Pure Gym abandons London stock market flotation, blaming market volatility

Sources said weaker-than-expected demand for the shares was also a factor

The company had hoped to raise £190m to fund expansion and pay down its debt (Istock)

The UK’s biggest gym operator, Pure Gym abandoned its planned stock market floatation on Monday. The company had hoped to raise £190m to fund expansion and pay down its debt, but volatile markets put the deal on hold.

Humphrey Cobbold, chief executive, said: “Given the challenging IPO market conditions, the board has decided not to proceed with a listing despite the strong interest shown by potential investors.”

Sources said weaker-than-expected demand for the shares also contributed to the decision. Pure Gym had received sufficient orders to buy all the shares offered, but the level of support was lower than hoped for, convincing the board to pull the plug.

The collapsing value of the pound amid fears around the form that Brexit will take has spread anxiety through stock markets in recent weeks, but nonetheless the FTSE 100 hit 7,118 yesterday, just 4 points off its all-time high.

Pure Gym has witnessed a rapid expansion since its foundation in 2008 and now boasts 169 sites and 820,000 members.

Cobbold said the chain was still expecting to build on that growth: “This year alone we have opened 35 new Pure Gyms and had over 150,000 new members join. Current trading is strong giving us further confidence that we can capitalise on the significant market opportunity and encourage even more people to become fitter and healthier.”

The firm has focused on low monthly fees, flexible contracts and 24-hour opening combined with a “no-frills” offering which dispenses with the saunas, pools and cafes of more expensive competitors.