Justin Musgrove, chief executive of The Bannatyne Group said an initial public offering (IPO) remains on the table for the firm.
The chain had planned to raise £300 million by floating in 2016, but later pulled the plug on the IPO amid tumultuous market conditions sparked by the shock Brexit vote.
Musgrove said while an IPO was not an immediate priority, he “can’t rule it out” as an option over the next three or four years.
He said: “Duncan has always said it remains an opportunity for us. We have got some work to do and still have a lot of acquisitions to complete, but it’s very much an option that remains open.”
In the meantime, the 71-strong chain is focusing on expanding further across the UK under plans to have some 100 clubs nationwide.
It completed four acquisitions in 2017, including its first club in Northern Ireland, and has more “careful” deals planned for 2018. The group has its sights set on Europe further down the line.
Musgrove said a European launch could be possible within the next five years, with the market on the continent driven by the low cost gym model and leaving a gap for Bannatyne’s affordable, premium offering.
He said its focus on this market has helped differentiate the chain in the UK and kept profits growing at a healthy clip despite stiff competition.
No-frills rivals are growing aggressively in the UK, with The Gym Group planning to add 20 sites this year.
“We had a dilemma three or four years ago when the low cost sector had polarised the market – the likes of Pure Gym created a vacuum in the market,” said Musgrove. “We had a decision to take the group low cost or upmarket.”
It has firmly focused on its niche, with a £50m investment drive to upgrade existing health clubs, add new spa facilities and expand through acquisition.
The decision has paid off, with the firm recently posting a 57 per cent surge in underlying pre-tax profits to £14.3m for 2017 thanks to record turnover of £117.6m as it increased its membership by 7.4 per cent to nearly 212,000.
It saw spa revenues increase by more than 13 per cent last year as it has opened nine spas to take the total to 46.
The group wants to have about 55 spas by the end of next year, with aims to boost revenues further by cross-selling treatments and facilities to existing gym members.
“The big prize in this sector is retaining your members – if more members are making use of the pool, and gym and having treatments as well, we believe we can keep these members for years to come,” said Musgrove.
Bannatyne, 69, still owns 99 per cent of the chain.