’) and also enters into hire purchase and lease agreements for
gym equipment (‘Non-property leases’). Property leases are typically made for fixed periods of 10 to 20 years but may have
extension options as well. Non-property leases are typically made for fixed periods of three years. Both property and non-
property leases are recognised as a right-of-use asset with a corresponding liability at the date at which the leased asset is
available for use by the Group.
(i) Amounts recognised in the consolidated statement of financial position
| Property leases | Non-property leases | Total | |
| £m | £m | £m | |
| Cost | |||
At 1 January 2023 | 420.5 | 15.3 | 435.8 |
Additions | 13.8 | 3.0 | 16.8 |
At 31 December 2023 | 434.3 | 18.3 | 452.6 |
Additions | 32.0 | 0.2 | 32.2 |
Disposals | (2.5) | (0.1) | (2.6) |
At 31 December 2024 | 463.8 | 18.4 | 482.2 |
| Accumulated depreciation | |||
At 1 January 2023 | (144.6) | (1.8) | (146.4) |
Charge for the year | (25.7) | (2.3) | (28.0) |
Impairment | (0.1) | – | (0.1) |
At 31 December 2023 | (170.4) | (4.1) | (174.5) |
Charge for the year | (27.0) | (2.4) | (29.4) |
Disposals | 2.3 | – | 2.3 |
Transfers | – | (0.1) | (0.1) |
At 31 December 2024 | (195.1) | (6.6) | (201.7) |
| Net book value | |||
At 31 December 2023 | 263.9 | 14.2 | 278.1 |
At 31 December 2024 | 268.7 | 11.8 | 280.5 |
During the year, a total impairment loss of £0.4m (2023: £0.6m) was recognised relating to one (2023: two) site, of which £0.4m
(2023: £0.5m) was allocated against property, plant and equipment and £nil (2023: £0.1m) was allocated against right-of-use
assets. The total recoverable amount of the affected CGU was £1.8m (2023: £1.3m). See Note 13 for further disclosure.
The split of lease liabilities between current and non-current is as follows:
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Current | 27.6 | 28.6 |
Non-current | 312.9 | 310.6 |
Total Lease liabilities | 340.5 | 339.2 |
The total cash outflow for leases in the year was £45.7m (2023: £43.5m). The maturity analysis of lease liabilities is disclosed in
Note 22.
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for the year ended 31 December 2024
14. Right-of-use assets and leases continued
(ii) Amounts recognised in the consolidated income statement
The statement of profit or loss shows the following amounts relating to leases:
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Depreciation charge of right-of-use assets | 29.4 | 28.0 |
Impairment of right-of-use assets | – | 0.1 |
Interest expense (included in finance cost) | 15.5 | 15.5 |
There are no variable lease payments and no sublease income recognised in the consolidated income statement.
(iii) Extension and termination options
The Group has recognised lease extension options contained within the lease in the calculation of right-of-use assets and
lease liabilities at inception of the lease if management is reasonably certain to exercise the option to extend the lease beyond
its contractual term. In all other cases, a lease extension is only recognised when a lease is extended beyond the original
contractual term.
During the year, the Group has renegotiated one lease (2023: two) which resulted in additional lease liabilities of £2.3m being
recognised (2023: £1.8m), with a corresponding increase included within additions to the right-of-use assets in the table in Note
14 (i). The Group terminated no leases (2023: one) in the year.
(iv) Non-property leases
At 31 December 2024, the Group had amounts outstanding in respect of non-property lease arrangements of £3.3m (2023:
£8.9m). These lease arrangements predominantly relate to the financing of the fit-out of gyms opened in 2022 and 2023.
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Trade receivables | 1.0 | 1.7 |
Loss allowance | (0.3) | – |
0.7 | 1.7 | |
Other receivables | 0.3 | 0.2 |
Prepayments and accrued income | 7.8 | 8.9 |
Trade and other receivables | 8.8 | 10.8 |
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| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Cash at bank | 3.0 | 1.5 |
Cash and cash equivalents | 3.0 | 1.5 |
Cash and cash equivalents earn interest at floating rates based on daily bank deposit rates. Short term deposits are made for
periods of one day and earn interest at the respective short term deposit rates.
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Trade payables | 9.4 | 6.7 |
Social security and other taxes | 2.2 | 4.3 |
Accruals | 21.9 | 18.0 |
Other payables | 0.2 | 0.2 |
Contract liabilities (Note 5) | 15.8 | 14.4 |
Trade and other payables | 49.5 | 43.6 |
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| Non-property | Property | Total | ||
| Borrowings | lease liabilities | lease liabilities | lease liabilities | |
| £m | £m | £m | £m | |
At 1 January 2023 | 70.0 | 11.4 | 339.0 | 350.4 |
Repayments of interest and principal | (17.5) | (6.5) | (37.0) | (43.5) |
Interest expense | 5.7 | 1.0 | 14.5 | 15.5 |
Drawdowns | 2.0 | – | – | – |
New leases and modifications | – | 3.0 | 13.8 | 16.8 |
Other | (1.3) | – | – | – |
At 31 December 2023 | 58.9 | 8.9 | 330.3 | 339.2 |
Repayments of interest and principal | (8.8) | (6.1) | (39.6) | (45.7) |
Interest expense | 5.4 | 0.5 | 15.0 | 15.5 |
Drawdowns | 5.0 | – | – | – |
New leases and modifications | – | – | 31.5 | 31.5 |
Other | 0.8 | – | – | – |
At 31 December 2024 | 61.3 | 3.3 | 337.2 | 340.5 |
| Dilapidations | Other | Total | |
| £m | £m | £m | |
At 1 January 2024 | 1.7 | 0.1 | 1.8 |
New provisions | 1.0 | – | 1.0 |
Utilisation of provisions | – | (0.1) | (0.1) |
At 31 December 2024 | 2.7 | – | 2.7 |
Due in less than one year | 0.5 | – | 0.5 |
Due in more than one year | 2.2 | – | 2.2 |
At 31 December 2024 | 2.7 | – | 2.7 |
22. Financial instruments
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| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Bank borrowings | 61.0 | 59.0 |
Non-property leases | 3.3 | 8.9 |
| Less: Cash and cash equivalents | (3.0) | (1.5) |
| Non-Property Net Debt | 61.3 | 66.4 |
Equity | 229.8 | 229.7 |
| Total capital | 291.1 | 296.1 |
| Gearing ratio | 21% | 22% |
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Change in interest rates of 0.5% (2023: 0.5%) | 0.3 | 0.3 |
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for the year ended 31 December 2024
22. Financial instruments continued
| 31 December 2024 | |||||
| More than | |||||
| Within 1 year | 1 to 2 years | 2 to 5 years | 5 years | Total | |
| £m | £m | £m | £m | £m | |
Trade and other payables | 31.5 | – | – | – | 31.5 |
Borrowings | 4.5 | 4.7 | 64.5 | – | 73.7 |
Lease liabilities | 45.0 | 43.7 | 126.2 | 224.1 | 439.0 |
81.0 | 48.4 | 190.7 | 224.1 | 544.2 |
| 31 December 2023 | |||||
| More than | |||||
| Within 1 year | 1 to 2 years | 2 to 5 years | 5 years | Total | |
| £m | £m | £m | £m | £m | |
Trade and other payables | 24.9 | – | – | – | 24.9 |
Borrowings | 6.2 | 64.7 | – | – | 70.9 |
Lease liabilities | 43.4 | 43.6 | 125.9 | 218.0 | 430.9 |
74.5 | 108.3 | 125.9 | 218.0 | 526.7 |
23. Net cash inflow from operating activities
The Directors believe that Free cash flow is the measure that best reflects the amount of cash available to the Group for
investing in new sites and technology, and for enhancing existing sites. As such, Free cash flow is included within the Key
performance indicators section of the Annual Report and Accounts 2024 and referenced in both the Financial review and
Going concern note. A reconciliation of Net cash inflow from operating activities to Free cash flow is included below.
Reconciliation of net cash inflow from operating activities to free cash flow
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Net cash inflow from operating activities | 95.1 | 79.5 |
Less: Property lease payments made (Note 20) | (39.6) | (37.0) |
Less: Maintenance capital expenditure (including funded by lease) | (12.2) | (10.3) |
Less: Bank and non-property lease interest paid | (6.3) | (5.5) |
Add: Bank interest received | 0.5 | 0.3 |
Free cash flow | 37.5 | 27.0 |
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24. Issued share capital and reserves
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
| Allotted, called up and fully paid | ||
Ordinary shares of £0.0001 each Own shares held | – | – |
Deferred Ordinary shares of £1 each | 0.1 | 0.1 |
31 December 2024 | 31 December 2023 | |
Ordinary shares of £0.0001 each | 179,287,837 | 178,700,366 |
Deferred Ordinary shares of £1 each | 48,050 | 48,050 |
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
25. Share based payments
The Group had the following equity-settled share based payment arrangements in operation during the year:
a) The Gym Group plc Performance Share Plan (‘PSP’)
b) The Gym Group plc Share Incentive Plan – Free shares (‘SIP – Free Shares’)
c) The Gym Group plc Share Incentive Plan – Matching shares (‘SIP’)
d) The Gym Group plc Restricted Stock Plan (‘RSA’)
e) The Gym Group plc Long Service Award Plan (‘LSA’)
f) The Gym Group plc Savings Related Share Option Scheme (‘SAYE’)
In accordance with IFRS 2 Share Based Payment, the value of the awards is measured at fair value at the date of the grant.
The fair value is expensed on a straight-line basis over the vesting period, based on management’s estimate of the number
of shares that will eventually vest. The Group recognised a total charge of £2.9m (2023: £2.4m) in respect of the Group’s share
based payment arrangements. There was a charge of £0.5m related to employer’s national insurance (2023: £nil).
A summary of the movements in each scheme is outlined below:
| 31 December 2024 | |||||||
| Lapsed/ | |||||||
| Outstanding at | Granted | cancelled | Exercised | Outstanding at | Exercisable at | ||
| 1 January | during | during | during | 31 December | 31 December | ||
| Scheme name | 2024 | the year | the year | the year 2024 | 2024 | ||
Performance Share Plan | 4,052,963 | 2,804,981 | (1,076,142) | (205,574) 1 | 5,576,228 | 169,726 | |
Share Incentive Plan – Free shares | 14,367 | – | (1,413) | (3,429) 2 | 9,525 | 9,525 | |
Share Incentive Plan – Matching shares | 274,534 | 84,668 | (33,716) | (16,195) 3 | 309,291 | 101,136 | |
Restricted stock | 3,388,244 | 1,782,726 | (331,108) | (796,242) 4 | 4,043,620 | 539,705 | |
| Long Service Awards | 1,500 | 2,500 | – | (1,500) 5 | 2,500 | – | |
Save as You Earn | 1,424,361 | 166,486 | (314,668) | (150,990) 6 | 1,125,189 | 13,187 | |
9,155,969 | 4,841,361 | (1,757,047) | (1,173,930) | 11,066,353 | 833,279 | ||
1 The weighted average share price at the date of exercise of these options was £1.12.
2 The weighted average share price at the date of exercise of these options was £1.31.
3 The weighted average share price at the date of exercise of these options was £1.36.
4 The weighted average share price at the date of exercise of these options was £1.35.
5 The weighted average share price at the date of exercise of these options was £1.53.
6 The weighted average share price at the date of exercise of these options was £1.21.
| 31 December 2023 | |||||||
| Lapsed/ | |||||||
| Outstanding at | Granted | cancelled | Exercised | Outstanding at | Exercisable at | ||
| 1 January | during | during | during | 31 December | 31 December | ||
| Scheme name | 2023 | the year | the year | the year 2023 | 2023 | ||
Performance Share Plan | 3,337,237 | 2,778,282 | (2,062,556) | – | 4,052,963 | 375,300 | |
Share Incentive Plan – Free shares | 16,383 | – | – | (2,016) 1 | 14,367 | 14,367 | |
Share Incentive Plan – Matching shares | 216,704 | 100,645 | (21,659) | (21,156) 2 | 274,534 | 87,808 | |
Restricted stock | 2,178,032 | 1,770,627 | (298,496) | (261,919) 3 | 3,388,244 | 405,377 | |
Long Service Awards | 2,750 | 1,500 | – | (2,750) 4 | 1,500 | – | |
Save as You Earn | 1,312,444 | 526,656 | (410,851) | (3,888) 5 | 1,424,361 | 255,979 | |
7,063,550 | 5,177,710 | (2,793,562) | (291,729) | 9,155,969 | 1,138,831 | ||
1 The weighted average share price at the date of exercise of these options was £1.09.
2 The weighted average share price at the date of exercise of these options was £1.04.
3 The weighted average share price at the date of exercise of these options was £1.13.
4 The weighted average share price at the date of exercise of these options was £1.00.
5 The weighted average share price at the date of exercise of these options was £1.40.
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The exercise price of all options under the schemes held during the year is 0.01p (2023: 0.01p), with the exception of the SAYE
scheme where the exercise price ranges between 93p and 236p (2023: 93p and 236p). 820,092 options were exercisable
under the PSP, RSA and SIP schemes as at 31 December 2024 (2023: 882,852) and 13,187 options were exercisable under the
SAYE scheme (2023: 255,979). No other options were exercisable as at 31 December 2024 (2023: none).
In the case of the Performance Share Plan and Restricted Stock Plan, when exercised, the Group is required to withhold an
amount in respect of the participating employee’s tax obligation associated with these share based payments and transfer
it to the tax authority on behalf of the employee. To fulfil this obligation, the Group withholds the number of equity instruments
equal to the monetary value of the employee’s tax obligation from the total number of equity instruments that otherwise
would have been issued to the employee upon exercise of these share based payments (referred to as ‘net settlement’).
The estimated future payments to the tax authority over the next five years in respect of these schemes at 31 December 2024
is £5.3m. This has been estimated based on the number of equity instruments expected to vest, multiplied by the share price
at 31 December 2024, multiplied by the average tax rate of 45%.
During the year, the Group made income tax payments on behalf of employees of £0.4m (2023: £nil) in the form of cash as part
of the net settlement process on share based payments. The settlement in cash reduced the future funding requirement to the
EBT and has accordingly been classified as a financing activity in the consolidated cash flow statement.
(a) Performance Share Plan
The outstanding awards under the PSP as at 31 December 2024 will all vest within three years, subject to continued
employment and the achievement of certain performance targets.
For awards made in 2024, the targets are based on financial targets (Group Adjusted EBITDA Less Normalised Rent and ROIC),
employee engagement and member visits. The financial targets contribute 80% of the vesting conditions, with the employee
engagement and member visit targets each contributing 10%. All targets in the 2024 award are non-market based conditions,
and therefore the fair value of the award was determined using the share price at the date of grant.
For awards made in 2023, the targets are based on TSR and Social Value performance measures, with the TSR target
contributing 80% of the vesting conditions, and the Social Value contributing 20%. The TSR performance measures are
relative TSR and absolute TSR, with awards being split equally between these two measures.
For awards made in 2022, the targets are based on TSR and financial performance measures with each target contributing
to 50% of the vesting conditions. The financial performance measures are Return on Invested Capital (‘ROIC’) and Cumulative
Adjusted Group Operating Cash Flow, with the awards being split equally between these two measures.
For awards made in 2021, the performance targets are solely based on TSR, with 33.3% based on absolute shareholder return
and 66.7% based on relative TSR.
The vesting conditions of the Performance Share Plan awards are set out on pages 97 to 98. The maximum term of these
awards is three years and settlement is in the form of shares.
The fair value of the awards that vest based on non-market based conditions was determined using the share price at the date
of grant.
The fair value of the awards that vest based on market based conditions (TSR element) was estimated at the grant date using
a Monte Carlo simulation model, taking into account the terms and conditions upon which the awards were granted. This model
simulates the TSR and compares it against the group of comparator companies. It takes into account historic dividends and
share price fluctuations to predict the distribution of relative share price performance.
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Notes to the consolidated financial statements continued
for the year ended 31 December 2024
25. Share based payments continued
(a) Performance Share Plan continued
The following assumptions were used for options granted during the year:
Without holding period | With holding period | |||
2024 | 2023 | 2024 | 2023 | |
Weighted average share price at date of grant | £1.33 | £0.97 | £1.33 | £0.97 |
Exercise price | £0.0001 | £0.0001 | £0.0001 | £0.0001 |
Expected volatility | – | 51.2% | – | 42.3% |
Expected term until exercised | 3 years | 3 years | 5 years | 5 years |
Expected dividend yield | – | – | – | – |
Risk-free interest rate | – | 3.83% | – | 3.66% |
The weighted average fair value of each award issued under this scheme during the year was £1.33 (2023: £0.46). The weighted
average remaining contractual life was 7.8 years at 31 December 2024 (2023: 7.8 years).
(b) Share Incentive Plan – Free shares
The awards made under the SIP – Free Shares occurred when the Group floated on the London Stock Exchange and were
subject to continued employment requirements over a three year period and had no performance conditions. Therefore,
the options vested in full at the end of the three year period. No further awards have been issued. The shares are held by
an employee benefit trust.
The weighted average remaining contractual life was 1.3 years at 31 December 2024 (2023: 2.3 years).
(c) Share Incentive Plan – Matching shares
Under the matching shares award, for every share purchased by an employee the Company will award one matching share,
up to a maximum value. Therefore, the options vest in full at the end of the three year period. The awards are subject to
continued employment requirements over a three year period and have no performance conditions. The shares are held
by an employee benefit trust.
The weighted average fair value of each award issued under this scheme during the year was £1.24 (2023: £1.06) and was
determined using the share price at the date of grant. The weighted average remaining contractual life was 1.1 years at
31 December 2024 (2023: 1.3 years).
(d) Restricted stock
The outstanding awards under the RSA are subject to continued employment requirements, which range from a one year
to a three year period and have no performance conditions. Therefore, the options vest in full at the end of the period.
The weighted average fair value of each award issued under this scheme during the year was £1.33 (2023: £1.22) and was
determined using the share price at the date of grant. The weighted average remaining contractual life was 8.2 years at
31 December 2024 (2023: 8.3 years).
(e) Long Service Awards
The outstanding awards under the LSA are subject to continued employment requirements over a one year period and have
no performance conditions. Therefore, the options vest in full at the end of the period.
The weighted average fair value of each award issued under this scheme during the year was £1.33 (2023: £1.14) and was
determined using the share price at the date of grant. The weighted average remaining contractual life was 0.5 years
(2023: 0.2 years) at 31 December 2024.
(f) Save as You Earn (‘SAYE’) Scheme
Under the SAYE scheme, employees are allowed to acquire options over the Company’s shares at a discount of up to 20%
of their market value at the date of grant. The awards are subject to continued employment requirements over a three year
period and have no performance conditions. Therefore, the options vest in full at the end of the period.
The weighted average fair value of each award issued under this scheme during the year was £1.28 (2023: £0.95) and was
determined using the share price at the date of grant. The weighted average remaining contractual life was 2.0 years
(2023: 2.4 years) at 31 December 2024.
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27. Related party transactions
Identification of related parties
Company | Principal activity | Country of incorporation | Holding |
The Gym Group Midco1 Limited | Holding company | United Kingdom | 100% |
The Gym Group Midco2 Limited | Holding company | United Kingdom | 100% |
The Gym Group Operations Limited | Holding company | United Kingdom | 100% |
The Gym Limited | Fitness operator | United Kingdom | 100% |
| 31 December 2024 | 31 December 2023 | |
| £m | £m | |
Remuneration | 3.6 | 2.4 |
Company contributions to defined contribution pension scheme | 0.1 | 0.1 |
Share based payment charge | 1.3 | 0.6 |
5.0 | 3.1 |
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Company statement of financial position
as at 31 December 2024
Note
31 December 2024
£m
31 December 2023
£m
Non-current assets
Investments in subsidiaries 4 232.8 229.9
Trade and other receivables 5 74.6 75.3
Deferred tax asset 0.2 0.5
Total non-current assets 307.6 305.7
Current assets
Trade and other receivables 5 3.0 3.0
Cash and cash equivalents 0.1 –
Total current assets 3.1 3.0
Total assets 310.7 308.7
Current liabilities
Trade and other payables 6 5.5 5.3
Non-current liabilities
Borrowings 7 61.3 58.9
Total liabilities 66.8 64.2
Net assets 243.9 244.5
Capital and reserves
Own shares held 8 0.1 0.1
Share premium 8 189.9 189.8
Own shares reserve – EBT 8 (3.0) –
Merger reserve 8 39.9 39.9
Retained earnings 8 17.0 14.7
Total equity shareholders’ funds 243.9 244.5
The Notes on pages 160 to 165 form an integral part of the financial statements.
As permitted by s.408 of the Companies Act 2006, the Company’s profit and loss account is not presented as part of these
accounts. The Company’s loss for the year amounted to £0. 2 m (2023: £0.2 m).
These financial statements were approved by the Board of Directors on 12 March 2025.
Signed on behalf of the Board of Directors
Chief Executive Officer Chief Financial Officer
Company Registration Number 08528493
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Financial statements
Company statement of changes in equity
for the year ended 31 December 2024
Own shares
held
£m
Share
premium
£m
Own shares
reserve – EBT
£m
Merger
reserve
£m
Retained
earnings
£m
Total
£m
At 1 January 2023 0.1 189.8 – 39.9 12.5 242.3
Loss for the year – – – – (0.2) (0.2)
Other comprehensive income – – – – – –
Total comprehensive loss for the year – – – – (0.2) (0.2)
Capital contributions to subsidiaries – – – – 2.4 2.4
At 31 December 2023 0.1 189.8 – 39.9 14.7 244.5
Loss for the year – – – – (0.2) (0.2)
Other comprehensive income – – – – – –
Total comprehensive loss for the year – – – – (0.2) (0.2)
Capital contributions to subsidiaries – – – – 2.9 2.9
Issue of Ordinary share capital – 0.1 – – – 0.1
Purchase of own shares by EBT – – (3.5) – – (3.5)
Exercise of share options – – 0.5 – (0.4) 0.1
At 31 December 2024 0.1 189.9 (3.0) 39.9 17.0 243.9
The capital contributions to subsidiaries relate to share based payments made by subsidiaries of the Company.
The Notes on pages 160 to 165 form an integral part of the financial statements.
Retained earnings include distributable reserves of £9.2m (2023: £9.4m).
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Notes to the Company financial statements
for the year ended 31 December 2024
1. General information
The Gym Group plc (the ‘Company’) is incorporated and domiciled in the United Kingdom with Company number 08528493.
The registered address of the Company is 5th Floor, OneCroydon, 12-16 Addiscombe Road, Croydon, CR0 0XT, United Kingdom.
2. Summary of material accounting policies
A summary of the material accounting policies is set out below. These have been applied consistently in the Financial
statements.
Statement of compliance and basis of preparation
The Financial statements of the Company have been prepared in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (‘FRS 101’) and with those parts of the Companies Act 2006 applicable to companies
reporting under FRS 101. The Financial statements of the Company are included in the Group’s consolidated financial
statements which can be obtained from the Company’s registered office.
The Company meets the definition of a qualifying entity under FRS 101 and has therefore taken advantage of the following
disclosure exemptions available to it under FRS 101:
(a) the requirements of IFRS 7 Financial Instruments;
(b) the requirements of paragraph 97 of IFRS 13 Fair Value Measurement;
(c) the requirements of IAS 7 Statement of Cash Flows;
(d) the requirements of paragraphs 10(d), 111 and 134 to 136 of IAS 1 Presentation of Financial Statements;
(e) the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
(f) the requirements of paragraph 17 of IAS 24 Related Party Disclosures; and
(g) the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a
member.
The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The
areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to
the Financial statements are disclosed in Note 3.
Going concern
In assessing the going concern position of the Company for the year ended 31 December 2024, the Directors have
considered the following:
the Group’s trading performance in 2024 and throughout the traditional January and February 2025 peak period, in
particular in respect of its trading subsidiary The Gym Limited (‘TGL’) on which the Company is interdependent;
future expected trading performance of the Company and TGL to 30 June 2026 (the going concern period), including
membership levels and behaviours in light of the continued difficult macroeconomic environment; and
the Company and Group’s financing arrangements and relationship with its lenders and shareholders.
Trading in 2024 for The Gym Group was strong, with membership at the end of December 2024 reaching 891,000, an
increase of 5% from the end of December 2023. Average revenue per member per month (‘ARPMM’) for the year was £20.81,
up 7% from £19.50 in the prior year. Ultimate, the premium price product, ended the year at 29.6% of total membership
compared with 31.7% in December 2023. As a result, revenue increased by 11% to £226.3m (2023: £204.0m), and Group
Adjusted EBITDA Less Normalised Rent at £47.7m was 24% better than in 2023.
The Group also reported strong cash generation in the year, with free cash flow of £37.5m (see Note 23 to the consolidated
financial statements for a reconciliation to Net cash inflow from operating activities) being generated and used to fund
12 new site openings and a number of major refurbishments and enhancements, as well as significant investment in
technology.
On 28 June 2024, the Company agreed a new facilities agreement with its existing banking syndicate, which came into
effect on 1 July 2024. Under the new agreement, the Company has in place a combined £90m facility, consisting of £45m
of Term Loan and £45m of RCF. The new facility is due to mature in June 2027. Drawings under the facilities continue to be
subject to quarterly financial covenant tests on Adjusted Leverage (Non-property Net Debt divided by Group Adjusted
EBITDA Less Normalised Rent must not exceed 3.0 times) and Fixed Charge Cover (Adjusted EBITDAR to Net Finance
Charges plus Normalised Rent must be greater than 1.5 times).
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As at 31 December 2024, the Group had Non-Property Net Debt (including non-property leases) of £61.3m, consisting of
£61.0m drawn debt under the RCF, £3.3m of non-property leases and £3.0m of cash. The Directors believe that this measure
of net debt best reflects the financial health of the business. In addition, it is a key constituent of the Adjusted Leverage
covenant included in the Group’s banking agreement as noted above. Headroom under the bank facilities at 31 December
2024 (drawn debt less cash) was £32.0m. Adjusted Leverage was 1.3 times and Fixed Charge Cover was 1.9 times.
Following the January and February 2025 peak trading period, closing membership at 28 February 2025 was 951,000, an
increase of 7% on the position at 31 December 2024, demonstrating that the low cost gym model remains resilient and
spend on gym membership continues to be prioritised.
Despite the continued strong trading performance, the Directors have continued to take a cautious approach to planning.
The base case forecast for the period to 30 June 2026 anticipates some growth in yields across the whole estate as a result
of pricing optimisation actions identified as part of the Next Chapter growth plan. Modest increases in membership levels
are driven largely by the sites opened in 2023 and 2024, and not by growth in the mature estate.
In addition, the Directors have continued to take a measured approach to new site openings throughout the plan period,
with all new sites assumed to be self-financed. Under this scenario, the financial covenants are passed with headroom, and
the Group can operate comfortably within its financing facilities.
The Directors have also considered a severe downside scenario in which membership numbers in the mature estate decline
by approximately 4%. Yields continue to grow, but at a much more modest rate than in the base case. In this scenario, the
number of new site openings is reduced to conserve cash, expenditure on maintenance and marketing is reduced slightly, and
discretionary performance-related bonuses and share based payment funding are removed. Under this scenario, the financial
covenants continue to be passed, and the Group continues to operate within its financing facilities.
The Directors have also considered a reverse stress test scenario to ascertain the extent of the downturn in trading that
would be required to breach the Company and Group’s banking covenants or liquidity requirements. Mitigating actions
assumed in this scenario include moving to a minimum level of maintenance and technology capital expenditure; further
reducing controllable operating costs and marketing expenditure; and pausing the new site opening programme in order
to preserve cash. In this scenario, the closing membership would need to decline by 23% from April 2025 before the Fixed
Charge Cover covenant would be breached in June 2026. The Group would, however, continue to operate within its current
level of debt capacity and the Adjusted Leverage ratio would not be breached.
In the event of a reverse stress test scenario, the Directors would introduce additional measures to mitigate the impact
on the Company and Group’s covenants and liquidity, including: (i) even greater reductions in controllable operating
costs, marketing and capital expenditure; (ii) discussions with lenders to secure a covenant waiver; and (iii) deferral of, or
reductions in, rent payments to landlords. The Directors consider the reverse stress test scenario to be highly unlikely.
Conclusion
The Board has reviewed the financial plan and downside scenarios of the Group and has a reasonable expectation that
the Company and the Group has adequate resources to continue in operational existence for the period to 30 June 2026.
As a result, the Directors continue to adopt the going concern basis in preparing the financial statements. In making this
assessment, consideration has been given to the current and future expected trading performance; the Company and
Group’s current and forecast liquidity position and the support received to date from our lenders and shareholders; and the
mitigating actions that can be deployed in the event of reasonable downside scenarios.
Investments
On initial recognition, investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid.
Where consideration is paid by way of shares, the excess of fair value of the shares over nominal value of those shares is
recorded in share premium. Investments in subsidiaries are reviewed for impairment at each balance sheet date with any
impairment charged to the income statement. Refer to Note 4 for further details of impairment testing.
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Notes to the Company financial statements continued
for the year ended 31 December 2024
2. Summary of material accounting policies continued
Financial instruments continued
Fair value hierarchy
IFRS 7 requires fair value measurements to be recognised using a fair value hierarchy that reflects the significance of the
inputs used in the value measurements:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between levels throughout the periods under review.
Financial assets
The Company measures its trade and other receivables and cash and cash equivalents at amortised cost. Subsequent
to initial recognition these assets are carried at amortised cost using the effective interest method. Income from these
financial assets is calculated on an effective yield basis and is recognised in the income statement.
The Company recognises an allowance for expected credit losses (‘ECL’) for all debt instruments held at amortised cost.
The ECLs are based on the difference between the contractual cash flows due, and the cash flows expected to be received.
For trade receivables, the Company does not track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date.
For receivables other than trade receivables, the Company recognises ECLs in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initial recognition, a loss allowance is recognised based on
12-month ECLs. For credit exposures for which there has been a significant increase in credit risk since initial recognition, a
loss allowance is required for lifetime ECLs.
Financial liabilities
The Company initially recognises its financial liabilities at fair value and subsequently they are measured at amortised cost
using the effective interest method.
Current taxation
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance sheet date.
Income tax relating to items recognised in comprehensive income or directly in equity, is recognised in comprehensive
income or equity and not in the income statement.
Refer to Note 2 to the consolidated financial statements for the Deferred taxation accounting policy.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Financial statements in accordance with FRS 101 requires estimates and assumptions to be made
that affect the value at which certain assets and liabilities are held at the balance sheet date and also the amounts of
revenue and expenditure recorded in the period. The Directors believe the accounting policies chosen are appropriate to
the circumstances and that the estimates, judgements and assumptions involved in its financial reporting are reasonable.
There are no critical accounting judgements or estimates within these Financial statements.
The Gym Group plc | Annual Report and Accounts 2024
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4. Investments in subsidiaries
£m
At 1 January 2023 227.6
Additions 2.3
At 31 December 2023 229.9
Additions 2.9
At 31 December 2024 232.8
During the current and prior year, share options in the Company’s shares were granted to employees of The Gym Limited.
A corresponding capital contribution of £2.9m has been recognised within investments in subsidiaries (2023: £2.3m). Details
of the Company’s share based payment arrangements are shown in Note 25 to the consolidated financial statements.
In January 2024, the Company established an Employee Benefit Trust (‘EBT’) to purchase shares in order to minimise
dilution associated with the share based payments. As the sponsoring entity of the EBT, the EBT has been accounted for
as an extension of the Company in the Company’s financial statements. During the year ended 31 December 2024, the EBT
purchased 2,834,928 shares at a cost of £3.5m. As at 31 December 2024, the EBT holds 2,479,863 shares at a value of £3.0m.
The Company’s subsidiary undertakings are shown in Note 27 to the consolidated financial statements.
The Company assesses at each reporting date, whether there are any indications of impairment of investments. If at a
reporting date any indication is present, an impairment test is performed. The impairment test assesses the investments in
subsidiaries for impairment by comparing the recoverable amount (being the higher of the fair value less costs of disposal
and value-in-use) to the carrying amount. If the carrying amount exceeds the recoverable amount, the investment is
considered impaired and written down to its recoverable amount.
The Company determines the recoverable amount of its investments by determining the present value of the estimated
future cash flows expected to be generated by the investees. This is performed using cash flow projections based on the
Board-approved three year plan. Cash flows beyond this period are extrapolated using an estimated growth rate of 3.0%
(2023: 3.0%). All cash flows are discounted using a pre-tax discount rate of 11.0% (2023: 10.4%).
In the years under review, management’s value-in-use calculations have indicated no requirement to impair and no
reasonably possible change in key assumptions gives rise to an impairment.
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Notes to the Company financial statements continued
for the year ended 31 December 2024
5. Trade and other receivables
31 December 2024
£m
31 December 2023
£m
Amounts owed by Group undertakings 77.6 78.3
77.6 78.3
Due in less than one year 3.0 3.0
Due in more than one year 74.6 75.3
77.6 78.3
The Company provides a guarantee over certain non-property lease contracts of its trading subsidiary, The Gym Limited.
As a result, at 31 December 2024, the Company was exposed to £3.3m (2023: £8.9m) should The Gym Limited default on its
obligations under those leases. No expected credit loss in respect of this has been recognised at the balance sheet date.
No expected credit loss in respect of the intercompany receivables has been recognised at the balance sheet date
(2023: £nil) as these have been assessed as immaterial. In making this assessment, consideration has been given to a
probability-weighted estimate of credit losses over the expected life of the intercompany debt.
Qualitative factors, including a review of the cash flow projections of the main trading entity (The Gym Limited), have then
been considered to ascertain whether there has been a significant increase in the credit risk during the year. Based on
this assessment, there has been no significant increase in credit risk and the entity is expected to generate sufficient
cash to repay its intercompany balances and/or dividends to other entities within the Group to allow them to repay their
intercompany balances.
6. Trade and other payables (due in less than one year)
31 December 2024
£m
31 December 2023
£m
Trade payables 0.1 –
Amounts owed to Group undertakings 4.9 3.8
Accruals 0.5 1.5
5.5 5.3
7. Borrowings
The carrying value of the Company’s borrowings at 31 December 2024 was £61.3m (2023: £58.9m).
Refer to Note 19 of the consolidated financial statements for further details.
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8. Issued capital and reserves
31 December 2024
£m
31 December 2023
£m
Allotted, called up and fully paid
Ordinary shares of £0.0001 each – –
Own shares held
Deferred Ordinary shares of £1 each 0.1 0.1
The number of Ordinary shares in issue is as follows:
31 December 2024 31 December 2023
Ordinary shares of £0.0001 each 179,287,837 178,700,366
Deferred Ordinary shares of £1 each 48,050 48,050
Refer to Note 24 of the consolidated financial statements for details of movements in share capital.
The following describes the nature and purpose of each reserve in equity:
Own shares held
These reserves represent 48,050 Deferred Ordinary shares of £1 each repurchased by the Company on 12 November 2015.
The Deferred Ordinary shares constitute a separate, non-voting class of shares which is held in treasury and not admitted
to trading. The rights attached to the Deferred Shares are set out in the Company’s Articles.
Share premium
The amount subscribed for share capital in excess of nominal value.
Own shares reserve – EBT
The value of shares that are held by the EBT, which will be used to settle share based payments transactions.
Merger reserve
The amount subscribed for share capital in excess of nominal value attracting merger relief under the Companies Act 2006.
Retained earnings
The accumulated net gains and losses of the Company since inception.
Issued Share Capital and Capital Redemption Reserve are not included in the Consolidated statement of changes in equity
because the balances in these reserves are less than £0.1m.
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Five year record
The following table sets out a summary of selected key financial information and Key Performance Indicators for the
business.
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Revenue 226.3 204.0 172.9 106.0 80.5
Group Adjusted EBITDA Less Normalised Rent
1
47.7 38.5 38.0 5.7 (10.2)
Free cash flow
2
37.5 27.0 16.7 2.0 (16.6)
Non-Property Net Debt
3
61.3 66.4 76.0 44.1 47.3
Adjusted Leverage (x) 1.29 1.72 2.00 7.74 (4.64)
Total number of gyms (number) 245 233 229 202 183
Total number of members (‘000) 891 850 821 718 578
Average revenue per member per month (£)
4
20.81 19.50 17.82 17.60 17.20
Members that visit 4+ times in a month
5
53.5% 52.3% 48.8% 35.5% 25.3%
Number of mature gyms in operation (number) 227 199 182 175 155
Mature gym site EBITDA Less Normalised Rent
6
61.5 53.6 50.9 22.5 3.9
Return on Invested Capital of mature gym sites
7
25% 21% 22% 20% 19%
Employee engagement score
8
9.0 8.5 8.4 7.6 6.4
1 A reconciliation of Operating profit/(loss) to Group Adjusted EBITDA Less Normalised Rent has been included underneath the Consolidated statement
of comprehensive income on page 124.
2 A reconciliation of net cash inflow from operating activities to free cash flow has been provided in Note 23 to the consolidated financial statements.
3 Information on the make-up of Non-Property Net Debt is included under Capital risk management in Note 22 to the consolidated financial statements.
4 In order to provide better year on year comparability for yield, the figures presented for 2021 and 2020 have been adjusted to exclude the impact of UK
Government-enforced closure periods as a result of the Covid-19 pandemic. The 2021 figure is calculated for the period from July 2021 to December 2021 when all
gyms were fully open and trading had returned to normal. The 2020 figure is calculated on a site-by-site basis and excluded days where the sites were required
to be closed due to government restrictions.
5 The figures for 4+ visits for 2023 and earlier have been restated to include like-for-like sites only and to exclude Saver members, members on freeze and members
who have joined in a gym’s pre-opening period to ensure comparability across periods. Further adjustments and restatements may occur in 2025 as we continue
to refine this KPI. The 2021 and 2020 figures are impacted by closure days.
6 Group Adjusted EBITDA Less Normalised Rent contributed by mature sites (£61.5m in 2024; £53.6m in 2023) plus Group Adjusted EBITDA Less Normalised Rent
contributed by non-mature and acquisition sites (£13.1m in 2024; £6.3m in 2023) less Central Support Office costs (£26.9m in 2024; £21.4m in 2023) equals Group
Adjusted EBITDA Less Normalised Rent (£47.7m in 2024; £38.5m in 2023).
7 ROIC for 2023 and earlier has been restated to deduct the value of rent free amounts from the capital initially invested. In order to provide better year on year
comparability for ROIC, the figures presented for 2021 and 2020 have also been adjusted to exclude the impact of UK Government-enforced closure periods as
a result of the Covid-19 pandemic. The 2021 figure is calculated for the period from July 2021 to December 2021 when all gyms were fully open and trading had
returned to normal. The 2020 figure is calculated to exclude those months when sites were required to be closed due to government restrictions.
8 In 2023, we changed the way we measure employee engagement. We partnered with Peakon, an engagement specialist, and adopted a more accurate and
comprehensive approach using a 0-10 scale rating system, moving away from a percentage score (Top Box). Due to the change in methodology for calculating
the engagement score, a precise comparison to 2022 and prior cannot be made. These are therefore included for indicative purposes only.
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Other information
Definition of non-statutory measures
Group Adjusted EBITDA – operating profit before depreciation, amortisation, share based payments and
non-underlying items.
Normalised Rent – Normalised Rent is the contractual rent payable, recognised in the monthly period to which it relates.
Group Adjusted EBITDA Less Normalised Rent – Group Adjusted EBITDA after deducting Normalised Rent. A reconciliation
of Operating profit to Group Adjusted EBITDA Less Normalised Rent is included below the Consolidated statement of
comprehensive income on page 124.
Adjusted Profit/Loss before tax – profit/loss before tax before non-underlying items.
Adjusted Earnings – profit/(loss) for the year before non-underlying items and the related tax.
Basic Adjusted EPS – Adjusted Earnings divided by the basic weighted average number of shares.
Free cash flow – Group Adjusted EBITDA Less Normalised Rent and movement in working capital, less maintenance
and enhancement capital expenditure, cash non-underlying items, bank and non-property lease interest and tax.
A reconciliation of Net cash inflow from operating activities to Free cash flow is included in Note 23 to the consolidated
financial statements.
Non-Property Net Debt – bank and non-property lease debt less cash and cash equivalents. See Note 22 to the
consolidated financial statements for the breakdown.
Mature gym site EBITDA Less Normalised Rent – Group Adjusted EBITDA Less Normalised Rent contributed by mature
sites. Mature sites are defined as those sites that have been open for 24 months or more at the period end and exclude
acquisition sites.
Return On Invested Capital (‘ROIC’) of mature gym sites – Mature gym site EBITDA Less Normalised Rent divided by total
capital initially invested in the mature sites (after capital contributions and rent free amounts).
Maintenance and enhancement capital expenditure – costs of replacement gym equipment and premises refurbishment.
Expansionary capital expenditure – costs of fit-out of new gyms (both organic and acquired), technology projects and
other strategic projects. It is stated net of contributions from landlords.
Adjusted Leverage – Non-property Net Debt divided by Group Adjusted EBITDA Less Normalised Rent.
Fixed Charge Cover – Group Adjusted EBITDA divided by Finance costs (excluding interest costs on property leases) less
Finance income plus Normalised Rent.
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Overview
Strategic
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Governance
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Other
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Financial
statements
Other information
Corporate information
Company Secretary
Alison Camille Skerritt
Company number
08528493
Registered office
5th Floor
OneCroydon
12–16 Addiscombe Road
Croydon
CR0 0XT
Website
www.tggplc.com
Corporate Advisers
Bankers
HSBC Bank plc
Solicitors
Allen Overy Shearman Sterling LLP
Auditor
Ernst & Young LLP
Joint Brokers
Deutsche Numis
Peel Hunt LLP
Registrar
MUFG Corporate Markets (formerly Link Group)
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The Gym Group plc
5th Floor OneCroydon
12-16 Addiscombe Road
Croydon CR0 0XT
www.tggplc.com
www.thegymgroup.com