Mind Gym flags mixed first half, appoints new finance chief

22nd Oct 2024 07:25

(Sharecast News) - Human capital and business improvement specialist Mind Gym reported a mixed first-half performance on Tuesday, in line with expectations as it continued its strategic transformation.

The AIM-traded firm said revenue for the six months ended 30 September reached £20.2m, a 3% decline from the same period last year, as ongoing market challenges, particularly in the US, weighed on results.

It said it was shifting from a traditional training provider model to a "behaviour change partner", with a focus on building sustainable, recurring revenue.

Mind Gym said it faced difficult conditions in the US, where client spending fell significantly, especially in diversity, equity, and inclusion (DEI) initiatives.

US revenues dropped 27% to £8.1m, reflecting a cautious spending environment.

In contrast, Mind Gym's performance in Europe, the Middle East, and Africa (EMEA) was stronger, with revenue increasing 24% to £12.1m, bolstered by a key multi-year energy framework agreement set to expire in December.

The company said it expected to return to EBITDA profitability, recovering from a £4.1m loss in the first half of 2024.

Mind Gym said it also negotiated a new £4m overdraft facility, providing liquidity alongside its £0.7m in cash reserves.

Operationally, Mind Gym said it had focussed on improving efficiency, globalising its structure, and reducing costs.

The company launched its diagnostics offering in the second quarter, and said it would expand with further analytics in the second half, as part of its broader strategy to integrate proprietary data and AI-driven solutions.

It said the efforts aimed to foster long-term client relationships.

In governance, Mind Gym confirmed Emily Fyffe as its new chief financial officer, effective 22 October.

Fyffe, who joined the company in 2016, would succeed Dominic Neary, and had held senior finance roles leading up to the appointment.

Looking ahead, Mind Gym said it expected second-half revenue to remain in line with the first half, with profitability expected to improve gradually as the market stabilised.

"Mind Gym has delivered a resilient performance with significant improvement in profitability, despite a macroeconomic environment for HR services that remains challenging," said chief executive officer Christoffer Ellehuus.

"We are making good progress on our strategy to productise and digitise our IP, making Mind Gym solutions easy to buy, easy to deliver, and easy to renew, whilst delivering more sustainable, repeatable revenues.

"We therefore remain confident in the long-term prospects of the business."

Mind Gym said it would announce its half-year results on 3 December.

At 0925 BST, shares in Mind Gym were down 0.52% at 20.89p.

Reporting by Josh White for Sharecast.com.