18 January 2016


News that Pure Gym will give investors (or shall I say punters?) the opportunity to value it at anything close to £500 Mio must raise an eyebrow or two. Looking at the Gym Group which has already publicly traded shares it should be clear who the main beneficiaries of any going public would be if the valuation would be on a similarly elevated basis: These are the Gym Group metrics: Market Cap £287 Mio, 12 month revenues a grand total of just over £52 Mio and if that is not enough of a yellow light - tangible book value is £27.6 Mio vs long-term debt of £78 Mio. You may want to keep an eye on your financial adviser when he submits your next account statement. As a matter of principle, PBA advises against taking part in New Issues unless there is a very clear valuation argument in favour of the Buyer.