XERCISE4LESS, the low-cost gym chain, has secured £31m in funding to help it grow around the UK.
Xercise4Less has attracted a further £5m equity investment from BGF (Business Growth Fund), in addition to an increased debt facility of £20m with Lloyds Bank Commercial Banking and a further £6m in asset finance and leasing facilities.
The latest round of funding comes as the Yorkshire-based gym chain, whose turnover has almost doubled in the last year and is now valued at £128m, expands around the UK. The Leeds-based business is planning to open its first site inside the M25, at Hounslow, and further sites are planned in London and the South East.
Over the last 18 months Xercise4Less has opened 15 gyms bringing the total to 24. It has more than 180,000 members.
The business is on track this year to achieve a turnover of around £30m and EBITDA of approximately £10m. BGF, which offers long-term capital and follow-on investment, has now invested £12m in the company, after its initial commitment of £5m in August 2013 and a further injection of £2m in May 2014.
Jon Wright, the founder and chief executive of Xercise4Less, said: “We are less than half way through a five year plan, with ambitions to grow to over 100 gyms nationwide and create more than 4,000 jobs. Our growth has really accelerated in the 18 months since BGF’s first investment. Gaining the backing of a minority equity investor has lent us additional credibility, and played a big role in helping us to increase our lending agreements with Lloyds Bank and others. Having investment backing of this kind enables me to fully realise my vision for the business and drive it forward at the pace it needs for us to further disrupt the leisure industry and strengthen our place amongst the big players.”
Richard Taylor, the investment director at BGF, said: “Xercise4Less, led by a strong management team, has been on an impressive upward sales and profitability trajectory and we’re looking forward to continuing the roll-out of their popular low cost model nationwide. This is a great example of equity and debt working hand-in-hand to support growth. We are delighted that Jon has been able to secure a complementary mix of funding, resulting in an appropriate and flexible capital structure for the company at its current growth stage.”
Xercise4Less was founded in 2006 by ex-rugby player Jon Wright from a single unit in Castleford, West Yorkshire.
Matthew Pollard, Martin Beckett and Saran Lall from Lloyds Bank’s Yorkshire-based mid market and strategic finance teams provided the enlarged debt facility.
Mr Beckett said: “The management team at Xercise4Less has built a successful business based around the principle of providing consumers with access to high quality fitness facilities at affordable prices. The latest round of funding provides the business with the capital to accelerate its rollout strategy.”