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Wednesday Update

DB Live: Gym Group slumps; Barratt reports strong sales

4.30pm: London holds on to gains

The market held on to its strong start and closed at 5,940.95 +78.90 (1.35%).

3pm: Problems mount for Leonard

A trade union has called for internal attacks on Scottish Labour leader Richard Leonard to stop as another of his top team resigned.

Full story here

1pm: Bus jobs hope

Boris Johnson today offered a glimmer of hope for workers in Scotland and England whose jobs are under threat at bus manufacturer Alexander Dennis.

Full story here

8.50am: Accountants rebrand

Scottish accountancy firms Campbell Dallas and Scott Moncrieff are to rebrand as Azets, the largest brand within Cogital Group.

Full story here

9am: Lockdown advice

On the west of Scotland lockdown measures, the Scottish Government has produced guidance suggesting tradespeople, and some other businesses which might do work in people’s homes, can continue to operate provided social distancing precautions are taken.

Hisashi Kuboyama, FSB’s development manager for the West of Scotland, said: “At this critical juncture, we’d urge smaller firms across this region to play their part in keeping this virus under control by closely following the official advice.”

Restrictions on visiting other households have been introduced in Glasgow, West Dunbartonshire and East Renfrewshire after a rise in coronavirus cases.

8.15am: London higher

The FTSE 100 opened higher after falling sharply yesterday, as investors weighed signs of economic recovery against rising coronavirus cases around the world.

The UK’s main stock index rose 0.7% to 5,903 points, having shed around 1.9% yesterday.

7am: Gym Group slumps to loss

Gym group

The Gym Group, which operates 183 no-contract gyms, ran up a £26.9m loss for the half year to the end of June against a £5.58m profit last time.

Its gyms were closed for half of the reporting period and it has lost almost 100,000 members from a year ago, although a third have temporarily frozen membership.

Rent deferrals, business rates relief and the scheme to defer VAT helped control costs.

It said it was cash flow positive in August after re-opening in England on 25 July.

Total membership has increased from 658,000 at the point of re-opening to 676,000 as at 31 August ((771,000 as at 31 August 2019), during a summer holiday period when in a normal year membership would be expected to decline.

Of these members, 37,000 have opted to ‘freeze’ their membership temporarily without charge. Since re-opening, member visits have been steadily increasing week by week. Whilst the total number of visits remains lower than the same period last year, due to the lower membership levels, the number of visits per member is now at the level of last year.

Richard Darwin, CEO, said: “We anticipate the long-term structural growth of low-cost gyms will continue to be driven by the underlying interest in health and fitness, which is accelerating as a result of COVID 19 and the Government’s initiative to reduce obesity.

“With the likelihood of a challenging economic environment in the coming months, gym-goers will increasingly look for great value and as the lowest-priced high quality gym operator we are well placed to meet this demand.”

Barratt profits hit

Housebuilder Barratt Developments said sales orders were now strong after reporting a near-halving of annual profit before tax to £491.8m (2019: £909.8m), impacted by the unprecedented disruption to sales and build in the fourth quarter.

The board said it will reinstate the dividend when it “believes the time is right”, based on a dividend cover of 2.5 times. 

It reported strong forward sales as at 23 August with 15,660 homes (25 August 2019: 13,064 homes) and a value of £3,706.5m (25 August 2019: £3,037.5m).

David Thomas, chief executive, said: “Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism.

“We are now renewing our focus on our medium term targets.”

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