Pure Gym has an ambitious growth plan over the next few years, with the UK-headquartered budget gym provider expecting to double its estate to over 1,000 sites. The help of fresh equity from KKR, and existing lender support, should provide the company with some financial leeway. But with a fast approaching 2025 maturity wall on the horizon, management will have to carefully decide the best option for a refinancing.

Over £800m (equiv.) of debt, including €418m 5.50% SSNs and £430m 6.375% SSNs, is set to mature in February 2025. These notes currently trade with 6.1% and 7.4% yields, after narrowing from 8-9% in mid-May before Q1 results were released.

In this report we will delve into the refinancing options for Pure Gym, to see whether a straight refinancing is viable or whether the group might use part of their liquidity buffer to ease a refinancing over the line. 

Mindful of Pure Gym’s growth aspirations, we will also explore if current cash burn will persist in the future. Or will new gym openings, complemented by better IRR and working capital dynamics, produce a turnaround in cash generation.

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