BST:4GY

Stock Analysis Report

Executive Summary

The Gym Group plc operates health and fitness facilities in the United Kingdom.

Rewards

Trading at 37.2% below its fair value

Earnings are forecast to grow 15.37% per year

Earnings grew by 87.3% over the past year

Risk Analysis

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Gym Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 4GY's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.9%

4GY

-2.1%

DE Hospitality

0.7%

DE Market


1 Year Return

49.5%

4GY

-20.2%

DE Hospitality

15.6%

DE Market

Return vs Industry: 4GY exceeded the German Hospitality industry which returned -15.8% over the past year.

Return vs Market: 4GY exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

4GYIndustryMarket
7 Day3.9%-2.1%0.7%
30 Day7.4%-5.1%1.7%
90 Day16.5%-6.6%6.3%
1 Year50.4%49.5%-15.0%-20.2%19.2%15.6%
3 Yearn/a-10.2%-22.1%18.3%7.9%
5 Yearn/a-11.5%-28.6%26.8%9.4%

Price Volatility Vs. Market

How volatile is Gym Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Gym Group undervalued compared to its fair value and its price relative to the market?

36.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 4GY (€3.62) is trading below our estimate of fair value (€5.76)

Significantly Below Fair Value: 4GY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 4GY is poor value based on its PE Ratio (46.9x) compared to the Hospitality industry average (20.5x).

PE vs Market: 4GY is poor value based on its PE Ratio (46.9x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: 4GY is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: 4GY is overvalued based on its PB Ratio (2.9x) compared to the DE Hospitality industry average (2.3x).


Next Steps

Future Growth

How is Gym Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

27.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 4GY's forecast earnings growth (15.4% per year) is above the savings rate (-0.4%).

Earnings vs Market: 4GY's earnings (15.4% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 4GY's revenue (11.6% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: 4GY's revenue (11.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 4GY's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Gym Group performed over the past 5 years?

67.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 4GY has high quality earnings.

Growing Profit Margin: 4GY's current net profit margins (6.5%) are higher than last year (4.5%).


Past Earnings Growth Analysis

Earnings Trend: 4GY has become profitable over the past 5 years, growing earnings by 67.9% per year.

Accelerating Growth: 4GY's earnings growth over the past year (87.3%) exceeds its 5-year average (67.9% per year).

Earnings vs Industry: 4GY earnings growth over the past year (87.3%) exceeded the Hospitality industry -39.6%.


Return on Equity

High ROE: 4GY's Return on Equity (6.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Gym Group's financial position?


Financial Position Analysis

Short Term Liabilities: 4GY's short term assets (£14.4M) do not cover its short term liabilities (£44.2M).

Long Term Liabilities: 4GY's short term assets (£14.4M) do not cover its long term liabilities (£282.4M).


Debt to Equity History and Analysis

Debt Level: 4GY's debt to equity ratio (34.8%) is considered satisfactory.

Reducing Debt: 4GY's debt to equity ratio has reduced from 598% to 34.8% over the past 5 years.

Debt Coverage: 4GY's debt is well covered by operating cash flow (85%).

Interest Coverage: 4GY's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

Inventory Level: 4GY has a high level of physical assets or inventory.

Debt Coverage by Assets: 4GY's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Gym Group's current dividend yield, its reliability and sustainability?

0.42%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%1.4%markettop25%3.5%industryaverage5.3%forecastin3Years0.7%

Current dividend yield vs market & industry

Notable Dividend: 4GY's dividend (0.42%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: 4GY's dividend (0.42%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: 4GY is not paying a notable dividend for the German market, therefore no need to check if payments are stable.

Growing Dividend: 4GY is not paying a notable dividend for the German market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 4GY is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 4GY's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Gym Group's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Richard Darwin (51yo)

1.3yrs

Tenure

UK£338,324

Compensation

Mr. Richard Darwin serves as Chief Executive Officer at The Gym Group plc since September 17, 2018 and also serves as its Company Secretary. Mr. Darwin served as Company Secretary of The Gym Group plc and  ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD439.92K) is below average for companies of similar size in the German market ($USD817.80K).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.3yrs

Average Tenure

51yo

Average Age

Experienced Management: 4GY's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

3.5yrs

Average Tenure

57yo

Average Age

Experienced Board: 4GY's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€61,81027 Mar 19
Penelope Hughes
EntityIndividual
Role
Chairman of the Board
Independent Non-Executive Chairwoman
Shares23,911
Max Price€2.59
Buy€28,22827 Mar 19
Richard Darwin
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares11,000
Max Price€2.57

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.3%.


Management Team

  • John Treharne (65yo)

    Founder & Executive Director

    • Compensation: UK£478.27k
  • Nick Henwood

    Chief Operating Officer

    • Tenure: 3.4yrs
  • Richard Darwin (51yo)

    CEO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£338.32k
  • Jasper McIntosh (46yo)

    Chief Information Officer

    • Tenure: 0.8yrs
  • Barney Harrison

    Chief Commercial Officer

    • Tenure: 0.5yrs
  • Mark George

    CFO, Company Secretary & Director

    • Tenure: 1.3yrs
    • Compensation: UK£233.25k
  • Ann-marie Murphy

    Director of People & Development

    • Tenure: 0.8yrs
  • David Melhuish

    Head of Property Development


    Board Members

    • John Treharne (65yo)

      Founder & Executive Director

      • Compensation: UK£478.27k
    • Penny Hughes (60yo)

      Independent Non-Executive Chairwoman

      • Tenure: 4.2yrs
      • Compensation: UK£130.00k
    • David Kelly (56yo)

      Independent Non-Executive Director

      • Tenure: 3.5yrs
      • Compensation: UK£50.00k
    • Richard Darwin (51yo)

      CEO & Executive Director

      • Tenure: 1.3yrs
      • Compensation: UK£338.32k
    • Paul John Gilbert (57yo)

      Senior Independent Non-Executive Director

      • Compensation: UK£52.51k
    • Emma Woods

      Independent Non-Executive Director

      • Tenure: 3.2yrs
      • Compensation: UK£50.00k
    • Mark George

      CFO, Company Secretary & Director

      • Tenure: 1.3yrs
      • Compensation: UK£233.25k

    Company Information

    The Gym Group plc's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: The Gym Group plc
    • Ticker: 4GY
    • Exchange: BST
    • Founded: 2007
    • Industry: Leisure Facilities
    • Sector: Consumer Services
    • Market Cap: UK£427.544m
    • Listing Market Cap: UK£501.492m
    • Shares outstanding: 137.92m
    • Website: https://www.tggplc.com

    Number of Employees


    Location

    • The Gym Group plc
    • OneCroydon
    • 5th Floor
    • Croydon
    • CR0 0XT
    • United Kingdom

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    GYMLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 2015
    GYMLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 2015
    4GYBST (Boerse-Stuttgart)YesOrdinary SharesDEEURNov 2015
    GYYM.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2015

    Biography

    The Gym Group plc operates health and fitness facilities in the United Kingdom. As of March 19, 2019, it operated 160 gyms. The company was founded in 2007 and is based in Croydon, the United Kingdom. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 22:54
    End of Day Share Price2020/01/20 00:00
    Earnings2019/06/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.