REG - Mind Gym PLC - Full Year Trading Update

Mind GymAnnouncement

22/04/2024 07:00

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RNS Number : 4076L  Mind Gym PLC  22 April 2024

 22 April 2024

Mind Gym plc

 ("Mind Gym" or the "Company" or "Group")

Full Year Trading Update

Significantly improved second half performance

MindGym (AIM: MIND), the global provider of human capital and business
improvement solutions, today announces a trading update for its financial year
ended 31 March 2024 ("FY24").

 

The Group has delivered a significantly stronger performance in the second
half of FY24, despite the challenging market conditions noted in the
announcement of our interim results in December 2023. Revenues for H2 FY24
were £24.0m, an increase of 15% on H1 FY24. This improvement, coupled with
the significant cost reduction plan implemented during FY24, results in an H2
FY24 expected underlying EBITDA of £3.8m (vs the £4.1m loss reported in H1
FY24). During the period, revenues included the energy framework agreement
announced in FY23, which is receiving strong positive customer feedback.
This programme will continue into FY25.

 

As a result, the Group expects to report full year revenue for FY24 of £44.9m
and an adjusted EBITDA loss of c.£0.3m.

 

A key strategic focus during the financial year has been to reset the Group's
cost base to improve cash generation and increase resilience in current market
conditions. In addition to the £8.0m cost reductions announced in December
2023, our continued focus in recent months has identified a further £3.0m of
reductions bringing the total to £11.0m of annualised cost savings. The
additional £3.0m reduction in costs consists of £0.5m of capex and £2.5m of
operating expense, almost all of which has been actioned by the end of FY24
and will therefore benefit the new financial year FY25.  An additional
one-off cost associated with achieving these increased ongoing cost savings of
c.£0.6m was incurred in the period.

 

As at 31 March 2024, the Group had sufficient liquidity with cash of £1.4m
and access to a £2m undrawn loan facility. The Board does not currently see a
scenario in which this loan facility will be drawn.  We have seen a small
improvement in cash in Q4, and in Q1 FY25 expect to see a material improvement
reflecting the collection of March revenues and the benefit of the £11.0m
reduction in the cost base.

 

Board changes:

As separately announced today, Christoffer Ellehuus, who has been acting as
CEO designate since 8 January 2024, has been appointed as CEO and Octavius
Black has transitioned to Executive Chairman, both with immediate effect.

 

Christoffer Ellehuus will provide more detail on the Group's strategy and an
update on current trading at the time of the final results for the year ended
31 March 2024 (which are expected to be released in June 2024).

 

Outlook:

Following the improved H2 performance, we have entered the new financial in
year in an enhanced financial and operating position. The actions taken during
FY24 to realign the Group's cost base are expected to provide greater
resilience and to ensure that MindGym is cash generative in the current
challenging macro-economic market conditions.

 

Despite the strong growth in bookings and pipeline, clients and CHROs remain
cautious on spending commitments, and we are continuing to see delays in
decision making and scaling back of projects, and an increasing use of trials
prior to commitment.

 

However, looking beyond this macro uncertainty, the opportunity for MindGym in
the large and highly fragmented Learning & Development market remains
strong and we remain confident in the long-term prospects of the business and
the Group's ability to grow revenues and improve profitability.

 

 

 

 

Enquiries

 Mind Gym plc                            +44 (0) 20 7376 0626

 Octavius Black (Chair)                  investors@themindgym.com (mailto:investors@themindgym.com)

 Christoffer Ellehuus (CEO)

 Dominic Neary (CFO)

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

 Nick How

 Edward Mansfield

 Anake Singh

 MHP (for media enquiries)               +44 (0) 20 3128 8100

 Reg Hoare                               mindgym@mhpgroup.com (mailto:mindgym@mhpgroup.com)

 Katie Hunt

 Veronica Farah

 

 

 Ends 

 

 

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.

 

 

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