REG - Mind Gym PLC - Final results for the year ended 31 March 2025
12/06/2025 07:00
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RNS Number : 4838M Mind Gym PLC 12 June 2025
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 expenses(1) £34.2m £41.9m -18.3%
Adjusted EBITDA profit/(loss)(1) £1.9m(1) £(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%
( )
( )
(1)Adjusted 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 (mailto:mindgym@mhpc.com) .
Enquiries
Mind Gym plc +44 (0) 20 7376 0626
Christoffer Ellehuus (CEO) investors@themindgym.com (mailto:investors@themindgym.com)
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
(https://protect.checkpoint.com/v2/___http:/www.themindgym.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkNDA5NTRiMDJhNmY0MjA0M2EzZjQ3ZTVhNmVhNDg4MDo2OjVlMmY6M2U5MGUzNTlkYzhlNDI0OTE2YTEyMDNhODRmZjE0NzY3MGEzZGY5OTkwOGQ0MmNkY2IxN2EyYjQwNzRiMTAzZDpwOlQ)
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 FY24
Reported 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 Year to
31 March 2025 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 -
(6,048) (12,014)
Operating (loss)
Finance income 8 1 30
Finance costs 8 (142) (163)
(6,189) (12,147)
(Loss) before tax
Adjusted loss before tax (803) (3,264)
Total adjusting items 5 (5,386) (8,883)
(Loss) before tax (6,189) (12,147)
9 (2,000) 1,259
Tax on (loss)/profit
(8,189) (10,888)
(Loss) for the financial period from continuing operations attributable to
owners of the parent
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
1 242 496 22,075 22,814
At 1 April 2023
- - - (10,888) (10,888)
Profit for the period
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)
1 258 481 11,097 11,837
At 31 March 2024
- - - (8,189) (8,189)
Loss for the period
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
1 274 441 2,833 3,549
At 31 March 2025
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 March 2025 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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
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 2024
31 March 2025
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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 (1,547) (3,037)
25% (2024: 25%)
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 2024
31 March 2025
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
Disposals(1) - (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.
( )
(1)The 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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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 2024
31 March 2025
£'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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