31 March 2025

Mind Gym plc

 ("MindGym" or the "Company" or "Group") 

Full Year Trading Update and Notice of Results

MindGym returns to adjusted EBITDA profitability; Transformation strategy on track

MindGym (AIM: MIND), the global provider of human capital and business improvement solutions, provides a trading update for the financial year ended 31 March 2025 ("FY25") and an updated outlook for the year ending 31 March 2026 ("FY26").

MindGym has embarked on a 3-year transformation strategy to evolve the business from episodic training provider to behaviour change partner, through embedding IP with clients and packaging products, which will enable the Group to earn more sustainable, repeatable, sticky revenues.  Market headwinds for professional services, including Human Capital, continue to impact revenue predictability, reflecting broader challenges in the industry and economy.  Despite this, at the end of the first year, our strategy is on track and in FY25 the Group has performed in line with the Board's expectations delivering a return to EBITDA profitability.

FY25 financial highlights

For FY25, the Group expects to report revenues of c.£38.6m, and to deliver profitable adjusted EBITDA in line with market expectations, a marked improvement on the £0.3m adjusted EBITDA loss in FY24.  Performance in EMEA remained strong through FY25 supported by the multi-year energy framework agreement, which has now concluded, having delivered the expected levels of revenue over its three-year term.  Client decision making has slowed: in the US, budgets continue to be held back driven by hesitancy over the impact of tariffs and regulatory changes by the US government, particularly in DEI, whilst in the UK, this is impacted by the National Insurance changes and new employment rights legislation.

During the period, MindGym negotiated a new £4m overdraft facility which replaced the expiring RCF and reduced ongoing financing costs.  This overdraft facility was successfully renewed for a further 12 months in March 2025.  Year-end cash at bank is anticipated to be c.£0.6m, in line with market expectations, which, combined with access to the £4m undrawn overdraft facility, provides the Group with adequate liquidity.

Strategic and operational update

·      The Group continues to make good progress with our strategy to make MindGym "easier to sell, easier to buy, and easier to renew" and we remain committed to continue executing on this strategy in FY26.

·      In H2 FY25, MindGym launched new IP packages which enable clients to license MindGym's content while selecting their preferred method of delivery.  This increases the stickiness and ease of renewal. Packaged content subscriptions were launched in December and have already generated greater revenue than projected, especially in the US.

·      We also launched our Manager Performance Academy, which combines MindGym content with our new AI-based speech coaching tool, Lio, which has been well received.

·      In FY26 we will continue to simplify our solutions for our go-to-market strategy to increase pipeline volume and speed up sales cycles. In H1 we will be launching our new comprehensive leadership proposition which integrates MindGym's 10X diagnostic with Performa coaching, the proven portfolio of live and virtual workshops, our new AI coach and our established eWorkout digital library.  Configurations of these have already delivered business impact with a range of clients.  The new packaging will make leadership development programmes, which already makes up a significant portion of the Group's revenue, easier to buy, sell and renew.

·      Sales effectiveness and new business acquisition remain a top focus into FY26, and we have strengthened our global sales leadership whilst making additional investments in rebuilding and incentivising the sales team. 

·      During the period MindGym moved from a "build" to a "partner" platform strategy to improve operational efficiencies and add new product features.  This included contracting a new third-party coaching platform which provides a more cost-effective solution and improved features for clients, whilst enabling MindGym to continue delivering its award-winning Precision coaching methodology.  This led to an impairment charge of £4.4m in H2.

FY26 Outlook

·      Given the continued macro-economic uncertainty and unpredictability of client purchasing decisions, the Group is taking a more cautious view on expected revenue growth and expects modest underlying revenue growth in FY26 (excluding the effect of the multi-year energy framework which represented c.£6.4m of revenues in FY25).

·      With a focus on supporting long-term growth, the Board intends to continue the investment in strategic marketing and product priorities and rebuilding the commercial team.

·      Overall, the Group is expected to remain profitable in FY26, albeit at a lower level than previously anticipated.

·      The Group expects its cash reserves to remain flat year on year as cash generated by the business is reinvested to fund these long-term growth initiatives.

Christoffer Ellehuus, Chief Executive Officer of MindGym, commented:

"MindGym has delivered a resilient performance in FY25 with significant improvement in profitability, despite a macro-economic environment for HR services that remains challenging.  We are pleased with the progress made on cost reductions, creating a more efficient and resilient organisation.  At the same time, we are rebuilding our marketing capabilities and intensifying our efforts to build a more efficient and effective sales organisation.  We are fully committed to executing our strategy, making MindGym easy to buy, easy to sell, easy to renew and remain confident in the long-term prospects of the business."

Notice of Results

Mind Gym will announce its results on Thursday, 12 June 2025.  Christoffer Ellehuus, CEO and Emily Fyffe, CFO, will host a webcast and conference call for analysts and investors at 09:00 BST on the day. 

Please contact  mindgym@mhpgroup.com if you would like to receive the webcast and conference call details.

Enquiries    

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") EU no.596/2014. Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

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