22 October 2024

Mind Gym plc

 ("Mind Gym" or the "Company" or "Group") 

Half Year Trading Update and Notice of Interim Results

MindGym (AIM: MIND), the global provider of human capital and business improvement solutions, provides a trading update for the six months ended 30 September 2024.

MindGym has embarked on a transformation strategy to evolve the business from episodic training provider to behaviour change partner, which will set the Group up to earn more sustainable, repeatable revenues.  The strategy is on track and in FY25 to date, which is a year of transition, the Group is performing in line with the Board's expectations for a return to profitability.

There continues to be challenging market conditions for HR services, reflected by cautious buying behaviours and postponed contracts. This has been particularly pronounced in the US where there has been a sustained reduction in client spend, especially as it relates to DEI initiatives.  Performance in EMEA has been strong, helped by the multi-year energy framework agreement, which has delivered the expected levels of revenue over its three-year term and is due to end in December 2024.

Financial highlights

The Group expects to report:

·      H1 revenues of £20.2m

o  3% lower than the comparative period last year (2% in constant currency).

o  Performance in EMEA has been strong with revenues of £12.1m, a 24% improvement versus H1 FY24. 

o  In the US, performance has been impacted by the challenging market conditions outlined above, with H1 revenues expected to be down 27% to £8.1m (25% down in constant currency).

·      A return to EBITDA profitability in H1 vs the £4.1m adjusted loss reported in H1 FY24.

·      During the period, MindGym negotiated a new £4m overdraft facility which replaces the expiring RCF and reduces ongoing financing costs.  As at 30 September 2024, cash at bank was £0.7m which, combined with access to the £4m undrawn overdraft facility, provides the Group with adequate liquidity.          

Strategic and operational highlights

·      A core focus has been to increase operational efficiency and resilience.    In H1 FY25 the Group has continued to globalise its organisational structure and reduce the cost base, which aligns with the strategic priorities.

·      In Q2, MindGym's Diagnostics offering was succesfully launched with a number of clients, and will be followed by additional diagnostics and analytics offerings in H2.  This is key to the strategy of building long term client relationships and for generating new, proprietary insights from primary data.

·      In H2, after significant market testing, we will be launching the first of our new integrated packages which combine proprietary diagnostics, digital self-directed and live deliveries.  Future releases will also incorporate AI.  The Group will also be launching a new IP package for clients who have, or want, their own in-house, certified MindGym coaches. 

Outlook

·      H2 revenues are expected to be broadly in line with H1, reflecting the on-going challenging market conditions.

·      The Board's expectations for FY25 of adjusted EBITDA remain unchanged, with the actions taken providing greater resilience and expected to lead to improved profitability in due course.

Board change

As separately announced today, Mind Gym confirms the appointment of Emily Fyffe as CFO and a Director of the Company.  This follows the announcement of 28 August 2024 when Emily was announced as CFO Designate and successor to Dominic Neary who leaves the Group on 25 October 2024.

Notice of Half Year Results

Mind Gym will announce its half year results on 3 December 2024.  

Christoffer Ellehuus, Chief Executive Officer of MindGym, commented:

"MindGym has delivered a resilient performance with significant improvement in profitability, despite a macroeconomic environment for HR services that remains challenging.  We are making good progress on our strategy to productise and digitise our IP, making MindGym solutions easy to buy, easy to deliver, and easy to renew, whilst delivering more sustainable, repeatable revenues.  We therefore remain confident in the long-term prospects of the business."

Enquiries    

About MindGym

MindGym is a company that delivers business improvement solutions using scalable, proprietary products which are based on behavioural science.  The Group operates in three global markets: business transformation, human capital management and learning & development.

MindGym is listed on the London Stock Exchange Alternative Investment Market (ticker: MIND) and headquartered in London. The business has offices in London, New York and Singapore.

Further information is available at www.themindgym.com @themindgym