REG - Mind Gym PLC - Full Year Trading Update and Notice of Results

Mind GymAnnouncement

31/03/2025 07:15

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RNS Number : 8618C  Mind Gym PLC  31 March 2025

31 March 2025

Mind Gym plc

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

Full Year Trading Update and Notice of Results

MindGym returns to adjusted EBITDA profitability; Transformation strategy on
track

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

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

FY25 financial highlights

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

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

Strategic and operational update

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

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

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

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

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

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

FY26 Outlook

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

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

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

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

Christoffer Ellehuus, Chief Executive Officer of MindGym, commented:

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

Notice of Results

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

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

Enquiries

 Mind Gym plc                                    +44 (0) 20 7376 0626
 Christoffer Ellehuus, CEO                       investors@themindgym.com (mailto:investors@themindgym.com)

 Emily Fyffe, CFO

 Panmure Liberum (Nominated Adviser and Broker)  +44 (0) 20 3100 2000
 Nick How

 Dougie McLeod

 MHP (for media enquiries)                       +44 (0) 7885 447 944
 Reg Hoare                                       mindgym@mhpgroup.com (mailto:mindgym@mhpgroup.com)

 Katie Hunt

 Veronica Farah

 

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

About MindGym

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

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

Further information is available at www.themindgym.com
(http://www.themindgym.com/) @themindgym

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