GYM : Annual Report and Notice of AGM15 Apr 2019

RNS Number : 2629W The Gym Group plc 15 April 2019

15 April 2019

The Gym Group Plc (the 'Company')

Annual Report and Accounts 2018 and Notice of 2019 Annual General Meeting

Following the announcement on 19 March 2019 of its full year results for the year ended 31 December 2018 (RNS: 2208T), the Companyannounces that it has posted its Annual Report and Accounts 2018.

The Company also announces that it will hold its Annual General Meeting at 11.00am on Tuesday 4 June 2019 at the offices of Allen & OveryLLP, One Bishops Square, London, E1 6AD.

Copies of the Annual Report and Accounts 2018 and the Notice of the 2019 Annual General Meeting are available to view on the Company's website at http://www.tggplc.com/. They have also been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM.

Copies of those documents, together with a form of proxy for use in connection with the 2019 Annual General Meeting, have been posted or otherwise made available to the Company's shareholders today.

For further information, please contact
The Gym Group	via Instinctif Partners
Richard Darwin, CEO
Mark George, CFO
Instinctif Partners	0207 457 2020
Matthew Smallwood
Justine Warren
Appendix

The additional information set out below, which is extracted from the Annual Report, is included in compliance with Disclosure Guidance and TransparencyRule 6.3.5. This information should be read in conjunction with the Annual Report as a whole:

Principal Risks and Uncertainties

Risk Management

In order to gain an understanding of the risk exposure of the Group, we review each area of our business annually and use a methodology that will assist the Group in measuring, evaluating, documenting and monitoring its risks within all areas of its operations.

We use our risk management process as described to identify, monitor, evaluate and escalate risks as they emerge, enabling management to take appropriate action wherever possible in order to control them and also enabling the Board to keep risk management under review.

Principal risks

The risk factors addressed below are those which we believe to be the most material to our business model, which could adversely affect the operations, revenue, profit, cash flow or assets of the Group and which mayprevent us from achieving the Group's strategic objectives.Additional risks and uncertainties currentlyunknown to us, or which we currentlybelieve are immaterial, mayalso have an adverse effect on the Group.

Principal risk	Definition	Impact	Mitigation
Competition	The Group mayface	The abilityof the	∙ Arecent PwC report indicates
and Market	increased competition	Group to hold or		significant headroom in the low
Saturation	and pressure from	increase prices and		cost gym market.
	competitor pricing	therefore achieve	∙ Maintain price discipline and
	decisions. This will	performance targets		leadership.
	become more	could be affected.	∙	Maintain focus on choosing the
	significant if the low			best sites in a geographical area.
	cost gym market		∙ Continue to invest in the member
	becomes saturated.			proposition.
Organic	Site scarcitymayaffect	Delays to our rollout	∙	Our highlyexperienced property
Rollout	the deliveryof our	plan mayhave an		team are focussed on site

	rollout plan.	adverse impact on		selection and sourcing the best
		growth targets and		deals.
		operational returns.
Member	Failure to provide	Reductions in actual	∙ Monitor utilisation and member
Experience	members with a high	or perceived member		satisfaction scores.
	qualityproduct and	service could result	∙ Enhance monitoring and feedback
	service would damage	in a decrease in		processes.
	the Group's reputation.	membership	∙ Ongoing review of equipment
		numbers and		usage to ensure we meet
	The Group also relies	revenue generation.		member requirements.
	on third parties to		∙	Explore further innovations to
	provide high quality			improve the member experience.
	equipment and		∙	Service level agreements and
	services.			monitoring of service levels for key
				suppliers.
Staff	Loss of keystaff	Alack of experienced	The Group uses a varietyof techniques to
Retention	through retention policy	and motivated staff	attract, retain and motivate staff at all levels
	and failure to manage	will have a	across the business. These techniques
	succession.	detrimental impact	include:
		on all areas of the	∙	competitive remuneration
		business, from		packages;
		operations to central	∙	opportunities to own shares in the
		functions.		Company;
			∙ opportunities for training and
				progression;
			∙ short, clear reporting lines; and
			∙	succession planning.
Economic	The result of Brexit	Incoming equipment	∙	As part of our Brexit planning we
Conditions	could cause significant	and materials could		have stockpiled the capital
	disruption to business	increase in cost due		requirements needed to be
	conditions.	to currency		imported from Europe to ensure
		movement and		we can continue to meet our
		additional import		rollout target in the first six
		costs.		months.
Information	Our abilityto enrol	Disruption in critical	∙	Our primarydata systems are
Technology	members, carryout	IT systems could		hosted byfullyqualified
Dependency	online marketing	have a negative		organisations in suitable data
	activity, process	impact on our		centres.
	payments and control	reputation and our	∙	Our primaryIT infrastructure is
	gym access is	abilityto collect		fullymanaged byspecialist IT
	dependent on the	revenue.		companies who provide best-
	performance of our IT			practice architecture and support.
	systems.		∙	All membership and business
				information is backed up using
				third partylocations.
			∙ Robust disaster recoveryand
				business continuityplans are in
				place.
Data	The Group holds	Unauthorised	∙	The Group's networks and
Protection	business critical and	access, loss or		systems are protected by
	confidential	disclosure of this		firewalls, securitysoftware and
	information	information maylead		secure passwords.
	electronically. Abreach	to legal claims,	∙	All sensitive data is captured and
	of securityor data	regulatorypenalties,		presented using SSL encryption.
	protection rules is a	disruption of		Our transactional website is
	keyrisk.	operations and		scanned quarterlyto ensure PCI
		reputational damage.		compliance.
			∙ Access to central member data
				systems requires 2-Factor
				authentication.
			∙ All customer payment data is
				stored externallyon systems that
				are PCI-DSS and/or BACS
				certified.
			∙ Athird partydata securityaudit
				took place in 2018.
Operational	High operational	Alimited number of	∙ Monthlymonitoring and re-
Gearing	gearing from the fixed	corrective options in		forecasting of business
	cost base	the cost base could		performance at site level.

		be made to correct	∙	Active yield management on a
		any		gym-bygym basis.
		underperformance in	∙	Regular financial management by
		membership		Executive Committee and Board.
		numbers, which
		could have an
		adverse impact on
		profitability.
Regulatory	Failure to adhere to	Potential reputational	∙	The Board has oversight of the
	regulatory	damage and		management of regulatoryrisk
	requirements such as	penalties.		and compliance, and delegates
	the Listing Rules,			specific responsibilities to senior
	taxation, the Data			management.
	Protection Act,		∙	Expert opinion sought where
	employment law,			relevant.
	health and safety		∙	Legal advice taken to ensure
	requirements,			systems, processes and
	planning regulations,			documentation conform with the
	noise abatement and			Data Protection Act.
	advertising and		∙	Third partyhealth and safetyrisk
	marketing regulations.			assessments and audits carried
				out. Staff conduct periodic health
				and safetyassessments.
			∙	Employment and continuous
				training and development of
				appropriatelyqualified staff.
END OF ANNOUNCEMENT

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