The International Monetary Fund has made a significant declaration presented in a recent report indicating that "70 is the new 50," suggesting that advances in physical and mental health have elevated the capabilities of those in their seventies to levels comparable to fifty-somethings a mere quarter of a century ago. This statement is not merely a marketing catchphrase; it reflects changing societal norms and expectations regarding ageing, particularly as individuals increasingly prioritise fitness and nutrition. A recent survey indicates a notable trend among consumers across various age groups, revealing a preference for spending on wellness over other expenditures.
Accompanying the emergence of a healthier ageing population are notable implications for elder care and financial planning in the context of longer lifespans. Addressing these emerging challenges, several companies are poised to benefit from current trends in health and wellness.
One such entity is The Gym Group, a low-cost gym chain founded in 2007 by former squash champion John Treharne. The Gym Group has witnessed substantial growth, expanding from its inaugural site in West London to nearly 250 locations nationwide, catering to the increasing fitness demands of over 11 million Britons. The company's membership pricing begins at £14.99 per month, making gym access more affordable compared to traditional fitness clubs. In 2023, under the leadership of new chief executive Will Orr, The Gym Group has seen a resurgence, reporting an 11% increase in sales to £226 million and a 24% rise in underlying profits to £48 million for the upcoming fiscal year. As membership numbers approach one million, Orr aims to open approximately 50 new gyms over the next three years, with funding sourced from within the business. Industry analysts express optimism regarding the company's trajectory, noting that shares, currently valued at £1.40, appear undervalued.
Another firm aligned with health-focused consumer trends is Camellia, a prominent player in the tea industry and the largest independent producer globally. Based in Kent, Camellia manages over 100,000 tons of tea leaves sourced from plantations across India, Bangladesh, and East Africa. The health benefits associated with tea consumption, including reduced heart disease risk and improved immune function, cater to a nation of avid tea drinkers. Additionally, the company has diversified into avocado and macadamia nut production, with avocado estates located in Kenya producing significant yields. Under the leadership of new chief executive Byron Coombs, Camellia has moved to streamline operations by divesting non-core businesses, strengthening its financial position. Although profits have declined, the reinstatement of dividends signifies a positive outlook for shareholders. At £46 per share, the company is positioned for sustainable growth aligned with global health trends.
Lastly, Target Healthcare addresses the growing need for modern elder care. Founded by Kenneth MacKenzie, the company was established in response to inadequate facilities observed in conventional care homes. Target Healthcare now operates 94 sites, offering over 6,400 bedrooms, nearly all equipped with ensuite facilities. The company takes ownership of the properties, leasing them to care home operators. Financial indicators suggest a positive operational trajectory, with increasing rents and profits, and analysts anticipate a steady dividend yield of 5.88 pence for the fiscal year ending in June. Target shares have appreciated over 25% in value since being recommended, reaching 99 pence, yet analysts still consider the price low relative to the company's asset valuations, which stand at £1.12 per share.
In summary, the evolving landscape of health and wellness not only reflects a shift in consumer behaviour but also presents investment opportunities in companies responding to these emerging trends. As the population ages and health consciousness rises, firms like The Gym Group, Camellia, and Target Healthcare are strategically positioned to thrive.
Source: Noah Wire Services