Puregym plans a London float as customers flock back to get fit after lockdown
Puregym is weighing up a listing on the stock market in London as it looks to pull in customers looking to get fit post-lockdown.
A listing of Puregym, which is owned by US private equity firm Leonard Green, would be an example of a buyout firm floating a UK company rather than snapping it up off the stock market.
London-listed businesses including Meggitt, Ultra Electronics and Morrisons are in the crosshairs of private equity firms, after a record year so far for takeovers.
Puregym, which is owned by US private equity firm Leonard Green, is weighing up a listing on the stock market in London
Private equity firms are notorious for listing companies which are laden with debt. Casualties in the past have included Debenhams and the AA.
And Puregym, which made a loss of £92.1million in the six months to June, has debts of £810million including £7million in Government-backed Covid loans.
Chief executive Humphrey Cobbold conceded that the pandemic had been ‘shockingly challenging’ for Puregym – especially in the first quarter of this year, when gyms were closed due to lockdown and the business was losing more than £500,000 every day.
He added: ‘Clearly, we’re carrying a pretty debt-laden balance sheet at the moment.
‘So I don’t think there’s any surprise that we’re considering capital raising options.’
But Puregym, which specialises in no-frills sites and affordable memberships, said it was recovering well now its sites were allowed to reopen.
Membership levels are at 94 per cent of pre-pandemic totals, up from 81 per cent at the end of March.
While lockdowns temporarily halted business for the chain, it used the opportunity to snap up sites – helped along by a £100million cash injection from its private equity owners.
It opened 15 gyms in the first half of 2021, taking its total across the UK, Denmark and Switzerland to 506, and plans to open a dozen more in Britain by the end of the year.
Cobbold said weaknesses in the retail sector due to online shopping, and in the office market due to home-working, were allowing Puregym to take advantage of cheaper rents.
The budget chain, which has around 1.6m members, added that it was ‘aiming to accelerate expansion in 2022’.
It wants to push into the Middle East, Asia and the US, and its first franchise partner – Saudi Arabian leisure investor Al Hokair Group – will open four sites before the end of the year.
Leonard Green, which is based in Los Angeles, bought Puregym in 2017 for around £600million. Morgan Stanley and Barclays will act as lead advisers on the capital raising.