Mind Gym ends first half well above last year

Human capital and business improvement specialist Mind Gym said in an update on Tuesday that it expected to report first-half revenues of £26.8m - 11% higher year-on-year, or 2% in constant currency.

The AIM-traded firm said the United States represented 62% of reported revenues in the six months ended 30 September at actual exchange rates, reflecting both underlying growth in the region and the recent strengthening of the dollar.

Notwithstanding the current economic uncertainty, the group said it was benefitting from its “operating discipline”, adding that price increases had helped offset cost inflation.

The group's performance to date was in line with the board's expectations, and guidance for the full 2023 financial year remained unchanged.

Mind Gym said it remained confident in its prospects, offering a “unique range” of performance solutions, and benefitting from a “diverse portfolio” of large clients.

It said it won a number of “significant” framework agreements in the first half, including its largest-ever in respect of an organisation-wide leadership programme at an unnamed global energy company.

Revenues from the client are forecast to be in excess of £10m over the next 24 months, and the other framework agreements were also expected to drive revenues in the second half, into the 2024 financial year.

The company added that it was delivering on its digital strategy to integrate live and digital learning, with the ‘Performa’ product being “well-received” by clients.

Mind Gym was also seeking to launch its new organisational diagnostics digital product in the second half, which would diagnose client challenges, determine which Mind Gym product solutions would work, and provide “data-backed” insights.

The group said it retained a “strong” financial position to support investments in future growth with net cash, as at 30 September, of £4.5m, including further planned investment in its new digital products in the first half, as its £10m debt facility consisting of a £6m revolving credit facility and a £4m accordion remained undrawn.

“We are encouraged by our first half performance and the significant momentum going into the second half,” said chief executive officer Octavius Black.

“In a volatile economic environment, MindGym is showing that it is well placed to meet the dynamic demands of the human capital market.

“Mind Gym's debt free balance sheet, increasing strength in the US market, recent client wins and strong digital pipeline position it well for the remainder of this financial year and beyond.”

Mind Gym said it would provide a further update with its half-year results on 2 December.

At 1036 BST, shares in Mind Gym were up 3.11% at 97.95p.

Reporting by Josh White at Sharecast.com.