Interim report
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RNS Number : 9192TGym Group PLC (The)09 September 2026 9 September 2026 The Gym Group plc('The Gym Group', 'the Group' or 'the Company')2026 Interim Results Continued strategic delivery underpins strong first half performance Leading low cost gym operator, The Gym Group, announces its interim results for the six month period ended 30 June 2026. Key financial metrics[1] Six monthsended 30 June2026 Six monthsended 30 June2025 Movement Revenue (£m) 133.1 121.0 +10% Group Adjusted EBITDA (£m) 53.0 48.3 +10% Group Adjusted EBITDA Less Normalised Rent (£m) 30.8 27.4 +12% Adjusted Profit before Tax (£m) 6.4 4.9 +31% Statutory Profit before Tax (£m) 4.9 3.3 +48% Statutory Profit after Tax (£m) 4.3 3.3 +30% Adjusted Diluted Earnings Per Share (p)[2] 2.9 2.4 +21% Statutory Diluted Earnings Per Share (p) 2.3 1.8 +28% Free Cash Flow (£m) 27.7 25.1 +10% Non-Property Net Debt (£m) (as at period end) (58.0) (51.2) Increased by£6.8m Financial Highlights • Revenue for the period increased by 10%, with average members up 5% to 1 million and average revenue per member per month ('ARPMM') up 5%; like-for-like[3] revenue (including all sites open as at 31 December 2023)grew 3% • Group Adjusted EBITDA Less Normalised Rent at £30.8m was 12% ahead of the prior year period as revenuegrowth continues to outpace cost inflation • Strong free cash flow generated in H1, up 10% to £27.7m, funding new sites, enhancements to existing sites,technology investment and share buyback (£3.8m of the proposed £10m completed in H1) • Non-Property Net Debt at £58.0m, reduced by £1.3m in the period (Dec 2025: £59.3m); Adjusted Leverage[4] maintained at 1.0x; bank facilities increased to £117m in June 2026 (previously £102m) Business and Operational Highlights • Both mature and new sites continue to perform well, reflecting disciplined execution of Next Chapter growth plan,advantaged, labour-light business model and continued appeal of high value, low cost proposition • Sustained pricing opportunity continues to support yield growth of 5% and underpins further progress towards our30% ROIC target for the mature estate • Successfully completed the migration of all members to new member management and payment platforms • Four new sites opened in H1 and currently on site at a further 11; expect to open at least 20 new sites in 2026, inline with our plan to open c.75 sites over three years, funded from free cashflow • Elevated site design continues to evolve and be retrofitted into mature estate - 3 sites refurbished in H1; 18 to becompleted in H2 (with 12 completed since June); gyms refurbished in 2025 achieving 10% incremental membership • Continued to build on high levels of member engagement and satisfaction, with 94% of members rating The GymGroup 4 or 5 out of 5 for overall satisfaction; proportion of members visiting 4+ times a month increased by 130bps Full Year Outlook • Remain on track to deliver 3% like-for-like revenue growth for the full year, with like-for-like cost growth nowexpected to be at the lower end of the guided range of 3-4% • Expect full year Group Adjusted EBITDA Less Normalised Rent to be at the top end of current analysts' forecast range[5] Will Orr, CEO of The Gym Group, commented:"We have delivered another strong set of results, reflecting the continued appeal of our high value, low cost proposition,disciplined execution of our growth strategy and sustained customer demand. Reaching one million members during the periodwas an encouraging milestone for the Group. I've also been pleased to see our elevated gym design supporting performancegains in both new and refurbished gyms. This continued focus on product excellence is one of the ways we can build on themomentum we have. Our teams remain focused on executing our Next Chapter growth plan, including the acceleration of our rollout programme, and we are confident in delivering full year results at the top end of the current analysts' forecast range5,while creating further value for both shareholders and members." A live audio webcast of the analyst presentation will be available at 9:00 a.m. today via the following link: https://storm-virtual-uk.zoom.us/webinar/register/WN_sngY1YMrRpaxBBQIfh1kvQ Webinar ID814 9073 5330
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A copy of the presentation and recording of the webcast will be published on the Company's website. For further information, please contact: The Gym GroupWill Orr, CEOLuke Tait, CFOKatharine Wynne, Investor Relations via Team Lewis Team Lewis (Financial PR)Justine WarrenGalyna Kulachek +44 (0)20 7802 2617/2664 Forward-Looking StatementsThis announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. By their nature, suchstatements involve risk and uncertainty since they relate to future events and circumstances. Actual results may, and often do,differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflectmanagement's view with respect to future events as at the date of this announcement. Save as required by law or by the ListingRules of the UK Listing Authority, the Company undertakes no obligation to publicly revise any forward-looking statements inthis announcement following any change in its expectations or to reflect subsequent events or circumstances following the dateof this announcement. Notes for EditorsThe Gym Group was a pioneer of the low cost gym model and offers 24/7 opening and flexible, no contract memberships. As at 30 June 2026, we operated 264[6] high quality sites across the UK with around 1 million members nationwide. Our gyms havec.70 million visits per annum and score highly on member satisfaction. The Gym Group is the world's first gym operator to haveits science-based net-zero emission reduction targets validated by the Science Based Targets initiative (SBTi). LEI Number: 213800VCU9TBANZIN455 CEO Review Strategic Delivery Driving Strong Momentum The Gym Group leadership team is focused on delivering sustained growth. A winning high value, low cost proposition,delivered by an advantaged business model, in a health and fitness market with structural growth tailwinds, means we are wellpositioned to continue to drive strong momentum in results. Our first half performance demonstrates further strategic progress under our Next Chapter growth plan. Building on the like-for-like revenue growth of previous years, we have delivered another half of consistent like-for-like progress, in line with ourguidance. Group Adjusted EBITDA Less Normalised Rent has grown 12%, reflecting strong performance in our new gyms aswell as continuing growth in mature site returns. This has resulted in strong free cashflow which is funding acceleratinginvestment in new and existing gyms, as well as supporting returns to shareholders. Progress under the Next Chapter Growth PlanStrengthen the CoreThe Next Chapter growth plan has three interrelated elements, the first of which is 'Strengthen the Core'. We have continued topursue growth in like-for-like revenue to 'Strengthen the Core' of our business and deliver further improvement in mature sitereturns. We will update on our progress towards a 30% ROIC in our mature sites at full year results in March 2027. We are driving like-for-like growth through a combination of pricing and revenue management, cost-effective memberacquisition and improving member retention. Optimising Pricing and Revenue Management We continue to see a strong opportunity when it comes to pricing and yield management. Industry and customer pricinganalysis, provided by Simon-Kucher and regularly updated, shows that the value that our members ascribe to their gymsubscription continues to be substantially higher than the price they pay. Spending on health and fitness is also an increasingpriority, particularly for our Gen Z members, who make up nearly half of our membership. Our Gen Z Fitness Pulse Reportsurvey carried out in July 2026 found that 55% of those surveyed rank health and fitness as either their first or second spendingpriority, up from 44% last year. The value gap between low cost gyms and middle and premium market providers remains significant, with the average mid-market competitor at a premium of 55%. As a result of these factors, we continue to see a sustained opportunity in pricing headroom, without eroding our competitiveposition. We have continued to increase headline rates for new members, and the average standard headline rate increased by £1.81per month, to £26.91, which remains extraordinary value. Driving Member Acquisition and Improving RetentionUsing data analytics, we continue to optimise our promotional activity. For example, in trials conducted earlier in the year, wehave demonstrated that we are able to improve revenue from lapsed members through tailoring offers based on their modelledpropensity to rejoin. We have also built on previous activity to broaden further the pricing options available to members. We have been verysuccessful with unbundled 'add-on' offers, such as guest passes and multi-site access, which allow Standard members to pickand choose elements of the Ultimate membership package. This has resulted in a 26% uplift year-on-year in ARPMM fromthose members that have purchased add-ons. With new member acquisition measures focused on marketing and web conversion initiatives, we have made good progress inH1. Unprompted awareness increased again by 5ppts and our activity on social media continues to gain traction, with an 11%increase in national and a 7% increase in local followers. Our website optimisation programme also continues to deliver asteady stream of incremental gains in website conversion. In aggregate, average revenue per member per month was up 5% in the first half, to £22.14, reflecting average yield growth inour mature sites of 3%, as well as more rapid yield progression in our new sites that are not yet fully mature. We have seengood performance from our Wellhub partnership. The maturing of our off-peak pricing proposition, within the mix of membership options, has helped to support memberretention. We are also attracting more members to our fixed term membership options which now account for 10% of ourmembership base. Changes to our payments management have also improved our overall card payment success rate by 6%;this reduces the risk of failed payments creating unintended churn triggers. Overall, our average member tenure has increased by 4% in the first half and stands at 18.5 months.
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Investing in our PropositionCustomer satisfaction measures show that our proposition continues to deliver for our members, with strong value for moneyperceptions. As we continue to improve yield, it is equally important that we find new ways to support the value of what we offerto our members. Our elevated site design is delivering tangible improvements in site performance as our new gyms ramp up,as well as in existing sites that have been retrofitted within our existing maintenance programme. The 10 major refurbishmentswe completed in 2025 are achieving over 10% higher customer satisfaction and 10% incremental membership growth, and areon track to deliver 30% ROIC. Including the four new sites opened in H1, we currently have 24 maturing gyms trading in the new elevated site design. Wehave upgraded a further 15 mature gyms to date in 2026, to add to the 10 major refurbishments last year. By the end of thecurrent year, we expect to have around 25% of our total portfolio in this format. Investing in our TechnologyTechnology is an important enabler in delivering for our members, and we reached a significant milestone in our technologytransformation in August with the successful migration of all members from our legacy member management and paymentsystems to modern, cloud-native SaaS platforms. These new platforms provide a more scalable and resilient foundation for thebusiness, with enhanced functionality already strengthening our commercial and operational capabilities. Alongside this major programme, we continue to modernise our wider technology estate. Enhancements to our app andwebsite, including new A/B testing capabilities, are supporting sales conversion, and we are increasingly applying AI to improveproductivity, speed and decision-making. At the same time, investment in our cloud, data and network infrastructure, togetherwith strengthened security and monitoring capabilities, is improving resilience and helping to mitigate operational andtechnology risk. Together, our investments in member management and payments, digital channels and AI provide further opportunities toenhance revenue and optimise costs through faster innovation, greater member engagement and retention, more sophisticatedpricing and promotional capabilities, and increased operational efficiency. Combined with a more resilient and securetechnology estate, they provide a strong foundation to support our future growth. Accelerating Rollout of Quality Sites We announced in January 2026 that we would accelerate our site rollout, from c.50 to c.75 sites over the coming three years,continuing to target 30% ROIC and funded from free cash flow. This is a market undergoing structural growth. The number of gym members continues to grow in the UK, with the most recentLeisure DB report, State of the UK Fitness Industry 2026, showing that gym membership penetration has risen a fullpercentage point to 17.6%. This is driven predominantly by higher engagement from younger generations (16-34 year olds),with 85% currently being, or having been, a member of a gym. An additional structural opportunity comes from the increasing use of GLP-1s. UK users are forecast to increase to c.7 millionin 2027 and PwC's recent report on "Appetite for disruption: What GLP-1 means for consumer markets", found that theseconsumers spend more on fitness both during and after usage. Alongside updated projections from PwC showing additional headroom for 600-850 more high value, low cost gyms across theUK, these drivers indicate a runway for site expansion of at least 10 years based on current rates of our own and competitorsite openings. To date in 2026, we have opened four new sites and are currently on site at a further 11. We expect to open at least 20 sites in2026 and are building a strong pipeline for 2027. We are continuing to refine our site selection model to optimise the locationanalysis, and to tailor the format for maximum returns in that location. Our compelling contemporary site design is continuing to evolve and is supported by ongoing cost efficiency projects to refinethe operating model, optimise energy usage and innovate on build cost management. Alongside our improved approach to newsite launches, our confidence in the returns potential of these new locations is well underpinned. For example, ourLoughborough Junction gym, which opened on 30 December 2025, was at over 80% of its appraised membership total by June2026. Broaden our Growth We continue to assess a number of options to broaden sources of growth for our business, across new channels, new formatsand new markets. Our criteria for these are that any opportunity should be aligned to our core competencies and meet a highhurdle rate, given the highly attractive returns in our current operations. Our new partnership with Wellhub, a corporate wellness platform which provides its clients' employees with access to fitnessand wellness providers through workplace benefits, is progressing well and delivering results ahead of our expectations. We are testing new formats in both small catchments and larger "destination" gyms, following the success of early trials atMidsomer Norton and gyms of c20,000 sq. ft in edge of town locations at Norwich (opened September 2025) and Lincoln(opened May 2026). We are also exploring partnership opportunities in the broader health and fitness ecosystem, for example relating to thecontinuing expansion of GLP-1 usage. Board ChangesFollowing the conclusion of the AGM in May, Wais Shaifta stepped down as a Non-Executive Director after five years ofservice, and Tamsin Todd assumed the role of Chair of the Remuneration and Sustainability Committees, bringing herextensive leadership and governance experience to these important roles. Summary and Outlook The Gym Group has a winning high value, low cost proposition with an advantaged business model, that is well placed to thrivein the growing health and fitness market. Our Next Chapter growth plan continues to deliver excellent progress in profitability.Both our new and mature sites are performing strongly, increasing confidence that we will deliver ROIC of at least 30% acrossour site portfolio. Our confidence that the Group's business model and strategy is delivering, has encouraged us to confirm anacceleration of our three year site opening programme, funded from free cashflow, as well as commence a £10m sharebuyback to return capital to our shareholders. We remain on track to deliver 3% like-for-like revenue growth for the full year, with like-for-like cost growth now expected to beat the lower end of the guided range of 3-4%. As a result, we expect Group Adjusted EBITDA Less Normalised Rent to be at the top end of the current analysts' forecast range5. Financial Review Presentation of ResultsThis Financial Review uses a combination of statutory and non-statutory measures to discuss performance in the period. Thedefinitions of the non-statutory key performance indicators can be found in the 'Definition of non-statutory measures' section. To assist stakeholders in understanding the financial performance of the Group, aid comparability between periods and providea clearer link between the Financial Review and the consolidated financial statements, we have also adopted a three-columnformat for presenting the Group income statement in which we separately disclose underlying trading and non-underlyingitems.
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Non-underlying items are income or expenses that are material by their size and/or nature and are not considered to beincurred in the normal course of business. They are classified as non-underlying items on the face of the Group incomestatement within their relevant category. Further details on non-underlying items are provided later in this report. Summary Financial Information1 Six months ended30 June 2026 Six months ended30 June 2025 Movement Total Number of Gyms at Period End 264 247 +7% Total Number of Members at Period End ('000) 991 949 +4% Revenue (£m) 133.1 121.0 +10% Group Adjusted EBITDA (£m) 53.0 48.3 +10% Group Adjusted EBITDA Less Normalised Rent (£m) 30.8 27.4 +12% Adjusted Profit before Tax (£m) 6.4 4.9 +31% Statutory Profit before Tax (£m) 4.9 3.3 +48% Statutory Profit after Tax (£m) 4.3 3.3 +30% Adjusted Diluted Earnings Per Share (p)2 2.9 2.4 +21% Statutory Diluted Earnings Per Share (p) 2.3 1.8 +28% Net Cash Inflow from Operating Activities (£m) 59.3 55.5 +7% Free Cash Flow (£m) 27.7 25.1 +10% Non-Property Net Debt (£m) (as at period end) (58.0) (51.2) Increased by £6.8m Adjusted Leverage 1.0 1.0 Unchanged Results for the period Six months ended 30 June 2026 Six months ended 30 June 2025[7] Underlyingresult Non-underlyingitems Total Underlyingresult Non-underlyingitems Total £m £m £m £m £m £m Revenue 133.1 - 133.1 121.0 - 121.0 Cost of sales (2.1) - (2.1) (1.8) - (1.8) Gross profit 131.0 - 131.0 119.2 - 119.2Operating expenses (beforedepreciation, amortisation andimpairment) (81.1) (1.3) (82.4) (73.4) (0.9) (74.3)Depreciation, amortisation andimpairment (32.6) - (32.6) (30.5) (0.6) (31.1) Operating profit 17.3 (1.3) 16.0 15.3 (1.5) 13.8 Finance costs (11.1) (0.2) (11.3) (10.6) (0.1) (10.7) Finance income 0.2 - 0.2 0.2 - 0.2 Profit before tax 6.4 (1.5) 4.9 4.9 (1.6) 3.3 Tax (charge)/credit (1.0) 0.4 (0.6) (0.4) 0.4 -Profit for the period attributableto shareholders 5.4 (1.1) 4.3 4.5 (1.2) 3.3 Earnings per share Basic (p) 3.1 2.5 2.6 1.9 Diluted (p) 2.9 2.3 2.4 1.8 RevenueTrading in the first half of 2026 has continued to be robust, with good growth in both membership and yield. Revenue increasedby 10% to £133.1m (H1 25: £121.0m), reflecting 5% higher average membership numbers throughout the period and a 5%increase in yield. Like-for-like revenue increased by 3% year on year. The average membership number in the period was 1,002,000 compared with 953,000 in the six months ended 30 June 2025.We closed the period with 991,000 members which was up 4% on June 2025 and 7% on 31 December 2025. The averageheadline price of a Standard membership increased to £26.91 in June 2026 compared with £25.10 in June 2025 and £25.64 inDecember 2025, largely as a result of price increases for new members, and selective repricing of the base membership. As aresult, Average Revenue Per Member Per Month ('ARPMM') in the first half of 2026 was up 5% to £22.14 compared with£21.16 in the first half of 2025. Cost of SalesCost 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 £2.1m (H1 257: £1.8m). Underlying Operating Expenses (before Depreciation, Amortisation and Impairment) Six months ended30 June 2026 Six months ended 30 June 20256 £m £m Site costs before Normalised Rent 63.7 57.5 Site Normalised Rent 22.0 20.7 Site costs including Normalised Rent 85.7 78.2 Central Support Office costs before Normalised Rent 14.3 13.4 Central Support Office Normalised Rent 0.2 0.2 Central Support Office costs including Normalised Rent 14.5 13.6 Share based payments 3.1 2.5 103.3 94.3
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Less: Normalised Rent (22.2) (20.9)Underlying operating expenses (before depreciation, amortisation andimpairment) 81.1 73.4 Site Costs including Normalised Rent In the first half of 2026, site costs including Normalised Rent increased by 10% to £85.7m (H1 257: £78.2m), with like-for-likesite costs increasing by 3.5%. The fixed costs associated with running the sites (predominantly building rates and service charges) increased by 6% reflectingthe estate growth, with the impact of changes to the Uniform Business Rates multiplier being broadly offset by rates refundsreceived. Controllable site costs increased by 12% year on year, again reflecting the larger estate as well as the annualisation of higheremployment costs, impacting both staffing and cleaning costs, and increased investment in marketing to build brandawareness. In utilities, the continued normalisation of electricity commodity prices during the period largely offset the impact ofthe higher non-commodity rates that came into effect in the second half of 2025. We have now fixed electricity commodityprices through to October 2028, securing a further reduction in rates for winter 2027 and summer 2028 compared with winter2026 and summer 2027. Site normalised rent, which is defined as the contractual rent payable, recognised in the monthly period to which it relates,increased by 6% and reflects the additional sites and rent reviews in the mature estate. Central Support Office Costs Including Normalised RentCentral Support Office costs including normalised rent increased by 7% year on year, largely reflecting inflationary payincreases and headcount growth. Central Support Office costs as a percentage of revenue decreased to 10.9% from 11.2% inthe prior year period. Share Based PaymentsThe charge for share based payments (including related employer's national insurance) in the period amounted to £3.1m (H125: £2.5m). The increase year on year reflects share price growth and strong performance of the 2025 scheme. During the period, the EBT purchased 1,686,637 shares at a cost of £3.0m (H1 25: 1,433,184 shares at a cost of £2.0m). Underlying Depreciation and AmortisationUnderlying depreciation and amortisation charges in the period amounted to £32.6m (H1 25: £30.5m), made up of £16.1m (H125: £15.5m) on right-of-use assets, £13.4m (H1 25: £11.7m) on property, plant and equipment and £3.1m (H1 25: £3.3m) onintangible assets. The increases year on year reflect the larger estate. Group Adjusted EBITDA Less Normalised RentThe Group's key profit metric is Group Adjusted EBITDA Less Normalised Rent as the Directors believe that this measure bestreflects the underlying profitability and cash generation of the business. Group Adjusted EBITDA Less Normalised Rent isreconciled to Operating profit as follows: Six months ended30 June 2026 Six months ended30 June 2025 £m £m Operating profit 16.0 13.8 Non-underlying operating items (see below) 1.3 1.5 Share based payments 3.1 2.5 Underlying depreciation and amortisation 32.6 30.5 Group Adjusted EBITDA 53.0 48.3 Normalised Rent[8] (22.2) (20.9) Group Adjusted EBITDA Less Normalised Rent 30.8 27.4 Group Adjusted EBITDA Less Normalised Rent at £30.8m was 12% ahead of the prior year period (H1 25: £27.4m), as thestrong trading and increased revenue continued to be supported by tight control of operating costs. Net Financing CostsUnderlying net financing costs increased in the period by £0.5m to £10.9m (H1 25: £10.4m). The finance costs associated with our bank borrowings (comprising interest payable and fee amortisation lesscapitalised interest) were unchanged year on year at £2.5m (H1 25: £2.5m), as the impact of higher average debtthroughout the period was offset by lower average interest rates. The average interest rate paid in the period ondrawn funds was 6.5% (H1 25: 7.4%). The implied interest relating to the lease liabilities increased by £0.5m to £8.6m (H1 25: £8.1m), reflecting additional propertyleases due to the larger estate. Non-Underlying ItemsNon-underlying items are costs or income which the Directors believe, due to their size or nature, are not the result of normaloperating performance. They are therefore separately disclosed on the face of the income statement to allow a morecomparable view of underlying trading performance. Six months ended30 June 2026 Six months ended30 June 2025 £m £m Affecting operating expenses (before depreciation, amortisation and impairment) Costs of major strategic projects and investments 1.1 1.0 Restructuring and reorganisation costs/(income) (including site closures) 0.2 (0.1) 1.3 0.9 Affecting depreciation, amortisation and impairment Impairment of property, plant and equipment, right-of-use assets and intangible assets - 0.5 Amortisation of business combination intangible assets - 0.1 - 0.6 Affecting finance costs Refinancing costs and remeasurement of borrowings 0.2 0.1 0.2 0.1
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Total all non-underlying items before tax 1.5 1.6 Tax on non-underlying items7 (0.4) (0.4) Total non-underlying charge in income statement 1.1 1.2 Non-underlying items affecting operating expenses (before depreciation, amortisation and impairment) in the period amountedto £1.3m (H1 25: £0.9m) and relate predominantly to the non-capitalisable costs (including £0.4m of employee costs) incurredon the implementation of the new member management and payment systems. Non-underlying items affecting finance costs amounted to £0.2m (H1 25: £0.1m) and relate to the remeasurement of the RCFand Term Loan as a result of the amendment to the Group's banking facilities in the period. TaxationThe tax charge for the period was £0.6m (H1 25: £nil), comprising tax calculated using the expected effective tax rate for thefull year of c.18% (FY25: 0%), partly offset by the impact of discrete tax items recognised in the period. The net deferred tax asset recognised at 30 June 2026 was £17.6m (31 December 2025 and 30 June 2025: £18.2m). Deferredtax assets are recognised in respect of tax losses and other temporary differences only to the extent it is considered probablethat the assets will be recoverable. This involves an assessment of when those assets are likely to be recovered, and ajudgement as to whether there will be sufficient taxable profits available to offset the assets. The financial forecast used in the Going Concern assessment was also used to assess the deferred tax recoverability at 30June 2026, and the Directors believe that this forecast provides convincing evidence that sufficient future taxable profits willarise to support the continued recognition of the net deferred tax asset at 30 June 2026. EarningsAs a result of the factors discussed above, the statutory profit before tax in the period was £4.9m (H1 25: £3.3m) and thestatutory profit after tax was £4.3m (H1 25: £3.3m). Adjusted profit before tax is calculated by taking the statutory profit before tax and adding back the non-underlying items. Adjusted profit before tax was £6.4m (H1 25: £4.9m). Adjusted profit after tax was £5.4m (H1 257: £4.5m). The basic and diluted earnings per share was 2.5p and 2.3p respectively (H1 25: 1.9p and 1.8p respectively), and the basic and diluted adjusted earnings per share was 3.1p and 2.9p respectively (H1 257: 2.6p and 2.4p respectively). Cash Flow Six months ended30 June 2026 Six months ended30 June 2025 £m £m Group Adjusted EBITDA Less Normalised Rent 30.8 27.4 Movement in working capital 7.4 8.0 Maintenance capital expenditure (7.1) (7.3) Free cash flow before non-underlying items, interest and tax 31.1 28.1 Non-underlying items (1.2) (0.5) Net interest paid (2.2) (2.5) Free cash flow[9] 27.7 25.1 Expansionary capital expenditure (18.5) (12.6) Refinancing fees (0.1) (0.3) Repurchase of Ordinary share capital (3.8) - Purchase of own shares by EBT (3.0) (2.0) Net cost of share schemes settlement (1.0) (0.1) Cash flow before movement in debt 1.3 10.1 Net decrease in non-property lease indebtedness (0.3) (1.8) Net drawdown/(repayment) of borrowings 5.0 (2.0) Net cash flow 6.0 6.3 Free cash flow generated in the period was £27.7m (H1 25: £25.1m). The increase year on year reflects the strong tradingperformance which resulted in £3.4m additional EBITDA Less Normalised Rent. The working capital inflow was slightly loweryear on year but remained strong at £7.4m (H1 25: £8.0m). Maintenance capital expenditure in the period was broadly in line. Expansionary capital expenditure in the period amounted to £18.5m (H1 25: £12.6m) and relates predominantly to the fit-out ofnew gyms, as well as continued investment in technology and data, including the new member management and paymentcapabilities. Balance Sheet and Net Debt At 30 June 2026 At 30 June 2025 At 31 December 2025 £m £m £m Non-current assets 602.8 574.2 602.4 Current assets 15.6 15.0 13.5 Current liabilities (90.3) (80.5) (88.9) Net current liabilities (74.7) (65.5) (75.4) Non-current liabilities (387.4) (373.9) (385.3) Net assets 140.7 134.8 141.7 Non-Property Net Debt (58.0) (51.2) (59.3) Non-current assets at 30 June 2026 were in line with the position at 31 December 2025, as the impact of assets acquired (inrelation to new and refurbished gyms) and investments made in the new member management and payment capabilities wasbroadly offset by the depreciation charged in the period. Net current liabilities at 30 June 2026 were also in line with the position at 31 December 2025, as were non-current liabilities,where an increase in drawings under the Group's RCF was broadly offset by a decrease in property lease liabilities.
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As at 30 June 2026, the Group had Non-Property Net Debt of £58.0m (31 December 2025: £59.3m; 30 June 2025: £51.2m)comprising drawn facilities of £67.0m less cash of £9.0m. The Directors believe that this measure of net debt best reflects thefinancial health of the business. In addition, it is a key constituent of the Adjusted Leverage covenant included in the Group'sbanking agreement. At 30 June 2026, Adjusted Leverage was 1.0 times (31 December 2025 and 30 June 2025: 1.0 times),significantly below the banking covenant threshold of 3.0 times; and Fixed Charge Cover was 2.2 times (31 December 2025and 30 June 2025: 2.1 times). Banking FacilitiesOn 19 June 2026, the Group agreed an increase in the Term Loan of £15m. As a result, the Group now has inplace combined bank facilities of £117m, consisting of £60m of Term Loan and £57m of RCF, which are due tomature in June 2028. Funds borrowed under the facility agreement continue to bear interest at a minimum annual rate of 2.75% above the SterlingOvernight Index Average ('SONIA'); and undrawn funds under the RCF continue to bear interest at a minimum annual rate of1.1%. The facilities agreement also continues to be subject to quarterly financial covenant tests on Adjusted Leverage and FixedCharge Cover (both terms defined below). Adjusted Leverage must not exceed 3.0 times, and the Fixed Charge Cover mustbe greater than 1.5 times. Terms permit the distribution of surplus cashflow to shareholders. Capital Allocation PolicyWe continue to deliver against our capital allocation policy which prioritises investment in capital expenditure to enhance andmaintain the condition of the estate, with enhancements prioritised by commercial returns. This is followed by investing freecash flow in organic new site growth, whilst maintaining Adjusted Leverage below 2.0 times. We then retain the option to returnexcess capital to shareholders. The Directors are not proposing an interim dividend for the current year. However, in January 2026, having established thatsufficient distributable reserves existed, the Board determined that there was surplus financing capacity and, in line with ourcapital allocation policy, commenced a share buyback programme of up to £10m. In the first half of the year, 2.2m shares werepurchased under the share buyback programme, with £3.8m of the proposed £10m spent. Going ConcernThe Board has reviewed the financial forecast and downside scenario of the Group and has a reasonable expectation that theGroup has adequate resources to continue in operational existence for the period to 31 December 2027. As a result, theDirectors continue to adopt the going concern basis in preparing the Interim Financial Statements. In making this assessment,consideration has been given to the current and future expected trading performance; the Group's current and forecast liquidityposition; and the mitigating actions that can be deployed in the event of reasonable downside scenarios. Further detail isprovided in Note 2 to the Interim Financial Statements. Full Year OutlookWe remain on track to deliver like-for-like revenue growth for the full year of 3%, with like-for-like cost growth now expected tobe at the lower end of the guided range of 3-4%. As a result, we expect full year Group Adjusted EBITDA Less Normalised Rent to be at the top end of the analysts' forecast range5. We expect full year capital expenditure to be in the region of £60-65m, as previously guided, as we deliver at least 20 newopenings as well as the 21 major refurbishments of our mature estate. Capital expenditure will continue to be financed fromfree cash flow. We also expect to complete the £10m share buyback by year end (with £5.7m completed as at 8 September). Principal Risks and UncertaintiesThe Directors take very seriously their responsibility for operating a robust risk management and internal controls process, andfor reviewing its effectiveness at least annually. The risk management framework is designed to effectively identify, assess andmitigate risks, whilst enabling the Group to deliver its strategic and operational objectives. During the period, there has been a continued focus on risk management. Key risk indicators are monitored quarterly, andfunctional risk registers have been updated during the period. We also continue to monitor the ongoing macroeconomic andgeopolitical environment and assess the impact this could have on the Group's principal risks. The principal risks and uncertainties that the Group expects to be exposed to in the second half of the year are the same asthose described in the 'Managing Risk' section of the Group's Annual Report and Accounts 2025 (pages 42-49), a summary ofwhich is provided below. • Operational Gearing • Member Experience • Trading Environment • Our People • Reputation, Brand and Trust • IT Dependency • Cyber and Data Security • Reliance on Key Suppliers Climate Change, Artificial Intelligence and Weight Loss Drugs (as described on page 50 of the Group's Annual Report andAccounts 2025) continue to be considered as emerging risks for the Group. Responsibility StatementThe Directors confirm that, to the best of their knowledge: • the condensed consolidated financial statements ('Interim Financial Statements') have been prepared in accordancewith IAS 34 Interim Financial Reporting as adopted for use in the United Kingdom and give a true and fair view ofthe assets, liabilities, financial position and profit or loss of the Group for the period ended 30 June 2026 as requiredby the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority ('DTR') 4.2.4R. • the half year results announcement includes a fair review of the significant events during the first six months of thefinancial year and a description of principal risks and uncertainties for the remaining six months of the financial yearas required by DTR 4.2.7R. • the notes to the condensed consolidated financial statements include a fair review of related party transactions andchanges thereto as required by DTR 4.2.8R. The Directors of the Company are listed on pages 56 and 57 of the Group's Annual Report and Accounts 2025. A list of thecurrent Directors is maintained on the Group's website at www.tggplc.com. On 7 May 2026, Wais Shaifta stepped down as aDirector of the Company and Tamsin Todd was appointed as Chair of the Remuneration and Sustainability Committees.
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On behalf of the Board Luke TaitChief Financial Officer9 September 2026 Definition of Non-Statutory Measures • Group Adjusted EBITDA- operating profit before depreciation, amortisation, share based payments andnon-underlying items. • Normalised Rent- 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. Areconciliation of Operating profit to Group Adjusted EBITDA Less Normalised Rent is included below theConsolidated Statement of Comprehensive Income in the Interim Financial Statements. • Adjusted Profit Before Tax - profit before tax before non-underlying items. • Adjusted Earnings - profit for the period before non-underlying items and the related tax. • Adjusted Basic/Diluted EPS - Adjusted Earnings divided by the basic/diluted weighted average number of shares. • Free Cash Flow- Group Adjusted EBITDA Less Normalised Rent and movement in working capital, lessmaintenance capital expenditure, cash non-underlying items, bank and non-property lease interest andtax. A reconciliation of Net Cash Inflow from Operating Activities to Free Cash Flow is included in Note 11to the Interim Financial Statements. • Non-Property Net Debt-bank and non-property lease debtless cash and cash equivalents. See Note 9to theInterim Financial Statementsfor the breakdown. • Maintenance Capital Expenditure - costs of replacement gym equipment and premises refurbishment andtechnology maintenance spend. • Expansionary Capital Expenditure - costs of fit-out of new gyms (both organic and acquired), technology projectsand other strategic projects. It is stated net of contributions from landlords. • Adjusted Leverage - Non-Property Net Debt divided by LTM Group Adjusted EBITDA Less Normalised Rent. • Fixed Charge Cover - LTM Group Adjusted EBITDA divided by LTM Finance Costs (excluding interest costs onproperty leases) less LTM Finance Income plus LTM Normalised Rent. Consolidated Statement of Comprehensive IncomeFor the period ended 30 June 2026 6 months ended 30 June 2026 6 months ended 30 June 20251 Unaudited Unaudited Underlying Non-underlying(Note 4) Total Underlying Non-underlying(Note 4) Total Note £m £m £m £m £m £m Revenue 3 133.1 - 133.1 121.0 - 121.0 Cost of sales (2.1) - (2.1) (1.8) - (1.8) Gross profit 131.0 - 131.0 119.2 - 119.2Operating expenses (before depreciation,amortisation and impairment) (81.1) (1.3) (82.4) (73.4) (0.9) (74.3) Depreciation, amortisation and impairment (32.6) - (32.6) (30.5) (0.6) (31.1) Operating profit 17.3 (1.3) 16.0 15.3 (1.5) 13.8 Finance costs (11.1) (0.2) (11.3) (10.6) (0.1) (10.7) Finance income 0.2 - 0.2 0.2 - 0.2 Profit before tax 6.4 (1.5) 4.9 4.9 (1.6) 3.3 Tax (charge)/credit 5 (1.0) 0.4 (0.6) (0.4) 0.4 -Profit for the period attributable toequity shareholders 5.4 (1.1) 4.3 4.5 (1.2) 3.3Other comprehensive income for theperiod - - - - - -Total comprehensive incomeattributable to equity shareholders 5.4 (1.1) 4.3 4.5 (1.2) 3.3 Earnings per share (p) 6 Basic 3.1 2.5 2.6 1.9 Diluted 2.9 2.3 2.4 1.8 1 For the six months ended 30 June 2025, £0.4m of bank transaction fees have been reclassified from Operatingexpenses to Cost of sales to better reflect the nature of these costs and align with the current period presentation. Inaddition, the tax charge for the six months ended 30 June 2025 has been reallocated between Underlying and Non-Underlying items to make it consistent with the presentation adopted in the 2025 financial statements. This restatementaffects non-statutory measures only and has no impact on Statutory Profit After Tax or Statutory Diluted Earnings PerShare. Reconciliation of Operating Profit to Group Adjusted EBITDA Less Normalised Rent2 6 months ended30 June 2026 6 months ended30 June 2025 Unaudited Unaudited Note £m £m Operating profit 16.0 13.8 Add back: Non-underlying operating items 4 1.3 1.5
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Share based payments (included in Operating expenses) 13 3.1 2.5 Underlying depreciation and amortisation 32.6 30.5 Group Adjusted EBITDA 53.0 48.3 Less: Normalised Rent3 (22.2) (20.9) Group Adjusted EBITDA Less Normalised Rent2 30.8 27.4 2 Group Adjusted EBITDA Less Normalised Rent is a non-statutory metric used internally by management and externallyby investors. It is calculated as operating profit before depreciation, amortisation, share based payments and non-underlying items, and after deducting Normalised Rent.3 Normalised Rent is the contractual rent payable, recognised in the monthly period to which it relates. Property leasepayments are higher than Normalised Rent by £0.1m (H1 25: £0.3m lower) due to timing differences and rent refunds. Consolidated Statement of Financial PositionAs at 30 June 2026 30 June 2026 30 June 2025 31 December 2025 Unaudited Unaudited Audited Note £m £m £m Non-current assets Intangible assets 17.3 10.0 13.9 Goodwill 81.8 81.8 81.8 Property, plant and equipment 7 204.0 185.2 202.8 Right-of-use assets 8 281.1 278.0 284.7 Investments in financial assets 1.0 1.0 1.0 Deferred tax assets 5 17.6 18.2 18.2 Total non-current assets 602.8 574.2 602.4 Current assets Inventories 0.6 0.7 0.6 Trade and other receivables 6.0 5.0 9.9 Cash and cash equivalents 9.0 9.3 3.0 Total current assets 15.6 15.0 13.5 Total assets 618.4 589.2 615.9 Current liabilities Trade and other payables 61.5 53.0 61.8 Lease liabilities 8 28.4 27.0 26.7 Dilapidations provision 0.4 0.5 0.4 Total current liabilities 90.3 80.5 88.9 Non-current liabilities Borrowings 9 67.4 59.2 62.2 Lease liabilities 8 317.6 312.4 320.8 Dilapidations provision 2.4 2.3 2.3 Total non-current liabilities 387.4 373.9 385.3 Total liabilities 477.7 454.4 474.2 Net assets 140.7 134.8 141.7 Capital and reserves Own shares held 0.1 0.1 0.1 Share premium 190.4 189.9 190.1 Own shares reserve - EBT (6.2) (4.8) (4.6) Merger reserve 39.9 39.9 39.9 Retained deficit (83.5) (90.3) (83.8) Total equity shareholders' funds 140.7 134.8 141.7 Consolidated Statement of Changes in EquityFor the period ended 30 June 2026 Own sharesheld Sharepremium Own sharesreserve -EBT Mergerreserve Retaineddeficit Total Note £m £m £m £m £m £m At 1 January 2026 0.1 190.1 (4.6) 39.9 (83.8) 141.7 Profit for the period - - - - 4.3 4.3Other comprehensive income forthe period - - - - - - Profit for the period and totalcomprehensive income - - - - 4.3 4.3 Share based payments 13 - - - - 2.5 2.5 Issue of Ordinary share capital - 0.3 - - - 0.3Repurchase of Ordinary sharecapital - - - - (3.8) (3.8) Purchase of own shares by EBT - - (3.0) - - (3.0)
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Exercise of share options - - 1.4 - (2.7) (1.3) At 30 June 2026 (Unaudited) 0.1 190.4 (6.2) 39.9 (83.5) 140.7 Consolidated Statement of Changes in EquityFor the period ended 30 June 2025 Own sharesheld Sharepremium Own sharesreserve -EBT Mergerreserve Retaineddeficit Total Note £m £m £m £m £m £m At 1 January 2025 0.1 189.9 (3.0) 39.9 (95.3) 131.6 Profit for the period - - - - 3.3 3.3Other comprehensive income forthe period - - - - - -Profit for the period and totalcomprehensive expense - - - - 3.3 3.3 Share based payments 13 - - - - 2.0 2.0 Issue of Ordinary share capital - - - - - - Purchase of own shares by EBT - - (2.0) - - (2.0) Exercise of share options - - 0.2 - (0.3) (0.1) At 30 June 2025 (Unaudited) 0.1 189.9 (4.8) 39.9 (90.3) 134.8 Consolidated Cash Flow StatementFor the period ended 30 June 2026 6 months ended30 June 2026 6 months ended30 June 2025 Unaudited Unaudited Note £m £m Cash flows from operating activities Profit before tax 4.9 3.3 Adjustments for: Finance costs 11.3 10.7 Finance income (0.2) (0.2) Non-underlying operating items 1.3 1.5 Underlying depreciation and amortisation 7,8 32.6 30.5 Share based payments and associated NICs 13 3.1 2.5 Decrease in inventories 0.1 0.1 Decrease in trade and other receivables 3.3 3.8 Increase in trade and other payables 4.1 3.8 Cash generated from operations 60.5 56.0 Tax (paid)/received - - Net cash inflow from operating activities before non-underlying items 60.5 56.0 Non-underlying operating items 4 (1.2) (0.5) Net cash inflow from operating activities 11 59.3 55.5 Cash flows from investing activities Purchase of property, plant and equipment (19.4) (16.9) Purchase of intangible assets (6.2) (3.0) Bank interest received 0.2 0.2 Net cash outflow used in investing activities (25.4) (19.7) Cash flows from financing activities Repayment of lease liability principal (14.0) (14.4) Lease interest paid (8.6) (8.1) Bank interest paid (2.4) (2.6) Repayments of bank loans (2.0) (2.0) Drawdown of bank loans 7.0 - Payment of financing fees (0.1) (0.3) Repurchase of Ordinary share capital (3.8) - Purchase of own shares by EBT 13 (3.0) (2.0) Settlement of share based payments through EBT 13 (1.3) (0.1) Proceeds from issue of Ordinary shares 0.3 - Net cash outflow from financing activities (27.9) (29.5) Net increase in cash and cash equivalents 6.0 6.3 Cash and cash equivalents at the start of the period 3.0 3.0 Cash and cash equivalents at the end of the period 9.0 9.3
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Notes to the Interim Financial Statements 1. General Information The Directors of The Gym Group plc ('the Company') and its subsidiaries ('the Group') present their interim report andunaudited condensed consolidated financial statements ('Interim Financial Statements') for the six months ended 30 June2026. The Group operates high value, low cost, 24/7, no contract gyms. The Company is a public limited company whose shares are publicly traded on the London Stock Exchange and isincorporated and domiciled in the United Kingdom. The registered address of the Company is 2nd Floor, Arding & Hobbs, 7 StJohn's Road, SW11 1QN, United Kingdom. The Interim Financial Statements were approved by the Board of Directors on 8 September 2026. They have notbeen audited or formally reviewed by the auditors. 2. Basis of Preparation TheInterim Financial Statementshave been prepared in accordance with IAS 34 Interim Financial Reporting asadopted for use in the UK, and the Listing Rules and the Disclosure Guidance and Transparency Rules of the UKFinancial Conduct Authority (where applicable). The Interim Financial Statements provide comparative information in respect of the previous period. The financial informationshown for the half year periods ended 30 June 2026 and 30 June 2025 does not constitute statutory financial statements withinthe meaning of section 434 of the Companies Act 2006. The information shown for the year ended 31 December 2025 hasbeen extracted from the Group's Annual Report and Accounts 2025 and does not constitute statutory accounts within themeaning of section 434 of the Companies Act 2006. The Interim Financial Statements should be read in conjunction with the Group's Annual Report and Accounts 2025. Theconsolidated financial statements for the year ended 31 December 2025 have been filed with the Registrar of Companies. Theindependent auditor's report on the Group's Annual Report and Accounts for 2025 was unqualified and did not contain astatement under 498(2) or (3) of the Companies Act 2006. The functional currency of each entity in the Group is pound sterling. TheInterim Financial Statementsare presentedin pound sterling, and all values are rounded to the nearest one hundred thousand pounds, except where otherwiseindicated. Accounting PoliciesThe accounting policies adopted in the preparation of the Interim Financial Statements are consistent with thosedescribed in the Group's Annual Report and Accounts 2025, except for new standards effective as of 1 January 2026.The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yeteffective. Two changes in accounting standards applies for the first time in 2026: Amendments to the Classification and Measurement ofFinancial Instruments - Amendments to IFRS 9 and IFRS 7, and Annual Improvements to IFRS Accounting Standards - Volume11. The adoption of these standards did not have a material impact on the Group's financial statements. Going ConcernThe Interim Financial Statements have been prepared on a going concern basis under the historical cost conventionas modified by the recognition of derivative financial instruments, financial assets and other financial liabilities at fairvalue through the profit and loss and the recognition of financial assets at fair value through other comprehensiveincome. In assessing the going concern position of the Group for the period ended 30 June 2026, the Directors have considered thefollowing: · the Group's trading performance in the first half of 2026 and throughout July and August; · the future expected trading performance of the Group to December 2027 (the going concern period), includingmembership levels and behaviours in light of the continued difficult macroeconomic and geopoliticalenvironment; and · the Group's financing arrangements and relationship with its lenders and shareholders. In the first half of 2026, we have seen continued strong trading, with membership at 30 June 2026 reaching 991,000, anincrease of 7% from the end of 2025. Average Revenue Per Member Per Month ('ARPMM') in the first half of 2026 was up 5%to £22.14 compared with £21.16 in the first half of 2025. As a result, revenue for the period was £133.1m, up 10% on the prioryear; and Group Adjusted EBITDA Less Normalised Rent at £30.8m was 12% higher than in the first half of 2025. The Group also reported strong cash generation in the period, with Free Cash Flow of £27.7m (see Note 11 to theInterim Financial Information for a reconciliation to Net Cash Inflow from Operating Activities) being generated andused to fund new site openings, mature site refurbishment and enhancement projects and significant investmentin technology. On 19 June 2026, the Group agreed an increase in the Term Loan of £15m. As a result, the Group now has inplace combined bank facilities of £117m, consisting of £60m of Term Loan and £57m of RCF, which are due tomature in June 2028. Drawings under the facilities continue to be subject to quarterly financial covenant tests onAdjusted Leverage and Fixed Charge Cover (both terms defined above). Adjusted Leverage must not exceed 3.0times, and the Fixed Charge Cover must be greater than 1.5 times. As at 30 June 2026, the Group had Non-Property Net Debt of £58.0m (31 December 2025: £59.3m; 30 June 2025: £51.2m)comprising drawn facilities of £67.0m less cash of £9.0m. The Directors believe that this measure of net debt best reflects thefinancial health of the business. In addition, it is a key constituent of the Adjusted Leverage covenant included in the Group'sbanking agreement. At 30 June 2026, Adjusted Leverage was 1.0 times (31 December 2025: 1.0 times), significantly below thebanking covenant threshold of 3.0 times; and Fixed Charge Cover was 2.2 times (31 December 2025: 2.1 times). Headroomunder the banking facilities was £59.0m. Despite the continued robust trading performance, the Directors have continued to take a cautious approach to planning. Thebase case forecast for the period to 31 December 2027 anticipates some growth in yields across the whole estate as a resultof pricing optimisation actions. Modest increases in membership levels are driven largely by the sites opened in 2026 and2027, and not by growth in the mature estate.
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In addition, whilst the Directors have planned for an acceleration of the new site opening programme throughoutthe forecast period, all new sites are assumed to be self-financed. Under this scenario, the financial covenants arepassed 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 matureestate decline by approximately 5%. Yields continue to grow, but at a much more modest rate than in the basecase. In this scenario, the number of new site openings is reduced to conserve cash, expenditure on maintenanceand marketing is reduced slightly, and discretionary performance-related bonuses are removed. The sharebuyback programme is also paused. Under this scenario, the financial covenants continue to be passed, and theGroup continues to operate within its financing facilities. Conclusion The Board has reviewed the financial forecast and downside scenario of the Group and has a reasonableexpectation that the Group has adequate resources to continue in operational existence for the period to 31December 2027. As a result, the Directors continue to adopt the going concern basis in preparing the InterimFinancial Statements. In making this assessment, consideration has been given to the current and future expectedtrading performance; the Group's current and forecast liquidity position; and the mitigating actions that can bedeployed in the event of reasonable downside scenarios. 2. Revenue The principal revenue streams for the Group are membership income, rental income from personal trainers and ancillaryincome. The majority of revenue is derived from contracts with members, and all revenue arises in the United Kingdom. Disaggregation of revenueIn the following table, revenue is disaggregated by major products and service lines and timing of revenue recognition. 6 months ended30 June 2026 6 months ended30 June 2025 Unaudited Unaudited £m £m Major products/service lines Membership income 126.1 115.0 Rental income from personal trainers 4.6 4.2 Ancillary income 2.4 1.8 133.1 121.0 Timing of revenue recognition Products transferred at a point in time 2.6 2.2 Products and services transferred over time 130.5 118.8 133.1 121.0 Contract liabilities at 30 June 2026 amounted to £16.2m (H1 25: £15.6m). Contract liabilities relate to membership fees received at the start of a contract, where the Group has the obligation to provide agym membership over a period of time, and are included within trade and other payables. The contract liability balanceincreases as the Group's membership numbers increase. The Group does not receive any consideration greater than 12months in advance from members. The Group operates in a market that experiences a small degree of seasonality. The majority of members join during the firstquarter of the year as a result of a post-Christmas drive to improve fitness levels and general health. A second wave of newjoiners is experienced in September and October as students return to university, with quieter periods experienced during theschool holidays. Marketing expenditure is phased towards peak joining periods, particularly the January/February campaign. 3. Non-Underlying Items 6 months ended30 June 2026 6 months ended 30 June 20251 Unaudited Unaudited £m £m Affecting operating expenses (before depreciation, amortisation andimpairment) Costs of major strategic projects and investments 1.1 1.0 Restructuring and reorganisation costs/(income) (including site closures) 0.2 (0.1) Total affecting operating expenses (before depreciation, amortisation andimpairment) 1.3 0.9 Affecting depreciation, amortisation and impairment Impairment of property, plant and equipment, right-of-use assets and intangibleassets - 0.5 Amortisation of business combination intangible assets - 0.1 Total affecting depreciation, amortisation and impairment - 0.6 Total affecting operating expenses 1.3 1.5 Affecting finance costs Refinancing costs and remeasurement of borrowings 0.2 0.1 Total affecting finance costs 0.2 0.1 Total all non-underlying items before tax 1.5 1.6
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Tax on non-underlying items (0.4) (0.4) Total non-underlying charge in income statement 1.1 1.2 1 The tax charge for the six months ended 30 June 2025 has been reallocated between Underlying and Non-Underlying items to make it consistent with the presentation adopted in the 2025 financial statements. Therestatement has no impact on Statutory Profit After Tax or Statutory Diluted Earnings Per Share. Non-underlying items affecting operating expenses (before depreciation, amortisation and impairment) relate predominantly tothe costs incurred on the implementation of new member management and payment systems to replace legacy technology andintroduce market-leading business and member capabilities to further accelerate delivery of our strategic initiatives. Non-underlying items affecting finance costs relate to the remeasurement of the RCF and Term Loan as a result of theamendment in the period of the Group's banking facilities. Reconciliation of Non-Underlying Operating Items to Cash Flow 6 months ended30 June 2026 6 months ended30 June 2054 Unaudited Unaudited £m £m Non-underlying items affecting operating expenses 1.3 1.5 Less: Non-underlying items affecting depreciation, amortisation and impairment - (0.6) Add: opening accruals 0.3 - Less: closing accruals (0.4) (0.4) Cash outflow from non-underlying operating items 1.2 0.5 4. Taxation The income tax charge for the period was £0.6m (H1 2025: £nil). In accordance with IAS 34 Interim Financial Reporting, the taxcharge on ordinary activities has been determined by applying management's best estimate of the annual effective income taxrate for the year ending 31 December 2026, being c.18%, to the profit before tax for the six months ended 30 June 2026. Thetax charge also includes the effect of discrete tax items recognised in the period, principally those arising on employee sharescheme exercises, which are recognised in the interim period in which they occur rather than through the estimated annualeffective tax rate. The net deferred tax asset at 30 June 2026 was £17.6m (31 December 2025: £18.2m; 30 June 2025: £18.2m). Deferred taxassets are recognised in respect of tax losses and other deductible temporary differences only to the extent that it is consideredprobable that sufficient future taxable profits will be available against which they can be utilised. Determining the amountrecognised requires judgement regarding the timing of the reversal of temporary differences and the availability of futuretaxable profits. The assessment of deferred tax recoverability at 30 June 2026 was based on the same financial forecast used to underpin theGroup's Going Concern assessment. Having considered that forecast and the expected future taxable profits it demonstrates,the Directors concluded that it provides convincing evidence to support the continued recognition of the net deferred tax assetat 30 June 2026. 5. Earnings Per Share Basic earnings per share is calculated by dividing the profit attributable to equity shareholders by the weighted average numberof Ordinary shares outstanding during the period, excluding unvested shares held pursuant to The Gym Group plc's sharebased long term incentive schemes. Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares outstanding to assumeconversion of all dilutive potential Ordinary shares. During the period ended 30 June 2026, the Group had potentially dilutiveshares in the form of share options and unvested shares issued pursuant to The Gym Group plc's share based long termincentive schemes. 6 months ended30 June 2026 6 months ended 30 June 20251 Unaudited Unaudited Profit (£m) Profit for the period attributable to equity shareholders 4.3 3.3 Adjustment for non-underlying items 1.1 1.2 Adjusted profit for the period attributable to equity shareholders 5.4 4.5 Weighted average number of ordinary shares for basic earnings per share 174,123,058 176,335,271 Effect of dilution from share options 9,978,493 8,503,147 Weighted average number of ordinary shares adjusted for the effect of dilution 184,101,551 184,838,418 Earnings Per Share (p) Basic Earnings Per Share 2.5 1.9 Diluted Earnings Per Share 2.3 1.8 Adjusted Basic Earnings Per Share 3.1 2.6 Adjusted Diluted Earnings Per Share 2.9 2.4 1 The tax charge for the six months ended 30 June 2025 has been reallocated between Underlying and Non-Underlying items to make it consistent with the presentation adopted in the 2025 financial statements. Therestatement has no impact on Statutory Profit After Tax or Statutory Diluted Earnings Per Share. The weighted average number of ordinary shares excludes the shares that are held by the EBT (see Note 13) as these areclassified as Own shares reserve - EBT.
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6. Property, Plant and Equipment For the period ended 30 June 2026 Assets underconstruction Leaseholdimprovements Fixtures,fittings andequipment Gym andotherequipment Computerequipment Total £m £m £m £m £m £m Cost At 1 January 2026 1.2 304.0 12.2 99.0 7.8 424.2 Additions 2.4 9.0 0.1 2.4 0.7 14.6 Disposals - (0.4) (0.2) (0.4) (0.1) (1.1) Transfers (0.8) 0.5 - 0.3 - - At 30 June 2026 (Unaudited) 2.8 313.1 12.1 101.3 8.4 437.7 Accumulated depreciation At 1 January 2026 - (141.1) (10.3) (64.1) (5.9) (221.4) Charge for the period - (9.4) (0.2) (3.1) (0.7) (13.4) Disposals - 0.4 0.2 0.4 0.1 1.1 At 30 June 2026 (Unaudited) - (150.1) (10.3) (66.8) (6.5) (233.7) Net book value At 30 June 2026 (Unaudited) 2.8 163.0 1.8 34.5 1.9 204.0 For the period ended 30 June 2025 Assets underconstruction Leaseholdimprovements Fixtures,fittings andequipment Gym andotherequipment Computerequipment Total £m £m £m £m £m £m Cost At 1 January 2025 0.9 273.5 12.1 92.2 7.8 386.5 Additions 3.1 9.5 0.5 2.2 0.4 15.7 Disposals - - - (1.4) - (1.4) Transfers (0.6) 0.6 - - - - At 30 June 2025 (Unaudited) 3.4 283.6 12.6 93.0 8.2 400.8 Accumulated depreciation At 1 January 2025 - (126.7) (10.4) (62.4) (5.8) (205.3) Charge for the period - (8.4) (0.2) (2.6) (0.5) (11.7) Disposals - - - 1.4 - 1.4 At 30 June 2025 (Unaudited) - (135.1) (10.6) (63.6) (6.3) (215.6) Net book value At 30 June 2025 (Unaudited) 3.4 148.5 2.0 29.4 1.9 185.2 Included within additions for the period is £0.1m of capitalised interest (H1 25: £0.1m) and £5.3m of accrued capitalexpenditure (H1 25: £1.2m). The Group had £8.2m of commitments that were contracted but not provided as at 30 June 2026 relating to contracts for the fit-out of new gyms where works have not yet commenced (H1 25: £8.1m). 7. Right-of-Use Assets and Leases Amounts recognised in the Consolidated Statement of Financial Position in respect of right-of-use assets are as follows: For the period ended 30 June 2026 Property leases Non-propertyleases Total £m £m £m Cost At 1 January 2026 494.4 18.4 512.8 Additions 12.5 - 12.5 At 30 June 2026 (Unaudited) 506.9 18.4 525.3 Accumulated depreciation At 1 January 2026 (219.1) (9.0) (228.1) Charge for the period (15.1) (1.0) (16.1) At 30 June 2026 (Unaudited) (234.2) (10.0) (244.2) Net book value At 30 June 2026 (Unaudited) 272.7 8.4 281.1
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For the period ended 30 June 2025 Property leases Non-propertyleases Total £m £m £m Cost At 1 January 2025 463.8 18.4 482.2 Additions 14.2 - 14.2 Disposals (4.5) - (4.5) At 30 June 2025 (Unaudited) 473.5 18.4 491.9 Accumulated depreciation At 1 January 2025 (195.1) (6.6) (201.7) Charge for the period (14.3) (1.2) (15.5) Impairment (0.5) - (0.5) Disposals 3.8 - 3.8 At 30 June 2025 (Unaudited) (206.1) (7.8) (213.9) Net book value At 30 June 2025 (Unaudited) 267.4 10.6 278.0 The split of lease liabilities between current and non-current is as follows: 30 June 2026 30 June 2025 31 December 2025 Unaudited Unaudited Audited £m £m £m Current 28.4 27.0 26.7 Non-current 317.6 312.4 320.8 Total Lease liabilities 346.0 339.4 347.5 8. Borrowings and Non-Property Net Debt The carrying value of the Group's bank borrowings at 30 June 2026 was £67.4m (31 December 2025: £62.2m; 30 June 2025:£59.2m). Up until 19 June 2026, the Group had in place a combined £102m Revolving Credit Facility ('RCF') (H1 25:£102m) which was syndicated to a three-lender panel of NatWest, HSBC and Barclays. The facility is due tomature in June 2028 and funds borrowed under the facility agreement bear interest at a minimum annual rate of2.75% (H1 25: 2.75%) above the Sterling Overnight Index Average ('SONIA'). Undrawn funds bear interest at aminimum annual rate of 1.1% (H1 25: 1.1%). On 19 June 2026, the Group agreed an increase in the Term Loan of £15m. As a result, the Group now has inplace a combined £117m facility, consisting of £60m of Term Loan and £57m of RCF. All other terms remainunchanged. Drawings under the facilities are subject to quarterly financial covenant tests on Adjusted Leverage and FixedCharge Cover (both terms defined above). Adjusted Leverage must not exceed 3.0 times, and the Fixed ChargeCover must be greater than 1.5 times. The average interest rate paid in the period on drawn funds was 6.5% (H125: 7.4%). The Group's borrowings are held at amortised cost using the effective interest method. Each reporting period, the Groupreviews its cash flow forecasts and if these have changed since the previous reporting period (other than as a result of changesin floating interest rates), the borrowings are remeasured using the original effective interest rate. Any remeasurement ofborrowings is treated as non-underlying and excluded from Adjusted Earnings. At 30 June 2026, the Group had drawn down £67.0m under the facilities agreement (30 June 2025: £59.0m).Adjusted Leverage was 1.0 times (H1 25: 1.0 times) and Fixed Charge Cover was 2.2 times (H1 25: 2.1 times). Non-Property Net Debt at the period end was made up as follows: 30 June 2026 30 June 2025 31 December 2025 Unaudited Unaudited Audited £m £m £m Bank borrowings 67.0 59.0 62.0 Non-property leases (Note 10) - 1.5 0.3 Less: Cash and cash equivalents (9.0) (9.3) (3.0) Non-Property Net Debt 58.0 51.2 59.3 9. Financial Liabilities The table below sets out the changes in liabilities arising from financing activities. For the period ended 30 June 2026 Borrowings Non-property leaseliabilities Property leaseliabilities Total leaseliabilities £m £m £m £m At 1 January 2026 62.2 0.3 347.2 347.5 Repayments of interest and principal (4.4) (0.3) (22.3) (22.6) Interest expense 2.5 - 8.6 8.6
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Drawdowns 7.0 - - - New leases and modifications - - 12.5 12.5 Other 0.1 - - - At 30 June 2026 (Unaudited) 67.4 - 346.0 346.0 For the period ended 30 June 2025 Borrowings Non-property leaseliabilities Property leaseliabilities Total leaseliabilities £m £m £m £m At 1 January 2025 61.3 3.3 337.2 340.5 Repayments of interest and principal (4.6) (1.9) (20.6) (22.5) Interest expense 2.5 0.1 8.0 8.1 New leases and modifications - - 14.2 14.2 Lease disposals - - (0.9) (0.9) At 30 June 2025 (Unaudited) 59.2 1.5 337.9 339.4 10. 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 forinvesting in new sites and technology, and for enhancing existing sites. As such, Free Cash Flow is included within the KeyPerformance Indicators section of the Annual Report and Accounts 2025 and referenced in both the Financial Review and theGoing 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 30 June 2026 30 June 2025 Unaudited Unaudited £m £m Net cash inflow from operating activities 59.3 55.5 Less: Property lease payments made (Note 10) (22.3) (20.6) Less: Maintenance capital expenditure (7.1) (7.3) Less: Bank and non-property lease interest paid (2.4) (2.7) Add: Bank interest received 0.2 0.2 Free Cash Flow 27.7 25.1 11. Issued Capital The total number of Ordinary shares in issue as at 30 June 2026 was 177,696,518 (30 June 2025: 179,335,918). 12. Share Based Payments and Employee Benefit Trust The Group operates share based compensation arrangements under The Gym Group plc Incentive Plan ('TGG IncentivePlan'), The Gym Group plc Share Incentive Plan - Matching Shares ('SIP'), The Gym Group plc Share Incentive Plan - FreeShares ('SIP - Free Shares'), The Gym Group plc Performance Share Plan ('PSP'), and The Gym Group plc Save as You EarnPlan ('SAYE'). During the period, a total of 3,202,250 (H1 25: 4,277,990) shares were granted under the TGG Incentive Plan, the PSP, the SIPand the SAYE. The PSP and TGG Incentive Plan awards all vest within three years and are subject to continued employment.The TGG Incentive Plan and certain PSP options are also subject to achievement of certain performance targets. For the period ended 30 June 2026, the Group recognised a total charge of £3.1m (H1 25: £2.5m) in respect of the Group'sshare based payment arrangements and related employer's national insurance. In January 2024, the Group established an Employee Benefit Trust ('EBT') to purchase shares in order to minimise dilutionassociated with the share based payments. During the period ended 30 June 2026, the EBT purchased 1,686,637 shares at acost of £3.0m (H1 25: 1,433,184 shares at a cost of £2.0m). As at 30 June 2026, the EBT held 4,587,767 shares at a value of£6.2m (30 June 2025: 3,790,226 shares at a value of £4.8m). The shares held in the EBT have been classified as Own sharesreserve - EBT in the Consolidated Statement of Financial Position. During the period, the Group made income tax payments on behalf of employees of £1.3m (H1 25: £0.1m) in the form of cashas part of a net settlement process on share based payments. The settlement in cash reduced the future funding requirementto the EBT and has accordingly been classified as a financing activity in the Consolidated Cash Flow Statement. 13. Related Party Transactions The Group's significant related parties are as disclosed in Note 28 on page 134 of the Group's Annual Report and Accounts2025. There have been no significant changes to the nature of the Group's related parties during the period. [1] Refer to the 'Definition of non-statutory measures' section for definitions of non-statutory measures used in the table.[2] Adjusted Profit After Tax and Adjusted Diluted Earnings Per Share for HY25 have been restated to reflect a reallocation of the tax charge between Underlying andNon-Underlying items, consistent with the presentation adopted in the FY25 financial statements. The restatement has no impact on Statutory Profit After Tax or StatutoryDiluted Earnings Per Share.[3] Like-for-like vs 2025 includes all sites open as at 31 December 2023.[4] Adjusted Leverage calculated as Non-Property Net Debt divided by LTM Group Adjusted EBITDA Less Normalised Rent.[5] Current Company-compiled analysts' forecast range for Group Adjusted EBITDA Less Normalised Rent is £60.5m - £62.0m.
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[6] Opened the year with 260 gyms with four new openings in the first half: London Stamford Hill, Lincoln, London Hackney and Leeds Crown Point. [7]£0.4m of bank transaction fees have been reclassified from Operating expenses to Cost of sales in HY25 to better reflect the nature of these costs and align with thecurrent period presentation. In addition, the tax charge for HY25 has been reallocated between Underlying and Non-Underlying items to make it consistent with thepresentation adopted in the FY25 financial statements. The restatement has no impact on Statutory Profit After Tax or Statutory Diluted Earnings Per Share.[8] Normalised Rent is the contractual rent payable, recognised in the monthly period to which it relates. Property lease payments are higher than Normalised Rent by £0.1m (H1 25: £0.3m lower) due to timing differences and rent refunds. [9] A reconciliation of Net cash inflow from operating activities to Free cash flow has been included in Note 11 to the Interim Financial Statements. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authorityto act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this informationmay apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the informationcontained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. Forfurther information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END