Workplace training provider Mind Gym announced a recovery in losses in the second half of the year, after initially suffering from the impact of Covid-19 lockdowns.
The company’s chief executive Octavius Black told City A.M., “we’re absolutely back,” as the company reported a £400,000 statutory loss for the year ending 31 March, £7m less than 2020.
“It was a very tough first six months because of lockdown, and we were unsure how quickly we’d recover,” said Black. “So we’re really pleased it’s happening faster than expected,” he added.
The company was generating good growth prior to Covid-19, but its predominantly face-to-face business model meant it suffered from social distancing restrictions.
Mind Gym’s annual revenue was down 18 per cent at £39.4m, £8.8m less than its 2020 revenue figure. The second half of the year was more successful for the training provider, with revenues bouncing back by 79 per cent from a coronavirus-induced low in the first half of FY21.
Transferring to virtual delivery of training sessions helped mitigate some of the impact of the coronavirus lockdown on the business.
“At first clients said that they preferred face-to-face sessions, but then they became increasingly concerned about how they could deal with staff mental wellbeing remotely,” said Black.
“We were determined to show them our virtual live sessions could be just as good, and it paid off. Coronavirus has definitely accelerated our move to digital.”
Pure digital revenues increased to £6.4m, 51 per cent higher than the previous year, representing 16 per cent of total revenue, up from 9 per cent in 2020.
Clients of Mind Gym, which include multiple FTSE 100 and S&P 100 companies, gave positive feedback for virtual sessions. The percentage of participants giving an “excellent” rating rose to 56.1 per cent, up from 50.1 per cent the previous year.
The company expects revenue to reach pre-Covid levels by FY22, breaking even in the same year. It doesn’t expect to return to profitability until FY23.
It intends to bounce back by investing more in digital services, and eventually pivoting to a predominantly digital business.
“This recovery in revenue is before we start to see the return from our continuing digital capex, with the launch of two new, market-leading digital products in FY22,” Black said.
“As the core business returns to profitability, we will invest those profits, primarily in digital, proprietary IP and marketing. This will form the basis for long term, sustainable growth,” Black added.