Pure Gym to work out London stock market listing
Pure Gym, the UK's biggest gym operator, plans to raise £190m by listing on the London stock market to help fund expansion.
The chain has 163 gyms, including 40 within the M25, and more than 780,000 members who pay about £20 a month.
The low monthly fee has helped Pure Gym to attract customers from more expensive operators, as well as newcomers to working out.
The company was founded in 2008 by entrepreneur Peter Roberts.
Pure Gym was bought in May 2013 by a group of investors and senior managers and expanded two years later by taking over the LA Fitness chain.
Its gyms are open 24 hours a day, have minimal staffing and do not lock customers into 12-month contracts.
Tony Ball, chairman, said its growth from a start-up to UK market leader today is a "story of disruption and shows how entrepreneurial vision can build real business success".
"Our successful model is built around our members' needs and it has made gym membership accessible for hundreds of thousands of people ... I am hugely excited about its potential for the future," he said.
Humphrey Cobbold, chief executive of Pure Gym, said the listing would further raise Pure Gym's profile by building brand awareness and reward staff.
"As well as opening more gyms, we will continue to invest in technology and the innovation it supports," he said.
Pure posted a 51% rise in revenue for the six months to 30 June to £76.6m and a 23% increase in adjusted profits to £16.5m.
The company believes the UK budget gym market can double in size to 950 sites in the coming years, with between 3.5 million and 4.5 million members - up from 1.9 million as of March 2016.
It plans to open about 38 gyms this year, 25 to 30 in 2017 and 20 to 25 new sites a year thereafter.
The number of UK gym members hit a record 9.2 million this year, meaning a record 1 in 7 people belong to a fitness club, with just over 6,400 gyms.
In 2014 Pure Gym attempted to merge with discount rival The Gym Group, but the deal was abandoned after the competition regulator raised objections.
Upmarket operator Virgin Active was bought by South African investment group Brait in 2015 for £682m.
In June Brait announced that 35 clubs would be sold to Nuffield Health, leaving it with 61 UK sites.
Virgin Active charges about £130 a month for membership,
The gym market has faced similar pressures to the retail sector, with those at the bottom and top prospering, while those in the middle suffering.
Fitness First - one of the squeezed mid-market operators - could be broken up, with JJB Sports founder Dave Whelan taking on most of its 70 sites, Sky News reported.
The others could be bought by The Gym Group and GLL, the charitable social enterprise set up by Greenwich council in the 1990s that operates council-owned gyms and pools under the Better brand.