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Chris Hoy-backed Pure Gym to gain financial mass with IPO

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The firm charges an average monthly membership of £19.79, which has allowed it to take business that would have otherwise gone to mid-market and premium chains, such as Fitness First and David Lloyd.

Determined to keep that trend going, with a view of building on 163 gyms and 786,000 members nationwide, Pure said it expects to raise £190m from the IPO. Most of the capital will be used alongside other borrowings to clear bank debt entirely, with remaining funds to drive future growth.

The company highlighted that its price point has also attracted new business, not just custom from rivals, in that consumers who have never joined gyms previously have become members of Pure. In addition to low cost, convenience is also a factor as customers aren’t tied into contracts and can cancel any time, while gyms are open all hours of the day.

Pure boasted an ambition to “lead the revolution in the UK health and fitness industry” through meeting customer needs and delivering shareholder returns. The takeover of LA Fitness was one component of Pure’s growth strategy and directors claim there is “substantial opportunity to evaluate avenues for growth such as alternative fitness formats and opportunistic acquisitions”.

An example of this is the firm’s Pure Ride cycling studio, which was opened by Olympic gold medal-winning cyclist Chris Hoy, who is both an investor and ambassador for the business.

Real Business previously investigated the rise of “alternative fitness formats”, which can include boutique outfits that have also been keen to take on the big box operators. In fact, premium, but small, fitness studio 1Rebel secured investment from Pure’s co-founder James Jack.

Tony Ball, chairman of Pure Gym, said: “Pure Gym’s growth from a start-up company in 2008 to undisputed market leader today is a story of disruption and shows how entrepreneurial vision can build real business success.

“Considering what the company has achieved in just eight years, I am hugely excited about its potential for the future.”

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The company’s 2015 revenue reached £125.2m, with a CAGR of 64 per cent from 2013. Meanwhile, H1 2016 revenue is already at £76.6m with a year-on-year growth of 51 per cent, while 27 new gyms opened over the period.

“Pure Gym is ready to become a listed company. An IPO will enable us to be an even stronger counterparty for landlords, further raise our profile by building greater awareness of our strong brand, and provide a mechanism for incentivising the colleagues who have worked so hard to build the UK’s leading gym business,” added Humphrey Cobbold, CEO of Pure Gym.

“We have a well-established and committed management team and are already benefiting from the scale of our 167 gym estate which provides a fantastic platform for future expansion in the fitness and health arena.

“As well as opening more gyms, we will continue to invest in technology and the innovation it supports. Technological capability has been and will remain fundamental to our success and going forward offers opportunities to further differentiate the options and services we provide our members.”

Honesty is the growth stimulant for rising fitness empire LDN Muscle, not steroids, as we found out during an interview with the four man-founded firm.

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