Tees Valley-based Bannatyne Group has reported a record high in sales, with profits also up 57% to £14.3m.
The Bannatyne Health Clubs chain – launched by former Dragon’s Den star Duncan Bannatyne with its first gym on Teesside in 1997 – has delivered record turnover of £117.6m.
The group, which has two Tees gyms – Ingleby Barwick in Stockton and Coulby Newham in Middlesbrough – and its HQ in Darlington, has also revealed it has acquired four new sites in the last year as well as opening nine spas costing £2.6m.
The group spent a total of £14m completing the modernisation of the estate during the year and £2.4m maintaining it.
It now operates a portfolio of affordable, premium health clubs nationwide with a total of 71 gyms, 46 spas and four hotels.
Group CEO Justin Musgrove, pictured above, said: “We’re delighted with the 2017 results – 57% increase in profits year on year after a 15% uplift in 2016 and very strong cash generation is clear demonstration that our strategy is delivering and that the investment over the past two years is driving strong returns.
“Our aspirational proposition with investment in state of the art gyms, Treatment Spas, technological developments is robust, differentiated and sustainable providing indulgence with lifestyle balance that rewards the group with ever increasing membership and spa guest visits.
“The Bannatyne Group is seeking expand further through both organic growth as our current reinvested estate potential is realised and by careful acquisition.
“We are excited about prospects for 2018 which has started well with over 19,000 new members, another record, signed up to date.”
In its annual accounts, the company said it had delivered a strong performance building again on the operational initiatives and investment of the past two years.
“The company is well positioned in the affordable premium segment of the UK health and fitness market, with its clubs featuring spas and swimming pools, a segment that it has made its own,” added the report.
Turnover for the year to December 31, 2017, increased to £117.6m (2016: £112.2m) and profit before tax before exceptional items increased 57% to £14.3m (2016: £9.2m), the underlying improvement in profitability a result of an increase in membership of 7.4% to 211,715, a double-digit increase in spa income and a relentless focus on operational efficiency.
Supported by a strong balance sheet and very strong cash generation (up £5m to £30m) the group acquired four further gyms in Weybridge, Stratford upon Avon, Humberston and Belfast, the first foray into Ireland, taking the total number of gyms in the estate to 71.
Over the past two years the company has invested over £28m, modernising its premises and taking advantage of technological development and expanding its profitable spa operations by nine to take the total to 46.
The report added: “In delivering this result, the company has absorbed cost headwinds of national and living wage increases, the apprenticeship levy and due to our success and expansion, we now employ over 3,000 people, up 10% on 2016.
“The company is operating in a marketplace that has strong fundamental growth drivers. Our proposition plays to today’s trends and customers aspirations – value, lifestyle and a desire to look and feel good. It is expected that these favourable underlying conditions are set for the future.
“Significant further growth is anticipated in 2018 with the benefits of the completion of the modernisation and investment programme in 2017 across the group continuing to attract and grow the membership.
“The acquisitions made over the past two years will also drive growth and further acquisitions will be sought across a fragmented marketplace.”
The company’s chairman Alan Jackson said: “Strategically, the company has carved out its own sub-sector playing to today’s trends.
“The results for 2017 are testimony to the company’s ability to deliver a truly excellent and modern proposition to its members.
“Led by a talented management and a totally dedicated team, Bannatyne has an efficient and very profitable model that will continue to prosper.”