No frills chain The Gym Group posted its first full-year profit last year as revenues rose 22 per cent.

The company notched up a pre-tax profit of £6.9m in 2016, compared with a loss of £12.4m a year earlier. It announced a final dividend of 0.75p for a full-year total of 1p a share.

It said gym openings would be towards the top of its guidance of 15-20 sites during 2017.

The Gym Group and other no-frills operators such as Pure Gym have rapidly eaten into the market share of mid-market fitness operators. They offer no long-term contracts and charge about £20 a month.

Last August it announced a maiden dividend and its first pre-tax profit. The shares on Monday closed at 180p, 8 per cent below the November 2015 float price of 195p.

John Trehane, chief executive, said:

2016 has been a good year with strong financial and operational progress. Our existing estate continues to deliver excellent returns and our low cost, 24/7, no contract model is disrupting the market and attracting new members.

We will continue to expand rapidly in 2017 through a well developed site pipeline. We have had an encouraging start to 2017 with January and February, key months for any gym business, showing record membership levels with an increase in members to 495,000.

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