The Gym Group Shares Forecast September 2021 – Time to Buy GYM?
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Around the world financial markets are making a comeback due to the rapid recovery made by companies that suffered during the pandemic’s peak. A glance at the top movers of yesterday on the London Stock Exchange would reveal that several names active under the consumer services industry are consistently making their way up to the top. In the following, we will discuss a well-performing share of The Gym Group Plc which provides health and fitness facilities across the country.
The Gym Group Plc. Technical Analysis
The Gym Group came into existence back in 2007 when John Treharne founded the company that is now headquartered in Croydon, UK. Years later, Gym Group has become a well-known chain of health & fitness facilities that manage hundreds of gyms. Just half a year ago, due to COVID-19, when social distancing rules were still being prioritised, UK gyms lost billions of pounds every day as compared to the Pre-COVID figures.
But things started to look better when the government declared that fitness sites would re-open from April. A quick look at the financial details of the company reveals that the total market capitalisation of GYM has reached £501.9 million. The total shares outstanding for the company is at £177.3 million with £355.4 million in debt.
As the markets closed for September 2, GYM shares reached £306 with an 8.13 uptick. The company’s income statement leads us to the conclusion that the share would continue being in the hot zone for a while. From a technical viewpoint, all preferable technical indicators are pointing toward a Strong Buy price action for new and existing investors. Moving averages and oscillators like SMA (278.6), EMA (283.4), RSI (71.4), and MACD (2.5) look convincing.
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Recent Developments
Shares of the second-largest gyms in the UK showed a sign of recovery faster than all others as soon as gyms were opened due to increased public demand. By the end of May 2021, the total membership count increased from 547K to 729K but it was still less than pre-pandemic levels. A representative of The Gym Group stated that the gyms have seen an uptick in weekly visits by members and attributed the increase to their safety process.
Reasons to Buy GYM Shares
Since the reopening, The Gym Group has expanded to over 183 sites across the country. They have opened 4 new gyms in York, Cambridge, Sydenham, and Chichester since April 12. Richard Darwin, the chief executive of the company said he expects a certain slow rate of increase in membership during the summer months but the situation would improve again in 2022. Darwin has also revealed plans of expansion over the next two years. News is that The Gym Group has also signed contracts for 10 new locations.
However, the expansion plans are awaiting financial support from banks that are amidst ongoing talks on the topic. Markets expect an update from Darwin once the financial support is finalised with banks. GYM has already raised their revenue for the current year by £8 million. As Britons head back to the gyms, the company plans to install 40 gym units in the future and have the membership numbers touch a new all-time high record.
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