REG - Mind Gym PLC - Half year results
03/12/2021 07:00
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RNS Number : 4486U Mind Gym PLC 03 December 2021
03 December 2021
Mind Gym PLC
("Mind Gym", the "Group" or the "Company")
Half year results for the six months ended 30 September 2021
Strong increase in digitally enabled revenues and gross margin compared to
pre-COVID
Mind Gym (AIM: MIND), the global provider of human capital and business
improvement solutions, announces its half year results for the six months
ended 30 September 2021.
Key Financials
6 months to 30 Sept 2021 6 months to 30 Sept 2020 6 months to 30 Sept 2019 12 months to 31 Mar 2021 (FY21) Change (H1 FY22 v H1 FY21) Change (H1 FY22 v H1 FY20)
(H1 FY22) (H1 FY21) (H1 FY20)
Revenue £24.1m £14.5m £23.9m £39.4m +67% +1%
Digitally enabled(1) revenue £19.5m £10.3m £7.1m £30.5m +89% +175%
Gross profit margin 85.9% 88.3% 78.8% 87.4% -2.4 pps +7.1pps
Adjusted PBT(2,3) £17k £(1.3m) £3.9m £0.3m n/a n/a
Adjusted EBITDA £0.7m £(0.8m) £4.2m £1.6m n/a -152%
Statutory (loss)/profit before tax £0m £(2.0m) £3.9m £(0.4m) n/a n/a
Diluted EPS (0.01p) (1.58p) 3.06p (0.23p) n/a n/a
Adjusted(2,3) Diluted EPS (0.01p) (1.04p) 3.06p 0.30p n/a n/a
Total Dividend per share(4) - - 0.9p - n/a n/a
Cash at bank £12.0m £14.5m £10.7m £16.8m -17% +12%
Cash used in/ generated from operations £(1.2m) £1.1m £4.3m £5.9m n/a -128%
Capital Expenditure £2.8m £1.4m £0.1m £3.2m +100% +270%
(1)Digitally enabled revenue comprises revenue from our digital products and
revenue from delivery of virtual sessions.
(2)Adjustments include restructuring costs in FY21. A reconciliation of these
adjustments is shown in Note 6.
(3) Adjustments have been updated to exclude share-based payments, in line
with the presentation of FY21 results. As a result, the adjusted figures for
the six months ended 30 September 2019 have been restated to provide a direct
comparative.
(4)FY20 dividend of 0.9p reflects interim dividend only and no final dividend.
(5) Adjusted EBITDA cash conversion defined as Adjusted cash generated from
operations/Adjusted EBITDA.
Overview
· Revenue bounced back to ahead of pre-COVID levels at £24.1m, up
by 67% (76% in constant currency) on prior year and 1% (7% on a constant
currency basis) on the same period two years ago.
· Digitally-enabled revenue increased 175% on pre-COVID levels to
£19.5m, (H1 FY20: £7.1m) to represent 81% of total revenue (H1 FY20: 30%),
reflecting growth in both digital products and live virtual deliveries:
o Existing on demand digital product revenue grew by 44% to £2.7m (£1.9m)
to represent 11% of total revenue (H1 FY20: 8%).
o Live virtual deliveries grew by 224% to £15.9m, whilst face to face
delivery has been limited by COVID restrictions H1 FY20: £4.9m)
o Strong feedback reflected in a 2% increase in participants rating courses
as "Excellent" to 54% (H1 FY 20: 52%).
· Our new digital 1:1 coaching platform "Performa", which delivers
high impact, precision coaching at scale using a proprietary methodology, will
launch in the New Year, with a first client already signed up and with strong
prospective interest. Our second new digital product, DXP (Digital Content
Experience) will launch in FY23, as we focussed resource on Performa whilst
actively seeking to recruit further digital expertise.
· Innovation investments include:
o Our new DEI white paper "The Inclusion Solution" and associated products
launched in H1 FY22, with DEI accounting for 35% of revenues (H1 FY21: 19%, H1
FY20: 13%).
o Hybrid working webinars with supporting products available in H2 FY22.
o Our new point of view on leadership development was launched at the recent
CHRO summit to critical acclaim.
o Our new point of view on wellness is on track to launch in H2 FY22.
o Academic Board boosted with new members; Tessa West, PhD, and Dr Jay Van
Bavel.
· Repeat revenue(6) represented 92% of Group revenue, returning
to pre-COVID levels (H1 FY21: 87%, H1 FY20: 92%).
· Gross margin increased by 7.1 percentage points from H1 FY20 to
85.9% due to higher digital and virtual revenues.
· Adjusted(2) profit before tax of £17k (H1 FY20: £3.9m) in line
with full year expectations as we continue to reinvest,
· Cash balance remains strong at £12.0 million (H1 FY21: £14.5m)
due to continued working capital improvements, supporting a further £2.8m of
capital investment, of which £2.4m related to new digital products in H1
FY22.
· In line with our strategy to focus on investing in digital for
future growth, no interim dividend will be paid.
(6)Repeat revenue is defined as revenue from clients that have purchased
products during a comparative period in one or more of the previous three
years.
Separately announced today
Mind Gym is also pleased to announce the appointment of Dominic Neary to the
Board with effect from today and that he will assume the role of Chief
Financial Officer of the Company from 1 January 2022. Dominic will be
replacing Richard Steele who has been the Chief Financial Officer of Mind Gym
since before its IPO in 2018. Dominic brings a wealth of relevant experience
gained from senior finance roles at high growth digital and international
companies. The Board wishes to express its gratitude and appreciation to
Richard for the significant role he has played in the Company's growth and
development and wishes him all the best for the future.
Current Trading & Outlook
The second half of the year has continued to see growth on FY20. We expect
revenues to continue to increase on pre-COVID levels as we maintain our
investment strategy to deliver long-term, sustainable growth with our first
new digital product, Performa launching in Q4 FY22 and our new digital
platform, DXP, which is in the middle of Beta trials, to be launched in FY23.
We face uncertainty as we enter Q4 with an increase in reported rates of
COVID infections and the possible impact of the Omicron variant which may
affect client decision making. Nonetheless, Mind Gym has demonstrated
significant adaptability and resilience to date and remains focused on the
delivery of its leading client solutions. Our expectations for the full year
therefore remain broadly unchanged.
Octavius Black, Chief Executive Officer of Mind Gym, said:
"I am delighted to see the bounce back of revenue ahead of pre-COVID levels.
Our digital strategy remains on track and our clients' responses to the first
of our new digital products, Performa, are extremely positive. COVID still
presents challenges which may impact buying including the "Great Resignation",
a potential return to lockdown which has already begun in some European
countries and inflationary pressure. However, we have demonstrated our ability
to continue to grow revenues in a virtual world with a strong digitally
enabled proposition, and Mind Gym remains well placed to adapt and prosper in
the vast, growing and rapidly evolving corporate change, learning and wellness
market."
Enquiries:
Mind Gym plc +44 (0)20 7376 0626
Octavius Black, Chief Executive Officer
Richard Steele, Chief Financial Officer
( )
Liberum (Nominated Adviser and Sole Broker) +44 (0)20 3100 2000
Bidhi Bhoma
Nick How
Kane Collings
MHP (for media enquiries) +44 (0)20 3123 8572
Reg Hoare mindgym@mhpc.com
Katie Hunt
Florence Mayo
About Mind Gym
Mind Gym 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.
Mind Gym is quoted 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
Half Yearly report
Business overview
As H1 FY21 was impacted by COVID-19, performance is mainly compared to H1 FY20
Revenues in the first six months to 30 September 2021 increased 7% in constant
currency on pre-COVID levels compared to the same period two years ago. The
strengthening of sterling meant the actual reported revenue increase was 1%.
There was a greater recovery in the US (+12%) where the leadership and other
investments are more advanced than in EMEA where revenues increased 1%.
Repeat revenue remained strong at 92% (H1 FY20: 92%) and we continued to be
well diversified across many sectors, led by technology, financial services
and pharma.
Revenue from the Group's top 25 clients contributed 47% of revenue which was
in line with the 46% seen for the same period in FY20 as we returned to
delivering larger sized projects.
Digitally-enabled revenue increased 175% on pre-COVID levels to £19.5m, (H1
FY20: £7.1m) to represent 81% of total revenue (H1 FY20: 30%). Existing on
demand digital product revenue grew by 44% to £2.7m (£1.9m) to represent 11%
of total revenue (H1 FY20: 8%). Live virtual deliveries grew by 224% to
£15.9m with only 3% returning to face to face delivery. Our feedback scores
continue to give comfort that participants' experience of virtual can be as
good, if not better, than face to face. There was a 2% increase in
participants rating courses as "Excellent" to 54% during the period (H1 FY 20:
52%). We have taken steps to protect our gross profit margin should clients
choose to switch a proportion of deliveries back to face to face by increasing
face to face prices.
We continue to invest in new digital products. "Performa" is a 1:1 coaching
platform that delivers high impact, precision coaching at scale using a
proprietary methodology and will launch in the New Year. It builds on the
expertise the Group has developed over 20 years in delivering live sessions to
multi-participant audiences and harnesses the latest technology. Our second
new digital product DXP (Digital Content Experience) will launch in FY23, as
we focussed resource on Performa whilst actively seeking to recruit further
digital expertise.
Innovation has accelerated following increased investment. Our new DEI point
of view "The Inclusion Solution" and associated products has supported
revenues from DEI of 35% of total revenues in the period (H1 FY20: 13%),
increasing 175% on H1 FY20 revenues. During H1 FY22 we held webinars on hybrid
working and are developing new products that will be available in H2 FY22. Our
new point of view on leadership development was very well received at our
recent in person CHRO event in London to over 60 senior HR professionals. Our
new point of view on wellness at work will launch in H2 FY22. Our Academic
Board comprises of an eminent range of behavioural science specialists who
help select and validate our points of view. The Board has been further
strengthened by the appointment of Tessa West Ph.D, Associate Professor of
Psychology at New York University and Dr Jay Van Bavel, Associate Professor of
Psychology and Neural Science with an affiliation at the Stern School of
Business in Management at New York University.
The gross profit generated from the revenues was reinvested back into the
business as intended to support future growth. Overheads of £20.6m in the six
months to 30 September 2021 increased 38% (H1 FY20: £15.0m). The majority of
the additional operational investment is in people costs as we expand and
upgrade our commercial team, innovation, marketing and operations teams. Our
marketing investment also saw the completion of our rebranding during the
period including the website relaunch.
Financial Performance
Revenue for the six months to 30 September 2021 increased 1% (7% on a constant
currency basis) on pre-COVID levels to £24.1m (H1 FY20: £23.9m). Actual
reported revenues were adversely impacted by the strengthening of sterling
against the US dollar to a period average of 1.38 (H1 FY20: 1.25). Revenue
from the top 25 clients increased to 47% of regional revenue (H1 FY20: 46%).
In EMEA, revenue increased by 1% to £10.3m (H1 FY20: £10.2m), representing
43% of total revenue. Revenue from the top 25 clients decreased to 66% of
regional revenue (H1 FY20: 70%).
In the US, revenue increased by 1% (12% on a constant currency basis) to
£13.9m (H1 FY20: £13.7m), representing 57% of total revenue. Revenue from
the top 25 clients increased to 56% of regional revenue (H1 FY20: 55%).
Revenue from digital products in H1 FY22 increased by 44% (at constant
currency) to £2.7mn (H1 FY20: £1.9m), representing 11% of total revenue (H1
FY20: 8%). Digitally-enabled revenue (including workouts delivered virtually)
increased by 175% to £19.5m (H1 FY20: £7.1m), representing 81% of total
revenue (H1 FY20: 30%), following the significant shift to virtual deliveries
driven by our response to COVID.
Gross profit increased by 7.1 percentage points to 85.9% (H1 FY20: 78.8%) in
the period and reflects the higher mix of digital and digitally-enabled
revenues in the period. Prices for face to face deliveries have been increased
to help mitigate any impact on gross profit margin should clients decide to
return to this offer.
Adjusted overheads of £20.6m in the period increased by 38% (H1 FY20:
£15.0m) as we continue to invest in our commercial team, innovation,
marketing and operations. This will support future growth of our existing
revenue streams and prepare for the launch of our new digital products.
Excluding digital heads that are capitalised, salary costs increased 34% with
average headcount increasing 19% to 281 (H1 FY20: 234) and average salaries
increased 13% on H1 FY20. Share based payments were £0.3m in the period (H1
FY20: £0.1m). Awards to management were granted at 31 March 2021 with
performance conditions agreed in July 2021.
Adjusted profit before tax in the period was £17k (H1 FY20: £3.9m) as gross
profit was reinvested to support future growth.
Basic earnings per share in the period was -0.01 pence (H1 FY20: earnings of
3.07 pence). Adjusted diluted loss per share was -0.01 pence (H1 FY20: 3.06
pence).
The Group continued to invest in its new digital products with £2.4m (H1
FY21: £1.2m) capitalised during the period, which meets the definition of
development costs under IAS 38, "Intangible assets". Total intangible assets
were valued at £5.2m at 31 September 2021. A further £0.4m was capitalised
in tangible assets in the period relating to IT equipment and office fixtures
and fittings.
The balance sheet remains strong with no bank debt and cash at bank at 30
September was £12.0m, a reduction of £4.8m from the year-end balance at 31
March 2021 of £16.8m. This was due predominantly to £2.8m capital
expenditure and a £2.5m decrease in payables and provisions. The strong
recovery in performance in H2 FY21 led to higher payments of commissions and
reductions in deferred income during H1 FY22. The Group continues to manage
working capital tightly: overdue debt has fallen to 10% of trade debtors at 30
September 2021 compared to 14% at the same time a year ago and 24% two years
ago.
The Group secured a £10m debt facility (£6m RCF, £4m accordion) on 30
September 2021 which matures after 3 years, providing additional flexibility
if required. The facility remains undrawn as at 3 December 2021.
Overall net assets increased by £0.4m to £17.9m in the six months to 30
September 2021.
Dividend
In line with our strategy to focus on investing in digital for future growth,
no interim dividend will be paid.
Board
As announced on 11 June 2021, the Board welcomed the appointment of Ruby
McGregor-Smith CBE as Board Chair effective 15 July 2021, with Joanne Cash
stepping down and remaining as a non-executive on the Board.
As announced on 11 June 2021, Trevor Phillips has replaced Ruby McGregor-Smith
CBE as Chair of the Remuneration Committee, effective 15 July 2021.
As announced today, Dominic Neary will be appointed to the Board with effect
from today and he will assume the role of Chief Financial Officer of the
Company from 1 January 2022. Dominic brings a wealth of relevant experience
gained from senior finance roles at high growth digital and international
companies. Dominic will be replacing Richard Steele who has been the Chief
Financial Officer of Mind Gym since before its IPO in 2018. Richard will stand
down from the Board, and as Chief Financial Officer, on 31 December 2021 after
a handover period to ensure the smooth transition of the role. The Board
wishes to express its gratitude and appreciation to Richard for the
significant role he has played in the Company's growth and development and
wishes him all the best for the future. We look forward to working with
Dominic to deliver our digital transformation and establish Mind Gym as the
go-to partner for delivering cultural change.
Outlook
The second half of the year has continued to see growth on FY20. We expect
revenues to continue to increase on pre-COVID levels as we maintain our
investment strategy to deliver long-term, sustainable growth with our first
new digital product, Performa launching in Q4 FY22 and our new digital
platform, DXP, which is in the middle of Beta trials, to be launched in FY23.
We face uncertainty as we enter Q4 with an increase in reported rates of
COVID infections and the possible impact of the Omicron variant which may
affect client decision making. Nonetheless, Mind Gym has demonstrated
significant adaptability and resilience to date and remains focused on the
delivery of its leading client solutions. Our expectations for the full year
therefore remain broadly unchanged.
Ruby McGregor-Smith
Chair
Octavius Black
Chief Executive Officer
Richard Steele
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months to Year to
30 Sept 30 Sept 31 March
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Continuing operations
Revenue 3 24,142 14,468 39,383
Cost of sales (3,418) (1,687) (4,967)
Gross profit 20,724 12,781 34,416
Administrative expenses (20,645) (14,699) (34,635)
79 (1,918) (219)
Operating profit/(loss)
5 9 8 30
Finance income
Finance costs 5 (71) (82) (167)
Profit/(loss) before taxation 17 (1,992) (356)
Adjusted profit/(loss) before tax 17 (1,330) 306
Restructuring costs 6 - (662) (662)
Total adjustments 6 - (662) (662)
17 (1,992) (356)
Profit/(loss) before tax
7 (30) 424 124
Tax on profit/(loss)
(13) (1,568) (232)
(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 63 (116) (281)
Other comprehensive income for the period attributable to the owners of the 63 (116) (281)
parent
50 (1,684) (513)
Total comprehensive income for the period attributable to the owners of the
parent
Earnings per share (pence)
Basic 8 (0.01)p (1.58)p (0.23)p
Diluted 8 (0.01)p (1.58)p (0.23)p
Adjusted earnings per share (pence)
Basic 8 (0.01)p (1.04)p 0.30p
Diluted 8 (0.01)p (1.04)p 0.30p
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 September 30 September 31
2021 2020 March
2021
Note (Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Non-current assets
Intangible assets 10 5,204 1,306 2,877
Property, plant and equipment 3,287 3,904 3,406
Deferred tax assets 472 520 230
Other receivables 212 507 339
9,175 6,237 6,852
Current assets
Trade and other receivables 11 10,521 6,176 10,620
Current tax receivable 280 176 280
Cash and cash equivalents 11,972 14,549 16,833
22,773 20,901 27,733
31,948 27,138 34,585
Total assets
Current liabilities
Trade and other payables 12 11,250 7,083 13,813
Lease liability 1,106 889 1,085
Redeemable preference shares 50 50 50
Current tax payable 18 52 104
12,424 8,074 15,052
Non-current liabilities
Lease liability 1,614 3,004 2,081
Total liabilities 14,038 11,078 17,133
17,910 16,060 17,452
Net assets
Equity
Share capital 14 1 1 1
Share premium 213 112 157
Share option reserve 603 871 674
Retained earnings 17,093 15,076 16,620
17,910 16,060 17,452
Equity attributable to owners of the parent Company
The Board of Directors approved these condensed interim financial statements
on 3 December 2021.
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
- - - (1,568) (1,568)
Loss for the period
Other comprehensive income:
Exchange translation differences on consolidation - - - (116) (116)
Total comprehensive income for the period - - (1,684) (1,684)
Credit to equity for share based payments 15 - - 187 - 187
1 112 871 15,076 16,060
At 30 September 2020
- - - 1,336 1,336
Profit for the period
Other comprehensive income:
Exchange translation differences on consolidation - - - (165) (165)
Total comprehensive income for the period - - - 1,171 1,171
Exercise of options - 45 (308) 308 45
Credit to equity for share based payments 15 - - 111 - 111
Tax relating to share-based payments - - - 65 65
1 157 674 16,620 17,452
At 31 March 2021
- - - (13) (13)
Loss for the period
Other comprehensive income:
Exchange translation differences on consolidation - - - 63 63
Total comprehensive income for the period - - - 50 50
Exercise of options - 56 (407) 407 56
Credit to equity for share based payments 15 - - 336 - 336
Tax relating to share-based payments - - - 16 16
1 213 603 17,093 17,910
At 30 September 2021
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
6 months to 6 months to Year to
30 Sept 30 Sept 31 March
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit for the financial period (13) (1,568) (232)
Adjustments for:
Amortisation of intangible assets 34 26 52
Depreciation of tangible assets 591 546 1,084
Profit on disposal of property, plant and equipment - - (2)
Net finance costs 62 74 137
Taxation charge/(credit) 30 (424) (124)
Decrease in inventories - 73 73
Decrease/(increase) in trade and other receivables 238 4,003 (246)
(Decrease)/increase in payables and provisions (2,524) (1,838) 4,892
Share based payment charge 15 336 187 298
Cash generated from operations (1,246) 1,079 5,932
Net tax (paid) (329) (517) (521)
Net cash generated from operating activities (1,576) 562 5,411
Cash flows from investing activities
Purchase of intangible assets (2,361) (1,237) (2,834)
Purchase of property, plant and equipment (423) (187) (388)
Proceeds from sale of property, plant and equipment - - 10
Interest received 5 8 15
Net cash used in investing activities (2,779) (1,416) (3,197)
Cash flows from financing activities
Cash repayment of lease liabilities (603) (444) (1,075)
Issuance of ordinary shares 56 - 45
Dividends paid 8 - - -
Net cash used in financing activities (547) (444) (1,030)
(4,902) (1,298) 1,184
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of period 16,833 15,952 15,952
Effect of foreign exchange rate changes 41 (105) (303)
Cash and cash equivalents at the end of period 11,972 14,549 16,833
Cash and cash equivalents at the end of period comprise:
Cash at bank and in hand 11,972 14,549 16,833
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 & 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. Basis of preparation
The condensed interim financial statements have been prepared in accordance
with the requirements of the AIM Rules for Companies. As permitted, the
Company has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing this interim financial information. The condensed interim financial
statements should be read in conjunction with the annual financial statements
for the year ended 31 March 2021, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union, including interpretations issued by the International Financial
Reporting Interpretations Committee ("IFRIC"), and with the Companies Act 2006
applicable to companies reporting under IFRS. The unaudited interim financial
information does not constitute statutory accounts within the meaning of the
Companies Act 2006. This interim report, which has neither been audited nor
reviewed by independent auditors, was approved by the board of directors on 3
December 2021.
Statutory accounts for the year ended 31 March 2021 were approved by the Board
of Directors on 10 June 2021 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under Section
498 of the Companies Act 2006.
The interim financial statements have been prepared on a going concern basis
under the historical cost convention.
The interim financial statements are presented in pounds sterling. All values
are rounded to £1,000 except where otherwise indicated.
The accounting policies used in preparing the interim results are the same as
those applied to the latest audited annual financial statements.
3. Segmental analysis
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker, who is responsible
for allocating resources and assessing performance of the business. The chief
operating decision maker has been identified as the Board. The Group has two
operating segments: EMEA (comprising the United Kingdom and Singapore) and
America (comprising the United States and Canada).
Both segments derive their revenue from a single business activity, the
provision of human capital and business improvement solutions.
The Group's business is not highly seasonal and the Group's customer base is
diversified with no individually significant customer.
Segment results for the 6 months ended 30 September 2021 (Unaudited)
Segment result
EMEA America Total
£'000 £'000 £'000
Revenue 10,255 13,887 24,142
Cost of sales (1,459) (1,959) (3,418)
Administrative expenses (11,541) (9,104) (20,645)
Profit before inter-segment charges (2,745) 2,824 79
Inter-segment charges 1,785 (1,785) -
Operating (loss)/profit - segment result (960) 1,039 79
Finance income 9
Finance costs (71)
Profit before tax 17
The mix of revenue for the six months ended 30 September 2021 is set out
below.
EMEA America Group
Delivery 64.6% 70.6% 68.1%
Design 11.2% 6.3% 8.3%
Digital 11.5% 11.3% 11.4%
Licensing and certification 4.4% 5.5% 5.0%
Other 6.4% 5.1% 5.7%
Advisory 1.9% 1.2% 1.5%
Segment results for the 6 months ended 30 September 2020 (Unaudited)
Segment result
EMEA America Total
£'000 £'000 £'000
Revenue 5,764 8,704 14,468
Cost of sales (747) (940) (1,687)
Administrative expenses (7,776) (6,923) (14,699)
Profit/(loss) before inter-segment charges (2,759) 841 (1,918)
Inter-segment charges 1,228 (1,228) -
Operating loss - segment result (1,531) (387) (1,918)
Finance income 8
Finance costs (82)
Loss before taxation (1,992)
Adjusted profit before tax
EMEA America Total
£'000 £'000 £'000
Operating loss - segment result (1,531) (387) (1,918)
Restructuring costs 587 75 662
Adjusted EBIT (944) (312) (1,256)
Finance income 8
Finance costs (82)
Adjusted loss before taxation (1,330)
The mix of revenue for the six months ended 30 September 2020 is set out
below.
EMEA America Group
Delivery 59.6% 55.8% 57.2%
Design 13.0% 12.1% 12.5%
Digital 12.6% 16.0% 14.6%
Licensing and certification 8.7% 10.0% 9.5%
Other 3.1% 5.0% 4.3%
Advisory 3.0% 1.1% 1.9%
Segment results for the year ended 31 March 2021 (Audited)
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 tax (356)
Adjusted profit before tax
EMEA America Total
£'000 £'000 £'000
Operating (loss)/profit - segment result (1,087) 868 (219)
Restructuring costs 587 75 662
Adjusted EBIT (500) 943 443
Finance income 30
Finance costs (167)
Adjusted profit before tax 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%
4. Employees
Staff costs were as follows:
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Wages and salaries 13,839 9,181 22,464
Social security costs 1,477 897 2,249
Pension costs - defined contribution plans 498 415 897
Share-based payments 336 187 298
Restructuring payroll costs included in adjusted items - 583 583
16,150 11,263 26,491
The average number of Group's employees by function was:
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
Delivery 190 170 170
Support 80 63 61
Digital 49 11 20
319 245 251
The period end number of Group's employees by function was:
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
Delivery 194 162 174
Support 90 59 67
Digital 62 19 35
346 240 276
5. Net finance costs
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Finance income
Bank interest receivable 5 8 15
Finance lease income 4 - 15
Finance costs
Lease interest (IFRS 16) (71) (82) (167)
(63) (74) (137)
6. Adjustments
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Restructuring costs - 662 662
- 662 662
Restructuring costs in the six months ended 30 September 2020 include
redundancy costs related to the headcount reduction exercise undertaken in
response to the COVID-19 impact on the business.
7. Tax
The statutory tax charge of £30,000 (six months ended 30 September 2020:
credit of £424,000; year ended 31 March 2021: charge of £1,493,000)
represents an effective tax rate on profit before tax of 176.5% (six months
ended 30 September 2020: 21.3%; year ended 31 March 2021: 20.2%).
No adjustments to Profit before tax and therefore no adjustments no associated
tax adjustments have been recorded in the six months ended 30 September 2021
(six months ended 30 September 2020: adjusted charge of £292,000; year ended
31 March 2021: credit of £124,000 represents an effective tax rate on
adjusted loss before tax of 21.9% for the six months ended 30 September 2020;
year ended 31 March 2021: 21.4%).
8. Earnings per share
Basic earnings per share 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 14). Adjusted earnings
per share removes the effect of restructuring and employee option surrender
cost (see Note 6).
30 Sept 2021 30 Sept 2020 31 March 2021
(Unaudited) (Unaudited) (Audited)
Weighted average number of shares in issue 99,914,842 99,532,575 99,660,395
Potentially dilutive shares (weighted average) * - - 587,629
Fully diluted number of shares (weighted average) 99,914,842 99,532,575 100,248,024
*For 30 September 2021 and September 2020 dilutive potential ordinary shares
have no effect on the calculation of diluted EPS as their conversion into
ordinary shares cannot increase the loss per share. Potentially dilutive
shares disclosed for 31 March 2021 adjusted earnings per share only.
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
pence pence pence
Basic earnings per share (0.01) (1.58) (0.23)
Diluted earnings per share (0.01) (1.58) (0.23)
Adjusted basic earnings per share (0.01) (1.04) 0.30
Adjusted diluted earnings per share (0.01) (1.04) 0.30
The reconciliation of statutory profit to adjusted profit for the financial
period is as follows:
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
(Loss)/profit attributable to owners of the parent (13) (1,568) (232)
Adjusted items - 662 662
Tax on adjusted items - (132) (133)
Adjusted profit attributable to owners of the parent (13) (1,038) 297
9. Dividends
The Board did not propose a final dividend for the year ended 31 March 2021.
No interim dividend is proposed for the period to 30 September 2021.
10. Intangible assets
Patents Development costs Total
£'000 £'000 £'000
Cost
At 1 April 2021 63 4,761 4,824
Additions - 2,361 2,361
At 30 September 2021 63 7,122 7,185
Amortisation
At 1 April 2021 63 1,884 1,947
Amortisation charge - 34 34
At 30 September 2021 63 1,918 1,981
Net book value
At 31 March 2021 - 2,877 2,877
At 30 September 2021 - 5,204 5,204
Development cost additions in the six months ended 30 September 2021 includes
software development costs directly incurred in the creation of new digital
assets.
11. Trade and other receivables
30 Sept 2021 30 Sept 2020 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Trade receivables 8,455 4,775 9,138
Less provision for impairment (227) (218) (227)
Net trade receivables 8,228 4,557 8,911
Net investment in sub-lease 169 155 172
Other receivables 159 258 143
Prepayments 870 632 688
Accrued income 1,095 574 706
10,521 6,176 10,620
Non-current assets includes £212,000 (30 September 2020: £230,000; 31 March
2021: £79,000) of prepayments in respect of property deposits.
The net investment in sublease will be recovered in less than one year's time
and is classified as current. (Non-current 30 September 2020: £277,000; 31
March 2021: £260,000).
Trade receivables have been aged with respect to the payment terms as follows:
30 Sept 2021 30 Sept 2020 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Not past due 7,650 4,098 8,128
Past due 0-30 days 533 506 530
Past due 31-60 days 121 68 185
Past due 61-90 days 146 50 22
Past due more than 90 days 5 53 273
8,455 4,775 9,138
12. Trade and other payables
30 Sept 2021 30 Sept 2020 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Trade payables 1,199 1,348 2,514
Other taxation and social security 733 471 549
Other payables 598 931 536
Accruals 4,734 2,537 5,578
Deferred income 3,986 1,796 4,636
11,250 7,083 13,813
12.19. Borrowings
The Group entered into a £10 million debt facility (£6m RCF, £4m accordion)
on 30 September 2021 which matures after 3 years. The facility remains
undrawn as at 3 December 2021.
13. Share capital
30 Sept 30 Sept 30 Sept 30 Sept 31 March 2021 31 March 2021
2021 2021 2020 2020
Cost Cost Cost
Number £'000 Number £'000 Number £'000
Ordinary shares of £0.0001 At 1 April 99,791,784 1 99,493,210 1 99,493,210 1
Issue of shares to satisfy options 313,876 - 248,405 - 298,574 -
Ordinary shares of £0.00001 at period end 100,105,660 1 99,741,615 1 99,791,784 1
14. 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 awards granted during the
six months to 30 September 2021 are subject to performance conditions based on
revenue, adjusted earnings per share and total shareholder return.
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.
These shares vested in October 2021.
On the 30(th) September 2019 the Group launched an annual Save As You Earn
Scheme and an Employee Share Purchase Plan for all eligible employees in the
UK and USA respectively.
The total share-based payments expense was:
6 months to 30 Sept 2021 6 months to 30 Sept 2020 Year to 31 March 2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Equity settled share-based payments 336 187 298
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