Mind Gym PLC
("MindGym", the "Group" or the "Company")
Final results for the year ended 31 March 2025
Return to adjusted EBITDA profitability as MindGym executes on its strategy to transition from episodic training provider to become a behaviour change partner
MindGym (AIM: MIND), the global provider of human capital and business improvement solutions, announces its audited results for the year ended 31 March 2025.
Results summary
|
| 12 months to 31 Mar 2025 (FY25) | 12 months to 31 Mar 2024 (FY24) | Change |
| Revenue | £38.6m | £44.9m | -14% |
| Gross profit margin | 86.6% | 86.2% | 42 bps |
| Adjusted administrative expenses1 | £34.2m | £41.9m | -18.3% |
| Adjusted EBITDA profit/(loss)1 | £1.9m1 | £(0.3m)1 | -643% |
| Statutory (loss) before tax | (£6.2m) | £(12.1m) | -49.0% |
| Diluted EPS (adjusted) | (4.16p) 1 | (4.25p)1 | 2.1% |
| Diluted EPS (unadjusted) | (8.16p) | (10.86p) | 24.9% |
| Cash (used in)/generated from operations | £1.5m | £(3.1m) | £4.6m |
| Cash at bank | £0.6m | £1.4m | -£0.8m |
| Capital expenditure | £1.6m | £4.3m | -62% |
1Adjusted results exclude the impact of £5.4m (FY24: £8.9m) of exceptional costs incurred in the period
Strategic progress building the foundations for scalable growth by making MindGym solutions easier to buy, easier to sell, and easier to renew
· MindGym is executing on a transformation strategy to move from an episodic training provider to a strategic behavioural-change partner. The group has made good progress against this strategy:
o The launch of packaged subscription solutions that enables clients to license MindGym's content while selecting their preferred method of delivery (either in-house or through MindGym's facilitator network). This new go-to-market approach will increase client stickiness and recurring revenues.
o Signing new technology partnerships to improve operational efficiency and enhance product features and reporting capabilities. This included a new third-party coaching platform and a new booking management system, replacing internally developed tools. This led to the £4.4m digital asset impairment charge recognised in H2.
o Introducing new products including Lio, the new AI based coaching tool. Significant progress has also been made on developing MindGym's High Performance Behaviour Model, powered by our predictive diagnostic, 10X, which links key behaviours to business performance outcomes and MindGym products.
· Entering the second year of the three-year plan the business will focus on:
o Driving commercial rigour through our globally aligned sales team with strategic clarity and clear accountability. The Group will implement simplified contracting models and focus activities on targeting new client acquisition driven by the new sales commission scheme and marketing-generated leads.
o Aligning all core product assets to the new High-Performance Behavioural Model by hardwiring its IP into existing and new solution sets, while building a unified data and analytics infrastructure to support and scale its impact.
· In the medium-term, a key focus will be on accelerating the digitisation of our products to enable integration into partner platform ecosystems.
Financial and Operating summary
· Trading conditions were challenging in FY25, resulting in revenues of £38.6m down 14% on FY24's £44.9m:
o HR investments have continued to face greater scrutiny and slower decision making by business leaders.
o At the same time, the talent and HR landscape is also undergoing rapid transformation, with an influx of technology platforms. MindGym's competitive advantage in this landscape is the combination of our IP and integrated product offering including coaching, diagnostics, training and digital reinforcement tools tied to client business outcomes.
o EMEA performance was resilient to market challenges being +1% on prior year.
§ FY25 represented the final year of the multi-year energy framework agreement which contributed £6.4m of revenue
o US revenues were down 31% on prior year, impacted by the uncertain political and economic environment and contracted DEI spend as businesses reacted to the executive orders by the new US administration.
· In a year of recalibration, the cost reduction measures have enabled the business to deliver adjusted EBITDA profit despite the challenging market conditions:
o Return to adjusted EBITDA profitability of £1.9m, a £2.2m improvement on the £0.3m loss in FY24.
o £13.8m reduction across operating and capital expenditure in FY25, despite investments continuing to be made in strategic product development and marketing activities. This was driven by:
§ Adjusted operating expenditure (excluding exceptional items, depreciation and amortisation) of £31.7m, down 19% on FY24 (£39.1m)
§ Capital expenditure of £1.6m, down 62% on FY24 (£4.3m)
o Exceptional costs of £5.4m (FY24: £8.9m), comprised the following items:
§ Digital asset impairment - £4.4m (FY24: £6.6m)
§ Restructuring costs - £1.0m (FY24: £1.8m)
§ FY24 comparatives also included a non-cash impairment of the US office lease of £0.5m
o Loss before tax of £6.2m (FY24: loss of £12.1m), driven by reduced revenue and the impact of exceptional costs
· MindGym retains sufficient cash and liquidity:
o At 31 March 2025, the Group had cash of £0.6m (FY24: £1.4m), a decline of £0.8m from FY24, but in line with expectations as the business focused cash generated from operations into strategic investments.
o A further cost reduction exercise implemented in early FY26 will reduce operating and capital expenditure further ensuring the business will remain cash neutral.
o The Group retains access to its £4m overdraft facility successfully renewed in March 2025.
Current Trading and Outlook
· Given the continued macroeconomic uncertainty and unpredictability of client purchasing decisions, the Group is taking a more cautious view on anticipated revenue growth and now expects to deliver modest underlying revenue growth in FY26 (excluding the effect of the multi-year energy framework which represented c.£6.4m of revenues in FY25).
· Cash generated from operations will be reinvested in the business to fund strategic investments in long-term growth initiatives and the Group expects to end the year in a cash neutral position.
· In the medium-term, the Board remains confident of returning to revenue growth of more than 10% CAGR, with EBITDA margins exceeding 15%.
Christoffer Ellehuus, Chief Executive Officer of MindGym, said:
"We have made good progress in year one of our three-year transformation strategy to transition from episodic training provider to become the preferred behaviour change partner of our customers. Despite a challenging year and market headwinds, we delivered a return to adjusted EBITDA profitability, whilst laying strong foundations, remaining laser-focused on execution, and making significant strides towards our longer-term goal of returning to growth."
The Company will host a webcast and conference call for analysts and investors at 9:00am BST today. If you would like to attend the webcast and conference call, please contact mindgym@mhpgroup.com.
Enquiries
| Mind Gym plc | +44 (0) 20 7376 0626 |
|
Christoffer Ellehuus (CEO) |
|
| Emily Fyffe (CFO) | |
| | |
| Liberum (Nominated Adviser and Broker) | +44 (0) 20 3100 2000 |
| Nick How
| |
MHP (for media enquiries) +44 (0) 7885 447 944
Reg Hoare mindgym@mhpgroup.com
Katie Hunt
Veronica Farah
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated by the Market Abuse Regulation EU no.596/2014, as it forms part of the UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). 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
Statement of the Executive Chair
The talent and HR landscape is undergoing a particularly rapid transformation due to an influx of private equity-backed HR tech platforms and digital solutions - from talent platforms to wellbeing apps - that have crowded the market. Nonetheless, most L&D leaders concede that up to a quarter of their annual spend isn't used or doesn't deliver value and in response, we believe a more commercial, results-driven era for HR is emerging - one in which business leaders are demanding clear evidence of return on investment.
This is a trend that plays directly to MindGym's strengths. We have always placed behavioural science and measurable impact at the heart of what we do. Our Galderma case study illustrates the positive impact on top line and EBITDA growth MindGym leadership programmes can have.
I'm pleased that, with the realignment of our cost base and a refocus of investments, the Group has managed to navigate the market headwinds and returned to EBITDA profitability.
This provides a firm foundation as we enter the second year of our three-year transformation strategy to evolve the business from episodic training provider to behaviour change partner.
At the core of the strategy is licensing our market-leading IP to clients. IP licensing both creates more SaaS style, repeatable revenue, and provides the basis for building a deeper and more sustainable relationship as clients buy additional services such as delivery through MindGym certified coaches, digital eWorkouts and Performa, our 1:1 coaching service.
This will lead to a significant change in MindGym's business model, moving to a much greater proportion of subscription revenues and opportunities to cross-sell across the full range of leadership, performance and professional capabilities, creating deeper, multi-year relationships.
Looking ahead, we believe there is a significant and growing opportunity for organisations to rethink how they deliver talent development. Just as functions like Marketing have evolved by becoming more data-driven, so too will HR and, in particular, the talent market in which MindGym operates.
MindGym is well positioned to lead this change as we build the unified High Performance Behavioural Model, with our predictive diagnostic 10X at the heart of the model. This will enable us to provide data-driven, targeted, scalable, and highly personalised development that will remove waste and deliver measurable business impact faster.
We are also seizing the benefits of AI. We have launched an AI Coach (Lio) for tricky conversations, where you choose the profile of your interlocutor (passive, aggressive, etc) and practice live with a bot that talks back in the style you have chosen. Lio, who has been taught 25 years of MindGym's unique IP about what really works, then gives you detailed feedback on everything from tone and language to messaging and manner.
With the combination of diagnostics, live and virtual workshops, 1:1 coaching, AI coaching and digital learning across the full range of leadership and professional skills, MindGym will be able to offer clients a highly differentiated and powerful talent ecosystem. This will allow companies to cut costs and to pinpoint investments which will deliver greater and more certain impact on business KPIs.
We believe that MindGym's new talent ecosystem will differentiate us in this highly fragmented market (the largest companies in L&D account for less than 1% of market share). As businesses increasingly recognise the value of deep partnerships with one or two best in class providers, there is a substantial opportunity for MindGym which we are very focussed on capturing.
Founder and CEO transition
I'm delighted to say that the CEO succession has seen the smooth passing of the baton from me to Christoffer Ellehuus who took over as CEO at the start of the year.
Christoffer has built strong relationships with the team and now, increasingly, with clients, and has been adept at nourishing MindGym's core strengths while also making the necessary changes to set the business up for sustainable growth.
As Executive Chair, along with my co-founder, MindGym President Dr Sebastian Bailey, my executive involvement is predominantly in those areas where founder contributions are still helpful, namely market presence, innovation and some key client relationships.
It is our intention to continue to reduce founder involvement at the pace which the business performance allows.
The Board
In October 2024 Dominic Neary stepped down as Chief Financial Officer to pursue a new opportunity. Emily Fyffe, formerly Group Finance Director, was appointed as his successor and joined the Board on 22 October 2024. This transition aligned with the Board's succession plans and I'm delighted with this appointment and Emily's progress in this role.
The search for a new Independent Non-Executive Director continues as we seek to diversify the skills and enhance the ratio of independent directors on the Board, and an update will be provided in due course.
Non-profit activities: ParentGym
In 2009, we launched ParentGym, a programme providing free training to parents of children aged 2-11. It has been shown by independent academic studies to have a significant impact on parenting self-confidence and mental health as well as childhood outcomes. In FY25, we ran sessions for over 900 parents with the aim of helping them to grow our next generation, and certified 16 additional teachers and volunteers to deliver Parent Gym. We will continue this in FY26 with the intention of making more primary schools self-sustaining Parent Gym hubs. Many of our employees use their charity days to support ParentGym as well as their chosen charities.
Dividend
No dividend has been paid or proposed for the year ended 31 March 2025. The Board will continue to keep the appropriateness of dividend payments under periodic review.
Outlook
We are beginning the second year of a 3-year transformation. In the first year we completed much of the infrastructure simplification and rationalisation of investments to provide the platform for growth. This year's focus is on commercial excellence.
The actions taken during FY24 and FY25 to realign the Group's cost base are expected to provide greater resilience and to ensure that MindGym is cash neutral in the current challenging Human Capital market conditions.
We are excited about the road ahead. With our strong foundations, differentiated capabilities, and a growing demand for accountability in talent investments, MindGym's proposition is well placed for the future of people development. I want to extend my sincere thanks to our clients for their partnership, our exceptional team for their commitment, and our shareholders for their continued support for MindGym plc.
Octavius Black
Executive Chair
11 June 2025
CEO's review
FY25
FY25 was a challenging year for the business as the Human Capital market continued to be impacted by economic headwinds and increased competition from PE-backed HR platforms and technologies.
The US market was most impacted driven by the challenging political and economic environment. DEI spend continued to contract as businesses reacted to the executive orders by the new US administration. EMEA remained flat, supported by the multi-year energy framework agreement, which has now concluded, having delivered the expected levels of revenue over its 3-year term. The IP we developed to support this game-changing solution is expected to provide significant future benefits as it is leveraged for MindGym's core content.
Despite these challenging market conditions, we are pleased to deliver a return to adjusted EBITDA profitability, a significant improvement on the loss in FY24. This was driven by the annualised impact of the restructuring undertaken in FY24 and on-going activities to manage the cost base of the organisation.
In a year of recalibration, we made significant progress on our strategic priorities for FY25 to make MindGym easier to buy, easier to sell, and easier to renew. We implemented several new platform partnerships to streamline and upgrade our client experience such as our new AI speech coaching platform Lio. We also evolved our go-to-market strategy with the launch of a new packaged subscription solution and a new website to clarify our value proposition.
Market Opportunity:
The Learning and Development (L&D) sector is vast and highly fragmented with the $353bn market forecasted to grow by 12% CAGR between 2025 and 2030.
Client budgets are typically allocated across large numbers of suppliers, often with overlapping concepts and messages. This can result in ineffective programs with low utilisation and little data to provide visibility into the overall impact. Due to the increase in remote working, the market has also seen a significant increase in new HR tech platforms related to coaching, talent mobility, and development most of them backed by significant private equity investments.
In addition, challenging macroeconomic conditions are making businesses more cautious with their investment decisions. In response, MindGym is focusing on the most prominent talent management issues facing businesses: leadership, productivity and culture change and also by highlighting the Groups unique combination of IP, technology and diagnostics to deliver proven business impact.
MindGym is uniquely positioned as a true behaviour change partner: delivering data-driven diagnostics, actionable insights, world-class learning experiences, and measurable behaviour change at scale. Clients are seeking partners who move beyond basic skills training to deliver lasting behavioural change that directly impacts performance outcomes. They also want comprehensive global L&D solutions delivered both virtually and in person - especially in MindGym's core focus areas of leadership and interpersonal skills.
3-year transformation journey
Year one of our transformation journey focussed on strengthening the operational foundations for growth, making MindGym easier to buy, easier to sell and easier to renew. We transitioned operationally from a "build to partner" model, enabling greater scalability, reporting and insights and delivery capabilities. On the product side, we advanced our offering with the launch of content subscriptions and our new AI coaching tool Lio. We sharpened our commercial and brand presence - introducing a refreshed website, evolving our tone of voice and grounding our marketing approach in data and client insights.
In FY26, we will continue to build on these foundations with an increased focus on commercial effectiveness. We have a globally aligned sales team under new global sales leadership with consistent expectations and performance standards. The focus will be increasingly geared towards new client acquisition, in part facilitated by new marketing generated leads. We will continue to improve our go-to-market proposition by simplifying our pricing strategy and maturing our packaged subscription offering.
In FY27, we plan to evolve the MindGym offering through the digitisation of our content and solutions, which will in turn allow us to scale the business through strategic commercial partnerships and platforms.
MindGym's Behaviour Change Model
As we enter a new fiscal year, I am excited to launch our new integrated leadership model and client solutions to the market. This new offering will unify 25 years of MindGym IP and psychometric data under a new Behaviour Change Model linked to business performance outcomes. This will be powered by the world's most predicative diagnostic, 10X: and provides us with a "Rosetta Stone" of behavioural change that in turn allows us to link MindGym's individual diagnostics, training content, and coaching platform into a unified set of solutions that help drive client performance outcomes.
Outlook
Given the continuing macro-economic uncertainty and unpredictability of client purchasing decisions, the Group is taking a more cautious view on expected revenue growth and therefore expects modest underlying revenue growth in FY26 (excluding the effect of the multi-year energy framework). Cash generated from operations will be reinvested as we continue to focus on strategic marketing, product priorities and rebuilding our sales team as we prioritise commercial execution.
In the medium term, the opportunity for MindGym in this highly fragmented market is significant. We remain confident of returning the business to revenue growth of >10% p.a. and >15% operating EBITDA margins. I joined MindGym for the exceptional IP, talent of our team and the strength of our client relationships and am excited to continue leveraging these on our journey to profitable, sustainable growth.
Christoffer Ellehuus
Chief Executive Officer
11 June 2025
Financial review
Revenue for the year of £38.6m represented a year-on-year reduction of 14% (FY24: £44.9m) reflecting challenging macroeconomic conditions in the professional services sector. Client decision-making slowed: in the US, budgets were held back driven by hesitancy over the political and regulatory changes, particularly in DEI, whilst the UK market was impacted by the impending National Insurance changes and new employment rights legislation. HR investments continue to face greater scrutiny by business leaders, with clients increasingly requiring 'pilots' before committing to extensive contracts. As a result, underlying performance excluding the impact of the energy framework agreement was £32.2m, down £6.9m (18%) versus FY24.
Due to the ongoing market headwinds, we continued to focus on realigning the cost base and implementing operational efficiencies to deliver a return to adjusted EBITDA profitability. This involved reducing annualised expenditure by over £5.9m.
These changes resulted in one-off exceptional charges in the period of £5.4m comprising of:
- £4.4m digital asset impairment
- £1.0m staff restructuring
As a result of the cost-mitigating actions and increased vendor scrutiny, there was half-on-half improvement in profitability across the period, £0.8m adjusted EBITDA in H1 and £1.1m in H2. This resulted in an overall adjusted EBITDA for the year of £1.9m (FY24: £0.3m loss).
There was a loss before tax for the year of £6.2m, impacted by the exceptional charges for the period. This compared to a loss in FY24 of £12.1m.
This loss resulted in an adjusted diluted EPS of (2.92p) (FY24: 4.25p loss) and an unadjusted diluted EPS of (6.92p) (FY24: 10.86p loss).
As at 31 March 2025, the Group has sufficient liquidity with cash of £0.6m and access to a £4m bank overdraft facility. We expect to deliver a cash neutral position in FY26 as operating profits are reinvested in the business.
Revenue
The economic headwinds, which impacted performance in the period, were most pronounced in the US, particularly in the technology and healthcare sectors. As a result, revenue for the US region fell 31% YoY to £14.7m (FY24: £21.2m) or 29% in constant currency.
Revenue performance in EMEA was resilient during the first half of the year, as performance was boosted by the multi-year energy framework agreement, which has now concluded having delivered the expected levels of revenue. The second half saw a decline, in part due to the conclusion of the multi-year agreement and a slowdown in the services sector. On an underlying basis (excluding the impact of the energy framework agreement) revenue reduced £6.9m versus FY24 (18%).
|
| Year to 31 March 3025 | Year to 31 March 2024 | Change |
|
| £'000 | £'000 | % |
| Group Statutory View | 38,606 | 44,914 | -14% |
| EMEA | 23,892 | 23,729 | 1% |
| US | 14,714 | 21,185 | -31% |
Delivery revenue remained the primary driver, contributing 66.3% of total FY25 revenue (FY24: 67.4%), with 43% being delivered face-to-face as clients increasingly seek to connect colleagues in person.
Digital revenues decreased to 7.3% of total revenue (FY24: 10.2%), as client appetite for digital eLearning decreased, driven by low employee engagement and take-up. During the period, the Group contracted a new third-party coaching platform for one-to-one coaching that will provide improved features for clients. The AI coaching tool, Lio, was introduced to the market late in Q4 and enables clients to offer employees tailored coaching in a scalable and cost-effective way.
Design and Advisory (D&A) services saw a net 2.8% increase, underpinned by the successful acquisition of several large, multi-year programmes.
Licensing revenue increased by 1.9% year-on-year, driven by the launch of the content subscription packages, granting clients greater flexibility to leverage our content using their own in-house certified MindGym facilitators. This growth is expected to accelerate in FY26 with the continued improvement of the packages, designed to increase stickiness with clients and generate recurring revenue.
Revenue mix by type compared to previous year
|
| FY25 | FY24 | % change |
| Delivery | 66.3% | 67.4% | -1.1% |
| Design | 16.4% | 13.0% | 3.4% |
| Advisory | 0.9% | 1.5% | -0.6% |
| Digital | 7.3% | 10.2% | -2.9% |
| Licensing and certification | 6.9% | 5.0% | +1.9% |
| Other services | 2.2% | 2.9% | -0.7% |
| Total | 100% | 100% |
|
| Year ended 31 March 2025 | ||||
| Revenue type | EMEA | US | Global | |
| Delivery | 69.7% | 61.0% | 66.3% | |
| Design | 16.3% | 16.5% | 16.4% | |
| Advisory | 1.1% | 0.5% | 0.9% | |
| Digital | 6.5% | 8.8% | 7.3% | |
| Licensing and certification | 3.7% | 12.0% | 6.9% | |
| Other services | 2.7% | 1.2% | 2.2% | |
| Total | 100% | 100% | 100% | |
| Year ended 31 March 2024 | ||||
| Revenue type | EMEA | US | Global | |
| Delivery | 67.1% | 67.8% | 67.4% | |
| Design | 15.0% | 10.9% | 13.0% | |
| Advisory | 2.1% | 0.7% | 1.5% | |
| Digital | 9.6% | 10.7% | 10.2% | |
| Licensing and certification | 2.2% | 8.2% | 5.0% | |
| Other services | 4.0% | 1.7% | 2.9% | |
| Total | 100% | 100% | 100% | |
Gross profit
Gross margin increased to 86.6% (FY24: 86.2%), up 0.4%, primarily reflecting a lower mix of delivery revenue and increase in licensing.
Both regions saw an improvement in gross margin; EMEA gross margin of 85.9% represented an increase of 0.5% on FY24 (85.4%), and US gross margin of 87.8% represented an increase of 0.7% on FY24 (87.1%).
Operating expenditure and profitability
Adjusted administrative expenses, excluding depreciation, amortisation and exceptional costs, of £31.7m represented a year-on-year reduction of 19% (FY24: £39.1m), reflecting the annualised impact of the FY24 major cost reduction exercise, further rationalisation of the cost-base including annualised headcount reductions of £5.3m and annualised vendor savings of £0.6m.
This resulted in an adjusted EBITDA profit for the period of £1.9m (FY24: £0.3m loss), at a margin of 4.8% (FY24: -0.8%).
The loss before tax for the year was £6.2m (FY24: loss of £12.1m). This figure was impacted by £5.4m of exceptional costs, which included £1.0m in restructuring costs and £4.4m non-cash impairment of digital assets.
Capital expenditure
In FY24, a major review of digital product expenditure was undertaken, which resulted in a decision to focus investment on digital assets that were already revenue generating, principally Performa and Diagnostics. This contributed to a 62% year-on-year reduction in capital expenditure to £1.6m (FY24: £4.3m), with investment activities focused on building out Diagnostics.
In H2, in line with the Group's strategy to leverage digital partnerships to drive operational efficiencies and deliver scalable programmes, the Group signed two vendor agreements which replaced internally developed intangible assets that were in use, including the Performa platform. This resulted in a one-off non-cash £4.4m impairment charge, £3.6m of which related to Performa. MindGym's award winning Precision coaching methodology will continue to be delivered through the new vendors platform in a more scalable and cost-effective way.
Taxation
A net full year tax charge of £2m was booked in FY25 (FY24: -£1.3m).
The tax credit generated from the loss before tax was offset by a reduction in the deferred tax asset recognised.
The Group policy is to recognise deferred tax assets for carried forward losses expected to be used in a 3-4 year period following year end. At year end, the Group reassessed the recoverability of its deferred tax asset related to previously recognised tax losses and determined it is appropriate that a deferred tax asset on carried forward losses should be recognised up to the value of the existing deferred tax liability in the UK. As a result, a deferred tax asset of £0.5m has been recognised on carried forward losses of £2.0m.
The Board has full confidence in the strategy and generating future profits and will reassess the recognition of deferred tax assets in future reporting periods. The Group carries £14.2m of unrecognised tax losses (FY24: nil) resulting in an unrecognised deferred tax asset of £3.5m.
There is no time limit for utilising trade losses in the UK and the Board remains confident of fully utilising the tax losses in the future.
|
| FY25 Reported | FY24 Reported |
| | £'000 | £'000 |
| (Loss) before tax | (6,189) | (12,147) |
| Tax credit/(charge) | (2,000) | 1,259 |
| LAT (earnings) | (8,189) | (10,888) |
| ETR % | -32.32% | 10.36% |
During the period, HMRC introduced a merged R&D scheme, which changes the method of obtaining relief for MindGym. Under the new scheme, an above-the-line credit is recorded in the P&L on qualifying expenditure. This resulted in £0.1m in other income being recognised. The new scheme results in a net benefit of 16.2% versus 18.6% under the previous regime.
Earnings per share
There was an adjusted diluted loss per share in the period of 4.16p (FY24: 4.25p loss). The unadjusted diluted loss per share was 8.16p (FY24: 10.86p loss).
On an undiluted basis the adjusted loss per share was 4.16p (FY24: 4.25p loss) and the unadjusted loss per share was 8.16p (FY24: 10.86p loss).
Dividends
No dividend has been paid or proposed for the year ended 31 March 2025. The Board will continue to keep the appropriateness of dividend payments under periodic review.
Cash flow and balance sheet
Cash and cash equivalents decreased from £1.4m in FY24 to £0.6m in FY25. This included the impact of £1.6m of capital expenditure in the period, reduced from £4.3m in FY24. The run rate on capital expenditure decreased significantly through the year, with £1m in H1, reducing to £0.7m in H2.
During the period, the Group negotiated a new £4m overdraft facility which replaces the existing RCF facility, reduces the ongoing finance costs and provides improved liquidity going forward. This facility was renewed in March and is effective until 31 March 2026.
Net trade receivables reduced by £0.7m from FY24, with the proportion of overdue receivables at 31 March 2025 reducing to 5%, reflecting a continued improvement down from 6% in FY24 and 7% in FY23.
| Cash conversion | 31 March 2025 | 31 March 2024 |
| | £'000 | £'000 |
| Cash generated from operations | 1,471 | -3,094 |
| EBITDA | -3,530 | -9,226 |
| Add back non-cash exceptionals* | 4,404 | 7,121 |
| EBITDA excl non-cash exceptionals | 874 | -2,105 |
| Cash conversion (Cash from operations /adjusted EBITDA) | 168% | 147% |
*Adjusting for impact of non-cash exceptional charge in the period in respect of intangible asset (FY25 and FY24) and US office lease impairments (FY24).
| Cash conversion | 31 March 2025 | 31 March 2024 |
| | £'000 | £'000 |
| Overdue debtors % | 5% | 6% |
Going concern
The Board has reviewed scenario analysis to help assess their forward-looking assessment of the viability of the Group. The Directors are confident that the Group has adequate resources to continue in operational existence for the foreseeable future. The Board has reviewed scenarios including a range of revenues and cost-reduction actions that could be taken to mitigate a downturn. This is supported by strong cash management, financial controls and reduced expenditure heading into FY26. The Group also has access to a £4m bank overdraft facility.
Financial risk management
The Group has a diverse portfolio in excess of 450 clients across many industrial sectors and countries. This year, the multi-year energy framework agreement concluded, having accounted for 17% of Group revenue in the year. The second largest client accounted for less than 3% of Group revenue in the year. In FY26 the commercial focus will be on engaging new logos, further diversifying MindGym's portfolio. The recently launched content subscription package is designed to embed MindGym's content into clients' learning journeys, leading to stickier relationships and sustainable, recurring revenues.
The Group has translational foreign currency exposure arising on the consolidation of overseas company results into Sterling. Where possible, the exposure is naturally hedged; for example, by matching US Dollar revenues with US Dollar costs in the US subsidiary. The Group does not currently use forward exchange contracts or currency options to hedge currency risk.
Forward-looking statements
Certain statements in this announcement constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company's future expectations, operations, financial performance, financial condition, and business is a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing economic, financial, business, or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans, and events described in this announcement and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this announcement should be constructed as a profit forecast.
Emily Fyffe
Chief Financial Officer
11 June 2025
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| | | Year to 31 March 2025 | Year to 31 March 2024 |
|
| Note |
£'000 |
£'000 |
| Continuing operations | | | |
| Revenue | 3 | 38,606 | 44,914 |
| Cost of sales | | (5,163) | (6,194) |
| Gross profit | | 33,443 | 38,720 |
| Administrative expenses | | (39,598) | (50,734) |
| Other income | 4 | 107 | - |
|
Operating (loss) | | (6,048) | (12,014) |
| Finance income | 8 | 1 | 30 |
| Finance costs | 8 | (142) | (163) |
|
(Loss) before tax | | (6,189) | (12,147) |
| | | | |
| Adjusted loss before tax | | (803) | (3,264) |
| Total adjusting items | 5 | (5,386) | (8,883) |
|
| | | |
| (Loss) before tax | | (6,189) | (12,147) |
|
Tax on (loss)/profit | 9 | (2,000) | 1,259 |
|
(Loss) for the financial period from continuing operations attributable to owners of the parent | | (8,189) | (10,888) |
| | | | |
| Items that may be reclassified subsequently to profit or loss | | | |
| Exchange translation differences on consolidation | | (100) | (98) |
| Other comprehensive (loss) for the period attributable to the owners of the parent | |
(100) |
(98) |
|
Total comprehensive (loss) for the period attributable to the owners of the parent | |
(8,289) |
(10,986) |
| | | | |
| (Loss) per share (pence) | | | |
| Basic | 10 |
(8.16) |
(10.86) |
| Diluted | |
(8.16) |
(10.86) |
| Adjusted (loss) per share (pence) | | | |
| Basic | 10 |
(4.16) |
(4.25) |
| Diluted | |
(4.16) |
(4.25) |
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| | | 31 March 2025 | 31 March 2024 |
|
| Note |
£'000 |
£'000 |
| Non-current assets | | | |
| Intangible assets | 12 | 3,749 | 8,252 |
| Property, plant and equipment | 13 | 1,199 | 2,100 |
| Deferred tax assets | 9 | 303 | 2,281 |
| | | 5,251 | 12,633 |
| Current assets | | | |
| Inventories | 14 | 25 | 40 |
| Trade and other receivables | 15 | 6,469 | 7,787 |
| Current tax receivable | | 95 | 551 |
| Cash and cash equivalents | | 570 | 1,369 |
| | | 7,159 | 9,747 |
|
Total assets | |
12,410 |
22,380 |
|
| | | |
| Current liabilities | | | |
| Trade and other payables | 16 | 7,647 | 8,474 |
| Lease liability | 17 | 518 | 980 |
| Redeemable preference shares | 18 | 50 | 50 |
| Current tax payable | | - | 1 |
|
| | 8,215 | 9,505 |
| Non-current liabilities | | | |
| Lease liability | 17 | 646 | 1,038 |
| | | | |
| Total liabilities | | 8,861 | 10,543 |
|
Net assets | |
3,549 |
11,837 |
|
Equity | | | |
| Share capital | 21 | 1 | 1 |
| Share premium | | 274 | 258 |
| Share option reserve | | 441 | 481 |
| Retained earnings | | 2,833 | 11,097 |
|
Equity attributable to owners of the parent company | |
3,549 |
11,837 |
The financial statements were approved and authorised for issue by the Board of Directors on 11 June 2025 and were signed on its behalf by:
Emily Fyffe
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
| | Share capital | Share premium | Share option reserve | Retained earnings | Total equity |
| | Note | £'000 | £'000 | £'000 | £'000 | £'000 |
|
At 1 April 2023 | | 1 | 242 | 496 | 22,075 | 22,814 |
| | | | | | | |
|
Profit for the period | | - | - | - | (10,888) | (10,888) |
|
Other comprehensive income: | | | | | | |
| Exchange translation differences on consolidation | | - | - | - | (98) | (98) |
| Total comprehensive income for the period | | - | - | - | (10,986) | (10,986) |
| Exercise of options | | - | 16 | (8) | 8 | 16 |
| Credit to equity for share-based payments | 22 | - | - | (7) | - | (7) |
| | | | | | | |
|
At 31 March 2024 | | 1 | 258 | 481 | 11,097 | 11,837 |
|
Loss for the period | | - | - | - | (8,189) | (8,189) |
|
Other comprehensive loss: | | | | | | |
| Exchange translation differences on consolidation | | - | - | - | (100) | (100) |
| Total comprehensive loss for the period | | - | - | - | (8,289) | (8,289) |
| Exercise of options | | - | 16 | (22) | 22 | 16 |
| Credit to equity for share-based payments | 22 | - | - | (18) | - | (18) |
| Tax related to share based payments | 9 | - | - | - | 3 | 3 |
|
At 31 March 2025 | | 1 | 274 | 441 | 2,833 | 3,549 |
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
| | | Year to 31 March 2025 | Year to 31 March 2024 |
| | Note |
£'000 | £'000 |
| Cash flows from operating activities | | | |
| (Loss)/Profit for the financial period | | (8,189) | (10,888) |
|
Adjustments for: | | | |
| Amortisation of intangible assets | 12 | 1,531 | 1,615 |
| Impairment of intangible asset | 12 | 4,404 | 6,604 |
| Depreciation of property, plant and equipment | 13 | 987 | 1,173 |
| Impairment of right of use asset | 13 | - | 517 |
| Loss/(profit) on disposal of intangible assets | 12 | 26 | - |
| Loss/(profit) on disposal of property, plant and equipment | 13 | 83 | - |
| Net finance costs | 8 | 141 | 133 |
| Taxation (credit)/charge | 9 | 2,000 | (1,259) |
| Decrease in inventories | | 15 | 13 |
| Decrease in trade and other receivables | | 1,318 | 1,970 |
| (Decrease) in trade and other payables | | (827) | (2,965) |
| Share-based payment (credit) | 22 | (18) | (7) |
| Cash (used in)/generated from operations | | 1,471 | (3,094) |
| Net tax received | | 165 | 1,363 |
| R&D refund on account | | 295 | 1,066 |
| Net cash (used in)/generated from operating activities | | 1,931 | (665) |
|
Cash flows from investing activities | | | |
| Purchase of intangible assets | 12 | (1,458) | (4,151) |
| Purchase of property, plant and equipment | 13 | (42) | (82) |
| Interest received | 8 | 1 | 30 |
| Net cash used in investing activities | | (1,499) | (4,203) |
|
Cash flows from financing activities | | | |
| Cash repayment of lease liabilities | | (1,047) | (1,229) |
| Issuance of ordinary shares | | 16 | 16 |
| Interest paid | 8 | (74) | (47) |
| Net cash used in financing activities | | (1,105) | (1,260) |
|
Net decrease in cash and cash equivalents | |
(673) |
(6,128) |
| Cash and cash equivalents at beginning of period | | 1,369 | 7,587 |
| Effect of foreign exchange rate changes | | (126) | (90) |
| Cash and cash equivalents at the end of period | | 570 | 1,369 |
|
Cash and cash equivalents at the end of period comprise: | | | |
| Cash at bank and in hand | | 570 | 1,369 |
MIND GYM PLC NOTES TO THE GROUP FINANCIAL STATEMENTS
1. General information
Mind Gym plc ('the Company') is a public limited company incorporated in England and Wales, and its ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange ('AIM'). The address of the registered office is 160 Kensington High Street, London W8 7RG. The group consists of Mind Gym plc and its subsidiaries, Mind Gym (USA) Inc., Mind Gym Performance (Asia) Pte. Ltd, and Mind Gym (Canada) Inc. (together 'the Group').
The principal activity of the Group is to apply behavioural science to transform the performance of companies and the lives of the people who work in them. The Group does this primarily through research, strategic advice, management and employee development, employee communication, digital products, diagnostics and related services.
2. Summary of material accounting policies
Basis of preparation
The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 March 2025 or 31 March 2024, but is derived from those accounts. Statutory accounts for 2024 have been delivered to the registrar of companies, and those for 2025 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified; (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial information included in this preliminary announcement has been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Group expects to distribute full accounts that comply with UK-adopted international accounting standards and with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared on a going concern basis under the historical cost convention.
The consolidated financial statements are presented in Pounds Sterling. All values are rounded to £1,000 except where otherwise indicated.
Going concern
The Group meets its day-to-day working capital requirements from the cash flows generated by its trading activities and its available cash resources. As at 31 March 2025, the Group had £0.6m of cash, £6.5m of trade and other receivables, £7.6m of trade and other payables and £1.2m of lease liabilities. Trade and other payables included £2.2m of deferred income relating to client payments in advance and does not constitute a cash outflow.
In March 2025, the Group renewed the £4m overdraft facility (Note 20) which expires on 31 March 2026. The Board expects to renew this facility in the ordinary course of business and should this not be successful are confident of securing alternative financing arrangements.
The Board expects to use the facility in the ordinary course of business as it has done through the year ended 31 March 2025 as the Board anticipates ending FY26 in a cash neutral position. The Board do not anticipate utilising the facility in FY27 but will seek renewal as part of their risk mitigation strategy.
The Group prepares cash flow forecasts and re-forecasts regularly as part of the business planning process. The Directors have reviewed forecasted cash flows for a period of at least 12 months for the Group from the date of the approval of the financial statements and consider that the Group will have sufficient cash resources available to meet its liabilities as they fall due. These cash flow forecasts have been analysed in light of inflationary pressure and other medium-term macro-economic impacts and subjected to stress testing and scenario modelling which the Directors consider sufficiently robust. The scenario modelling has assessed the impact of various degrees of downturn in medium-term revenues generated. The Directors note that in a downturn scenario the Group also has the option to rationalise its cost base, including cuts to discretionary capital and overhead expenditure. The Directors consider that the required level of change to the Group's forecasted cash flows to give rise to a material risk over going concern is sufficiently remote. Furthermore, the Directors do not foresee exceeding the key performance indicator (KPI) within the going concern period under both the base scenario and sensitivity modelling.
As a result of these assessments, the Group's cash position and its clients predominantly comprising blue-chip corporates, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.
3. Segmental analysis
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the business. The chief operating decision-maker has been identified as the Board. The Group has two operating segments: EMEA (comprising the United Kingdom and Singapore) and America (comprising the United States and Canada).
Both segments derive their revenue from a single business activity, the provision of human capital and business improvement solutions.
The Group's business is not highly seasonal, and the Group's customer base is diversified. During the year ended 31 March 2025, the Group generated £6.4m of revenue from a single customer (2024: £5.7m), which accounts for 16.5% (2024: 12.7%) of total revenue. This revenue is reported within the EMEA delivery segment. No other customer individually accounted for 10% or more of the Group's revenue during the year.
Segment results for the year ended 31 March 2025
Segment result
| | EMEA | America | Total |
| | £'000 | £'000 | £'000 |
| Revenue | 23,892 | 14,714 | 38,606 |
| Cost of sales | (3,365) | (1,798) | (5,163) |
| Administrative expenses | (27,275) | (12,323) | (39,598) |
| (Loss)/profit before inter-segment charges | (6,748) | 593 | (6,155) |
| Inter-segment charges | 532 | (532) | - |
| Other income | 107 | - | 107 |
| Operating (loss)/profit - segment result | (6,109) | 61 | (6,048) |
| Finance income | | | 1 |
| Finance costs | | | (142) |
| Loss before taxation | | | (6,189) |
| Adjusted (loss)/profit before tax | EMEA | America | Total |
| | £'000 | £'000 | £'000 |
| Operating (loss)/profit - segment result | (6,109) | 61 | (6,048) |
| Adjusting items | 4,681 | 705 | 5,386 |
| Adjusted LBIT/EBIT | (1,428) | 766 | (662) |
| Finance income | | | 1 |
| Finance costs | | | (142) |
| Loss before taxation | | | (803) |
Management does not report segmental assets and liabilities internally and as such an analysis is not reported.
The mix of revenue for the year ended 31 March 2025 is set out below.
|
| EMEA | America | Group |
| Delivery | 69.7% | 61.0% | 66.3% |
| Design | 16.3% | 16.5% | 16.4% |
| Digital | 6.5% | 8.8% | 7.3% |
| Licensing and certification | 3.7% | 12.0% | 6.9% |
| Other | 2.7% | 1.2% | 2.2% |
| Advisory | 1.1% | 0.5% | 0.9% |
The vast majority of the Group's contracts are for the delivery of services within the next 12 months. The Group has therefore taken advantage of the practical expedient in paragraph 121(a) of IFRS 15 not to disclose information about remaining performance obligations.
Segment results for the year ended 31 March 2024
Segment result
| | EMEA | America | Total |
| | £'000 | £'000 | £'000 |
| Revenue | 23,729 | 21,185 | 44,914 |
| Cost of sales | (3,465) | (2,729) | (6,194) |
| Administrative expenses | (32,453) | (18,281) | (50,734) |
| (Loss)/profit before inter-segment charges | (12,189) | 175 | (12,014) |
| Inter-segment charges | 75 | (75) | - |
| Operating profit - segment result | (12,114) | 100 | (12,014) |
| Finance income | | | 30 |
| Finance costs | | | (163) |
| Profit before taxation | | | (12,147) |
| Adjusted profit before tax | EMEA | America | Total |
| | £'000 | £'000 | £'000 |
| Operating profit - segment result | (12,114) | 100 | (12,014) |
| Adjusting items | 7,693 | 1,190 | 8,883 |
| Adjusted EBIT | (4,421) | 1,290 | (3,131) |
| Finance income | | | 30 |
| Finance costs | | | (163) |
| Profit before taxation | | | (3,264) |
Management does not report segmental assets and liabilities internally and as such an analysis is not reported.
The mix of revenue for the year ended 31 March 2024 is set out below.
|
| EMEA | America | Group |
| Delivery | 67.1% | 67.8% | 67.4% |
| Design | 15.0% | 10.9% | 13.0% |
| Digital | 9.6% | 10.7% | 10.2% |
| Licensing and certification | 2.2% | 8.2% | 5.0% |
| Other | 4.0% | 1.7% | 2.9% |
| Advisory | 2.1% | 0.7% | 1.5% |
The vast majority of the Group's contracts are for the delivery of services within the next 12 months. The Group has therefore taken advantage of the practical expedient in paragraph 121(a) of IFRS 15 not to disclose information about remaining performance obligations.
4. Operating (loss)/profit
Operating (loss)/profit is stated after charging/(crediting):
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| External coach costs | 3,778 | 4,573 |
| Staff costs (Note 8) | 25,919 | 31,789 |
| Payroll restructuring costs included in adjusted items | 654 | 1,722 |
| Other restructuring costs included in adjusted items | 328 | 40 |
| Amortisation of intangible assets | 1,531 | 1,615 |
| Impairment - Digital Asset | 4,404 | 6,604 |
| Depreciation of property, plant and equipment | 987 | 1,173 |
| Impairment - Lease | - | 517 |
| Short-term and low-value lease expense | 7 | 14 |
| Impairment/(Write-back) of trade receivables | (20) | 11 |
| Other income - Research and Development Expenditure Credit | 107 | - |
5. Adjusting items
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Restructuring costs | 982 | 1,762 |
| Impairment of right of use asset | - | 517 |
| Impairment of intangibles | 4,404 | 6,604 |
| | 5,386 | 8,883 |
Restructuring costs in the year ended 31 March 2025 include redundancy costs and associated legal costs related to the headcount reduction exercise undertaken to reduce the cost base.
Impairment of intangible assets are excluded from the adjusted results of the Group since the costs are one-off charges. These relate to digital assets not in use that are no longer being developed.
6. Auditor remuneration
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Fees for audit of the Company and consolidated financial statements | 165 | 150 |
| Fees for audit of the Company's subsidiaries pursuant to legislation | 27 | 26 |
| Total audit fees | 192 | 176 |
| Other services | 18 | 18 |
| Total fees payable to the auditor | 210 | 194 |
7. Employees
Staff costs were as follows:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Wages and salaries | 22,779 | 28,059 |
| Social security costs | 2,307 | 2,678 |
| Pension costs - defined contribution plans | 851 | 1,059 |
| Share-based payments | (18) | (7) |
| | 25,919 | 31,789 |
| Restructuring payroll costs included in adjusted items | 654 | 1,722 |
| | 26,573 | 33,511 |
The average number of the Group's employees by function was:
| |
31 March 2025 | 31 March 2024 |
| Delivery | 151 | 211 |
| Support | 86 | 79 |
| Digital | 10 | 41 |
| | 247 | 331 |
The year-end number of the Group's employees by function was:
| |
31 March 2025 | 31 March 2024 |
| Delivery | 135 | 175 |
| Support | 80 | 79 |
| Digital | 8 | 16 |
| | 223 | 270 |
Key management personnel include all Directors and a number of senior managers across the Group who together have responsibility and authority for planning, directing and controlling the activities of the Group. The compensation paid to key management personnel for services provided to the Group was:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Salaries, bonuses and other short-term employee benefits | 2,319 | 2,823 |
| Post-employment benefits | 72 | 84 |
| Termination benefits | - | 20 |
| Share-based payments | (57) | (3) |
| Total compensation | 2,334 | 2,924 |
Details of Directors' remuneration and share options are set out in the Annual Report on Remuneration on pages 60 to 63.
8. Net finance costs
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Finance income | | |
| Bank interest receivable | 1 | 30 |
| | 1 | 30 |
| Finance costs | | |
| Bank interest payable | (44) | (47) |
| Other borrowing costs | (30) | - |
| Lease interest | (68) | (116) |
| | (142) | (163) |
| | (141) | (133) |
9. Tax
The tax (credit)/charge for the year comprises:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| UK current tax | 27 | (463) |
| UK adjustment in respect of prior periods | (61) | (1,864) |
| Withholding tax | 27 | 2 |
| Foreign current tax | 24 | 16 |
| Foreign adjustment in respect of prior periods | 6 | 105 |
| Total current tax (credit)/charge | 23 | (2,204) |
| Deferred tax - current year | 2,035 | (2,350) |
| Deferred tax - adjustment in respect of prior periods | (131) | 3,295 |
| Effect of changes in tax rates | 73 | - |
| Total deferred tax charge/(credit) | 1,977 | 945 |
| Total tax (credit)/charge | 2,000 | (1,259) |
Deferred tax totalling £3k in relation to share based payments has been recognised in Equity in the year ended 31 March 2025 (2024: £nil).
The tax charge/(credit) for the year can be reconciled to accounting (loss)/profit as follows:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| (Loss)/profit before tax | (6,189) | (12,147) |
| Expected tax (credit)/charge based on the standard rate of tax in the UK of 25% (2024: 25%) | (1,547) | (3,037) |
| Differences in overseas tax rates | 5 | 7 |
| Expenses not deductible for tax purposes | (11) | 23 |
| Adjustments to tax in respect of prior periods | (186) | 1,536 |
| Enhanced R&D deduction | - | (535) |
| Tax rate changes | 73 | - |
| Tax losses for which no deferred income tax asset was recognised | 3,544 | - |
| Losses surrendered under SME regime | - | 694 |
| Other tax adjustments | 122 | 53 |
| Total tax charge/(credit) | 2,000 | (1,259) |
The main categories of deferred tax assets and liabilities recognised by the Group are:
| | Tax losses | Intangible assets | Other | Total |
| | £'000 | £'000 | £'000 | £'000 |
| At 1 April 2023 | 5,254 | (2,374) | 349 | 3,229 |
| Charged to income | (1,704) | 924 | (166) | (946) |
| Exchange differences | - | - | (2) | (2) |
| At 31 March 2024 | 3,550 | (1,450) | 181 | 2,281 |
| Credited to income | (2,939) | 933 | 29 | (1,977) |
| Charged to equity | - | - | 3 | 3 |
| Exchange differences | (2) | - | (2) | (4) |
| At 31 March 2025 | 609 | (517) | 211 | 303 |
The Group has recognised £0.6m of deferred tax assets relating to carried forward tax losses. In the UK, the deferred tax asset on carried forward losses of £0.5m has been recognised up to the value of the existing deferred tax liability of £0.5m, relating to timing differences on intangible assets.
Losses for which no deferred tax asset has been recognised amount to £14.2m (2024: £nil), resulting in an unrecognised deferred tax asset of £3.5m. There is no time limit for utilising trade losses in the UK. The entity continues to perform an evaluation of its deferred tax asset valuation on an annual basis to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Board remains confident of full utilisation of tax losses in the future.
Other deferred tax assets include deferred tax on shared based payments in the UK and other temporary timing differences.
10. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the earnings attributable to shareholders of the Company by the weighted average number of ordinary shares in issue during the year. The Company has potentially dilutive shares in respect of the share-based payment plans (see Note 23), however, as the Company is loss making in the current period, these have not been included in the calculation of earnings per share on the basis that a loss cannot be diluted.
| |
31 March 2025 | 31 March 2024 |
| Weighted average number of shares in issue | 100,273,688 | 100,186,450 |
| Potentially dilutive shares (weighted average) | 6,965,965 | 7,921,037 |
| Diluted number of shares (weighted average) | 107,239,653 | 108,107,487 |
| | | |
| | 31 March 2025 | 31 March 2024 | ||||
| | | Basic EPS | Diluted EPS | | Basic EPS | Diluted EPS |
| | £'000 | Pence | Pence | £'000 | pence | pence |
| Net (loss)/profit attributable to shareholders | (8,189) | (8.16) | (8.16) | (10,888) | (10.86) | (10.86) |
| Adjusted (loss)/profit attributable to shareholders | (4,171) | (4.16) | (4.16) | (4,262) | (4.25) | (4.25) |
11. Dividends
No dividends have been paid or proposed for the year ended 31 March 2025 (FY24: nil).
12. Intangible assets
| | Patents | Development costs | Total |
| | £'000 | £'000 | £'000 |
| Cost | | | |
| At 1 April 2023 | 121 | 15,173 | 15,294 |
| Additions | 23 | 4,128 | 4,151 |
| Disposals1 | - | (1,660) | (1,660) |
| At 31 March 2024 (restated) | 144 | 17,641 | 17,785 |
| Additions | 28 | 1,430 | 1,458 |
| Disposals | - | (185) | (185) |
| At 31 March 2025 | 172 | 18,886 | 19,058 |
|
Amortisation | | | |
| At 1 April 2023 | 66 | 2,908 | 2,974 |
| Amortisation charge | 7 | 1,608 | 1,615 |
| Impairment | - | 6,604 | 6,604 |
| Disposals 1 | - | (1,660) | (1,660) |
| At 31 March 2024 (restated) | 73 | 9,460 | 9,533 |
| Amortisation charge | 10 | 1,521 | 1,531 |
| Impairment | - | 4,404 | 4,404 |
| Disposals | - | (159) | (159) |
| At 31 March 2025 | 83 | 15,226 | 15,309 |
|
Net book value | | | |
| At 31 March 2024 | 71 | 8,181 | 8,252 |
| At 31 March 2025 | 89 | 3,660 | 3,749 |
| | | | |
Development cost additions in the year to 31 March 2025 include software development costs directly incurred in the creation of new digital assets.
In October 2024, the Group secured significant partnerships to drive operational efficiencies and improve the scalability of the MindGym offering. This decision led to a potential indicator of impairment and triggered an impairment review of the intangible digital assets. As a result of this review an impairment charge of £4.4m was recognised in the Consolidated Statement of Comprehensive Income.
At 31 March 2025, all digital assets were reviewed for indicators of impairment. No indicators of impairment were identified and therefore no detailed review was required in line with the accounting standards and as such the Directors determined that no further impairment should be recognised.
1The gross cost and gross accumulated amortisation at 31 March 2024 included fully amortised development costs relating to assets that are no longer in use. The group has restated the opening gross cost and gross accumulated amortisation to correct the opening gross positions. The impact is a reduction of £1.7m to the gross costs and gross accumulated depreciation at 31 March 2024. There is no impact to the net book value or amortisation expense in the current or prior periods.
13. Property, plant and equipment
| | Right-of-use asset | Leasehold improvements | Fixtures, fittings and equipment | Total |
| | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | |
| At 1 April 2023 | 6,189 | 538 | 1,793 | 8,520 |
| Additions | 36 | - | 82 | 118 |
| Disposals | - | - | (517) | (517) |
| Exchange differences | (57) | (6) | (17) | (80) |
| At 31 March 2024 | 6,168 | 532 | 1,341 | 8,041 |
| Additions | 136 | - | 42 | 178 |
| Disposals | (3,045) | (300) | (716) | (4,061) |
| Exchange differences | (45) | (3) | (13) | (61) |
| At 31 March 2025 | 3,214 | 229 | 654 | 4,097 |
|
Depreciation | | | | |
| At 1 April 2023 | 3,235 | 374 | 1,220 | 4,829 |
| Depreciation charge | 772 | 83 | 318 | 1,173 |
| Impairment | 517 | - | - | 517 |
| Disposals | - | - | (517) | (517) |
| Exchange differences | (47) | (1) | (13) | (61) |
| At 31 March 2024 | 4,477 | 456 | 1,008 | 5,941 |
| Depreciation charge | 730 | 69 | 188 | 987 |
| Disposals | (3,045) | (294) | (639) | (3,978) |
| Exchange differences | (43) | (2) | (7) | (52) |
| At 31 March 2025 | 2,119 | 229 | 550 | 2,898 |
|
Net book value | | | | |
| At 31 March 2024 | 1,691 | 76 | 333 | 2,100 |
| At 31 March 2025 | 1,095 | - | 104 | 1,199 |
14. Inventories
| |
31 March 2025 | 31 March 2024 |
| | £'000 | £'000 |
| Finished goods | 25 | 40 |
Write-down of inventory amounted to £nil (2024: £1,000).
The cost of inventories recognised as an expense and included in cost of sales amounted to £540,000 (FY24: £558,000).
15. Trade and other receivables
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Current | | |
| Trade receivables | 5,331 | 6,005 |
| Less provision for impairment | (91) | (113) |
| Net trade receivables | 5,240 | 5,892 |
| Other receivables | 43 | 27 |
| Prepayments in respect of property deposits | 11 | 226 |
| Prepayments | 583 | 796 |
| Accrued income | 592 | 846 |
| | 6,469 | 7,787 |
Trade receivables have been aged with respect to the payment terms as follows:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Not past due | 5,045 | 5,617 |
| Past due 0-30 days | 227 | 313 |
| Past due 31-60 days | 46 | 39 |
| Past due 61-90 days | 5 | 35 |
| Past due more than 90 days | 8 | 1 |
| | 5,331 | 6,005 |
The movement in the allowance for impairment losses was:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| At the beginning of the period | 113 | 102 |
| Addition/(Write-back) | (20) | 11 |
| Utilisation of provision | - | - |
| Foreign exchange adjustment | (2) | - |
| At the end of the period | 91 | 113 |
The Group has applied the simplified approach to measuring expected credit losses, as permitted by IFRS 9, and recognises a loss allowance based on the lifetime expected credit loss.
16. Trade and other payables
| |
31 March 2025 | 31 March 2024 |
| | £'000 | £'000 |
| Trade payables | 1,016 | 1,172 |
| Other taxation and social security | 668 | 1,525 |
| Other payables | 356 | 323 |
| Accruals | 3,448 | 3,055 |
| Deferred income | 2,159 | 2,399 |
| |
7,647 |
8,474 |
17. Lease liability
The lease liabilities included in the statement of financial position are:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Current | 518 | 980 |
| Non-current | 646 | 1,038 |
| |
1,164 |
2,018 |
The related right-of-use asset is disclosed in Note 14.
The movements in the lease liability were as follows:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| At the beginning of the year | 2,018 | 3,109 |
| Additions | 138 | 41 |
| Finance cost | 69 | 116 |
| Lease payments | (1,047) | (1,229) |
| Exchange differences | (14) | (19) |
| At the end of the year | 1,164 | 2,018 |
The maturity analysis of the contractual undiscounted cash flows is:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Less than one year | 558 | 1,045 |
| Between one and five years | 669 | 1,098 |
| Total future lease payments | 1,227 | 2,143 |
| Total future interest payments | (63) | (125) |
| Total lease liability |
1,164 |
2,018 |
18. Redeemable preference shares
The Company allotted and issued 50,000 redeemable preference shares of £1.00 each to Octavius Black in June 2018. The shares are fully paid up. Under the Articles of Association, the Company may redeem the preference shares at their nominal amount at any time specified by either the Directors or the preference share holder. The preference share capital, however, counts towards the £50,000 minimum share capital required under the Companies Act 2006 and cannot therefore be redeemed unless the Company increases its other share capital. The preference shares are non-voting, give no rights to dividends or interest and entitle the holder to the return of the nominal value on a winding up.
19. Borrowings
The Group entered into a £10m debt facility (£6m RCF, £4m accordion) on 30 September 2021. This was replaced by a £4m overdraft facility in the period. The facility was successfully renewed for 12 months in March 2025 until March 2026.
The facility has been utilised in the ordinary course of business and was repaid in full by the year ended 31 March 2025.
The facility agreement includes a key performance indicator (KPI) stating that the amount drawn on the facility should not be greater than 120% of trade debtors. The Group has met this key KPI at all times when drawing down on the facility.
20. Financial instruments and financial risk management
Financial instruments by category
Trade and other receivables (excluding prepayments), cash and cash equivalents and trade and other payables are initially measured at fair value and subsequently held at amortised cost.
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Net trade receivables | 5,240 | 5,892 |
| Other receivables | 43 | 27 |
| Cash and cash equivalents | 570 | 1,369 |
| Financial assets at amortised cost |
5,853 |
7,288 |
| Trade payables | 1,016 | 1,172 |
| Other payables | 356 | 323 |
| Lease liabilities | 1,164 | 2,018 |
| Financial liabilities at amortised cost |
2,536 |
3,513 |
The Group holds no assets or liabilities that are held at fair value through income statement or OCI.
As the trade and other receivables and trade and other payables have a maturity of less than one year, the notional amount is deemed to reflect the fair value.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure.
The Group's sources of funding currently comprise cash flows generated from operations, and equity contributed by shareholders. The Group has no borrowings and is not subject to any externally imposed capital requirements.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders to the extent allowed by the Company's articles or issue new shares.
Financial risk management
The Group's risk management is overseen by the Audit and Risk Committee. The Group is exposed to a variety of financial risks that result from its operations, including credit risk, liquidity risk and foreign currency risk. Since the Group has no debt it is not significantly exposed to interest rate risk. The Group has not entered into any derivative transactions, such as interest rate swaps or forward foreign exchange contracts.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks, or the methods used to measure them from previous periods unless otherwise stated in this note.
Credit risk
Credit risk arises principally from the Group's trade receivables from customers and monies on deposit with financial institutions.
Credit risk on trade receivables is considered to be relatively low as the Group's customers mainly consist of large credit-worthy organisations. Credit exposure is spread over a large number of customers and so there is no significant concentration of credit risk. Outstanding and overdue balances are regularly reviewed and resulting actions are put in place on a timely basis. The Group establishes an allowance for impairment. This is based on a review of individual balances taking into account the results of credit control communications and our knowledge about the customer relationship. See Note 16 Trade and other receivables for further information on ageing and impairment of trade receivables.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties are accepted, and management maintain a close relationship with the Group's banks.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Trade receivables | 5,240 | 5,892 |
| Other receivables | 43 | 27 |
| Cash and cash equivalents | 570 | 1,369 |
| At the end of the period | 5,853 | 7,288 |
Liquidity risk
The Group ensures, as far as possible, that it has sufficient funds to meet foreseeable operational expenses. Cash flow forecasting is performed by Group Finance who monitor rolling forecasts of the Group's liquidity requirements. Such forecasting takes into consideration expected cash receipts, regular spending and payment of taxes such as VAT, payroll and corporate income tax.
Currently, the Group's liquidity risk is low as it is has a surplus of cash in all entities and the £4m overdraft facility available (set out in Note 20). All Group liabilities in the current and prior year are due within three months of the reporting date, apart from lease liabilities. The maturity of the lease liability is set out in Note 18.
Foreign currency risk
The Group operates internationally and is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than Sterling. The currencies giving rise to this risk are primarily the US Dollar and the Euro. Where possible the exposure is mitigated by a natural hedge. For example, US Dollar revenues are partially matched by US Dollar costs in the US subsidiary.
The Group holds cash in the UK in Sterling, Euro and US Dollar bank accounts and in the USA in US Dollar and Canadian Dollar bank accounts.
Trade receivables and cash and cash equivalents are analysed by currency as follows:
| | GBP | USD | EUR | Other | Total |
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
| At 31 March 2025 | | | | | |
| Net trade receivables | 3,222 | 1,563 | 381 | 74 | 5,240 |
| Cash and cash equivalents | 35 | 413 | 72 | 50 | 570 |
| | | | | | |
| At 31 March 2024 | | | | | |
| Net trade receivables | 2,884 | 2,324 | 658 | 26 | 5,892 |
| Cash and cash equivalents | 306 | 793 | 241 | 29 | 1,369 |
The Group does not currently use forward foreign exchange contracts or currency options to hedge currency risk.
21. Share capital
| | 31 March 2025 | 31 March 2025 | 31 March 2024 | 31 March 2024 |
| | | Cost | | Cost |
| | Number | £'000 | Number | £'000 |
| Ordinary shares of £0.00001 at 1 April | 100,198,464 | 1 | 100,167,584 | 1 |
| Issue of shares to satisfy options | 140,418 | - | 30,880 | - |
| Ordinary shares of £0.00001 at 31 March | 100,338,882 | 1 | 100,198,464 | 1 |
An Employee Benefit Trust ('EBT') has been established in connection with the Group's Share Incentive Plan. The movements in own shares held by the Employee Benefit Trust and the market value of the shares held at the year-end are shown below.
| | 31 March 2025 | 31 March 2025 | 31 March 2024 | 31 March 2024 |
| | | Cost | | Cost |
| | Number | £'000 | Number | £'000 |
| As at 1 April | 90,351 | - | 111,655 | - |
| Issue of new shares to EBT | - | - | - | - |
| Removed from the Trust | (43,086) | - | (21,304) | - |
| Ordinary shares of £0.00001 at 31 March | 47,265 | - | 90,351 | - |
| Market value at 31 March | | 10 | | 62 |
22. Share-based payments
The Group awards options to selected employees under a Long-Term Incentive Share Option Plan ('LTIP'). The options granted to date vest subject only to remaining employed up to the vesting date. Unexercised options do not entitle the holder to dividends or to voting rights.
The Group operates the Mind Gym plc Share Incentive Plan (SIP). An initial award of £1,000 of free shares was granted in October 2018 to all employees at the IPO price of 146 pence. The shares are held in an employee benefit trust and vested after three years subject only to remaining employed up to the vesting date. The holder was entitled to dividends over the vesting period. Many employees elected to leave their shares in the trust for a further two years for tax purposes. A number of shares continue to be held in trust after this date on behalf of employees.
On 30 September 2019, the Group launched a Save As You Earn scheme ('SAYE') and an Employee Share Purchase Plan ('ESPP') for all eligible employees in the UK and USA respectively. New schemes have been launched annually since 2019.
The total share-based payments expense was:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| Equity settled share-based payments | (18) | (7) |
The movements in the number of share awards and share options and the weighted average exercise price of awards are:
| | | 31 March 2025 | | 31 March 2024 |
| | Number | Weighted average exercise price £ | Number | Weighted average exercise price £ |
| | | | | |
| Outstanding at the beginning of the period | 6,169,557 | 0.17 | 3,591,566 | 0.36 |
| Granted during the period | 6,545,056 | 0.05 | 5,946,010 | 0.07 |
| Forfeited during the period | (5,717,329) | 0.04 | (3,337,139) | 0.18 |
| Exercised during the period | (140,418) | 0.34 | (30,880) | 1.02 |
| Outstanding at the end of the period | 6,856,866 | 0.17 | 6,169,557 | 0.17 |
| Exercisable at the end of the period | - | | - | |
| Weighted average fair value of awards granted (£) | 0.21 | | 0.49 | |
The range of exercise prices and weighted average remaining contractual life of share awards and share options outstanding at 31 March were:
| |
31 March 2025 | 31 March 2024 |
| |
£'000 | £'000 |
| £ nil | 690,413 | 752,913 |
| £0.00001 | 4,387,984 | 4,244,094 |
| £0.25500 | 44,246 | - |
| £0.26070 | 942,786 | - |
| £0.50575 | - | 32,397 |
| £0.52130 | 294,627 | 643,343 |
| £1.46000 | 496,810 | 496,810 |
| | 6,856,866 | 6,169,557 |
| Weighted average remaining contractual life (years) | 1.9 | 2.0 |
Simple share options awarded under the LTIP, SAYE and ESPP are valued using the Black-Scholes model. Complex share options awarded under the LTIP are valued using the Monte Carlo model. Shares awarded under the SIP are valued directly by reference to the share price at date of grant. The principal assumptions used in these valuations were:
| | Date of grant | Share price at grant | Exercise price | Expected life | Expected volatility | Dividend yield | Risk-free rate | Fair value |
| | | £ | £ | years | % | % | % | £ |
| LTIP (4-year vesting) | 14 Jul 21* | 1.90 | Nil | 4 | 36% | 0% | 0.23% | 1.90 |
| LTIP (4-year vesting) | 14 Jul 21* | 1.90 | Nil | 4 | 36% | 0% | 0.23% | 1.70 |
| LTIP (5-year vesting) | 14 Jul 21* | 1.90 | Nil | 5 | 36% | 0% | 0.31% | 1.90 |
| LTIP (5-year vesting) | 14 Jul 21* | 1.90 | Nil | 5 | 36% | 0% | 0.31% | 1.73 |
| LTIP (4-year vesting) | 3 Dec 21 | 1.675 | Nil | 4 | 36% | 0% | 0.23% | 1.675 |
| LTIP (5-year vesting) | 3 Dec 21 | 1.675 | Nil | 5 | 36% | 0% | 0.31% | 1.675 |
| LTIP (3-year vesting) | 21 July 22 | 1.20 | Nil | 3 | 36% | 0% | 0.15% | 1.20 |
| LTIP (4-year vesting) | 21 July 22 | 1.20 | Nil | 4 | 36% | 0% | 0.23% | 1.20 |
| LTIP (5-year vesting) | 21 July 22 | 1.20 | Nil | 5 | 36% | 0% | 0.31% | 1.20 |
| LTIP | 26 July 23 | 0.54 | Nil | 3 | 36% | 0% | 0.15% | 0.54 |
| SAYE | 1 Oct 23 | 0.57 | 0.48 | 3 | 36% | 0% | 0.31% | 0.13 |
| LTIP | 28 Aug 24 | 0.24 | Nil | 3 | 36% | 0% | 0.15% | 0.24 |
| ESPP | 1 Aug 24 | 0.30 | 0.255 | 1 | 34% | 0% | 0.15% | 0.06 |
| SAYE | 1 Aug 24 | 0.30 | 0.2607 | 3 | 36% | 0% | 0.31% | 0.09 |
* includes further options granted on 3 Dec 2021 on the same terms and with the same valuation assumptions.
23. Controlling party
The Group was controlled by O. Black and J. Cash by virtue of their joint shareholding in the Company throughout the period.
There were the following related party transactions during the year and balances at the end of the year:
· Key management compensation as disclosed in Note 8.
24. Events after the reporting period
There were no post-balance sheet events.
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