REG - Mind Gym PLC - Full Year Results
10/06/2022 07:00
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RNS Number : 3895O Mind Gym PLC 10 June 2022
Mind Gym PLC
("MindGym", the "Group" or the "Company")
Full year results for the year ended 31 March 2022
MindGym (AIM: MIND), the global provider of human capital and business
improvement solutions, is pleased to announce its audited results for the year
ended 31 March 2022.
Financial highlights
12 months to 31 Mar 2022 (FY22) 12 months to 31 Mar 2021 (FY21) Change
Revenue £48.7m £39.4m +24%
Digitally-enabled revenues(1) £37.4m £30.5m +23%
Gross profit margin 87.1% 87.4% -0.3pps
Adjusted (LBT)/PBT(2) £(0.5)m £0.3m n/a
Statutory (loss)/profit before tax £(0.5)m £(0.4)m n/a
Adjusted Diluted EPS 1.59p 0.30p +1.29p
Diluted EPS 1.59p (0.23)p +1.84p
Total Dividend per share nil nil
Cash at bank £10.0m £16.8m -40%
Capital expenditure £6.1m £3.2m +91%
Adjusted EBITDA cash conversion(3) 95% 418% -323pps
(1)Digitally enabled revenues are virtual live delivery (including virtual
licensing), and digital products (currently eWorkouts and Performa).
(2)Adjustments include restructuring costs in FY21. These adjustments are
detailed in Note 6.
(3)Adjusted EBITDA cash conversion defined as Adjusted cash generated from
operations/Adjusted EBITDA.
Financial and operating highlights
· Robust performance in line with the Board's expectations, with revenues
surpassing pre-Covid levels:
o Revenues of £48.7m were up 25 per cent on FY21 (in constant currency) and
up 5 per cent on pre-Covid levels (FY20).
o Repeat revenues (defined as revenues from clients that have purchased in
the current year and in one or more of the previous three years) were 86%
(2021: 78%).
o Adjusted LBT of £0.5m was down £0.8m on FY21 - prior year excluded
£0.7m of restructuring costs (adjusted due to the unprecedented impact of
COVID). The FY22 loss includes £0.5m of non-recurring cost.
· MindGym retains a strong financial position to support
investments in future growth:
o Net cash of £10.0m (31 March 2021: £16.8m), following investments
(digital capex of £5.6m) during the financial year in our new digital
products.
o H2 FY22 cash-burn (£2.0m) was substantially lower than H1 FY22 (£4.8m).
o During the year, the Group entered into a £10m debt facility
(£6m RCF, £4m accordion), which was undrawn as at 31 March 2022. This
provides the flexibility to support investment in future growth.
· Good progress with MindGym's Digital strategy: digitally-enabled
revenues up 23% versus FY21, with Performa successfully launched:
o Digitally-enabled revenues (virtual live, eWorkouts and Performa) of
£37.4m, were up 23 per cent versus FY21 and up 158 per cent versus FY20 (when
the majority of deliveries were still in-person) and represented 77 per cent
share of revenue (77 per cent in FY21 and 32 per cent in FY20).
o The continued high mix of virtual live delivery (vs. in person) resulted
in a gross profit margin of 87.1% (FY21: 87.4%), broadly in line with prior
year.
o Performa, MindGym's digital 1:1 coaching SaaS platform, was launched in
January 2022, generating more than £0.5m annualised revenue in its first 12
weeks.
o 10X which was acquired in administration for £0.1m, has been shown in a
large scale
co-validated study to be more accurate at predicting behaviour than the
leading questionnaires on the market. This will be integrated into MindGym's
planned upcoming digital product 'Behavioural Change Platform' (BCP), which is
expected to be launched in FY24.
· Leadership team: New CFO appointment
o Dominic Neary joined the Board as Chief Financial Officer on 1 January
2022, bringing highly relevant expertise for MindGym's next phase of growth.
Current Trading and Outlook
• Robust top line growth anticipated in FY23, despite the macro
economic headwinds, benefitting from the launch of Performa and our new
Points of View ("PoVs") on Leadership and Wellbeing.
• FY23 expected to return to profitability as we see leverage of the
investments that were made in FY22 to support growth expectations in the years
to come.
Octavius Black, Chief Executive Officer of MindGym, said:
"MindGym made progress during a turbulent year delivering a robust performance
in line with the Board's expectations, surpassing pre-Covid revenue.
Our digital strategy has seen the successful launch of our latest product,
Performa, our 1:1 digitally enabled coaching service. Performa has distinct
competitive advantages in this new, fast-growing market including our
proprietary Precision Coaching methodology and our ability to integrate with
MindGym's library of existing content to deliver integrated solutions to
challenges like leadership and inclusion. The more than £0.5m in annualised
revenue generated in the first 12 weeks is a promising indication of what's to
come.
MindGym's future digital transformation will increasingly be powered by data
and this has been enhanced by the acquisition of 10X Psychology's IP, which
will enable us to deliver highly personalised, mass customisation and equip
clients to target their investment on what works best.
"We have had a good start to the new financial year and, notwithstanding
economic uncertainty, have confidence that organisations will increasingly
turn to MindGym and our unique portfolio of proven solutions to address their
talent and culture challenges."
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@mhpc.com (mailto:mindgym@mhpc.com) .
Enquiries:
Mind Gym plc +44 (0)20 7376 0626
Octavius Black, Chief Executive Officer
Dominic Neary, Chief Financial Officer
( )
Liberum (Nominated Adviser and Broker) +44 (0)20 3100 2200
Bidhi Bhoma
Nick How
Edward Mansfield
Kane Collings
MHP Communications (Public Relations Advisor) +44 (0)20 3128 8990
Reg Hoare mindgym@mhpc.com (mailto:mindgym@mhpc.com)
Katie Hunt
Charlie Protheroe
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
(http://www.themindgym.com) @themindgym
Statement of the Board Chair
MindGym's purpose is to partner with the world's best companies and help them
optimise their Human Capital.
The depth and duration of the COVID pandemic surprised and tested society and
business more than any event in the last 75 years. Government policy and
spending expanded at unprecedented levels, and all businesses faced
unprecedented risks and opportunities.
Early on, MindGym took two critical decisions
Ø Firstly, the business pivoted to digital. In-person coaching was largely
replaced with digitally-enabled solutions which were more than 95% of delivery
in FY22. MindGym successfully expanded its proven ability to operate Live
delivery, at scale.
Ø Secondly, recognising the opportunity that this has provided, MindGym has
invested in excess of £8m in building new digital products, and a further
£6.6m primarily in FY22, ensuring that the organisation had the appropriate
structure to support this growth: primarily in Marketing, Innovation and
Digital structures. This provides the infrastructure to roll-out our new
digital products (Performa and BCP), and the more than doubling in Points of
View ("PoV") innovation that we have seen in FY22.
These investments are paying back. During FY 2022, we have seen revenue growth
of 24% and are ahead of pre-COVID growth levels. Performa was launched
successfully in January 2022, and BCP is in the pipeline for a launch in FY24.
In the long term, the Global 'human performance' market continues to be very
attractive. It remains highly fragmented (no single player has more than 1%
market share) and has an attractive long-term growth profile.
Short to medium term risks remain. Whilst we are exiting COVID, in-person
visits to clients can still be challenging, and large events have not yet
recovered to their pre-COVID levels.
Our role in society
MindGym's social objectives are a core part of who we are. In 2009, we
launched ParentGym, a programme providing free parental training to parents of
children aged 2-11. In FY22, this has helped over 650 families and we have
also partnered with the Prison Advice and Care Trust (PACT), recently
launching our first training to parents in prison. Many of our employees use
their charity days to support this and other charities.
MindGym has also conducted a third-party analysis of its operational
greenhouse gas emissions for the last financial year. The report will be used
to set a reduction objective through the 'Science Based Targets' initiative.
The Board
We welcomed Dominic Neary, our new CFO who joined the Board in December 2021.
He replaces Richard Steele who played a significant part in launching MindGym
on the AIM market, and to our development since, including to supporting us
through the worst of COVID.
Dominic's experience at Just Eat, MoneySuperMarket and Reckitt Benckiser has
already proven to be valuable,
and we look forward to working with him to grow our business over the coming
years.
Dividend
MindGym's dividend policy during COVID has been to freeze dividend payments.
This has allowed the business to focus on investment in growth over the coming
years. As stated above, these investments are beginning to pay back,
particularly with the recent launch of Performa and once the Board has greater
clarity on the performance of its digital investments, and of the broader
economic outlook, we will revisit our dividend policy.
Ruby McGregor-Smith,
Board Chair
CEO's review
In the last two years, business and society have changed fundamentally.
Widespread homeworking came suddenly and has reset employees' expectations of
what they do and where they do it.
Employees' expectations of their employers have changed in other important
ways too. From the issue of race to the recent invasion of Ukraine by
Russia, corporations are now expected to lead on the issues of the day, or
face being challenged by their employees internally, as vociferously as by
customers on social media.
It's not just social and political trends. Employees also increasingly demand
that employers take responsibility for their wellbeing, provide flexibility,
deliver on a purpose beyond profit, have diverse talent, build an inclusive
culture and nourish their development.
Company leaders have struggled to keep up. As a result, the corporate world is
experiencing the Great Resignation as an unprecedented number of employees
quit their job for something new . As one of our clients put it: "The war for
talent is over; the employee won."
These macro changes put Human Capital and corporate culture at the centre of
the business agenda. The 'human performance' market is large, profitable,
growing and massively disaggregated. There is no single player with more than
1% share despite major Tech and Consulting businesses actively investing and
acquiring, and private equity funding a flurry of start-ups. In the coming
years, we are likely to see the emergence of a few dominant players. Our
strategy is designed to establish MindGym as one of the dominant players in
this market with our combination of market leading IP, strong relationships
with clients and an engaging digital platform driven by data.
Digital Transformation
In January 2022, we launched Performa, our new, highly scalable, 1:1 coaching
platform, based on our proprietary Precision Coaching methodology. This
delivers greater performance improvements in a fraction of the time compared
to conventional coaching . We are encouraged by early feedback and, in the
first 12 weeks post launch, Performa has generated annualised revenue in
excess of £0.5m.
The development of our new 'Behavioural Change Platform' (BCP) is due to
launch in FY24.. Initially this will be offered to the more than 500,000
participants who currently attend live sessions each year, and will greatly
increase the level of sustained change to behaviour and performance.
Ultimately this will be the single digital journey through which all
participants engage with MindGym and its content, and provide a fully
integrated 'Behaviour Change Ecosystem' for clients.
Data Driven
Data is the fuel which will drive the Digital ecosystem by both enabling mass
customisation and providing clients with insight on where and how to invest
for maximum impact. During FY23, we will launch a new suite of custom-built
proprietary diagnostics in areas such as leadership, inclusion and wellbeing,
to add to our existing portfolio which includes JX, our proprietary diagnostic
that measures judgement.
We are very pleased by the recent acquisition (for £0.1m) of '10X
Psychology''s full suite of IP assets on diagnostics. This is the result of c.
£10m of investment by Peter Saville, the respected psychologist behind SHL
and Saville Assessment, and has been shown to be more accurate than the
leading psychometric tools on the market. This will be integrated into BCP
which will be launched in FY24.
Market-leading IP
MindGym leads the market on resesarch-based Points of View (PoVs) on universal
human capital challenges. Over the last 10 years we have published papers and
launched supporting products on Performance, Management, DEI, Ethics, Personal
effectiveness and re-organisation. This year's investment in innovation
means that we can significantly increase the pace of new launches, starting
with Leadership Development in H1 and followed by Wellbeing in H2.
This content is supported by a growing library of >200 live workshops which
have been tested on over three million professionals, over 100 digital
eWorkouts, and our proven ability to deliver live at scale to audiences in
excess of 1,000 at a time, using our growing pool of c. 400 MindGym accredited
coaches in over 40 countries, and over 1,000 accredited in-house coaches.
Delighting Clients and building long-lasting relationships
We have worked with 62% of the FTSE 100 and 56% of the S&P 500. The
quality of our work continues to result in high levels of repeat revenue (c.
86% in FY22).
Performance
MindGym navigated COVID well due to its strong balance sheet and proven
experience in digital - for over a decade, we have been running live virtual
programmes with hundreds of coaches and, in recent years, have built a library
>100 digital programmes.
This allowed us to pivot to digital quickly in FY21, and in FY22, revenues of
£48.7m, were up 24% on the prior year, of which 77% were digitally enabled
(FY21 77%). Digitally enabled revenues of £37.4m included £5.4m of digital
products (mostly eWorkouts, and a nominal amount of revenue from Performa).
MindGym invested in Opex in FY22 to create the infrastructure for growth as it
pivots the business to digital, and as a result, reported LBT was in line with
expectations at £0.5m (FY21: LBT of £0.4m).
People and Culture
I am immensely grateful to our determined team whose spirit, ingenuity and
generosity have set MindGym up not only for the success of today but to
transform how millions of people employed by our clients will think, feel and
behave for years to come.
As you would expect, we invest significantly in learning and development for
our team too, using
internal and external resources where appropriate. We also sponsor colleagues
in their masters, doctorates and a range of other external qualifications.
We benefit from and remain deeply committed to the diversity of our
organisation. Our Board is 37% female and 25% are from a minority ethnic
background. Our Executive team is 57% female and 29% from a minority ethnic
background. We are committed to report on our gender pay gap during FY23 and
take appropriate measures.
Social Impact
ESG has been at the core of MindGym from before its inception. We started the
business 21 years ago with the mission 'to help people use their minds more
effectively to get more out of life and give more to others'. This remains
core to the work we do.
In 2009, we launched ParentGym which delivers up to 2,000 free parenting
workshops a year in areas of social deprivation. In 2022, we formed a
partnership with PACT (the Prison Advice and Care Trust) to support prisoners
who are also parents; we have also trained PACT workers to deliver ParentGym
in UK prisons.
Looking ahead
Despite the macro economic headwinds including Russia's invasion of Ukraine,
we anticipate robust top line growth in FY23, with the launch of Performa and
our new PoVs on Leadership and Wellbeing. Leveraging the FY21 investments in
our infrastructure, will also see us return to profitability.
We have a strong reputation built over two decades, working with the world's
leading companies, an incredible team generating market-leading IP,
transformational digital products, and the right strategy to deliver a
proposition that will change forever the way companies care for, develop and
lead people. The opportunity is immense and we are ready to realise it
Octavius Black
Chief Executive Officer
Financial review
In FY22, MindGym has seen revenue growth of 24% to £48.7m (FY 21: £39.4m),
with an LBT of £0.5m (FY 21: LBT £0.4m). FY22 included investment in
overheads to create the infrastructure which will support substantial growth
in the coming years. The LBT includes a £0.5m non-recurring cost related to
the cost control programme in the final quarter which has offset the increase
in annualised overheads that this investment would otherwise have generated.
Revenues
Digitally-enabled revenues have grown by 23% in FY22, representing 77% (FY21:
77%) of group sales, despite a small shift towards in-person delivery during
the year.
MindGym has seen double-digit growth in both EMEA and the US.
Investment in the new US regional structure, which grew revenues 31% in FY22,
now provides a platform from which we believe we can target substantial
revenue expansion in the coming years. We are seeing regional growth
throughout the country, with notable opportunities in the West.
EMEA has grown at 14% in FY22, and investments in organisational structures
are enabling MindGym to win large projects from clients which should lead to
even stronger relationships in the future
£000's Year to Year to Change %
March 31(st) 2022 March 31(st) 2021
Group Statutory View 48,668 39,383 + 24%
EMEA 19,715 17,241 + 14%
US 28,953 22,142 + 31%
Revenue mix by type compared to previous year
FY22 FY21 % change
Delivery 64% 55% +9%
Design 11% 13% -2%
Digital 11% 16% -5%
Licensing and certification 6% 8% -2%
Other (e.g. project management) 7% 6% 1%
Advisory 1% 2% -1%
Total 100% 100%
Product mix has seen a significant shift towards live delivery as companies
have invested in virtual delivery in the second year of COVID.
Digital sales mix has declined from 16% to 11% in FY22; this is the result of
eWorkouts sales being down 14% compared to FY21. H2 FY21 sales were impacted
by high sales in the second half as companies looked for areas to re-direct
their learning and development spend during COVID. eWorkouts are up 26% on
pre-COVID levels, and are expected to continue to grow in the years ahead.
Performa sales in FY22 were minimal. The new 1:1 SaaS coaching platform was
launched in January 2022, and generated more than £0.5m of annualised revenue
in its first twelve weeks. Performa sales are spread across the lifetime of
the license - typically twelve months, and most of these revenues will be
recognised in FY23.
Gross Profit
Gross profit as a percentage of revenue at 87.1% was broadly in line with
prior year (FY21 87.4%). This was reflected in the regions with Gross profit
margin in the US of 87.2% (FY21: 87.7%), slightly higher than in EMEA with
87.0% (FY21: 87.0%). The marginal decline in the US was primarily caused by
the high level of eWorkout sales in the US in FY21.
We are seeing a gradual increase of in-person delivery from some of our
clients - in-person delivery was only 0.5% of total delivery during FY21. This
has a higher cost of delivery, but the margin impact in FY22 was offset by
minor savings in cost of sale. Going forward, this trend will continue.,
although we do not expect a fundamental shift. This trend will impact the
gross margin percentage, however relative pricing ensures that absolute
margins are protected.
Year ended 31 March 2022
EMEA US Global
Delivery 60% 66% 64%
Design 13% 10% 11%
Digital 12% 11% 11%
Licensing and certification 6% 6% 6%
Other (e.g. project management) 7% 6% 7%
Advisory 2% 1% 100%
Total 100% 100% 100%
Profitability and investment
During FY22, we invested in the infrastructure of our business to create an
organisation that is capable of supporting substantial growth in the coming
years. Adjusted operating expenses excluding depreciation and amortisation in
FY22 of £41.2m is a £10.5m increase on pre-Covid levels in FY20 (+£8.3m on
FY21) reflecting three 'trends':
· £3.1m primarily reflects inflation and a small amount of volume
growth.
· £0.8m reflects an investment in commission levels during COVID
which will unwind in FY23.
· £6.6m is 'fuel for growth' investment in our infrastructure:
o in Digital and Marketing (£2.9m)
o in Innovation (£1.3m)
o in the US region (£1m), and
o £1.4m behind Talent Acquisition supporting both CAPEX and OPEX
investments.
In Q4, we implemented a cost control programme which offset the increase in
the annualised cost of this infrastructure investment, that would otherwise
have impacted costs in FY23. We continue to target opex efficiencies in FY23.
Adjusted PBT in FY22 was a loss of £0.5m (FY21 adjusted PBT of £0.3m), and
this included c.£0.5m of expenditure relating to the cost control programme.
Adjustments to PBT - there were no adjustments to PBT in FY22. In FY21, the
reported LBT of £0.4m included £0.7m of restructuring costs which were
regarded as adjusting items, due to the unprecedented nature of COVID.
Taxation
In FY22, MindGym has submitted claims to ensure it obtains the benefit of
R&D tax credits relating to FY20, FY21 (and an accrual for FY22). At the
end of Q4 22 we recorded a deferred tax asset of c.£4m in relation to these
R&D credits. This is offset by a £1.3m deferred tax liability being the
timing difference linked to capitalised development costs.
FY22 FY21
Adjusted Adjustments Reported Adjusted Adjustments Reported
£'000 £'000 £'000 £'000 £'000 £'000
Profit/(loss) before tax (482) 0 (482) 306 (662) (356)
Tax credit/(charge) 2,084 0 2,084 (9) 133 124
PAT (earnings) 1,602 0 1,602 297 (529) (232)
ETR % 432.4% 0 432.4% 2.8% 20.0% 34.8%
In FY22, the Effective Tax Rate (ETR) is distorted by the application the
R&D credits noted above. MindGym has not claimed these credits in prior
years, however they have been factored in as part of the current year tax
credit and related deferred tax balances. The rate is further distorted by the
change in tax rates which are substantially enacted and effective from 1 April
2023.
Earnings per share
Adjusted diluted earnings per share increased by 1.29 pence to 1.59 pence
(2021: 0.3 pence). On a reported basis, earnings per share were 1.60 pence
(2021: basic loss per share of 0.23 pence).
Dividends
The Board has taken the decision not to pay a final dividend maintaining the
priority to focus on investment for growth in digital over the coming years.
Once the Board has greater clarity
on the performance of its digital investments, and of the broader economic
outlook, we will revisit our dividend policy.
No dividend has therefore been paid or proposed for the year ended 31 March
2022.
Cash flow and balance sheet
Cash and cash equivalents have decreased from £16.8m in FY21 to £10.0m at
the end of FY22, including the £5.6m investment in digital capital
expenditure. Cash burn more than halved over the course of the year from
£4.8m (in H1 FY22) to £2.0m (in H2 FY22).
Reported EBITDA was £1.2 million, 34% up on FY21 EBITDA of £0.9 million,
with cash generated from operations of £1.2 million, which was 80% down on
the £5.9 million cash generated from operations in the prior year. The
working capital reduction resulted in cash conversion, defined as cash
generated from operations as a percentage of EBITDA, of 95% (FY21: 647%).
Adjusted cash generated from operations was £1.2 million (2021: £6.6
million), resulting in Adjusted cash conversion of 95%. Prior Year adjusted
cash conversion was 418% reflecting a doubling in deferred revenues,
improvements in receivables, and the impact of salary deferrals during COVID.
Adjusted cash conversion excludes the effect of restructuring costs in FY21
and is defined as cash generated from operations before the cash effect of
Adjustments as a percentage of Adjusted EBITDA. Adjusted EBITDA is defined as
Adjusted PBT excluding net finance costs, depreciation of property, plant and
equipment and the amortisation of intangible assets.
Cash conversion
31 March 31 March
2022 2021
£'000 £'000
Adjusted cash generated from operations 1,162 6,594
Restructuring costs - 662
Employee options surrender costs - -
Cash generated from operations 1,162 5,932
Adjusted EBITDA 1,228 1,579
Reported EBITDA 1,228 917
Adjusted cash conversion (Adjusted cash from operations /Adjusted EBITDA) 95% 418%
Cash conversion (cash from operations /EBITDA) 95% 647%
Over the year, we again reduced the time taken to invoice clients and improved
the collection of overdue receivables which contributed to the favourable Net
Trade Receivables movement of £1.1m - this improvement was also impacted by
high revenues in March 21. Overdue debt as a percentage of total trade
receivables fell to 9% at the year end (FY21: 11%), with the amount of overdue
debt reducing £0.3 million to £0.7 million (FY21: £1.0 million). Deferred
income increased by 2% to £4.7m (FY21: £4.6m) as clients continue to secure
budgets for their following financial year. Trade and other payables reduced
by £1.1m, reflecting an accrual for salary repayments during COVID.
Tax paid in the year was £0.8 million (FY21: £0.5 million) mainly related to
US profits.
Capital expenditure was £6.1 million (FY21: £3.2 million) which included
£5.6 million of costs capitalised on developing our new digital products and
£0.5m on other tangible fixed assets.
Lease payments on our offices in the UK and the USA were £1.2 million (FY21:
£1.1m). No dividends were paid in the year (FY21: £nil).
At the year end, the Group had cash of £10.0 million (2021: £16.8 million)
and net cash of £7.8m (FY21: £13.7 million) after deducting the lease
liability included on the balance sheet
Going concern
The Board has reviewed scenario analyses 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 have reviewed scenarios including a range of
revenues and cost reduction actions that could be taken to mitigate a
downturn. This is supported by a strong balance sheet, cash management and
financial controls.
Financial risk management
The Group has a diverse portfolio in excess of 600 clients across many
industrial sectors and countries. The largest client accounted for less than
6% of Group revenue in the year.
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.
Adjusted performance measures
This announcement contains certain financial measures that are not defined or
recognised under IFRS, including Adjusted PBT and Adjusted earnings per share.
These adjusted measures exclude the effect of Adjustments. The Group use these
measures for planning and budgeting and for its internal assessment of the
operational performance of each business. Given the term Adjusted is not
defined under IFRS, the Adjusted measures may not be comparable with similarly
titled measures used by other companies. Reconciliations of the Adjusted
measures to their IFRS equivalents are shown on the face of the Consolidated
Statement of Comprehensive Income, in Note 4 Segmental Analysis and in Note 11
Earnings per share.
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.
Dominic Neary
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 March 2022 31 March 2021
Note £'000 £'000
Continuing operations
Revenue 4 48,668 39,383
Cost of sales (6,284) (4,967)
Gross profit 42,384 34,416
Administrative expenses (42,733) (34,635)
4, 5 (349) (219)
Operating loss
Finance income 9 19 30
Finance costs 9 (152) (167)
(482) (356)
Loss before tax
Adjusted (loss)/profit before tax (482) 306
Restructuring costs 6 - (662)
Total adjustments 6 - (662)
(482) (356)
Loss before tax
10 2,084 124
Tax on loss/profit
1,602 (232)
Profit/(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 192 (281)
Other comprehensive income for the period attributable to the owners of the 192 (281)
parent
1,794 (513)
Total comprehensive income/(loss) for the period attributable to the owners of
the parent
Earnings/(loss) per share (pence)
Basic 11 1.60 (0.23)
Diluted 1.59 (0.23)
Adjusted earnings per share (pence)
Basic 11 1.60 0.30
Diluted 1.59 0.30
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 31 March
2022 2021
Note £'000 £'000
Non-current assets
Intangible assets 13 8,175 2,877
Property, plant and equipment 14 2,815 3,406
Deferred tax assets 10 2,846 230
Other receivables 16 217 339
14,053 6,852
Current assets
Inventories 15 7 -
Trade and other receivables 16 10,063 10,620
Current tax receivable 494 280
Cash and cash equivalents 10,021 16,833
20,585 27,733
34,638 34,585
Total assets
Current liabilities
Trade and other payables 17 12,729 13,813
Lease liability 18 856 1,085
Redeemable preference shares 19 50 50
Current tax payable 28 104
13,663 15,052
Non-current liabilities
Lease liability 18 1,349 2,081
Total liabilities 15,012 17,133
19,626 17,452
Net assets
Equity
Share capital 22 1 1
Share premium 213 157
Share option reserve 608 674
Retained earnings 18,804 16,620
19,626 17,452
Equity attributable to owners of the parent Company
The financial statements were approved and authorised for issue by the Board
of Directors on [9 June 2022 and were signed on its behalf by:
Dominic Neary
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
1 112 684 16,760 17,557
At 1 April 2020
- - - (232) (232)
Loss for the period
Other comprehensive income:
Exchange translation differences on consolidation - - - (281) (281)
Total comprehensive loss for the period - - - (513) (513)
Exercise of options 22 - 45 (308) 308 45
Credit to equity for share-based payments 23 - - 298 - 298
Tax relating to share-based payments 10 - - - 65 65
1 157 674 16,620 17,452
At 31 March 2021
- - - 1,602 1,602
Profit for the period
Other comprehensive income:
Exchange translation differences on consolidation - - - 192 192
Total comprehensive income for the period - - - 1,794 1,794
Exercise of options 22 - 56 (407) 407 56
Credit to equity for share-based payments 23 - - 341 - 341
Tax relating to share-based payments 10 - - - (17) (17)
1 213 608 18,804 19,626
At 31 March 2022
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 March 2022 31 March 2021
Note £'000 £'000
Cash flows from operating activities
Profit/(loss) for the financial period 1,602 (232)
Adjustments for:
Amortisation of intangible assets 13 325 52
Depreciation of property, plant and equipment 14 1,252 1,084
Profit on disposal of property, plant and equipment - (2)
Net finance costs 9 133 137
Taxation (credit)/charge 10 (2,084) (124)
(Increase)/decrease in inventories (7) 73
Decrease/(increase) in trade and other receivables 686 (246)
Decrease/(increase) in payables and provisions (1,084) 4,892
Share-based payment charge 23 341 298
Cash generated from operations 1,164 5,932
Net tax (paid)/received (812) (521)
Net cash generated from operating activities 352 5,411
Cash flows from investing activities
Purchase of intangible assets (5,623) (2,834)
Purchase of property, plant and equipment (514) (388)
Proceeds from sale of property, plant and equipment - 10
Interest received 12 15
Net cash used in investing activities (6,125) (3,197)
Cash flows from financing activities
Cash repayment of lease liabilities (1,226) (1,075)
Issuance of ordinary shares 22 56 45
Interest paid (27) -
Dividends paid 12 - -
Net cash used in financing activities (1,197) (1,030)
(6,970) 1,184
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period 16,833 15,952
Effect of foreign exchange rate changes 158 (303)
Cash and cash equivalents at the end of period 10,021 16,833
Cash and cash equivalents at the end of period comprise:
Cash at bank and in hand 10,021 15,952
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 and related
services.
2. Summary of significant accounting policies
Basis of preparation
These consolidated financial statements have been prepared in accordance with
UK adopted international accounted standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards,
including interpretations issued by the International Financial Reporting
Interpretations Committee ('IFRIC'), and with the Companies Act 2006
applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on a going concern
basis under the historical cost convention.
The consolidated financial statements are presented in Pound Sterling. All
values are rounded to £1,000 except where otherwise indicated.
The principal accounting policies in the preparation of these financial
statements are set out below. These policies have been consistently applied to
all the years presented unless otherwise stated.
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 2022, the Group had £10.0 million of cash and £2.2m of lease
liabilities. Adjusted cash conversion in the year ended 31 March 2022 was 95%
(2021: 418%).
The Group prepares cash flow forecasts and re-forecasts regularly as part of
the business planning process. The Directors have reviewed forecast cash
flows for the forthcoming 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 COVID-19 and other
expected medium-term macro-economic impacts and subjected to stress testing
and scenario modelling which the Directors consider sufficiently robust. The
Group continued to be impacted by COVID-19 but has been protected from more
severe consequences by our digitally enabled revenue. The impact of the war in
Ukraine and inflationary pressures are further discussed in the Board Chair's
report. 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 forecast
cash flows to give rise to a material risk over going concern is sufficiently
remote.
As a result of these assessments, the Group's strong cash position and 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.
New standards and interpretations applied for the first time
The Group adopted the following new or amended IFRSs and IFRIC interpretations
from 1 April 2021:
Amendments to IFRS 3 Business Combinations
Amendments to IAS 16 Property, Plant and Equipment
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate
Benchmark Reform (Phase 2)
Annual Improvements to IFRS Standards 2018-2020 Cycle
The adoption of these amended IFRSs did not have a material impact on the
financial statements.
New standards and interpretations not yet applied
At the date of authorisation of these financial statements the following
standards and interpretations were in issue but not yet effective for the
financial period and have not been applied. The Directors plan to adopt these
standards in line with their effective dates.
Applicable from
Amendments to IAS 1: Classification of Liabilities as Current or Non-current 1 January 2023
Amendments to IAS 8: Definition of Accounting Estimates 1 January 2023
Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting 1 January 2023
policies
Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising 1 January 2023
from a Single Transaction
Amendments to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 - 1 January 2023
Comparative information
*Not yet endorsed by the UK.
The Directors anticipate that the adoption of these standards and amendments
will have no material impact on the financial statements.
Basis of consolidation
The consolidated financial statements incorporate those of Mind Gym plc and
its subsidiary undertakings (i.e. entities that the Group controls when the
Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power
over the entity). Subsidiaries are fully consolidated from the date on which
control is transferred to the Group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Where necessary,
amounts reported by subsidiaries have been adjusted to conform with the
Group's accounting policies.
Foreign currency translation
The Group's presentation currency is Pound Sterling. The results and financial
position of subsidiaries that have a functional currency different from
Sterling are translated into Sterling as follows:
· Assets and liabilities are translated at the closing rate at the
balance sheet date
· Income and expenses are translated at average rates of exchange
prevailing during the year
All resulting exchange differences are recognised in equity.
Foreign currency transactions are initially recorded at the exchange rate
ruling at the date of the transaction. Foreign exchange gains and losses
resulting from settlement of such transactions and from the translation at
exchange rates ruling at the balance sheet date of monetary assets or
liabilities denominated in foreign currencies are recognised in profit or
loss.
Revenue recognition
Revenue is recognised when control over a product or service is transferred to
a customer. Due to the short-term nature of the trade receivables, the Group
measures them at the original transaction price invoiced without discounting.
The Group generates revenue from business-to-business customers by satisfying
the following performance obligations:
· Delivering coach-led face-to-face and virtual training sessions.
Revenue is recognised at a point in time on the date of delivery of the
session.
· Developing training programmes customised to specific needs.
Revenue is recognised at a point in time on the completion of all development
work or, at the end of a stage of work when the contract provides an
enforceable right to payment on completion of a stage.
· Licensing digital training modules to clients. When non-cancellable
digital modules are provided to the client and hosted on the client's servers,
revenue is recognised at a point in time on the date the modules are provided
to the client. Where the client has a right to cancel, revenue is recognised
at the start of each committed period. When digital modules are hosted on the
Group's servers, revenue is recognised over time across the life of the
agreement.
· Training and certifying client staff to act as coaches. Revenue is
recognised at a point in time on the date of delivery of the certification
course.
· Digital coaching platform and coaching sessions. Revenue is
recognised over time, across the life of the agreement and in line with
expected customer usage levels.
Any advance consideration received from clients represents a contract
liability and is disclosed in Note 17 under the heading deferred income. When
the performance obligation has been satisfied but the income has not yet been
invoiced, the amount represents a contract asset and is disclosed in Note 16
as accrued income.
The incremental costs of obtaining a contract principally consist of
commissions paid to the Group's sales team. The sales team earn commission
over time as the revenue they have generated is recognised. Commission costs
are not therefore capitalised.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset are capitalised during the period of time
that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are
incurred and reported in finance costs.
Share-based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the Consolidated Statement of Comprehensive
Income over the vesting period. Non-market performance conditions are taken
into account by adjusting the number of equity instruments expected to vest at
each Statement of Financial Position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options
that eventually vest. Market performance conditions are factored into the fair
value of the options granted. The cumulative expense is not adjusted for
failure to achieve a market performance condition.
The fair value of the award also takes into account non-vesting conditions.
These are either factors beyond the control of either party (such as a target
based on an index) or factors that are within the control of one or other of
the parties (such as the Group keeping the scheme open or the employee
maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to the Consolidated Statement of
Comprehensive Income over the remaining vesting period.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined
contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions have been paid
the Group has no further payment obligations.
The contributions are recognised as an expense in the Statement of
Comprehensive Income when they fall due.
Government grants
Government grants are not recognised until there is reasonable assurance the
grants will be received and that the Group will comply with any conditions
attached to them. Government grants are recognised in the income statement
over the same period as the costs for which the grants are intended to
compensate.
Government grant income under the Coronavirus Job Retention Scheme and other
schemes reimbursing employee wages is netted against staff costs and is
disclosed in Note 8.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The current tax payable is based on taxable profit for the year. Taxable
profit differs from accounting profit as reported in the Consolidated
Statement of Comprehensive Income because it excludes items of income or
expense that are taxable or deductible in other years, and it further excludes
items that are never taxable or deductible. The Group's liability for current
tax is calculated using tax rates that have been enacted or substantively
enacted at the period-end date.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax is not recognised on temporary
differences arising from the initial recognition of goodwill or other assets
and liabilities in a transaction, other than a business combination, that
affects neither the accounting nor the taxable profit.
Deferred tax is measured on a non-discounted basis using tax rates and laws
that have been enacted or substantively enacted by the balance sheet date and
are expected to apply when the related deferred tax asset is realised, or
deferred tax liability is settled. Deferred tax assets are recognised to the
extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities, and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority.
The Group has taken advantage of HMRC's Small-Medium Enterprise (SME) Research
and Development tax relief scheme. This has resulted in an enhanced
deduction on eligible activities and is a significant component of both the
tax credit in the Consolidated Statement of Comprehensive Income and deferred
tax asset recognised in the balance sheet.
Tax is charged or credited in the Consolidated Statement of Comprehensive
Income, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also recognised in equity.
Intangible assets
Externally acquired intangible assets are initially recognised at cost.
Expenditure on internally developed assets is capitalised if it can be
demonstrated that it is technically feasible to develop the product for it to
provide expected future economic benefits, adequate resources are available to
complete the development, there is an intention to complete the project and
expenditure on the project can be measured reliably.
Other research and development costs that do not meet the above criteria are
recognised as expenses as incurred. Development costs previously recognised as
an expense are not recognised as an asset in a subsequent period.
After recognition intangible assets are measured at cost less any accumulated
amortisation and impairment losses. Amortisation is charged to administrative
expenses on a straight-line basis from the date on which the asset is
available for use. Intangible assets are amortised over their estimated useful
lives as follows:
· Internally developed software Three
to five years
· Other intangible assets
One to five years
The assets' residual values, useful lives and amortisation methods are
reviewed and adjusted prospectively if appropriate at each reporting date.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the
manner intended by management. Subsequent costs are included in the asset's
carrying amount only when it is probable that future economic benefits
associated with the item will flow to the Group. All other repairs and
maintenance costs are charged to profit or loss during the period in which
they are incurred.
Assets are depreciated to their estimated residual value using the
straight-line method over their estimated useful lives as follows:
· Leasehold improvements
Over the period of the lease
· Fixtures, fittings and equipment Two to
five years
The assets' residual values, useful lives and depreciation methods are
reviewed, and adjusted prospectively if appropriate at each balance sheet
date.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in the Consolidated Statement of
Comprehensive Income.
Impairment of property, plant and equipment and intangible assets
At each reporting date, the Group reviews the carrying amounts of its
property, plant and equipment and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any).
The recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset, for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued amount, in
which case the impairment loss is treated as a revaluation decrease.
Leases
Lease identification
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identifiable asset for a period of time in
exchange for consideration.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is depreciated on a straight-line basis over the
shorter of the estimated useful life of the asset and the lease term. In
addition, the right-of-use asset is periodically reduced by impairment losses,
if any, and adjusted for certain re-measurements of the lease liability.
Lease liability
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable.
The lease liability is measured at amortised cost using the effective interest
method.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to those leases
that have a lease term of 12 months or less from the commencement date and do
not contain a purchase option. It also applies the low-value assets
recognition exemption to leases of assets below $5,000. Lease payments on
short-term leases and leases of low-value assets are recognised as an expense
on a straight-line basis over the lease term.
As a lessor
When the Group acts as a lessor, it determines at lease inception whether each
lease is a finance lease or an operating lease.
When the Group is an intermediate lessor, it accounts for its interests in the
head lease and the sub-lease separately. It assesses the lease classification
of a sub-lease with reference to the right-of-use asset arising from the head
lease, not with reference to the underlying asset.
Amounts due from lessees under finance leases are recognised as finance lease
receivables at the amount of the Group's present value of the lease receipts.
The finance lease receivable is subsequently measured by increasing the
carrying amount to reflect interest on the finance lease receivable (using the
discount rate used at commencement) and by reducing the carrying amount to
reflect the lease payments received.
Inventories
Inventories comprise pack materials used in the delivery of courses and are
stated at the lower of cost and net realisable value. Cost is based on the
cost of purchase on a first in, first out basis. Work in progress and finished
goods include labour and attributable overheads. Net realisable value is the
estimated selling price less costs to complete and sell.
At each reporting date, inventories are assessed for impairment. If stock is
impaired, the carrying amount is reduced to its realisable value. The
impairment loss is recognised immediately in profit or loss.
Financial instruments
Financial instruments are recognised when the Group becomes party to the
contractual provisions of the instrument. The Group only enters into basic
financial instruments and does not have any hedging instruments.
Financial assets and liabilities are offset, with the net amounts presented in
the Financial Statements, when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle on a net basis or
to realise the asset and settle the liability simultaneously.
Financial assets - Loans and receivables
All of the Group's financial assets fall into the loans and receivables
category. Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. Financial
assets included in loans and receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at amortised cost,
using the effective interest rate method, less any impairment losses.
Financial assets are assessed for indicators of impairment at each reporting
date.
A provision for impairment of trade receivables is made for expected lifetime
credit losses based on past experience and general economic factors. Further
provisions are made against specific trade and other receivables when there is
objective evidence that one or more loss events that occurred after the
initial recognition of the financial asset, have had an impact on the
estimated future cash flows of the financial asset. The amount of the loss is
measured as the difference between the asset's carrying amount and the present
value of estimated future cash flows discounted at the financial asset's
original effective interest rate. Impaired debts are derecognised when they
are assessed as uncollectible.
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire or are settled, or when the Group transfers the
financial asset and substantially all the risks and rewards of ownership to
another entity, or if some significant risks and rewards of ownership are
retained but control of the asset has transferred to another party that is
able to sell the asset in its entirety to an unrelated third party.
Financial liabilities - Other financial liabilities
All of the Group's financial liabilities fall into the other financial
liabilities category. Such financial liabilities are initially measured at
fair value less any directly attributable transaction costs. Subsequent to
initial recognition, these liabilities are measured at amortised cost using
the effective interest method.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability to the net carrying amount on initial recognition.
Financial liabilities are derecognised when the Group's contractual
obligations expire or are discharged or cancelled.
Cash and cash equivalents
In the Statement of Cash Flows, cash and cash equivalents comprise cash in
hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank
overdrafts. In the Statement of Financial Position, bank overdrafts are shown
within borrowings in current liabilities.
Dividends
Dividend income is recognised when the right to receive payment is
established.
Dividends payable are recognised when paid, or as a liability in the period in
which the dividends are approved by the shareholders of the Company.
3. Use of judgements and estimates
In preparing these consolidated Financial Statements, management has made
judgements and estimates that affect the application of the Group's accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to estimates are
recognised prospectively.
Judgements
Judgements made in applying accounting policies that have the most significant
effects on the amounts recognised in the financial statements are:
Going concern
As noted in Note 2, the financial statements have been prepared on a going
concern basis, following detailed scenario testing and review.
Capitalisation of internally developed intangibles
Costs of £5.6 million incurred on developing software and new digital
products have been capitalised in the year (see Note 13). Initial
capitalisation is based on management's judgement on which costs meet the
definition of development costs. Costs capitalised include directly
attributable labour costs and purchases of directly attributable products and
services. No overheads have been capitalised. Initial capitalisation and any
subsequent impairment is also based on management's judgement that
technological and economic feasibility is demonstrated and assumptions
regarding the expected future cash generation of the projects and the expected
period of benefits.
Assumptions and estimation uncertainties
Assumptions and estimation uncertainties at 31 March 2022 that have a
significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities in the next financial year are:
Provisions against trade receivables and accrued income
A provision is initially made against trade receivables and accrued income for
expected lifetime credit losses. Historic credit losses have been low and the
provision rate is based on experience over the last three years and current
and expected economic conditions. Balances are reviewed on a regular basis and
provisions are increased to reflect any increase in credit risk where
appropriate. The review takes into account factors such as the age of the
debt, current economic indicators for the industry of the customer, recovery
since the reporting date and discussions with the customer. Provisions are
raised where debtors are not considered recoverable in full or in part.
Provisions are released when subsequent information supports the recovery.
Share-based payments
The Group has share-based payment remuneration for employees under a Long-Term
Incentive Plan. The fair value of share options at the date of grant is
estimated using the Black-Scholes model based on certain assumptions. The fair
value of the share options for the more complex share scheme granted on 14
July 2021 is estimated using the Monte Carlo model based on certain
assumptions. These assumptions are set out in Note 23 and include expected
share price volatility, dividend yield, expected life and the numbers of
options expected to vest.
Useful economic life of intangible assets
The useful economic lives of capitalised development costs, which are key
estimates, are assessed by management. In assessing the useful economic lives
of the coaching platform, Performa, management took factors into account such
as the speed of change in technology used across these types of Digital
products. The useful economic lives have been benchmarked against the market
and are deemed reasonable. A sensitivity analysis was performed to assess the
impact of changing the useful economic life of the coaching platform from
three to five years. This would have reduced amortisation charge for the year
ending 31 March 2022 by £103,000.
4. 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 with no individually significant customer.
Segment results for the year ended 31 March 2022
Segment result
EMEA America Total
£'000 £'000 £'000
Revenue 19,715 28,953 48,668
Cost of sales (2,572) (3,712) (6,284)
Administrative expenses (23,705) (19,028) (42,733)
(Loss)/profit before inter-segment charges (6,562) 6,213 (349)
Inter-segment charges 5,084 (5,084) -
Operating (loss)/profit - segment result (1,478) 1,129 (349)
Finance income 19
Finance costs (152)
Loss before taxation (482)
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 2022 is set out below.
EMEA America Group
Delivery 60.2% 66.0% 63.7%
Design 13.4% 9.8% 11.2%
Digital 11.9% 10.7% 11.2%
Licensing and certification 5.8% 6.3% 6.0%
Other 6.8% 6.2% 6.5%
Advisory 1.9% 1.0% 1.4%
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 2021
Segment result
EMEA America Total
£'000 £'000 £'000
Revenue 17,241 22,142 39,383
Cost of sales (2,237) (2,730) (4,967)
Administrative expenses (18,349) (16,286) (34,635)
(Loss)/Profit before inter-segment charges (3,345) 3,126 (219)
Inter-segment charges 2,258 (2,258) -
Operating (loss)/profit - segment result (1,087) 868 (219)
Finance income 30
Finance costs (167)
Loss before taxation (356)
Adjusted profit before tax
EMEA America Total
£'000 £'000 £'000
Operating profit - segment result (1,087) 868 (219)
Employee options surrender costs 587 75 662
Adjusted EBIT (500) 943 443
Finance income 30
Finance costs (167)
Adjusted profit before taxation 306
The mix of revenue for the year ended 31 March 2021 is set out below.
EMEA America Group
Delivery 59.7% 52.5% 55.6%
Design 12.7% 13.3% 13.0%
Digital 15.3% 16.8% 16.2%
Licensing and certification 6.3% 9.0% 7.8%
Other 4.2% 6.9% 5.7%
Advisory 1.8% 1.5% 1.7%
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.
5. Operating profit
Operating (loss)/profit is stated after charging:
31 March 2022 31 March 2021
£'000 £'000
Coach costs 5,025 3,369
Staff costs (Note 8) 32,977 26,491
Amortisation of intangible assets 325 52
Depreciation of property, plant and equipment 1,252 1,084
Short-term and low-value lease expense 23 35
(Write-back)/impairment of trade receivables (11) (41)
6. Adjustments
31 March 2022 31 March 2021
£'000 £'000
Restructuring costs - 662
- 662
Restructuring costs in the year ended 31 March 2021 include redundancy costs
related to the headcount reduction exercise undertaken in response to the
COVID-19 impact on the business.
The cash cost of Adjustments in 2021 was £662,000.
7. Auditor remuneration
31 March 2022 31 March 2021
£'000 £'000
Fees for audit of the Company and consolidated financial statements 97 88
Fees for audit of the Company's subsidiaries pursuant to legislation 16 15
Total audit fees 113 103
Tax compliance services 69 82
Tax advisory services 6 15
Other services 11 10
Total fees payable to the auditor 199 210
8. Employees
Staff costs were as follows:
31 March 2022 31 March 2021
£'000 £'000
Wages and salaries 28,828 22,464
Social security costs 2,825 2,249
Pension costs - defined contribution plans 983 897
Share-based payments 341 298
Restructuring payroll costs included in adjusted items - 583
32,977 26,491
Wages and salaries in 2021 are stated net of £216,000 of government grants
under the UK Coronavirus Job Retention Scheme and similar schemes.
The average number of the Group's employees by function was:
31 March 2022 31 March 2021
Delivery 196 170
Support 86 61
Digital 50 20
332 251
The year-end number of the Group's employees by function was:
31 March 2022 31 March 2021
Delivery 206 174
Support 88 67
Digital 41 35
335 276
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 2022 31 March 2021
£'000 £'000
Salaries, bonuses and other short-term employee benefits 2,955 2,583
Post-employment benefits 130 53
Termination benefits 311 -
Share-based payments 111 207
Total compensation 3,507 2,843
9. Net finance costs
31 March 2022 31 March 2021
£'000 £'000
Finance income
Bank interest receivable 12 15
Finance lease income 7 15
19 30
Finance costs
Bank interest payable (27) -
Lease interest (125) (167)
(152) (167)
Net Finance Costs (133) (137)
10. Tax
The tax (credit)/charge for the year comprises:
31 March 2022 31 March 2021
£'000 £'000
UK current tax - (191)
UK adjustment in respect of prior periods (42) (97)
Foreign current tax 326 299
Foreign adjustment in respect of prior periods 19 (2)
Total current tax charge 303 9
Deferred tax - current year (1,317) (6)
Deferred tax - adjustment in respect of prior periods (R&D claims) (429) (127)
Effect of changes in tax rates (641) -
Total deferred tax credit (2,387) (133)
Total tax (credit)/charge (2,084) (124)
Tax on items credited to equity:
31 March 2022 31 March 2021
£'000 £'000
Current tax credit on share-based payments - (48)
Deferred tax (credit)/charge on share-based payments 17 (17)
Total tax credit in equity 17 (65)
The tax charge for the year can be reconciled to accounting profit as follows:
31 March 2022 31 March 2021
£'000 £'000
(Loss)/profit before tax (482) (356)
Expected tax (credit)/charge based on the standard rate of tax in the UK of (91) (68)
19% (2021: 19%)
Differences in overseas tax rates 91 71
Expenses not deductible for tax purposes 717 21
Adjustments to tax in respect of prior periods (R&D claims) (452) (226)
Enhanced R&D deduction (1,722) -
Tax rate changes (641) -
Other tax adjustments 14 78
Total tax (credit)/charge (2,084) (124)
The main categories of deferred tax assets recognised by the Group are:
Tax losses Share-based payments Other Total
£'000 £'000 £'000 £'000
At 1 April 2010 - 85 - 85
Credited/(charged) to income - 31 102 133
Credited/(charged) to equity - 17 - 17
Exchange differences - - (5) (5)
At 31 March 2021 - 133 97 230
Credited to income 4,049 15 (1,438) 2,626
Credited to equity - (17) - (17)
Exchange differences - - 7 7
At 31 March 2022 4,049 131 (1,334) 2,846
The standard rate of corporation tax in the UK is 19%. The March 2022 Budget
Statement announced an increase in the main corporation tax rate to 25%, with
effect from April 2023. This increase was substantively enacted at the balance
sheet date.
The Group has recognised £4 million of deferred tax assets relating to
carried forward tax losses. These losses have been recognised as it is
probable that future taxable profits will allow these deferred tax assets to
be recovered. The Group has performed a continuing evaluation of its
deferred tax asset valuation allowance on an annual basis to estimate whether
sufficient future taxable income will be generated to permit use of the
existing deferred tax assets.
11. 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). Adjusted
earnings per share removes the effect of restructuring costs in 2021.
31 March 2022 31 March 2021
Weighted average number of shares in issue 100,009,727 99,660,395
Potentially dilutive shares (weighted average) 442,548 587,629
Diluted number of shares (weighted average) 100,452,275 100,248,024
31 March 2022 31 March 2021
Basic EPS Diluted EPS Basic EPS Diluted EPS
£'000 pence Pence £'000 pence pence
Net profit/(loss) attributable to shareholders 1,602 1.60 1.59 (232) (0.23) (0.23)
Exclude:
Adjustments - - - 662 0.66 0.66
Tax on adjustments - - - (133) (0.13) (0.13)
Adjusted net profit after tax 1,602 1.60 1.59 297 0.30 0.30
12. Dividends
No dividends have been paid or proposed for the year ended 31 March 2022
(2021: nil).
13. Intangible assets
Patents Development costs Total
£'000 £'000 £'000
Cost
At 1 April 2020 63 1,927 1,990
Additions - 2,834 2,834
At 31 March 2021 63 4,761 4,824
Additions - 5,623 5,623
At 31 March 2022 63 10,384 10,447
Amortisation
At 1 April 2020 63 1,832 1,895
Amortisation charge - 52 52
At 31 March 2021 63 1,884 1,947
Amortisation charge - 325 325
At 31 March 2022 63 2,209 2,272
Net book value
At 31 March 2021 - 2,877 2,877
At 31 March 2022 - 8,175 8,175
Development cost additions in the year to 31 March 2022 include software
development costs directly incurred in the creation of new digital assets.
14. Property, plant and equipment
Right-of-use asset Leasehold improvements Fixtures, fittings and equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 April 2020 4,194 254 1,772 6,220
Additions 34 72 316 422
Disposals - - (561) (561)
Exchange differences (307) (5) (83) (395)
At 31 March 2021 3,921 321 1,444 5,686
Additions 39 186 328 553
Disposals - - (301) (301)
Exchange differences 128 12 38 178
At 31 March 2022 4,088 519 1,509 6,116
Depreciation
At 1 April 2020 379 229 1,217 1,825
Depreciation charge 903 5 176 1,084
Disposals - - (553) (553)
Exchange differences (32) - (44) (76)
At 31 March 2021 1,250 234 796 2,280
Depreciation charge 885 53 314 1,252
Disposals - - (301) (301)
Exchange differences 49 - 21 70
At 31 March 2022 2,184 287 830 3,301
Net book value
At 31 March 2021 2,671 87 648 3,406
At 31 March 2022 1,904 232 679 2,815
At 31 March 2021, capital expenditure of £135,000 in respect of property,
plant and equipment was contracted for but not provided for in the accounts.
15. Inventories
31 March 2022 31 March 2021
£'000 £'000
Finished goods 7 -
Write-down of inventory amounted to nil (2021: £70,000).
The cost of inventories recognised as an expense and included in cost of sales
amounted to £112,000 (2021: £18,000).
16. Trade and other receivables
31 March 2022 31 March 2021
£'000 £'000
Non-current
Net investment in sub-lease - 79
Prepayments in respect of property deposits 217 260
217 339
Current
Trade receivables 7,999 9,138
Less provision for impairment (212) (227)
Net trade receivables 7,787 8,911
Net investment in sub-lease 81 172
Other receivables 82 143
Prepayments 1,170 688
Accrued income 943 706
10,063 10,620
The maturity analysis of the net investment in sub-lease is set out in Note
18.
Trade receivables have been aged with respect to the payment terms as follows:
31 March 2022 31 March 2021
£'000 £'000
Not past due 7,274 8,128
Past due 0-30 days 401 530
Past due 31-60 days 109 185
Past due 61-90 days 25 22
Past due more than 90 days 190 273
7,999 9,138
The movement in the allowance for impairment losses was:
31 March 2022 31 March 2021
£'000 £'000
At the beginning of the period 227 303
(Write-back)/charges (14) (41)
Utilisation of provision (7) (22)
Foreign exchange adjustment 6 (13)
At the end of the period 212 227
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.
17. Trade and other payables
31 March 2022 31 March 2021
£'000 £'000
Trade payables 1,401 2,514
Other taxation and social security 663 549
Other payables 690 536
Accruals 5,257 5,578
Deferred income 4,718 4,636
12,729 13,813
18. Lease liability
The lease liabilities included in the statement of financial position are:
31 March 2022 31 March 2021
£'000 £'000
Current 856 1,085
Non-current 1,349 2,081
2,205 3,166
There are no significant variable leases costs or lease term judgements. The
related right-of-use asset is disclosed in Note 14.
The movements in the lease liability were as follows:
31 March 2022 31 March 2021
£'000 £'000
At the beginning of the year 3,166 4,386
Lease payments (1,226) (1,075)
Finance cost 121 166
Additions 39 34
Exchange differences 105 (345)
At the end of the year 2,205 3,166
The maturity analysis of the contractual undiscounted cash flows is:
31 March 2022 31 March 2021
£'000 £'000
Less than one year 934 1,204
Between one and five years 1,412 2,213
Total future lease payments 2,346 3,417
Total future interest payments (141) (251)
Total lease liability 2,205 3,166
The Group sub-leased its New York office in March 2021. The Group has
classified the sub-lease as a finance lease, because the sub-lease is for the
whole of the remaining term of the head lease.
The following table sets out a maturity analysis of lease receivables, showing
the undiscounted lease payments to be received after the reporting date. The
related net investment in sub-lease is disclosed in Note 16.
31 March 2022 31 March 2021
£'000 £'000
Less than one year 82 180
One to two years - 80
Total undiscounted lease payments receivable 82 260
Unearned finance income (1) (9)
Net investment in the lease 81 251
19. 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.
20. Borrowings
The Group entered into a £10 million debt facility (£6 million Revolving
Credit Facility, £4 million accordion) on 30 September 2021 which matures
after three years. The facility remains undrawn as at 9 June 2022.
21. 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 2022 31 March 2021
£'000 £'000
Net trade receivables 7,787 8,911
Other receivables 82 143
Prepayments in respect of property deposits 217 260
Cash and cash equivalents 10,021 16,833
Financial assets at amortised cost 18,107 26,147
Trade payables 1,401 2,514
Other payables 690 536
Lease liabilities 2,205 3,166
Financial liabilities at amortised cost 4,296 6,216
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 2022 31 March 2021
£'000 £'000
Trade receivables 7,787 8,911
Other receivables 82 143
Prepayments in respect of property deposits 217 260
Cash and cash equivalents 10,021 16,833
At the end of the period 18,107 26,147
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 £10 million debt 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 2022
Net trade receivables 2,592 4,581 468 146 7,787
Cash and cash equivalents 6,725 3,018 95 183 10,021
At 31 March 2021
Net trade receivables 2,509 4,806 1,451 145 8,911
Cash and cash equivalents 14,465 1,974 80 314 16,833
The Group does not currently use forward foreign exchange contracts or
currency options to hedge currency risk.
22. Share capital
31 March 2022 31 March 2022 31 March 2021 31 March 2021
Cost Cost
Number £'000 Number £'000
Ordinary shares of £0.00001 at 1 April 99,791,784 1 99,493,210 1
Issue of shares to satisfy options 313,876 - 298,574 -
Ordinary shares of £0.00001 at 31 March 100,105,660 1 99,791,784 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 2022 31 March 2022 31 March 2021 31 March 2021
Cost Cost
Number £'000 Number £'000
As at 1 April 119,875 - 130,835 -
Issue of new shares to EBT (8,220) - (10,960) -
Ordinary shares of £0.00001 at 31 March 111,655 - 119,875 -
Market value at 31 March 151 156
23. 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 vest after three years subject only to remaining employed up to the
vesting date. The holder is entitled to dividends over the vesting period.
Many employees have elected to leave their shares in the trust a further two
years for tax purposes.
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.
The total share-based payments expense was:
31 March 2022 31 March 2021
£'000 £'000
Equity settled share-based payments 341 298
The movements in the number of share awards and share options and the weighted
average exercise price of awards are:
31 March 2022 31 March 2021
Number Weighted average exercise price £ Number Weighted average exercise price £
Outstanding at the beginning of the period 2,287,024 0.66 2,183,257 0.63
Granted during the period 2,448,318 0.14 741,070 0.67
Forfeited during the period (2,166,334) 0.14 (327,768) 0.97
Exercised during the period (322,096) 0.17 (309,535) 0.17
Outstanding at the end of the period 2,246,912 0.66 2,287,024 0.66
Exercisable at the end of the period 4,110 2,055
Weighted average fair value of awards granted (£) 1.69 0.27
The range of exercise prices and weighted average remaining contractual life
of share awards and share options outstanding at 31 March were:
31 March 2022 31 March 2021
£'000 £'000
£ nil 428,770 463,705
£0.00001 584,580 427,129
£0.77000 316,987 592,537
£1.04000 201,981 306,843
£1.44500 217,784 -
£1.46000 496,810 496,810
2,246,912 2,287,024
Weighted average remaining contractual life (years) 5.8 5.4
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 (2 year vesting) 27 Apr 2018 1.24 Nil 2 n/a 1.4% n/a 1.20
LTIP (3 year vesting) 27 Apr 2018 1.24 Nil 3 n/a 1.4% n/a 1.19
LTIP (2 year vesting) 25 Jun 2018 1.46 1.46 10 19% 1.4% 1.0% 0.28
LTIP (3 year vesting) 25 Jun 2018 1.46 1.46 10 19% 1.4% 1.0% 0.28
SIP 8 Oct 2018 1.67 Nil n/a n/a n/a n/a 1.67
SAYE 30 Sep 19 1.22 1.04 3 19% 1.4% 1.0% 0.25
ESPP 30 Sep 19 1.22 1.04 1 19% 1.4% 1.0% 0.20
LTIP (3 year vesting) 31 Mar 20* 1.00 Nil 3 n/a 1.4% n/a 0.96
LTIP (4 year vesting) 31 Mar 20* 1.00 Nil 4 n/a 1.4% n/a 0.95
LTIP (5 year vesting) 31 Mar 20* 1.00 Nil 5 n/a 1.4% n/a 0.93
SAYE 1 Sep 20 0.90 0.77 3 19% 1.4% 1.0% 0.25
ESPP 1 Sep 20 0.90 0.77 1 19% 1.4% 1.0% 0.20
LTIP (3 year vesting) 14 Jul 21** 1.90 Nil 3 36% 0% 0.15% 1.90
LTIP (3 year vesting) 14 Jul 21** 1.90 Nil 3 36% 0% 0.15% 1.69
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
SAYE 1 Aug 21 1.70 1.445 3 36% 0% 0.31% 0.53
ESPP 1 Aug 21 1.70 1.445 1 34% 0% 0.15% 0.36
LTIP (3 year vesting) 3 Dec 21 1.675 Nil 3 36% 0% 0.15% 1.675
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
* includes further options granted on 12 Jun 2020 on the same terms and with
the same valuation assumptions.
* *includes further options granted on 3 Dec 2021 on the same terms and with
the same valuation assumptions.
24. 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.
· Trevor Phillips, a non-executive director of Mind Gym plc, is also
chairman and director of Green Park Interim and Executive Search which
provided services to the Group totalling £105,500 in the year ended 31 March
2022.
· David Nelson, a non-executive director of Mind Gym plc is also a
partner of Dixon Wilson. Dixon Wilson provided services to the Group totalling
£6,410 in the year ended 31 March 2022.
· Zarina Ward, a key management person is the spouse of Simon Ward.
Simon Ward Search provided services to the Group totalling £75,000 in the
year ended 31 March 2022.
25. Events after the reporting period
There were no post balance sheet events.
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