Workplace training provider Mind Gym said it had wiped out the losses it incurred in the last year and a half, after its financials had a rocky ride due to Covid lockdowns impeding on its face-to-face offering.
The group also announced the appointment of Dominic Neary – previously a finance chief at Just Eat and Moneysupermarket.com – as its new CFO, replacing Richard Steele, the CFO who led Mind Gym through its 2018 IPO.
“With his experience in high growth digital companies alongside his extensive corporate track record in both the US and the UK, Dominic brings a wealth of expertise which is highly relevant for Mind Gym’s next phase of growth,” said CEO Octavius Black.
Meanwhile, Mind Gym’s statutory loss dissolved to £0, down from £2m in the same period last year, when Covid lockdowns were in full swing, and a recovery on the £400,000 losses it reported in its full year results in June.
Revenue surged 67 per cent in the sixth months to 30 September to £24.1m, up from £14.5m a year earlier, and a 1 per cent improvement on 2019, before Covid reared its head.
This was driven by a 175 per cent increase in Mind Gym’s digitally-enabled revenue from pre-Covid levels, as its pivot to new digital products and live virtual deliveries since Covid paid off and represented 81 per cent of total revenue. For context, digital products represented 30 per cent of its pre-Covid revenue.
Mind Gym’s pivot to more live virtual deliveries was the main driver behind this growth, as its revenues more than tripled to £15.9m, from £4.9m pre-Covid.
Existing on demand digital product revenue grew by 44 per cent to £2.7m , from £1.9m a year earlier, and represented 11 per cent of total revenue.
And a key metric for the group – repeat revenue, i.e., from its returning customers – represented 92 per cent of its total revenue, in line with pre-Covid revenues after a small dip to 87 per cent a year earlier.
Adjusted profit before tax was in line with its expectations at the full year and stood at a mere £17,000, as the group’s adjusted EBITDA sank 152 per cent from pre-Covid levels to £0.7m.
Mind Gym thus said it would not pay out any interim dividend to shareholders, which it said was “in line with our strategy to focus on investing in digital for future growth.”
The group did, however, say its cash balance “remains strong” at £12m, though this was down slightly (17 per cent) from £14.5m a year earlier. It said this was due to a £2.8m capital investment, most of which (£2.4m) went towards its new digital products in the first half.
Looking ahead, Mind Gym said it expects revenues to continue to increase on pre-Covid levels in the second half, as it continues to invest in long-term sustainable growth.
Highlights of this growth will be a new one on one digital coaching platform, called “Performa” which it said will launch in the New Year. This will be followed in FY23 with its second new digital product, which it said would be a “digital content experience.”
But the group was wary of the new Omicron variant, and said the business faces uncertainty as it enters Q4, as increased cases may affect client decision making.
“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,” said CEO Octavius Black.
“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.”