The Gym Group saw revenues cut by half and swung to a loss in the past six months after it closed branches during the coronavirus lockdown.
The company, which operates 183 gyms across the UK, said it made ‘virtually no revenue’ after shutting sites at the end of March.
Revenues fell by 49.6 per cent to £37.2million for the six months to July 30 as the firm swung to a pre-tax loss of £26.9million for the period – dropping from £5.5million profit from the same period in 2019.
However, member numbers and gym usage have grown since reopening to customers on English sites on July 25 ‘as member confidence increases’ following the introduction of Covid-safe measures, The Gym Group said.
In the first five weeks of trading since reopening, the number of new customers was up 30 per cent year-on-year while cancellations were up six per cent against 2019.
The Gym Group saw revenues cut by half and swung to a loss in the past six months after it closed branches during the coronavirus lockdown (pictured: Boris Johnson lifting a few rounds of weights at a branch of The Gym Group in his South Ruislip constituency, August 6, 2020)
The company, which operates 183 gyms across the UK, said it made ‘virtually no revenue’ after shutting sites at the end of March (pictured: Boris Johnson taking a tour of a branch of The Gym Group in his South Ruislip constituency, August 6, 2020)
Chief executive Richard Darwin said: ‘Following our decisive actions during lockdown to minimise costs and secure additional liquidity, we have reopened as the strongest capitalised company in the sector.
‘We anticipate the long-term structural growth of low-cost gyms will continue to be driven by the underlying interest in health and fitness, which is accelerating as a result of Covid-19 and the Government’s initiative to reduce obesity.
‘With the likelihood of a challenging economic environment in the coming months, gym-goers will increasingly look for great value and as the lowest-priced high-quality gym operator we are well placed to meet this demand.’
All the company’s gyms have reopened. It welcomed customers back in England in late July before its Welsh and Scottish sites received the green light.
It comes as a number of leisure centres in Newcastle reported plans to remain shut indefinitely, with 35 staff set to lose their jobs.
The Eldon Leisure Centre inside Eldon Square, the West Denton Swimming Pool, and Walker Activity Dome will not be reopening for the foreseeable future, operator Greenwich Leisure Ltd (GLL) has confirmed.
The non-profit organisation said that it had been ‘impossible’ to recoup losses caused by the coronavirus lockdown and the requirement to operate venues with reduced capacity in order to comply with social distancing. It is expected that 40 per cent of GLL’s permanent staff in Newcastle will lose their jobs as a result.
Revenues fell by 49.6 per cent to £37.2million for the six months to July 30 as the firm swung to a pre-tax loss of £26.9million for the period (pictured: Boris Johnson taking a tour of a branch of The Gym Group in his South Ruislip constituency, August 6, 2020)
However, member numbers and gym usage have grown since reopening to customers on English sites on July 25 ‘as member confidence increases’ following the introduction of Covid-safe measures (pictured: Boris Johnson lifting a few rounds of weights at a branch of The Gym Group in his South Ruislip constituency, August 6, 2020)
GLL also runs the East End Pool, Gosforth Leisure Centre, and the Newcastle Trampoline Park and Gym – all of which will remain open with ‘modified’ hours.
Outdoor football pitches at the Walker Activity Dome will also continue to operate, as will the other facilities at West Denton Leisure Centre aside from the pool.
Newcastle City Council confirmed that it has issued GLL with a loan from an emergency £5m fund set up to help businesses through the Covid-19 crisis but it is not enough to keep every leisure centre open.
GLL was handed control of most of the city’s council-run leisure facilities as part of civic centre budget cuts in recent years.
It was forced to ask local councils for financial help earlier this year to help it cope with the devastating impact of the pandemic.
As Britain’s gyms flounder, however, the UK’s housing market rockets back into action today, with average house prices rising by more than £3,000 in August as house-buyers shrugged off economic uncertainty.
The 2 per cent rise in August of £3,188 wiped out the losses made earlier this year as the pandemic tore through the country, according to building society Nationwide.
Despite the country officially being in recession, demand from buyers is 34 per cent higher than a year ago, with four and five bedrooms homes with a garden in high demand and properties selling faster than they were pre-lockdown.
‘The bounce-back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,’ said Nationwide chief economist Robert Gardner.
‘This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing.
‘Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown.
‘Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of lockdown.’
The holiday in stamp duty means that this trend is likely to continue in the near term, but Mr Gardner warned that a massive rise in unemployment, which is forecast by most experts, would probably send the housing market back into a slump.
Activity in the housing market is now running at its strongest pace for over five years, with the number of newly agreed sales in August up 76 per cent against the five year average, according to firm Zoopla.
The time it takes to sell a home has shrunk from 39 days to 27 days since lockdown, compared to the same period a year ago.
There is strong demand for three-bedroom homes, which are now taking just 24 days to sell, while properties with more bedrooms in higher price brackets are also proving a hit among buyers with deeper pockets.
Looking at the country’s entire property market, it has also become apparent that more homes in wealthy areas are coming up for sale, Zoopla said.
While many buyers are looking to move to bigger homes with more outdoor space, properties in city hotspots like Manchester and Nottingham remain popular with buyers.
In Manchester, average property prices have risen by 4 per cent to £174,100 in the last year, while in Nottingham growth levels are even higher, with prices up 4.4 per cent to an average of £158,500.
City living: Average house price shifts in cities across the UK, according to Zoopla
Growth: A map showing how property prices have moved in the last year
Leeds, Liverpool and Edinburgh have also seen house prices swell by 3 per cent or more in the last year, but London and Cambridge take the top two spots for being home to the most expensive city house prices anywhere in the country.
Property prices in London have increased by 2.1 per cent to an average of £475,100 in the last year, while in Cambridge they are up 2.1 per cent to £415,400.
Aberdeen is the only city in Zoopla’s latest findings to report a drop in house prices over the period. Average prices in the Scottish city fell by 1.4 per cent to £145,100.
In total, 16 out of the 20 cities covered by Zoopla’s research reported house price growth of 2 per cent or more.
Chris Sykes, at mortgage broker Private Finance, said that as government protections for renters come to an end, more properties could hit the market.
‘The ending of the Government’s eviction ban in September could lead to a surge in landlords trying to remove tenants from properties,’ he said.
‘This may cause a great deal of negative publicity, possibly suppressing appetite for new buy-to-let purchases. Landlords may even sell some of their properties to avoid potential difficulties moving forward.’
David Westgate, Group Chief Executive at Andrews Property Group, said: ‘Right now, activity in the UK property market is off the Richter scale.
‘A rebound was always likely after lockdown but the level of transactions and people seeking to move is phenomenal. For certain properties in the most sought-after areas prices are going through the roof.
In demand: A chart showing how demand for homes in the UK continues to rise
Selling times: Houses are selling faster than flats as buyer priorities shift
Demographic shift: The number of wealthier buyers looking for a home has increased
‘Pent-up demand, the stamp duty holiday and a desire to get into more appropriate homes in the event of future lockdowns are key drivers.
‘The current rate of growth will not last given the economic uncertainty ahead, but for now the property market is on fire.
‘The one issue is that people seeking to buy at higher loan to values are finding it considerably more difficult to secure mortgage finance.’
Meanwhile, research suggests that two-thirds of adults struggled to keep their weight down during lockdown as boredom and stress triggered comfort eating.
Britons found it more difficult to get to the shops for healthy foods, snacked due to boredom, resorted to comfort foods as a result of stress and exercised less, a survey of 800 adults for Slimming World found.
The report said: ‘A number reported snacking more frequently on unhealthy foods due to boredom, being at home and being out of a normal routine or lack of structure to the day.
Britons found it more difficult to get to the shops for healthy foods, snacked due to boredom, resorted to comfort foods as a result of stress and exercised less, a survey of 800 adults for Slimming World found. Stock photo of an overweight man measuring himself
Being at home during the day with children who are snacking was mentioned as increasing temptation to join in with snacks.’
The study included 222 Slimming World members.
Similar proportions between the two groups – 65 per cent among non-members and 59 per cent of members – admitted finding managing their weight in lockdown ‘very’ or ‘somewhat difficult’.
Study lead author Dr Sarah-Elizabeth Bennett said: ‘Lockdown inevitably had an effect on our choices around food, drink and activity.
‘Given that excess weight is associated with a higher risk of severe illness from Covid-19 and with lots of people coming out of lockdown feeling concerned about their weight and health, the findings of the study show behaviour change support is more important now than ever.’
Tam Fry, of the National Obesity Forum, said: ‘This report is welcome and confirms the effect of two factors not immediately associated with obesity – worry and anxiety. Both give rise to comfort eating and snacking.’
A report by Public Health England (PHE) concluded that obesity increases the likelihood of dying from Covid-19 by around 40 per cent.
Two thirds of people in the UK are obese or overweight, and ministers have recently unveiled a strategy to reduce obesity through measures including a ban on unhealthy snacks at checkouts.
Restaurants will have to display the calories contained in items on menus and there will be a consultation into doing the same for alcohol.
The survey was carried out between April 9 and May 16.
Participants were asked about their general health, mood, diet, alcohol intake, physical activity and weight management.