TIDMMIND
RNS Number : 5532B
Mind Gym PLC
11 June 2021
Mind Gym PLC
("Mind Gym", the "Group" or the "Company")
Full year results for the year ended 31 March 2021
Mind Gym (AIM: MIND), the global provider of human capital and
business improvement solutions, is pleased to announce its audited
results for the year ended 31 March 2021.
Financial highlights
12 months 12 months Change
to 31 Mar to 31 Mar
2021 (FY21) 2020 (FY20)
---------------------------------
Revenue GBP39.4m GBP48.2m -18%
-------------- -------------- ---------
Gross profit margin 87.4% 79.9% +7.5pps
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Adjusted PBT(1) GBP0.3m GBP6.6m -95%
-------------- -------------- ---------
Statutory (loss)/profit GBP(0.4)m GBP7.4m
before tax
-------------- -------------- ---------
Adjusted(1) Diluted EPS 0.30p 5.22p -94%
-------------- -------------- ---------
Diluted EPS (0.23)p 5.91p
-------------- -------------- ---------
Total Dividend per share(2) nil 0.9p
-------------- -------------- ---------
Cash at bank GBP16.8m GBP16.0m +5.5%
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Cash generated from operations GBP5.9m GBP10.6m -44%
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Capital expenditure GBP3.2m GBP0.6m +396%
-------------- -------------- ---------
Adjusted(1) EBITDA cash
conversion(3) 418% 136% +282pps
-------------- -------------- ---------
(1) Adjustments include restructuring costs in FY21 and a credit
on employee share option surrender bonuses in FY20. These
adjustments are detailed in Note 6.
(2) FY20 dividend of 0.9p reflects interim dividend only and no
final dividend.
(3) Adjusted EBITDA cash conversion defined as Adjusted cash
generated from operations/Adjusted EBITDA.
Financial and operating highlights
-- Strong H2 bounce back in revenues following initial impact of COVID-19 lockdown:
o H2 revenue 79% higher than H1 in constant currency
o H2 revenue +6% higher than in H2 FY20 in constant currency
o Progressive bounce back in quarterly performance in constant
currency:
Quarter Q1 Q2 Q3 Q4
% change to prior
year -40% -38% -2% +15%
------ ------ ----- ------
-- Successful pivot to virtual delivery whilst progressing digital strategy:
o Digitally enabled revenue of GBP30.5m in constant currency
(2020: GBP15.1m), including live workouts delivered virtually,
increased by 102% and represented 77% of total revenues (2020:
32%)
o Pure digital revenues of GBP6.4m (2020: GBP4.3m) increased by
51%, representing 16% of total revenue (2020: 9%) which builds
confidence for our next generation of digital products
o Increased proportion of digital revenue and savings on
delivering live sessions virtually delivered gross profit margin of
87.4% (FY20: 79.9%)
o Demonstrated that quality of virtual is at least as good as
face-to-face, as percentage of participants rating their Mind Gym
experience as "Excellent" rose from 50.1% to 56.1%
-- Resilient repeat revenues whilst winning new clients:
o 78% of total revenues (2020: 88%) reflecting new client wins
in H2
o Revenue from top 25 accounts stable at 41% (2020: 41%)
-- Strong financial position enabling significant investment in
capex, infrastructure and people:
o Cash balance of GBP16.8m (FY20: GBP16.0m) due to strong cash
conversion and benefit from near doubling in deferred income,
together with significant fall in overdue debt
o GBP2.8 million capex on developing new digital offer with a
further significant investment expected to be made during the
current financial year. Two products on track to launch in FY22 and
positive feedback from beta trials
o Continued investment in infrastructure, leadership and talent
to support future top line growth; new digital team now has 35
staff
-- Board Changes
o Joanne Cash will not seek re-election as Chair at the AGM on
15 July 2021 and will be succeeded by Ruby McGregor-Smith who
joined the Board in November 2020. Joanne Cash will remain on the
Board as a Non-Executive Director.
o Trevor Phillips who joined the Board in October 2020 will
assume the role Chair of the Company's Remuneration committee,
effective 15 July 2021
o Sally Tilleray, Chair of Audit and Risk Committee, was
appointed Senior Independent Director 16 October 2020
Current trading and outlook:
-- Strong start to the current financial year (FY22), with
continued demand for Mind Gym's distinct offering
-- FY22 revenue expected to at least reach pre-COVID FY20 levels
-- FY22 expected to be break-even as we continue to make
significant investment in our digital offer, with an anticipated
return to profitability in FY23
Octavius Black, Chief Executive Officer of Mind Gym, said:
" We are pleased with how the Group responded to the
extraordinary circumstances of the last year with a clear plan to
deliver highly topical, fresh insight to clients and accelerate our
pivot to virtual and pure digital delivery. We are already seeing
the results with a much faster than anticipated return to revenue
growth and 51% increase in our pure digital business, which now
represents 16% of revenue, up from 9% last year. While our repeat
revenues remained high at 78%, we were delighted to see significant
revenue wins from new clients.
"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. We anticipate that even
with the return to live, in-person delivery, the majority of our
business will be digitally enabled (which includes virtual) and our
pure digital offer will also continue to grow.
"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 and puts
us in a better position than ever to become one of the dominant
players in this vast, growing and highly fragmented market.
"We have had a strong first quarter with revenue anticipated to
be well ahead of Q1 last year, which suffered from the pandemic,
and also up on the previous pre-COVID year. While there is still
global and economic uncertainty, we and our clients have adapted
quickly, and we anticipate building on the momentum of H2 in the
year ahead. We are well-placed to at least match our FY20 pre-COVID
revenues in FY22 and return to profitability in FY23."
The Company will host a webcast and conference call for analysts
and investors at 9:00am BST today. If you would like to attend the
webcast and conference call, please contact mindgym@mhpc.com.
Enquiries:
Mind Gym plc
Octavius Black, Chief Executive Officer +44 (0)20 7376
Richard Steele, Chief Financial Officer 0626
Liberum (Nominated Adviser and Broker)
Bidhi Bhoma +44 (0)20 3100
Euan Brown 2200
MHP Communications (Public Relations Advisor) +44 (0)20 3128
Reg Hoare 8572
Katie Hunt mindgym@mhpc.com
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 listed 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
Statement of the Board Chair
Reflecting on all that has happened and the challenges the Group
has overcome, it is hard to believe only a year has passed since
the writing of the last Annual Report.
I am pleased to report that despite the hard hit to revenue at
the half year (down 40%), the Group recovered quickly and has ended
the year with revenue down only 18% for the year to GBP39.4 million
(2020 GBP48.2 million).
The fall in revenue impacted profitability, with Adjusted PBT
for 2021 at GBP0.3 million (2020 GBP6.6 million). However, cash
generation has remained strong enhanced by increased upfront
payments and cash ended the year at GBP16.8 million (2020 GBP16.0
million). However, decisions not to cut costs too hard so that the
business would be able to recover as demand increased again have
been vindicated.
Stronger than ever
The strong cash balance allowed the Group to maintain adequate
team numbers and infrastructure in H1 to enable it to accelerate
out of the crisis whilst continuing crucial investment in its
digital strategy. It is now well set up to embrace the ongoing
opportunities presented by the success of the vaccine
programmes.
The Group successfully navigated a pivot to 100% virtual live
delivery to meet the demands of global virtual working and the
feedback for those virtual sessions has met an even higher
threshold than that for live, proving the merit of the Group's
focus on quality. The Board's confidence in and commitment to the
Group's digital strategy and investment has been reinforced.
Increasing Demand
It has been an historical year globally and a significant one
for the Group's market. Over the past 12 months, businesses found
themselves the focus of social as well as market changes. From
Black Lives Matter to mental health, CEO's were expected to lead on
issues far from their traditional remit. COVID-19 blurred the
ultimate line between professional and private, work and home
because work has had to be at home.
Reflecting on three years as Chair since Mind Gym was admitted
to trading on AIM in June 2018, I am struck by how prophetic our
predictions have proved to be about the increasing amounts of
management time behavioural issues would occupy, and how COVID-19
has accelerated some of these trends.
The global training market is estimated at $240bn, the corporate
change market at $5bn and corporate wellness at $61bn. It remains
to be seen what the full impact of the last year will have been,
however early signs are that C-suite appreciation for the value
driven by these budgets has increased.
Governance
During the year we announced the appointment of two new
Non-Executive Directors, Trevor Philipps and Ruby McGregor Smith,
who have broadened the skills of the Board. Trevor Philipps chairs
the recruitment company Green Park and a data profiling business
and from May 2021 presents a weekly show on Sky News. Ruby McGregor
Smith was the Chief Executive of MITIE Group PLC and was on the
board of PageGroup for a decade over which time she oversaw their
investment in a digital proposition. Since joining, Trevor Philipps
has had oversight of Mind Gym's ESG activity and Ruby McGregor
Smith has chaired the Remuneration and Nomination Committee.
Our non-executives are highly proactive and supportive,
providing constant rigorous and attentive oversight. During the
most financially challenging months of COVID-19, the Executive
provided the Board with weekly updates and I chaired a bi-weekly
remote meeting. This regular governance enabled an agile review of
activity and in particular capital investment in digital.
Having spent ten years as a director of Mind Gym and seven years
as Board Chair navigating the business through our early years of
rapid expansion, a successful IPO and initial period as a quoted
company, this feels like the right time to implement our board
succession plan. I shall not be seeking re-election as Chair at the
AGM and I am delighted that Ruby McGregor-Smith, who was appointed
to our board in November 2020, has been nominated to succeed me as
Chair. As we drive forward our digital strategy, I believe that
Ruby's prior experience as a CEO of a FTSE 250 business, delivering
growth at scale is what is needed to realise the Group's
potential.
People and Culture
It has been a challenging year for everyone. The loss of the
day-to-day enjoyment and spontaneity of office life has exacerbated
the isolation of the pandemic and the pressures of working life.
Despite this, our remarkable team has driven the recovery narrated
in this report. The Group is undergoing a major digital
transformation which would be challenging in normal times. However,
we ended the year strong and confident with greater opportunity to
drive market share than ever. None of this would have been possible
without our talented Executive and colleagues. It is a testament to
the Mind Gym spirit that both our Board members and our employees
accepted salary reductions until the end of Q1 and we are delighted
to have ended the year in a position to repay these.
The Board wishes to thank every member of the team for their
hard work, resilience and care for clients over this last long
year.
Finally, I would like to thank my fellow Board Directors, a
fantastic group of professionals for whom no ask is ever too much
and whose leadership, work ethic and challenge provide the
Executive with the development and confidence so key to the Group's
success.
Dividend
The Board's positive strategy at this stage is to conserve cash
to invest for growth. The digital strategy has been vindicated by
the events of the last year, so we believe that prioritising
investment over restoring a dividend is the right decision for the
immediate future. We plan to restore dividend payments once Mind
Gym returns to profit and generates surplus free cash.
Joanne Cash
Chair
CEO's review
Emerging stronger
We predicted at the IPO in 2018 that the people agenda would
gain prominence in the C-suite. The extraordinary circumstances of
the last 15 months have accelerated this trend and put 'human
capital' centre stage, both in the short term as companies
responded to a global lockdown and in the medium term by changing
the rules of work in a dramatic and lasting way.
At the same time, the expectations of business and its role in
society have altered significantly. There were new demands on
companies both to speak out about racism in society and to address
racial inequality within. Care for employees' mental and physical
health has become mainstream with over 50,000 current job vacancies
in corporate wellbeing. The phenomenon of business leaders
resigning more often for behavioral transgressions than financial
underperformance, which first occurred in 2018, continues with a
flurry of high-profile departures in 2020.
Even before these changes, the market for human performance was
large (c. $300bn), growing (c. 5-10% pa), profitable and highly
fragmented (no-one has more than 0.5% market share). Now, as
working culture and behaviour is constantly scrutinised, the market
looks set to expand even faster and in new, exciting ways.
Global technology companies and consultancies, as well as
private equity firms, are investing heavily in the market for human
performance, generating unicorn valuations in businesses that have
yet to declare a profit and aggregating digital services to offer
'one stop' solutions.
The market is in flux and this creates an opportunity not just
to grow with the market, but to reshape clients' expectations and
provide them with a proposition that delivers greater behavioural
change, increased performance and less risk, while also reducing
costs.
Our strategy is to integrate in-person/virtual/digital in a
single proposition across the full range of human performance
mindsets and skills, using machine learning to hyper-personalise
the user's experience and real-time organisational data to optimise
return on investment.
Mind Gym is well placed to create this new-to-market
proposition. We have a reputation built over 20 years, client
relationships with the world's top companies, extensive scientific
IP, the full range of proven distribution channels and the track
record of successfully pivoting to fully digitally enabled.
Our priority now is to invest in the areas which will deliver
sustainable growth and turn Mind Gym into the global enterprise
partner for ambitious companies who want to make the most of their
people.
Trading performance - a year of two halves
The year has been made up of two halves: the first six months
when clients were focused on the operational consequences of COVID,
and the second half when they started to turn attention to areas
where Mind Gym can support such as performance, engagement,
inclusion and leadership.
Although our four year and 10-month revenue CAGR of 20% has been
interrupted by the pandemic, we are pleased that the business saw a
significant turnaround in the second half which sets us up well for
the year ahead.
H1
The impact of global lockdown and remote working would have been
more serious without Mind Gym's strong virtual and digital
products. Within the first few weeks of H1, 183 Mind Gym coaches
were trained and qualified to deliver virtual sessions. Mind Gym's
portfolio of eWorkouts, which are pure digital, provided immediate
solutions to clients and revenues subsequently grew from GBP1.9m
(H1 FY20) to GBP2.1m (H1 FY21).
Management's attention in H1 was focused on (1) keeping the
business in a stable state to be set up for growth as some
semblance of normality returned; (2) continuing to bring new
insights to clients so they would value our support when they were
ready to re-engage and (3) adapting and accelerating the digital
strategy.
We asked all employees to make a salary sacrifice. We adopted
the UK government's furlough scheme in Q1 and conducted a
restructuring in Q2 to bring costs more in line with revenue.
In H1 2021 our revenue shrank at -40% on the same period last
year, with low points in June and July of -50% and -54% on the same
months in the previous year, and as a result we declared an
adjusted loss before tax of GBP1.3 million (H1 2020: GBP3.9 million
profit).
H2
The investment in innovation and marketing in H1, along with the
decision to retain the team needed for a return to growth, began to
pay dividends in H2 and, significantly, saw a return to growth far
sooner than we had anticipated.
The attention we had given clients during the worst of the
pandemic paid off as they came to Mind Gym for support on the move
to hybrid working, the new role of the manager, ethics and a
renewed focus on combatting racism, which we were able to address
with the rapid development of new products. In addition, some
client projects that had been postponed pending a return to live,
were successfully converted to virtual.
As a result, the business returned to growth faster than
expected delivering +2% revenue growth in H2 (+6% at constant
currency) and making an H2 adjusted profit before tax of GBP1.6
million, even after repaying employees' H1 salary sacrifice.
FY21 review
Overall, Mind Gym delivered a better performance for the year
than we had anticipated at the nadir of the pandemic, reversing a
significant decline in revenue and a loss in H1 with a return to
growth and profitability in H2. The year ended at -18% (2020: 15%)
growth in revenue and a small adjusted profit before tax,
delivering an adjusted PBT margin of 0.8% (2020: 13.7%).
The business generated revenues from c. 600 clients and
delivered learning globally, through its two main offices in the UK
and US, and a small support office in Singapore. Revenues are
segmented into EMEA (where APAC also reports) and US regions
according to where the principal client relationship is held and/or
where the majority of training takes place. In the year to 31 March
2021, EMEA generated revenues of GBP17.2 million, 21% down on the
prior year and representing 44% of total revenues. US revenues of
GBP22.1 million represented a 16% year-on-year decrease. The ratio
of US:EMEA is 56:44 (2020: 55:45).
In the last year, Mind Gym successfully pivoted from largely
in-person delivery to become a fully digitally enabled business.
The users rate the virtual experience as highly as in-person and
the level of repeat business shows that clients are delighted. With
a return to some office working in sight, we anticipate a
rebalancing to in-person delivery, which we are very well placed to
deliver with over 300 qualified coaches in 40 countries, whilst
maintaining our strong position in virtual delivery.
Our clients are widely spread across industries which gives us
greater protection in light of the fast-changing economic
circumstances. Our largest industry in EMEA is financial services
and in the US is healthcare. Overall, we are globally well
represented in financial services, healthcare and technology which
appear to be among the more resilient industries in the current
climate.
EMEA Americas Global
Financial services 41% 18% 28%
--------------------------- --------------------------- ---------------------------
Industrial 19% 14% 16%
--------------------------- --------------------------- ---------------------------
Healthcare 5% 23% 15%
--------------------------- --------------------------- ---------------------------
Services 6% 18% 13%
--------------------------- --------------------------- ---------------------------
Technology 9% 12% 11%
--------------------------- --------------------------- ---------------------------
FMCG and retail 7% 11% 9%
--------------------------- --------------------------- ---------------------------
Government and non-profit 11% 4% 7%
--------------------------- --------------------------- ---------------------------
Other 2% - 1%
--------------------------- --------------------------- ---------------------------
Total 100% 100% 100%
--------------------------- --------------------------- ---------------------------
Our geographic diversity also mitigated risks. While our
deliveries in APAC were the first to suffer from COVID-19, they
were also among the first to return. Even within the US, the
response to COVID-19 has varied by state and overall, the impact
from the switch to extended remote working has been less
significant than EMEA as homeworking has long been a normal working
practice. Our US business is structured by region (East, Central,
West) and so can adapt to changes in local needs quickly. This
geographic diversity gives Mind Gym better protection against a
change in economic conditions in any particular region or
market.
We have continued our focus on cash conversion and in our third
year as a public company we have improved adjusted cash conversion
from 136% to a one off high of 418%. Our blue-chip client base has
ensured that we have virtually no bad debts and an increased number
of our clients have chosen to pre-pay for services, which is a
clear demonstration of commitment to the business. For these and
other reasons, despite a digital capex spend of GBP2.8 million, our
cash balance at end of the year was GBP16.8 million, roughly the
same as the prior year end (2020: GBP16.0 million).
Adjusted diluted earnings per share (EPS) decreased by 94% to
0.30 pence (2020: 5.22 pence).
Our vision
Our vision is to use data and technology to deliver highly
personalised, integrated learning to build the human advantage that
delivers business performance. This will enable companies to
-- Deliver global behaviour change at scale at the 'speed of life'
-- Use machine learning to deliver hyper-personalised development
-- Respond to changing business priorities immediately and without additional cost
-- Continuously improve their return on investment with consistent, real-time data
-- Replace disparate existing content and platforms
-- Make significant cost savings
Deepening client relationships
Our clients include 52% of the FTSE 100 and 65% of the S&P
100. Our strategy is to build long-lasting relationships with
existing clients and to win significant new ones. In previous
years, we have predominantly grown existing clients. The challenges
in the last year presented new opportunities and we are delighted
to have several significant new clients alongside deepening our
relationships with existing ones.
For the first time, five of our top 25 clients were new clients
to Mind Gym. This shows how we can complement our long-term client
relationships with winning new ones, which will help accelerate
growth in a post-COVID environment.
Market-leading innovation
Part of Mind Gym's success lies in its ability to identify and
address the most pertinent and challenging behavioural issues with
the science that works.
These are presented to the market as a 'point of view' ('PoV'),
which ultimately takes the form of a published research paper, and
assisting products which tend to be bite size workshops with
supporting digital assets. In addition, we create topic-specific
webinars and mini-PoVs on current issues. These are all proprietary
intellectual property.
In the last year we gained record attention in our webinars and
CHRO roundtables with current and potential clients as well as in
the media with Mind Gym being quoted in The Times, Financial Times,
The Economist, Bloomberg and many other mainstream media.
Diversity and inclusion
In 2013, we launched a new research-based point of view on
diversity and inclusion (D&I) which revealed that what drove
business improvement was not diversity alone, which by itself could
be value destroying, but inclusion. At the time this challenged
conventional wisdom. Now, eight years later it is widely
accepted.
D&I has continued to rise up the Board agenda with
legislation and media scrutiny on, for example, women on boards,
gender pay gap, and 'the pledge', a letter signed by CEOs of many
of the world's largest companies committing to diversity and
inclusion objectives. It received increased focus following the
murder of George Floyd and the increased influence of Black Lives
Matter.
In 2020, we launched a consultation edition of our new research
paper 'The inclusion solution' with a foreword by Trevor Phillips
OBE, Founding Chair of the Equalities and Human Rights Commission
(and Non-Executive Director at Mind Gym Plc). This challenged the
value of many of the orthodox approaches, such as unconscious bias
training, and offered a scientific alternative. We now have 57
learning assets which address 17 topics relevant to D&I.
The response from CHROs and Chief Diversity Officers has been
universally positive with several citing it as the most insightful
report they have read on this widely documented topic.
As a result, we have won several competitive tenders with new
clients when pitched against their established incumbents, as well
as increasing the depth of our relationship with existing clients.
The market for D&I training is estimated to be $8 billion in
the United States alone and is growing. We see the publication of
this report in Q1 FY22 as an opportunity to provide market
leadership in this area as well as increasing our credibility
across the C-suite.
Wellness and mental strength
The market for corporate Wellness is estimated at $61 billion
and forecast to grow to $97.4bn by 2027. There are over 50,000
vacancies for corporate wellbeing roles. In the current
environment, the importance of wellness has increased as companies
fear the effects of extended lockdown on mental health and the
potential legal challenge if they are perceived to have failed in
their duty of care.
We have always had a range of products which help people improve
their mental strength and wellbeing. We are in the process of
developing an original, evidence-based point of view on wellness
which will be supported by a range of existing and some new live
and digital products. This offer has already been trailed in our
new COVID-related point of view on 'The wellness precipice' and
will be launched later in the year.
Leading in a hybrid world
Management and leadership development is the most consistently
purchased topic. Our current PoV 'The return of the manager: this
time it's personal' was published in 2016. The recent, dramatic
changes in the world of work, including the shift to remote and
hybrid working, calls for a refreshed approach. We are conducting
an in-depth review with our Academic Board and will publish a fully
updated PoV with supporting products later this year.
Accelerating innovation
We are delighted to announce the appointment of Dr Janet Ahn as
our first Chief Behavioural Science Officer in January 2021. Janet
was formerly a tenure track professor at William Paterson
University and completed her PhD at New York University. Janet will
lead a new team with responsibility for the development of Mind
Gym's evidence-based points of view and products. This will lead to
a significant increase in quality and speed of innovation.
Whereas it has previously taken up to two years from initiation
to the publication of a new point of view in a whitepaper, we plan
to reduce this to between nine and twelve months. A new point of
view lasts for up to eight years before it needs to be refreshed
and so this will greatly help build a strong foundation of
proprietary IP across a wide range of universal Human Capital
challenges.
Distinctive digital strategy
Digital expansion
The recent, sudden move to extended remote working and the clear
signs that hybrid working is here to stay has reinforced the value
in our digital strategy.
Our first eWorkouts were launched in 2018. Now pure digital
makes up 16% of revenue (up from 9% in FY20). We now have a library
of 85 eWorkouts and in the last year, we have converted 31 to make
them AA rated for accessibility, and translated four into four
languages (French, German, Spanish and simplified Mandarin).
Digitally enabled revenue, which includes virtual delivery, was 77%
of total revenue.
Phase 1 of our digital strategy has been a great success. Last
year we embarked on phase 2, which is the next stage in our digital
transformation.
In the coming year we will launch two new products which are the
next steps towards realising this vision. Both will be offered on a
SaaS basis, which is consistent with how we have successfully grown
our eWorkout, digital revenue.
One of the new products is pure digital and the other is
digitally enabled. Both products have had positive feedback from
beta trials with participants reporting that they have implemented
insights and improved their skill levels. We expect the first,
digitally enabled, product to be revenue-generating by the end of
H1 and the second, pure digital, product to be revenue-generating
by the end of H2.
Our investment in this digital transformation in the last year
was slightly less than we had planned (GBP3m against a budgeted
GBP4m) as it has taken longer to recruit the talent we want.
Nonetheless, the delivery of the new products is on schedule, which
is a great tribute to the excellent team who have joined in the
last 12 months and helps position the business as an attractive
place for top class digital talent.
Live, virtual delivery
Our experience, built over a decade, of delivering live, virtual
bite-size workshops has proved to be extremely valuable during this
period of extended lockdown.
The mix of live delivery which is virtual has gone from 32%
virtual in FY19 and 37% in FY20 (when we first experienced the
effects of COVID) to 100% in FY21.
We have increased the number of coaches who are certified to
deliver virtually from 120 to 200 with the capacity to certify more
if the demand requires it. We have also certified bi-lingual
coaches in a range of languages including Hebrew, Mandarin,
Vietnamese and Arabic.
This renewed focus on virtual delivery is yielding very positive
results in terms of quality as measured by participant feedback. In
the year the 'Excellence' rate for all deliveries was 56.1%, which
compares with 50.1% for face-to-face deliveries in FY20. We are,
therefore, able to reassure clients that the quality of our virtual
sessions is at least as good as face-to-face.
With the success of the vaccination programmes in our main
markets, we anticipate a return to live, face-to-face delivery in
the coming year. If there is a return of leadership conferences and
all company gatherings, as we expect in H2, this will create
additional opportunity.
We have plans in place to provide a refreshed and improved live,
in-person delivery experience for when clients request it.
Infrastructure to support growth
We continue to invest in a range of operational improvements to
support long-term, sustainable growth and realise economies of
scale.
As part of the digital transformation we have designed a new
Target Operating Model which we plan to implement during the coming
year. This will provide clear accountabilities and the structure
that we need to deliver on the in-person/virtual/digital aggregated
proposition in a way that is seamless for clients and realises
operating efficiencies.
At the end of FY20 we introduced a new CRM, Salesforce, which,
this year, we have integrated with our Marketing systems to create
a more seamless process and produce data which helps redirect
effort and investment to where we will get the greatest return.
These are two of the many operational improvements that will set
the business up to scale efficiently.
Strong leadership
In FY20 we added experienced new members to the Mind Gym
Executive team including:
-- President, Americas, who was formerly President and CHRO of
Kindercare and, before that, Ann Inc
-- Chief Commercial Officer, EMEA, formerly the head of the
leadership development practice at Korn Ferry, EMEA;
-- Chief Digital Officer, former Digital COO at HSBC
These strong additions are now established and bringing great
value to the business.
This year we have added further to our leadership strength with
the appointment of a Chief Behavioural Science Officer who has
joined the Executive team. We have also added experienced new hires
to our extended leadership team, including a new Chief Commercial
Officer, Americas; a new Head of Creative, Americas and a new Chief
Technology Officer.
This strength and depth in leadership helps reduce founder
dependence and provides the foundations for long-term, sustainable
growth.
ESG
Mind Gym has been a proud proponent of ESG from before the term
was coined. Our business mission is to help people use their minds
more effectively so they can get more out of life and give more to
others. In the last year hundreds of thousands of professionals
have been to a Mind Gym experience and committed to take action to
improve their lives and those of their colleagues.
We also believe that businesses serve a vital role in their
communities and our social responsibility lies at the heart of our
culture. Each year we publish new research, that we share openly at
no cost, to help company bosses make better decisions about how
they run their businesses and so contribute to the social gains
that are central to the 'S' of ESG. All of these steps help make
companies more sustainable and contribute to a richer and healthier
society.
Our work is not restricted to companies. We are very proud of
Parent Gym. Recognising the impact that parenting has on a child's
life chances, and the minimal attention paid to parenting
capability by governments, we piloted a six-week parenting
programme in 2009 and ran our first fully-fledged Parent Gym
programme in 2010. Over 10 years the programme has continued to be
delivered by Parent Gym-trained volunteers in over 100 state
primary schools a term across the UK, fully funded by Mind Gym. At
the market rate for Mind Gym's comparable products, this is
equivalent to a donation of c. GBP3.5m pa.
Mind Gym employees are actively involved in many aspects of its
work, including the design of the programme and some of our people
cite it as one of the reasons they chose to work for Mind Gym. A
series of independent academic evaluations of the programme are
further proof to clients of the impact Mind Gym delivers. It has
been shown to be 'effective in aiding the positive development of
aspects of parenting behaviour, namely parents' self-efficacy,
parenting satisfaction and mental well-being, when delivered in
community settings' (Warwick University 2019).
One of the most challenging impacts of COVID-19 has been the
closure of the nation's schools through which, historically, we
have connected with and delivered the Parent Gym programme to
parents. However, it is testament to our employees' commitment that
we have converted the material to a digital programme; created an
online support community for parents and embarked on partnerships
with a number of family-focused charities to ensure they also have
access to the programme.
I would like to pay particular thanks to our Chair who not only
came up with the idea of Parent Gym, but has also led it into the
force that it has become. I am also greatly appreciative of our
investors who share our values and have been fully supportive of
this philanthropic venture.
Governance
I would like to express immense thanks to Joanne Cash who, as
Mind Gym's Chair, has been instrumental in shaping the
transformation of the business over the last decade. Joanne's
strategic foresight, forensic analysis and robust leadership have
been critical to our success in developing from a small, private
company into a fast-growing listed business and creating our
ability to shape the agenda both within and beyond the corporate
sphere.
Joanne also launched ParentGym, now in its 11(th) year of
providing invaluable guidance to parents both in socially deprived
parts of the UK and within our clients, and so changing lives for
tens of thousands of people for generations to come. We are all
immensely proud of what ParentGym has already achieved.
It is a further tribute that Joanne, one of only a few female
Chairs of an AIM company, has built one of the most diverse Boards
on the market. While we will greatly miss Joanne as Chair, I am
very grateful that she has agreed to remain on the Board as a
Non-Executive Director so we will all continue to gain from her
insight.
I am also delighted that Ruby McGregor-Smith has accepted the
role of Chair. Ruby's experience as CEO growing Mitie into a
FTSE-250 company, as well as her breadth of insight as Chair of the
British Chamber of Commerce, will bring immense value as we enter
Mind Gym's third decade and deliver on our strategy to become a
global leader in the market for Human Performance.
Summary and outlook
We are pleased with how the Group responded to the extraordinary
circumstances of the last year with a clear plan to deliver highly
topical, fresh insight to clients and accelerate our pivot to
virtual and pure digital delivery. We are already seeing the
results with a much faster than anticipated return to revenue
growth and 51% increase in our pure digital business, which now
represents 16% of revenue, up from 9% last year. While our repeat
revenues remained high at 78%, we were delighted to see significant
revenue wins from new clients as they responded to our propositions
in a virtual world.
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. We anticipate that even
with the return to live, in-person delivery, the majority of our
business will be digitally enabled (which includes virtual) and our
pure digital mix will also continue to grow.
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 and puts
us in a better position than ever to become one of the dominant
players in this vast, growing and highly fragmented market.
Our mission is to help people use their minds more effectively.
This is not only good for our clients but also helps participants
get more out of life and give more to others. The tragic death of
George Floyd in 2020 exemplifies how our proposition has never been
more important or relevant. Our D&I revenues climbed 77% in
FY21 on the previous year as ESG continues rightly to gain
attention.
We have had a strong first quarter with revenue anticipated to
be well ahead of Q1 last year, which suffered from the pandemic,
but also up on the previous pre-COVID year. While there is still
global and economic uncertainty, we and our clients have adapted
quickly, and we anticipate building on the momentum of H2 in the
year ahead. We are well-placed to at least match our FY20 pre-COVID
revenues in FY22 and return to profitability in FY23."
Octavius Black
Chief Executive Officer
Financial review
Following the initial COVID-19 downturn, a recovery of revenues
in the second half enabled continued investment for future growth
while maintaining a resilient balance sheet with cash at bank of
over GBP16 million and investing GBP2.8m of capital expenditure in
new digital products.
Revenues
In the year ended 31 March 2021, revenues declined 18% (16% on a
constant currency basis) to GBP39.4 million (2020: GBP48.2
million). EMEA region revenues declined 21% to GBP17.2 million
(2020: GBP21.8 million). In the US, revenues of GBP22.1 million
(2020: GBP26.4 million) were down 16%, and down 12% on a constant
currency basis.
Year to Year to
31 March 2021 31 March 2020 Change
GBP000 GBP000 %
EMEA 17,241 21,807 -21%
US 22,142 26,442 -16%
---------------- ---------------- --------
GLOBAL 39,383 48,249 -18%
================ ================ ========
As governments introduced lockdown restrictions in response to
the COVID-19 pandemic and clients pressed pause to fathom their
business needs and responses, we saw cancellations of many
programmes and of all face-to-face deliveries by clients across
Europe, the USA and Asia. Despite rapidly transitioning to
delivering all live sessions remotely, revenue for H1 was 40% down
on the prior year.
Revenues started to improve year on year from August as clients
increasingly adapted to COVID-19. In October to December 2020,
revenues were almost back at pre-COVID levels at only -2% decrease
on the previous year. Overall H2 revenue was 6% higher on a
constant currency basis than in H2 FY20.
A number of new client wins in the second half resulted in
repeat revenues for the year (defined as revenues from clients that
have purchased in the current year and in one or more of the
previous three years) falling to 78% of total revenues (2020:
88%).
Pure digital revenues from our suite of 85 e-Workouts in the
year increased by 51% to GBP6.4 million (2020: GBP4.3 million)
representing 16% of total revenues (2020: 9%). Digitally enabled
revenue, including live virtual deliveries increased 102% on the
previous year to GBP30.5m, representing 77% of total revenue
compared to 32% last year.
Revenue mix by type compared to previous year
FY21 FY20 % change
Live delivery 55% 57% -2%
Design 13% 15% -2%
Licensing and certification 8% 12% -4%
Digital 16% 9% 7%
Other (e.g. project management) 6% 2% 4%
Advisory 2% 5% -3%
------ ------ ----------
Total 100% 100%
------ ------ ----------
Gross profit
Gross profit as a percentage of revenue increased from 79.9% in
the prior year to 87.4% due to the increased proportion of digital
and to certain costs of live sessions being saved when they are
delivered virtually. This partially offset the revenue fall, and
gross profit for the year therefore declined by 11% to GBP34.4
million (2020: GBP38.6million).
Gross profit margin in the US (87.7%; 2020: 81.7%) was slightly
higher than in EMEA (87.0%; 2020: 77.8%) due principally to product
mix.
Year ended 31 March 2021
Revenue type EMEA US Global
Live delivery 60% 52% 55%
Design 13% 13% 13%
Licensing and certification 6% 9% 8%
Digital 15% 17% 16%
Other 4% 7% 6%
Advisory 2% 2% 2%
-------- -------- ----------
Total 100% 100% 100%
-------- -------- ----------
We expect some return to face-to-face delivery when our clients
are ready. We plan in FY22 to differentiate the pricing of live and
virtual delivery further to take account of the increased costs of
live and so protect the gross profit in absolute terms. A return to
face-to-face will however reduce the gross profit margin in
percentage terms.
Profitability and investment
During H1 21, we took measures in response to COVID-19 to reduce
ongoing costs whilst continuing to invest to support a return to
growth. People costs reduced by GBP1.1m before restructuring costs
of GBP0.7m. Measures taken included a temporary pay reduction,
furloughing some employees and deciding not to pay a final dividend
for FY20. We, however, continued to invest in the Group's digital
strategy and initiated our investment in a marketing function.
During H2 21 we increased our investment in marketing and
operations. Administrative expenses in FY21 included GBP1.3 million
on digital and operations including implementation of a CRM system.
As part of our plan to build a more strategic and data-driven
marketing function that will drive future growth, we also increased
our expenditure on marketing by GBP0.6 million. This included
development and design costs for a new website to be launched in
FY22. As a result, overheads before adjustments rose 6.5% to
GBP34.0 million (2020: GBP31.9 million). In February 2020 we signed
a lease on a new office in New York which had a GBP0.3m increased
impact on depreciation as a right of use asset.
The average number of staff during the year increased 2% to 251
(2020: 247), however, staff numbers at the end of the year were 276
(2020: 255) including 35 in the new digital team. Staff costs
(before Adjustments) represented 76% of overheads (2020: 75%)
increasing 9% on the year. This includes GBP0.8m repayment to staff
that took temporary deduction in H121.
As a result, Adjusted PBT in the year to 31 March 2021 reduced
95% to GBP0.3 million (2020: GBP6.6 million). Adjusted PBT as a
percentage of revenue was 0.8% (2020: 13.7%).
Operating profit as a percentage of revenue was 4% in the US but
-6% in EMEA. The negative margin in the EMEA is largely due to a
reduction in the royalty charges from the UK to the US.
Adjustments to PBT
The Group uses Adjusted PBT to provide a better understanding of
the underlying profitability of the business. Adjusted PBT excludes
certain costs as detailed in Note 6 to the group financial
statements.
Adjustments in the year to 31 March 2021 comprised GBP0.7
million of restructuring costs including redundancy payments and
related consulting and legal costs. Adjustments in 2020 were a
GBP0.8 million credit on the reversal of a provision for employee
option surrender costs.
Adjustments to PBT
31 March 2021 31 March 2020
GBP'000 GBP'000
Restructuring costs 662 -
Employee options surrender credit - (765)
662 (765)
=============== ===============
After Adjustments, the Group reported a loss before taxation of
GBP0.4 million (2020: profit of GBP7.4 million).
Taxation
There was a tax credit for the year of GBP0.1million (2020:
charge of GBP1.5 million) which represents an effective rate
('ETR') of 34.8% of profit before tax. The ETR on profit excluding
adjustments was 2.8%.
FY21 FY20
Adjusted Adjustments Reported Adjusted Adjustments Reported
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss)
before tax 306 (662) (356) 6,633 765 7,398
Tax credit/(charge) (9) 133 124 (1,420) (73) (1,493)
---------- ------------- ---------- ---------- ------------- ----------
PAT (earnings) 297 (529) (232) 5,213 692 5,905
---------- ------------- ---------- ---------- ------------- ----------
ETR % 2.8% 20.0% 34.8% 21.4% 9.5% 20.2%
---------- ------------- ---------- ---------- ------------- ----------
In FY21 the ETR is distorted by both GBP0.2 million of
adjustments to tax in respect of prior periods and by the mix of
profits by jurisdiction. The Group incurred a tax charge on taxable
profit in the USA where the combination of federal and state taxes
gives a rate of approximately 28% but benefitted from a tax credit
on a loss in the UK where the tax rate is 19%.
Earnings per share
Adjusted diluted earnings per share decreased by 94% to 0.30
pence (2020: 5.22 pence). On a reported basis there was a loss per
share of 0.23 pence (2020: basic earnings per share of 5.93
pence).
Dividends
The Board has taken the decision to allocate excess cash to
investment in digital. No dividend has therefore been paid or
proposed for the year ended 31 March 2021. An interim dividend of
0.9p per share was paid in January 2020 and represented the total
dividend in respect of FY20.
Cash flow and balance sheet
Reported EBITDA was GBP0.9 million, 89% down on the FY20 EBITDA
of GBP8.6 million. An increase of GBP4.9 million in payables,
however, resulted in cash generated from operations of GBP5.9
million which was 44% down on the GBP10.6 million cash generated
from operations in the prior year. The working capital benefit
resulted in cash conversion, defined as cash generated from
operations as a percentage of EBITDA, of 647% (2020: 124%).
Adjusted cash generated from operations was GBP6.6 million
(2020: GBP10.6 million) resulting in Adjusted cash conversion of
418% (2020: 136%). Adjusted cash conversion excludes the effect of
restructuring costs and is defined as cash generated from
operations before the cash effect of Adjustments as a percentage of
Adjusted EBITDA. Adjusted EBITDA is defined as Adjusted PBT
excluding net finance costs, depreciation of property, plant and
equipment and the amortisation of intangible assets.
Both Cash conversion and Adjusted cash conversion are unusually
high this year as the cash inflow from the working capital
improvements dwarfs the relatively low EBITDA.
Cash conversion
31 March 31 March
2021 2020
GBP'000 GBP'000
Adjusted cash generated from operations 6,594 10,615
Restructuring costs 662 -
Employee options surrender costs - -
Cash generated from operations 5,932 10,615
Adjusted EBITDA 1,579 7,818
Reported EBITDA 917 8,583
Adjusted cash conversion (Adjusted cash from
operations /Adjusted EBITDA) 418% 136%
Cash conversion (cash from operations /EBITDA) 647% 124%
Over the year we again reduced the time taken to invoice clients
and improved the collection of overdue receivables. March 2021 was
our highest recorded revenue month with revenue GBP1.9m higher than
in March 2020. This resulted in the number of days revenue tied up
in Trade receivables and Accrued income increasing by 21 days to 89
days (2020: 68 days). Taking account of the monthly revenue
profile, the days sales tied up in Trade receivables however fell.
Overdue debt as a percentage of total trade receivables fell to 11%
at the year end (2020: 20%) with the amount of overdue debt
reducing GBP0.7 million to GBP1.0 million (2020: GBP1.7 million).
We saw deferred income increase by 98% to GBP4.6m (FY20: GBP2.3m)
as clients secured budgets for their following financial year.
Tax paid in the year was GBP0.5 million (2020: GBP0.6 million
received).
Capital expenditure was GBP3.2 million (2020: GBP0.7 million)
which included GBP2.8 million of costs capitalised on developing
our new digital products and GBP0.2m on fitting out the new New
York office.
Lease payments on our offices in the UK and the USA were GBP1.1
million (2020: GBP0.6m). No dividends were paid in the year whereas
in FY20 the Group paid GBP2.5 million of dividends in cash
comprising the GBP1.6m final FY19 dividend and the GBP0.9m interim
dividend for the year ended 31 March 2020.
At the year end, the Group had cash of GBP16.8 million (2020:
GBP16.0 million) and net cash of GBP13.7m (2020: GBP11.6 million)
after deducting the lease liability included on the balance
sheet.
Going concern
The Board has reviewed scenario analyses to help assess their
forward-looking assessment of the viability of the Group. The
Directors are confident that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
Board have reviewed scenarios including a range of revenues and the
cost reduction actions that could be taken to mitigate a downturn.
This is supported by a strong balance sheet, cash management and
financial controls.
Financial risk management
The Group has a diverse portfolio of approximately 600 clients
across many industrial sectors and countries. The largest client
accounted for less than 6% of Group revenue in the year.
The Group has translational foreign currency exposure arising on
the consolidation of overseas company results into Sterling. Where
possible the exposure is naturally hedged, for example by matching
US Dollar revenues with US Dollar costs in the US subsidiary. The
Group does not currently use forward exchange contracts or currency
options to hedge currency risk.
Key performance indicators
Key performance indicators (KPI's) relate to sales, profit and
cash flow. The sales of the business are tracked through monthly
reviews of future confirmed and forecasted revenues against targets
approved by the Board and against prior year by region and
globally. The profitability of the business is managed through the
review of revenues and product mix, gross profit margin and
overheads against budget. Cashflow is reviewed on a Group basis
aided by rolling cash flow forecasts. Working capital is reviewed
using debtor days, overdue debt as a percentage of total debtors,
and combined debtor, accrued income and deferred income ('net
revenue') days.
Adjusted performance measures
This announcement contains certain financial measures that are
not defined or recognised under IFRS including Adjusted PBT and
Adjusted earnings per share. These adjusted measures exclude the
effect of Adjustments. The Group use these measures for planning
and budgeting and for its internal assessment of the operational
performance of each business. Given the term Adjusted is not
defined under IFRS, the Adjusted measures may not be comparable
with similarly titled measures used by other companies.
Reconciliations of the Adjusted measures to their IFRS equivalents
are shown on the face of the Consolidated Statement of
Comprehensive Income, in Note 4 Segmental Analysis and in Note 11
Earnings per share.
Certain statements in this announcement constitute
forward-looking statements. Any statement in this announcement that
is not a statement of historical fact including, without
limitation, those regarding the Company's future expectations,
operations, financial performance, financial condition and business
is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, among
other factors, changing economic, financial, business or other
market conditions. These and other factors could adversely affect
the outcome and financial effects of the plans and events described
in this announcement and the Company undertakes no obligation to
update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this
announcement should be constructed as a profit forecast.
Richard Steele
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 March 31 March
2021 2020
Note GBP'000 GBP'000
Continuing operations
Revenue 4 39,383 48,249
Cost of sales (4,967) (9,680)
----------- -----------
Gross profit 34,416 38,569
Administrative expenses (34,635) (31,147)
----------- -----------
Operating (loss)/profit 4, 5 (219) 7,422
Finance income 9 30 51
Finance costs 9 (167) (75)
----------- -----------
(Loss)/profit before tax (356) 7,398
Adjusted profit before tax 306 6,633
Restructuring costs 6 (662) -
Employee options surrender credit 6 - 765
Total adjustments 6 (662) 765
----------- -----------
(Loss)/profit before tax (356) 7,398
-------------------------------------------------- ------ ----------- -----------
Tax on loss/profit 10 124 (1,493)
----------- -----------
(Loss)/profit for the financial period
from continuing operations attributable
to owners of the parent (232) 5,905
=========== ===========
Items that may be reclassified subsequently
to profit or loss
Exchange translation differences on consolidation (281) 88
----------- -----------
Other comprehensive income for the period
attributable to the owners of the parent (281) 88
----------- -----------
Total comprehensive (loss)/income for
the period attributable to the owners
of the parent (513) 5,993
=========== ===========
(Loss)/earnings per share (pence) 11
Basic (0.23) 5.93p
Diluted (0.23) 5.91p
Adjusted earnings per share (pence) 11
Basic 0.30 5.24p
Diluted 0.30 5.22p
=========== ===========
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 31 March
2021 2020
Note GBP'000 GBP'000
Non-current assets
Intangible assets 13 2,877 95
Property, plant and equipment 14 3,406 4,395
Deferred tax assets 10 230 85
Other receivables 16 339 567
---------- ----------
6,852 5,142
Current assets
Inventories 15 - 73
Trade and other receivables 16 10,620 10,131
Current tax receivable 280 -
Cash and cash equivalents 16,833 15,952
---------- ----------
27,733 26,156
---------- ----------
Total assets 34,585 31,298
========== ==========
Current liabilities
Trade and other payables 17 13,813 8,921
Lease liability 18 1,085 914
Redeemable preference shares 20 50 50
Current tax payable 104 384
---------- ----------
15,052 10,269
---------- ----------
Non-current liabilities
Lease liability 18 2,081 3,472
Total liabilities 17,133 13,741
---------- ----------
Net assets 17,452 17,557
========== ==========
Equity
Share capital 22 1 1
Share premium 157 112
Share option reserve 674 684
Retained earnings 16,620 16,760
---------- ----------
Equity attributable to owners of the
parent Company 17,452 17,557
========== ==========
The financial statements were approved and authorised for issue
by the Board of Directors on 10 June 2021 and were signed on its
behalf by:
Richard Steele
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Share Share option Retained Total
capital premium reserve earnings equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 1 112 340 13,177 13,630
========== ========== ========== =========== =========
Profit for the period - - - 5,905 5,905
Other comprehensive income:
Exchange translation differences
on consolidation - - - 88 88
---------- ---------- ---------- ----------- ---------
Total comprehensive income
for the period - - - 5,993 5,993
Credit to equity for share-based
payments 23 - - 344 - 344
Tax relating to share-based
payments 10 - - - 77 77
Dividends 12 - - - (2,487) (2,487)
---------- ---------- ---------- ----------- ---------
At 31 March 2020 1 112 684 16,760 17,557
========== ========== ========== =========== =========
Profit for the period - - - (232) (232)
Other comprehensive income:
Exchange translation differences
on consolidation - - - (281) (281)
---------- ---------- ---------- ----------- ---------
Total comprehensive income
for the period - - - (513) (513)
Exercise of options 22 - 45 (308) 308 45
Credit to equity for share-based
payments 23 - - 298 - 298
Tax relating to share-based
payments 10 - - - 65 65
At 31 March 2021 1 157 674 16,620 17,452
========== ========== ========== =========== =========
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 March 31 March
2021 2020
Note GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit for the financial period (232) 5,905
Adjustments for:
Amortisation of intangible assets 13 52 444
Depreciation of property, plant and equipment 14 1,084 717
Profit on disposal of property, plant
and equipment (2) -
Net finance costs 9 137 24
Taxation (credit)/charge 10 (124) 1,493
Decrease /(increase)/decrease in inventories 73 (20)
(Increase)/decrease in trade and other
receivables (246) 2,279
Increase/(decrease) in payables and provisions 4,892 (571)
Share-based payment charge 23 298 344
----------- -----------
Cash generated from operations 5,932 10,615
Net tax (paid)/received (521) 638
Net cash generated from operating activities 5,411 11,253
----------- -----------
Cash flows from investing activities
Purchase of intangible assets (2,834) (94)
Purchase of property, plant and equipment (388) (556)
Proceeds from sale of property, plant
and equipment 10 -
Interest received 15 51
----------- -----------
Net cash used in investing activities (3,197) (599)
----------- -----------
Cash flows from financing activities
Cash repayment of lease liabilities (1,075) (565)
Issuance of ordinary shares 22 45 -
Dividends paid 12 - (2,487)
Net cash used in financing activities (1,030) (3,052)
----------- -----------
Net increase in cash and cash equivalents 1,184 7,602
Cash and cash equivalents at beginning
of period 15,952 8,294
Effect of foreign exchange rate changes (303) 56
----------- -----------
Cash and cash equivalents at the end
of period 16,833 15,952
=========== ===========
Cash and cash equivalents at the end
of period comprise:
Cash at bank and in hand 16,833 15,952
=========== ===========
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 and 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. Summary of significant accounting policies
Basis of preparation
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRS') in conformity with the requirements of the Companies Act
2006, including interpretations issued by the International
Financial Reporting Interpretations Committee ('IFRIC'), and with
the Companies Act 2006 applicable to companies reporting under
IFRS.
The consolidated financial statements have been prepared on a
going concern basis under the historical cost convention.
The consolidated financial statements are presented in Pound
Sterling. All values are rounded to GBP1,000 except where otherwise
indicated.
The principal accounting policies in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented unless otherwise
stated.
Going concern
The Group meets its day-to-day working capital requirements from
the cash flows generated by its trading activities and its
available cash resources. As at 31 March 2021 the Group had GBP16.8
million of cash and GBP3.2m of lease liabilities. Adjusted cash
conversion in the year ended 31 March 2020 was 418% (2020:
136%).
The Group prepares cash flow forecasts and re-forecasts
regularly as part of the business planning process. The Directors
have reviewed forecast cash flows for the forthcoming 12 months for
the Group from the date of the approval of the financial statements
and consider that the Group will have sufficient cash resources
available to meet its liabilities as they fall due. These cash flow
forecasts have been analysed in light of the COVID-19 outbreak and
expected medium-term economic impact and subjected to stress
testing and scenario modelling which the Directors consider
sufficiently robust. The Group was significantly impacted by
COVID-19 but has been protected from more severe consequences by
our digitally enabled revenue. The scenario modelling has assessed
the impact of various degrees of downturn in medium-term revenues
generated. The Directors note that in a downturn scenario the Group
also has the option to rationalise its cost base including cuts to
discretionary capital and overhead expenditure. The Directors
consider that the required level of change to the Group's forecast
cash flows to give rise to a material risk over going concern is
sufficiently remote.
As a result of these assessments performed, the Group's strong
cash position and clients predominantly comprising blue-chip
corporates, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the Annual Report and
Accounts.
New standards and interpretations applied for the first time
The Group adopted the following new or amended IFRSs and IFRIC
interpretations from 1 April 2020:
Amendments to References to the Conceptual Framework in IFRS
Standards
Amendments to IFRS 3 Definition of a Business
Amendments to IAS 1 and IAS 8: Definition of Material
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark
Reform (Phase 1)
The adoption of these amended IFRSs did not have a material
impact on the financial statements.
New standards and interpretations not yet applied
At the date of authorisation of these financial statements the
following standards and interpretations were in issue but not yet
effective for the financial period and have not been applied. The
Directors plan to adopt these standards in line with their
effective dates.
Applicable
from
Amendments to IFRS 16 Leases: COVID-19-Related
Rent Concessions 1 April 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and 1 April 2021
IFRS 16: Interest Rate Benchmark Reform (Phase
2)
Amendments to IFRS 4 Insurance Contracts: deferral 1 April 2021
of IFRS 9
IFRS 17 Insurance Contracts* 1 April 2023
Amendments to IAS 1: Presentation of Financial 1 April 2023
Statements*
Amendments to IFRS 3: Reference to the Conceptual 1 April 2022
Framework*
Amendments to IAS 16: Property, Plant and Equipment 1 April 2022
- Proceeds before Intended Use*
Amendments to IAS 37: Provisions, Contingent Liabilities 1 April 2022
and Contingent Assets - Onerous Contracts - Cost
of Fulfilling a Contract*
Annual Improvements to IFRS Standards 2018-2020 1 April 2022*
Cycle*
*Not yet endorsed by the UK.
The Directors anticipate that the adoption of these standards
and amendments will have no material impact on the financial
statements.
Basis of consolidation
The consolidated financial statements incorporate those of Mind
Gym plc and its subsidiary undertakings (i.e. entities that the
Group controls when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity).
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Where necessary, amounts reported by subsidiaries
have been adjusted to conform with the Group's accounting
policies.
Foreign currency translation
The Group's presentation currency is Pound Sterling. The results
and financial position of subsidiaries that have a functional
currency different from Sterling are translated into Sterling as
follows:
-- Assets and liabilities are translated at the closing rate at the balance sheet date
-- Income and expenses are translated at average rates of exchange prevailing during the year
All resulting exchange differences are recognised in equity.
Foreign currency transactions are initially recorded at the
exchange rate ruling at the date of the transaction. Foreign
exchange gains and losses resulting from settlement of such
transactions and from the translation at exchange rates ruling at
the balance sheet date of monetary assets or liabilities
denominated in foreign currencies are recognised in profit or
loss.
Revenue recognition
Revenue is recognised when control over a product or service is
transferred to a customer. Due to the short-term nature of the
trade receivables, the Group measures them at the original
transaction price invoiced without discounting.
The Group generates revenue from business-to-business customers
by satisfying the following performance obligations:
-- Delivering coach-led face-to-face and virtual training
sessions. Revenue is recognised at a point in time on the date of
delivery of the session.
-- Developing training programmes customised to specific needs.
Revenue is recognised at a point in time on the completion of all
development work or, at the end of a stage of work when the
contract provides an enforceable right to payment on completion of
a stage.
-- Licensing digital training modules to clients. When
non-cancellable digital modules are provided to the client and
hosted on the client's servers, revenue is recognised at a point in
time on the date the modules are provided to the client. Where the
client has a right to cancel, revenue is recognised at the start of
each committed period. When digital modules are hosted on the
Group's servers, revenue is recognised over time across the life of
the agreement.
-- Training and certifying client staff to act as coaches.
Revenue is recognised at a point in time on the date of delivery of
the certification course.
Any advance consideration received from clients represents a
contract liability and is disclosed in Note 17 under the heading
deferred income. When the performance obligation has been satisfied
but the income has not yet been invoiced, the amount represents a
contract asset and is disclosed in Note 16 as accrued income.
The incremental costs of obtaining a contract principally
consist of commissions paid to the Group's sales team. The sales
team earn commission over time as the revenue they have generated
is recognised. Commission costs are not therefore capitalised.
Share-based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to the Consolidated
Statement of Comprehensive Income over the vesting period.
Non-market performance conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
Statement of Financial Position date so that, ultimately, the
cumulative amount recognised over the vesting period is based on
the number of options that eventually vest. Market performance
conditions are factored into the fair value of the options granted.
The cumulative expense is not adjusted for failure to achieve a
market performance condition.
The fair value of the award also takes into account non-vesting
conditions. These are either factors beyond the control of either
party (such as a target based on an index) or factors that are
within the control of one or other of the parties (such as the
Group keeping the scheme open or the employee maintaining any
contributions required by the scheme).
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the Consolidated Statement of Comprehensive Income over the
remaining vesting period.
Defined contribution pension plan
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in the Statement
of Comprehensive Income when they fall due.
Government grants
Government grants are not recognised until there is reasonable
assurance that the grants will be received and that the Group will
comply with any conditions attached to them. Government grants are
recognised in the income statement over the same period as the
costs for which the grants are intended to compensate.
Government grant income under the Coronavirus Job Retention
Scheme and other schemes reimbursing employee wages is netted
against staff costs and is disclosed in Note 8.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The current tax payable is based on taxable profit for the year.
Taxable profit differs from accounting profit as reported in the
Consolidated Statement of Comprehensive Income because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted at
the period-end date.
Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax is
not recognised on temporary differences arising from the initial
recognition of goodwill or other assets and liabilities in a
transaction, other than a business combination, that affects
neither the accounting nor the taxable profit.
Deferred tax is measured on a non-discounted basis using tax
rates and laws that have been enacted or substantively enacted by
the balance sheet date and are expected to apply when the related
deferred tax asset is realised, or deferred tax liability is
settled. Deferred tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities, and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority.
Tax is charged or credited in the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
recognised in equity.
Intangible assets
Externally acquired intangible assets are initially recognised
at cost. Expenditure on internally developed assets is capitalised
if it can be demonstrated that it is technically feasible to
develop the product for it to provide expected future economic
benefits, adequate resources are available to complete the
development, there is an intention to complete the project and
expenditure on the project can be measured reliably.
Other research and development costs that do not meet the above
criteria are recognised as expenses as incurred. Development costs
previously recognised as an expense are not recognised as an asset
in a subsequent period.
After recognition intangible assets are measured at cost less
any accumulated amortisation and impairment losses. Amortisation is
charged to administrative expenses on a straight-line basis from
the date on which the asset is available for use. Intangible assets
are amortised over their estimated useful lives as follows:
-- Internally developed software Three to five years
-- Other intangible assets One to five years
The assets' residual values, useful lives and amortisation
methods are reviewed and adjusted prospectively if appropriate at
each reporting date.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation and any accumulated impairment losses.
Historical cost includes expenditure that is directly attributable
to bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by management.
Subsequent costs are included in the asset's carrying amount only
when it is probable that future economic benefits associated with
the item will flow to the Group. All other repairs and maintenance
costs are charged to profit or loss during the period in which they
are incurred.
Assets are depreciated to their estimated residual value using
the straight-line method over their estimated useful lives as
follows:
-- Leasehold improvements Over the period of the lease
-- Fixtures, fittings and equipment Two to five years
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted prospectively if appropriate at
each balance sheet date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in the
Consolidated Statement of Comprehensive Income.
Impairment of property, plant and equipment and intangible
assets
At each reporting date, the Group reviews the carrying amounts
of its property, plant and equipment and intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any).
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset, for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Leases
Lease identification
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identifiable asset for a period of time in exchange for
consideration.
Right-of-use asset
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is depreciated on a straight-line basis
over the shorter of the estimated useful life of the asset and the
lease term. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
re-measurements of the lease liability.
Lease liability
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable.
The lease liability is measured at amortised cost using the
effective interest method.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option. It also
applies the low-value assets recognition exemption to leases of
assets below $5,000. Lease payments on short-term leases and leases
of low-value assets are recognised as an expense on a straight-line
basis over the lease term.
As a lessor
When the Group acts as a lessor, it determines at lease
inception whether each lease is a finance lease or an operating
lease.
When the Group is an intermediate lessor, it accounts for its
interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to
the right-of-use asset arising from the head lease, not with
reference to the underlying asset.
Amounts due from lessees under finance leases are recognised as
finance lease receivables at the amount of the Group's present
value of the lease receipts. The finance lease receivable is
subsequently measured by increasing the carrying amount to reflect
interest on the finance lease receivable (using the discount rate
used at commencement) and by reducing the carrying amount to
reflect the lease payments received.
Inventories
Inventories comprise pack materials used in the delivery of
courses and are stated at the lower of cost and net realisable
value. Cost is based on the cost of purchase on a first in, first
out basis. Work in progress and finished goods include labour and
attributable overheads. Net realisable value is the estimated
selling price less costs to complete and sell.
At each reporting date, inventories are assessed for impairment.
If stock is impaired, the carrying amount is reduced to its
realisable value. The impairment loss is recognised immediately in
profit or loss.
Financial instruments
Financial instruments are recognised when the Group becomes
party to the contractual provisions of the instrument. The Group
only enters into basic financial instruments and does not have any
hedging instruments.
Financial assets and liabilities are offset, with the net
amounts presented in the Financial Statements, when there is a
legally enforceable right to set off the recognised amounts and
there is an intention to settle on a net basis or to realise the
asset and settle the liability simultaneously.
Financial assets - Loans and receivables
All of the Group's financial assets fall into the loans and
receivables category. Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not
quoted in an active market. Financial assets included in loans and
receivables are recognised initially at fair value. Subsequent to
initial recognition they are measured at amortised cost using the
effective interest rate method, less any impairment losses.
Financial assets are assessed for indicators of impairment at
each reporting date.
A provision for impairment of trade receivables is made for
expected lifetime credit losses based on past experience and
general economic factors. Further provisions are made against
specific trade and other receivables when there is objective
evidence that one or more loss events that occurred after the
initial recognition of the financial asset, have had an impact on
the estimated future cash flows of the financial asset. The amount
of the loss is measured as the difference between the asset's
carrying amount and the present value of estimated future cash
flows discounted at the financial asset's original effective
interest rate. Impaired debts are derecognised when they are
assessed as uncollectible.
Financial assets are derecognised only when the contractual
rights to the cash flows from the asset expire or are settled, or
when the Group transfers the financial asset and substantially all
the risks and rewards of ownership to another entity, or if some
significant risks and rewards of ownership are retained but control
of the asset has transferred to another party that is able to sell
the asset in its entirety to an unrelated third party.
Financial liabilities - Other financial liabilities
All of the Group's financial liabilities fall into the other
financial liabilities category. Such financial liabilities are
initially measured at fair value less any directly attributable
transaction costs. Subsequent to initial recognition, these
liabilities are measured at amortised cost using the effective
interest method.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability to the net
carrying amount on initial recognition.
Financial liabilities are derecognised when the Group's
contractual obligations expire or are discharged or cancelled.
Cash and cash equivalents
In the Statement of Cash Flows, cash and cash equivalents
comprise cash in hand, deposits held at call with banks, other
short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. In the Statement of
Financial Position, bank overdrafts are shown within borrowings in
current liabilities.
Dividends
Dividend income is recognised when the right to receive payment
is established.
Dividends payable are recognised when paid, or as a liability in
the period in which the dividends are approved by the shareholders
of the Company.
3. Use of judgements and estimates
In preparing these consolidated Financial Statements, management
has made judgements and estimates that affect the application of
the Group's accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
these estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to estimates are recognised
prospectively.
Judgements
Judgements made in applying accounting policies that have the
most significant effects on the amounts recognised in the financial
statements are:
Going concern
As noted in Note 2, the financial statements have been prepared
on a going concern basis, following detailed scenario testing and
review.
Capitalisation of internally developed intangibles
Costs of GBP2.8 million incurred on developing software and new
digital products have been capitalised in the year (see Note 13).
Initial capitalisation is based on management's judgement on which
costs meet the definition of development costs. Costs capitalised
include directly attributable labour costs and purchases of
directly attributable products and services. No overheads have been
capitalised. Initial capitalisation and any subsequent impairment
is also based on management's judgement that technological and
economic feasibility is demonstrated and assumptions regarding the
expected future cash generation of the projects and the expected
period of benefits.
Assumptions and estimation uncertainties
Assumptions and estimation uncertainties at 31 March 2021 that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities in the next
financial year are:
Provisions against trade receivables and accrued income
A provision is initially made against trade receivables and
accrued income for expected lifetime credit losses. Historic credit
losses have been low and the provision rate is based on experience
over the last three years and current and expected economic
conditions. Balances are reviewed on a regular basis and provisions
are increased to reflect any increase in credit risk where
appropriate. The review takes into account factors such as the age
of the debt, current economic indicators for the industry of the
customer, recovery since the reporting date and discussions with
the customer. Provisions are raised where debtors are not
considered recoverable in full or in part. Provisions are released
when subsequent information supports the recovery.
Share-based payments
The Group has share-based payment remuneration for employees
under a Long-Term Incentive Plan. The fair value of share options
at the date of grant is estimated using the Black-Scholes model
based on certain assumptions. These assumptions are set out in Note
23 and include expected share price volatility, dividend yield,
expected life and the numbers of options expected to vest.
4. 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 year ended 31 March 2021
Segment result
EMEA America Total
GBP'000 GBP'000 GBP'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 taxation (356)
==========
Adjusted profit before tax
EMEA America Total
GBP'000 GBP'000 GBP'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 taxation 306
---------
Management does not report segmental assets and liabilities
internally and as such an analysis is not reported.
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%
The vast majority of the Group's contracts are for the delivery
of services within the next 12 months. The Group has therefore
taken advantage of the practical expedient in paragraph 121(a) of
IFRS 15 not to disclose information about remaining performance
obligations.
Segment results for the year ended 31 March 2020
Segment result
EMEA America Total
GBP'000 GBP'000 GBP'000
Revenue 21,807 26,442 48,249
Cost of sales (4,832) (4,848) (9,680)
Administrative expenses (16,525) (14,622) (31,147)
---------- ---------- ----------
Profit before inter-segment charges 450 6,972 7,422
Inter-segment charges 5,064 (5,064) -
---------- ---------- ----------
Operating profit - segment result 5,514 1,908 7,422
Finance income 51
Finance costs (75)
----------
Profit before taxation 7,398
==========
Adjusted profit before tax
EMEA America Total
GBP'000 GBP'000 GBP'000
Operating profit - segment result 5,514 1,908 7,422
Employee options surrender costs - (765) (765)
Adjusted EBIT 5,514 1,143 6,657
Finance income 51
Finance costs (75)
---------
Adjusted profit before taxation 6,633
---------
The mix of revenue for the year ended 31 March 2020 is set out
below.
EMEA America Group
Delivery 58.2% 54.6% 57.2%
Design 12.8% 16.2% 14.9%
Digital 7.5% 10.0% 8.9%
Licensing and certification 14.4% 12.6% 12.0%
Other 1.2% 1.8% 1.6%
Advisory 5.9% 4.8% 5.4%
The vast majority of the Group's contracts are for the delivery
of services within the next 12 months. The Group has therefore
taken advantage of the practical expedient in paragraph 121(a) of
IFRS 15 not to disclose information about remaining performance
obligations.
5. Operating profit
Operating loss/profit is stated after charging:
31 March 31 March
2021 2020
GBP'000 GBP'000
Coach costs 3,369 6,030
Staff costs (Note 8) 26,491 23,786
Amortisation of intangible assets 52 444
Depreciation of property, plant and equipment 1,084 717
Short-term and low-value lease expense 35 132
(Write-back)/impairment of trade receivables (41) 254
========== ==========
6. Adjustments
31 March 31 March
2021 2020
GBP'000 GBP'000
Restructuring costs 662 -
Employee options surrender costs - (765)
662 (765)
========== ==========
Restructuring costs in the year ended 31 March 2021 include
redundancy costs related to the headcount reduction exercise
undertaken in response to the COVID-19 impact on the business.
The credit for employee options surrender costs in the year
ended 31 March 2020 reflects the release of a provision in respect
of compensation paid to a non-UK resident employee in relation to
the IPO in June 2018. The employee left the business in October
2019.
Credits in respect of prior year adjustments to the tax charge
of GBP151,000 have been treated as an adjusting item in the year
ended 31 March 2020.
The cash cost of Adjustments was GBP662,000 (2020: GBPnil).
7. Auditor remuneration
31 March 31 March
2021 2020
GBP'000 GBP'000
Fees for audit of the Company and consolidated
financial statements 88 66
Fees for audit of the Company's subsidiaries
pursuant to legislation 15 15
---------- ----------
Total audit fees 103 81
Tax compliance services 82 58
Tax advisory services 15 37
Other services 10 10
Total fees payable to the auditor 210 186
========== ==========
8. Employees
Staff costs were as follows:
31 March 31 March
2021 2020
GBP'000 GBP'000
Wages and salaries 22,464 20,613
Social security costs 2,249 2,006
Pension costs - defined contribution plans 897 823
Share-based payments 298 344
Restructuring payroll costs included in adjusted
items 583 -
26,491 23,786
========== ==========
Wages and salaries in 2021 are stated net of GBP216,000 of
government grants under the UK Coronavirus Job Retention Scheme and
similar schemes.
The average number of the Group's employees by function was:
31 March 31 March
2021 2020
Delivery 170 183
Support 61 64
Digital 20 -
251 247
========== ==========
The year-end number of the Group's employees by function
was:
31 March 31 March
2021 2020
Delivery 174 186
Support 67 69
Digital 35 -
276 255
========== ==========
Key management personnel include all Directors and a number of
senior managers across the Group who together have responsibility
and authority for planning, directing and controlling the
activities of the Group. The compensation paid to key management
personnel for services provided to the Group was:
31 March 31 March
2021 2020
GBP'000 GBP'000
Salaries, bonuses and other short-term employee
benefits 2,583 1,952
Post-employment benefits 53 59
Share-based payments 207 262
Total compensation 2,843 2,273
========== ==========
9. Net finance costs
31 March
31 March 2021 2020
GBP'000 GBP'000
Finance income
Bank interest receivable 15 51
Finance lease income 15 -
Finance costs
Lease interest (167) (75)
(137) (24)
=============== ==========
10. Tax
The tax (credit)/charge for the year comprises:
31 March 31 March
2021 2020
GBP'000 GBP'000
UK current tax (191) 1,117
UK adjustment in respect of prior periods (97) (44)
Foreign current tax 299 257
Foreign adjustment in respect of prior periods (2) (107)
---------- ----------
Total current tax charge 9 1,223
---------- ----------
Deferred tax - current year (6) 270
Deferred tax - adjustment in respect of prior
periods (127) -
---------- ----------
Total deferred tax credit (133) 270
---------- ----------
Total tax (credit)/charge (124) 1,493
========== ==========
Tax on items credited to equity:
31 March 31 March
2021 2020
GBP'000 GBP'000
Current tax credit on share-based payments (48) (373)
Deferred tax (credit)/charge on share-based
payments (17) 296
---------- ----------
Total tax credit in equity (65) (77)
========== ==========
The tax charge for the year can be reconciled to accounting
profit as follows:
31 March 31 March
2021 2020
GBP'000 GBP'000
(Loss)/profit before tax (356) 7,398
---------- ----------
Expected tax (credit)/charge based on the standard
rate of tax in the UK of 19% (2020: 19%) (68) 1,406
Differences in overseas tax rates 71 165
Expenses not deductible for tax purposes 21 11
Adjustments to tax in respect of prior periods (226) (151)
Other tax adjustments 78 62
---------- ----------
Total tax (credit)/charge (124) 1,493
========== ==========
The main categories of deferred tax assets recognised by the
Group are:
Share-based
Tax losses payments Other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 296 50 291 637
Credited/(charged) to income - 35 (305) (270)
Credited/(charged) to equity (296) - - (296)
Exchange differences - - 14 14
------------ ------------- --------- ---------
At 31 March 2020 - 85 - 85
Credited to income - 31 102 133
Credited to equity - 17 - 17
Exchange differences - - (5) (5)
At 31 March 2021 - 133 97 230
============ ============= ========= =========
The standard rate of corporation tax in the UK is 19%. The March
2021 Budget Statement announced an increase in the main corporation
tax rate to 25% with effect from April 2023. This increase was not
substantively enacted at the balance sheet date.
Net deferred tax assets have been recognised on the basis that
sufficient taxable profits are forecast to be available in the
future for them to be utilised.
11. Earnings per share
Basic earnings per share (EPS) 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 23). Adjusted earnings per
share removes the effect of restructuring, employee option
surrender costs and in 2020 one-off taxation credits.
31 March 31 March
2021 2020
Weighted average number of shares in issue 99,660,395 99,493,210
Potentially dilutive shares (weighted average) 587,629 445,571
------------- ------------
Diluted number of shares (weighted average) 100,248,024 99,938,781
------------- ------------
31 March 2021 31 March 2020
Basic Diluted Basic Diluted
EPS EPS EPS EPS
GBP'000 pence Pence GBP'000 pence pence
Net (loss)/profit attributable
to shareholders (232) (0.23) (0.23) 5,905 5.93 5.91
Exclude:
Adjustments 662 0.66 0.66 (765) (0.76) (0.76)
Tax on adjustments (133) (0.13) (0.13) 73 0.07 0.07
Adjusted net profit after tax 297 0.30 0.30 5,213 5.24 5.22
========= ======== ========= ========= ======== =========
12. Dividends
Per share 31 March 31 March
2021 2020
Pence GBP'000 GBP'000
FY19 Final dividend on ordinary shares
(paid Aug 2019) 1.60 - 1,592
Interim FY20 dividend on ordinary shares
(paid Jan 2020) 0.90 - 895
- 2,487
---------- ----------
Final dividend proposed - -
========== ==========
The Board did not propose a final dividend for the year ended 31
March 2020 and therefore the interim dividend paid in January 2020
represents the total dividend for the year of GBP895,000 (0.90
pence per share).
No dividends have been paid or proposed for the year ended 31
March 2021.
13. Intangible assets
Development
Patents costs Total
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 63 1,833 1,896
Additions - 94 94
--------- ------------- ---------
At 31 March 2020 63 1,927 1,990
Additions - 2,834 2,834
--------- ------------- ---------
At 31 March 2021 63 4,761 4,824
========= ============= =========
Amortisation
At 1 April 2019 63 1,388 1,451
Amortisation charge - 444 444
--------- ------------- ---------
At 31 March 2020 63 1,832 1,895
Amortisation charge - 52 52
--------- ------------- ---------
At 31 March 2021 63 1,884 1,947
========= ============= =========
Net book value
At 31 March 2020 - 95 95
--------- ------------- ---------
At 31 March 2021 - 2,877 2,877
========= ============= =========
Development cost additions in the year to 31 March 2021 include
software development costs directly incurred in the creation of new
digital assets.
14. Property, plant and equipment
Fixtures,
Right-of-use Leasehold fittings
asset improvements and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 1,794 234 1,241 3,269
Additions 2,922 20 536 3,478
Disposals (654) - (37) (691)
Exchange differences 132 - 32 164
-------------- --------------- ---------------- ---------
At 31 March 2020 4,194 254 1,772 6,220
Additions 34 72 316 422
Disposals - - (561) (561)
Exchange differences (307) (5) (83) (395)
-------------- --------------- ---------------- ---------
At 31 March 2021 3,921 321 1,444 5,686
============== =============== ================ =========
Depreciation
At 1 April 2019 - 229 1,107 1,336
Depreciation charge 591 - 126 717
Disposals (187) - (37) (224)
Exchange differences (25) - 21 (4)
At 31 March 2020 379 229 1,217 1,825
Depreciation charge 903 5 176 1,084
Disposals - - (553) (553)
Exchange differences (32) - (44) (76)
-------------- --------------- ---------------- ---------
At 31 March 2021 1,250 234 796 2,280
============== =============== ================ =========
Net book value
At 31 March 2020 3,815 25 555 4,395
-------------- --------------- ---------------- ---------
At 31 March 2021 2,671 87 648 3,406
============== =============== ================ =========
At 31 March 2021, capital expenditure of GBP135,000 in respect
of property, plant and equipment was contracted for but not
provided for in the accounts.
15. Inventories
31 March 31 March
2021 2020
GBP'000 GBP'000
Finished goods - 73
=========== ==========
Write-downs of inventory amounted to GBP70,000 (2020:
GBP16,000).
The cost of inventories recognised as an expense and included in
cost of sales amounted to GBP18,000 (2020: GBP2.0 million).
16. Trade and other receivables
31 March 31 March
2021 2020
GBP'000 GBP'000
Non-current
Net investment in sub-lease 79 278
Prepayments in respect of property deposits 260 289
339 567
========== ==========
Current
Trade receivables 9,138 8,235
Less provision for impairment (227) (303)
---------- ----------
Net trade receivables 8,911 7,932
Net investment in sub-lease 172 162
Other receivables 143 305
Prepayments 688 645
Accrued income 706 1,087
10,620 10,131
========== ==========
The maturity analysis of the net investment in sub-lease is set
out in Note 18.
Trade receivables have been aged with respect to the payment
terms as follows:
31 March 31 March
2021 2020
GBP'000 GBP'000
Not past due 8,128 6,549
Past due 0-30 days 530 1,027
Past due 31-60 days 185 266
Past due 61-90 days 22 177
Past due more than 90 days 273 216
9,138 8,235
========== ==========
The movement in the allowance for impairment losses was:
31 March 31 March
2021 2020
GBP'000 GBP'000
At the beginning of the period 303 114
(Write-back)/charges (41) 254
Utilisation of provision (22) (70)
Foreign exchange adjustment (13) 5
At the end of the period 227 303
========== ==========
The Group has applied the simplified approach to measuring
expected credit losses, as permitted by IFRS 9, and recognises a
loss allowance based on the lifetime expected credit loss.
17. Trade and other payables
31 March 31 March
2021 2020
GBP'000 GBP'000
Trade payables 2,514 1,997
Other taxation and social security 549 833
Other payables 536 673
Accruals 5,578 3,075
Deferred income 4,636 2,343
13,813 8,921
========== ==========
18. Lease liability
The lease liabilities included in the statement of financial
position are:
31 March 31 March
2021 2020
GBP'000 GBP'000
Current 1,085 914
Non-current 2,081 3,472
3,166 4,386
========== ==========
There are no significant variable leases costs or lease term
judgements. The related right-of-use asset is disclosed in Note
14.
The movements in the lease liability were as follows:
31 March 31 March
2021 2020
GBP'000 GBP'000
At the beginning of the year 4,386 1,809
Lease payments (1,075) (565)
Finance cost 166 75
Additions 34 2,922
Exchange differences (345) 145
At the end of the year 3,166 4,386
========== ==========
The maturity analysis of the contractual undiscounted cash flows
is:
31 March 31 March
2021 2020
GBP'000 GBP'000
Less than one year 1,204 1,087
Between one and five years 2,213 3,750
More than five years - -
---------- ----------
Total future lease payments 3,417 4,837
Total future interest payments (251) (451)
Total lease liability 3,166 4,386
========== ==========
The Group sub-leased its New York office in March 2020. The
Group has classified the sub lease as a finance lease, because the
sub-lease is for the whole of the remaining term of the head
lease.
The following table sets out a maturity analysis of lease
receivables, showing the undiscounted lease payments to be received
after the reporting date. The related net investment in sub-lease
is disclosed in Note 16.
31 March 31 March
2021 2020
GBP'000 GBP'000
Less than one year 180 179
One to two years 80 201
Two to three years - 87
---------- ----------
Total undiscounted lease payments receivable 260 467
Unearned finance income (9) (27)
Net investment in the lease 251 440
========== ==========
19. Provisions
31 March 31 March
2021 2020
GBP'000 GBP'000
At the beginning of the year - 767
Released in the year - (765)
Foreign exchange - (2)
At the end of the year - -
=========== ==========
At 31 March 2019, the Company held a provision in respect of
compensation paid to a non-UK resident employee in consideration
for surrendering EMI options which vested on the IPO. The employee
left the business in October 2019 and as a result the compensation
will no longer be payable.
20. Redeemable preference shares
The Company allotted and issued 50,000 redeemable preference
shares of GBP1.00 each to Octavius Black in June 2018. The shares
are fully paid up. Under the Articles of Association, the Company
may redeem the preference shares at their nominal amount at any
time specified by either the Directors or the preference share
holder. The preference share capital, however, counts towards the
GBP50,000 minimum share capital required under the Companies Act
2006 and cannot therefore be redeemed unless the Company increases
its other share capital. The preference shares are non-voting, give
no rights to dividends or interest and entitle the holder to the
return of the nominal value on a winding up.
21. Financial instruments and financial risk management
Financial instruments by category
Trade and other receivables (excluding prepayments), cash and
cash equivalents and trade and other payables are initially
measured at fair value and subsequently held at amortised cost.
31 March 31 March
2021 2020
GBP'000 GBP'000
Net trade receivables 8,911 7,932
Other receivables 143 305
Prepayments in respect of property deposits 260 289
Cash and cash equivalents 16,833 15,952
---------- ----------
Financial assets at amortised cost 26,147 24,478
========== ==========
Trade payables 2,514 1,997
Other payables 536 673
Lease liabilities 3,166 4,386
---------- ----------
Financial liabilities at amortised cost 6,216 7,056
========== ==========
The Group holds no assets or liabilities that are held at fair
value through income statement or OCI.
As the trade and other receivables and trade and other payables
have a maturity of less than one year, the notional amount is
deemed to reflect the fair value.
Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, to provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure.
The Group's sources of funding currently comprise cash flows
generated from operations, and equity contributed by shareholders.
The Group has no borrowings and is not subject to any externally
imposed capital requirements.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders to the extent allowed by the Company's
articles or issue new shares.
Financial risk management
The Group's risk management is overseen by the Audit and Risk
Committee. The Group is exposed to a variety of financial risks
that result from its operations including credit risk, liquidity
risk and foreign currency risk. Since the Group has no debt it is
not significantly exposed to interest rate risk. The Group has not
entered into any derivative transactions such as interest rate
swaps or forward foreign exchange contracts.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks, or the methods used to measure
them from previous periods unless otherwise stated in this
note.
Credit risk
Credit risk arises principally from the Group's trade
receivables from customers and monies on deposit with financial
institutions.
Credit risk on trade receivables is considered to be relatively
low as the Group's customers mainly consist of large credit-worthy
organisations. Credit exposure is spread over a large number of
customers and so there is no significant concentration of credit
risk. Outstanding and overdue balances are regularly reviewed and
resulting actions are put in place on a timely basis. The Group
establishes an allowance for impairment. This is based on a review
of individual balances taking into account the results of credit
control communications and our knowledge about the customer
relationship. See Note 16 Trade and other receivables for further
information on ageing and impairment of trade receivables.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties are
accepted, and management maintain a close relationship with the
Group's banks.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
31 March 31 March
2021 2020
GBP'000 GBP'000
Trade receivables 8,911 7,932
Other receivables 143 305
Prepayments in respect of property deposits 260 289
Cash and cash equivalents 16,833 15,952
At the end of the period 26,147 24,478
========== ==========
Liquidity risk
The Group ensures, as far as possible, that it has sufficient
funds to meet foreseeable operational expenses. Cash flow
forecasting is performed by Group Finance who monitor rolling
forecasts of the Group's liquidity requirements. Such forecasting
takes into consideration expected cash receipts, regular spending
and payment of taxes such as VAT, payroll and corporate income
tax.
Currently, the Group's liquidity risk is low as it is in a
cash-generating position with a surplus of cash in all entities.
All Group liabilities in the current and prior year are due within
three months of the reporting date, apart from lease liabilities.
The maturity of the lease liability is set out in Note 18.
Foreign currency risk
The Group operates internationally and is exposed to foreign
currency risk on sales and purchases that are denominated in a
currency other than Sterling. The currencies giving rise to this
risk are primarily the US Dollar and the Euro. Where possible the
exposure is mitigated by a natural hedge. For example, US Dollar
revenues are partially matched by US Dollar costs in the US
subsidiary.
The Group holds cash in the UK in Sterling, Euro and US Dollar
bank accounts and in the USA in US Dollar and Canadian Dollar bank
accounts.
Trade receivables and cash and cash equivalents are analysed by
currency as follows:
GBP USD EUR Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2021
Net trade receivables 2,509 4,806 1,451 145 8,911
Cash and cash equivalents 14,465 1,974 80 314 16,833
At 31 March 2020
Net trade receivables 3,914 3,465 445 108 7,932
Cash and cash equivalents 13,283 2,137 212 320 15,952
The Group does not currently use forward foreign exchange
contracts or currency options to hedge currency risk.
22. Share capital
31 March 31 March 31 March 31 March
2021 2021 2020 2020
Cost Cost
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.00001
at 1 April 99,493,210 1 99,493,210 1
Issue of shares to satisfy 298,574 - - -
options
------------ ---------- ------------ ----------
Ordinary shares of GBP0.00001
at 31 March 99,791,784 1 99,493,210 1
============ ========== ============ ==========
An Employee Benefit Trust ('EBT') has been established in
connection with the Group's Share Incentive Plan. The movements in
own shares held by the Employee Benefit Trust and the market value
of the shares held at the year-end are shown below.
31 March 31 March 31 March 31 March
2021 2021 2020 2020
Cost Cost
Number GBP'000 Number GBP'000
As at 1 April 130,835 - 130,835 -
Issue of new shares to EBT (10,960) - - -
---------- ---------- ---------- ----------
Ordinary shares of GBP0.00001
at 31 March 119,875 - 130,835 -
========== ========== ========== ==========
Market value at 31 March 156 131
---------- ---------- ---------- ----------
23. 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 Group operates the Mind Gym plc Share Incentive Plan (SIP).
An initial award of GBP1,000 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.
On 30 September 2019 the Group launched a Save As You Earn
scheme ('SAYE') and an Employee Share Purchase Plan ('ESPP') for
all eligible employees in the UK and USA respectively.
The total share-based payments expense was:
31 March 31 March
2021 2020
GBP'000 GBP'000
Equity settled share-based payments 298 344
========== ==========
The movements in the number of share awards and share options
and the weighted average exercise price of awards are:
31 March 31 March
2021 2020
Weighted Weighted
average exercise average exercise
Number price GBP Number price GBP
Outstanding at the beginning
of the period 2,183,257 0.63 1,606,434 0.90
Granted during the period 741,070 0.67 1,105,380 0.59
Forfeited during the period (327,768) 0.97 (528,557) 1.37
Exercised during the period (309,535) 0.17 - -
Outstanding at the end of the
period 2,287,024 0.66 2,183,257 0.63
----------- ------------------- ----------- -------------------
Exercisable at the end of the
period 2,055 2,055
----------- ------------------- ----------- -------------------
Weighted average fair value
of awards granted (GBP) 0.27 0.55
=========== =================== =========== ===================
The number granted during the year to 31 March 2021 excludes
2,055,839 awards in the form of nil cost options and restricted
stock awards awarded under the LTIP on 31 March 2021 as these are
subject to performance conditions which were not set until after
the year end.
The range of exercise prices and weighted average remaining
contractual life of share awards and share options outstanding at
31 March were:
31 March 31 March
2021 2020
GBP'000 GBP'000
GBP nil 463,705 484,255
GBP0.00001 427,129 579,536
GBP0.77000 592,537 -
GBP1.04000 306,843 622,656
GBP1.46000 496,810 496,810
----------- -----------
2,287,024 2,183,257
----------- -----------
Weighted average remaining contractual life
(years) 5.4 7.9
=========== ===========
Share options awarded under the LTIP, SAYE and ESPP are valued
using the Black-Scholes model. Shares awarded under the SIP are
valued directly by reference to the share price at date of grant.
The principal assumptions used in these valuations were:
Date of Share Exercise Expected Expected Dividend Risk-free Fair
grant price price life volatility yield rate value
at grant
GBP GBP years % % % GBP
LTIP (2 year 27 Apr
vesting) 2018 1.24 Nil 2 n/a 1.4% n/a 1.20
LTIP (3 year 27 Apr
vesting) 2018 1.24 Nil 3 n/a 1.4% n/a 1.19
LTIP (2 year 25 Jun
vesting) 2018 1.46 1.46 10 19% 1.4% 1.0% 0.28
LTIP (3 year 25 Jun
vesting) 2018 1.46 1.46 10 19% 1.4% 1.0% 0.28
8 Oct
SIP 2018 1.67 Nil n/a n/a n/a n/a 1.67
30 Sep
SAYE 19 1.22 1.04 3 19% 1.4% 1.0% 0.25
30 Sep
ESPP 19 1.22 1.04 1 19% 1.4% 1.0% 0.20
LTIP (3 year 31 Mar
vesting) 20* 1.00 Nil 3 n/a 1.4% n/a 0.96
LTIP (4 year 31 Mar
vesting) 20* 1.00 Nil 4 n/a 1.4% n/a 0.95
LTIP (5 year 31 Mar
vesting) 20* 1.00 Nil 5 n/a 1.4% n/a 0.93
1 Sep
SAYE 20 0.90 0.77 3 19% 1.4% 1.0% 0.25
1 Sep
ESPP 20 0.90 0.77 1 19% 1.4% 1.0% 0.20
=================== ========== =========== ========== ========== ============= ========== =========== ========
* includes further options granted on 12 Jun 2020 on the same
terms and with the same valuation assumptions.
24. Controlling party
The Group was controlled by O. Black and J. Cash by virtue of
their joint shareholding in the Company throughout the period.
There were the following related party transactions during the
year and balances at the end of the year:
-- Key management compensation as disclosed in Note 8.
-- Trevor Phillips, a non-executive director of Mind Gym plc, is
also chairman and director of Green Park Interim and Executive
Search which provided services to the Group totalling GBP83,000 in
the year ended 31 March 2021.
-- David Nelson, a non-executive director of Mind Gym plc is
also a partner of Dixon Wilson. Dixon Wilson provided services to
the Group totalling GBP12,000 in the year ended 31 March 2021.
-- The payment of dividends in the year ended 31 March 2020 to
O. Black and J. Cash on their shareholding in the Company.
25. Events after the reporting period
The performance conditions on share-based payment awards made on
31 March 2021 under the LTIP were approved in May 2021. See Note 23
and the Annual Report on Remuneration for further details.
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END
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