Sunday share tips: PureGym, SmartSpace Software

Since floating in 2105 it has grown into a group with over 187 budget gyms that charge members between £9.99 and £19.99 per month.

It is a no-frills outfit which doesn't even offer members towels.

In 2020 it saw sales plunge by almost half to £80.5m.

Yet membership had nearly recovered to its pre-Covid levels since April's reopening, reaching 729,000 people as of 24 May versus 794,000 at the end of 2019.

The business rates holiday also lowered its break-even membership level fall to 540,000.

"So far, so toned. However, Gym Group shares are trading at their highest level since February last year, before they crashed almost 70 per cent as the UK lurched towards lockdown," Meddings said.

"The group still has some recovering to do to justify its valuation. For now, this is one to hold."

The Financial Mail on Sunday's Midas column told readers to 'buy' stock in software manufacturer SmartSpace Software.

The tipster pointed to research that shows that working from home is here to stay to back up its case.

It also called attention to the track record of its chief executive officer, Frank Beechinor, who oversaw the surge in dotDigital's share price during his stint as chairman of the online marketing specialist outfit.

Beechinor's stated ambition was to boost SmartSpace's share price from £1.45 to £5 over the next couple of years.

SmartSpace has three areas of focus, desk management, meeting room bookings and visitor check-ins.

The company's most established subsidiary is that for visitor check-ins with nearly 5,000 customers around the world already onboard, including multinationals such as DHL.

What's more, in just four months after the pandemic's start, the business added 1,500 new accounts.

Desk management was also seeing growing interest, Midas said.

Analysts expect turnover will surge by over 50% to more than £7m over the year to 31 January and to £10.5m over the subsequent 12 months.

"The group is loss-making right now but it should move into profit during next year, with earnings rising sharply thereafter," the tipster added.

"For many companies, hybrid working is the way forward, not just for the next few months but for the foreseeable future. SmartSpace makes the switch simple and cost-effective. At £1.45, the shares are a buy."