TIDMMIND
RNS Number : 4675C
Mind Gym PLC
13 June 2023
Mind Gym PLC
("MindGym", the "Group" or the "Company")
Full year results for the year ended 31 March 2023
Double-digit revenue growth and return to profitability
MindGym (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 2023.
Financial highlights
12 months 12 months Change
to 31 Mar to 31 Mar
2023 (FY23) 2022 (FY22)
----------------------------------
Revenue GBP55.0m GBP48.7m +13%
-------------- -------------- -----------
Digitally-enabled revenues
(1) GBP37.6m GBP37.4m +1%
-------------- -------------- -----------
Gross profit margin 88.4% 87.1% +1.3% pts
-------------- -------------- -----------
Statutory profit/(loss) GBP3.0m GBP(0.5)m +GBP3.4m
before tax
-------------- -------------- -----------
Diluted EPS 2.84p 1.59p +1.25p
-------------- -------------- -----------
Cash generation from operations GBP4.4m GBP1.2m +GBP3.2m
-------------- -------------- -----------
Cash at bank GBP7.6m GBP10.0m - GBP2.4m
-------------- -------------- -----------
Capital expenditure GBP5.1m GBP6.1m -16%
-------------- -------------- -----------
EBITDA cash conversion (2) 83% 95% -12% pts
-------------- -------------- -----------
(1) Digitally enabled revenues are virtual live delivery
(including virtual licensing), and digital products (currently
eWorkouts and Performa).
(2) EBITDA cash conversion defined as cash generated from
operations/EBITDA.
Financial and operating highlights
-- Double-digit revenue growth:
o Revenues of GBP55.0m were up 13% on FY22 (+5% in constant
currency):
-- H2 FY23 revenues benefitted from (amongst other drivers) our
largest ever framework agreement awarded in H1 FY23 with a global
energy company, with revenues anticipated to be in excess of GBP10m
over the next 24 months
-- H2 FY23 also saw an initial framework win with an automotive
manufacturer which has the potential to generate significant
revenues over the next 18 months
o Digitally-enabled revenues of GBP37.6m up 1% vs. FY22;
representing 68% of revenues (FY22: 77%) following an increase in
face-to-face deliveries with the lifting of COVID restrictions
o Pure digital revenues which are a growing segment of this,
increased their product mix to 13% of Group revenue vs 11% in FY22,
reflecting:
-- A minor refresh and increased accessibility supporting growth
in the eWorkouts portfolio
-- Early revenues from the initial launch of Performa, MindGym's
1:1 digital coaching platform
-- Operational leverage driving improvement in financial performance:
o PBT of GBP3.0m is up by GBP3.4m on FY22's loss before tax,
driven by operational gearing, ongoing savings initiatives, and
returns from prior year investments in scalable operations
including MindGym's new shared service centre. We anticipate the
benefits of these will continue into FY24 and FY25
o EBITDA margins increased to 10% (FY22: 3%)
o Diluted EPS of 2.84p per share is up on FY22 by 1.25p
reflecting PBT growth
-- MindGym retains a strong financial position to support investment in future growth:
o Capex of GBP5.1m is GBP1.0m lower than FY22, reflecting the
organisational redesign in Q4 FY22 which further integrated the
business, and at the same time increased the pace of product
development
o Cash at bank of GBP7.6m is down GBP2.4m on the prior year (31
March 2022: GBP10.0m). This reflects Capex spend of GBP5.1m,
partially offset by PBT and continued improvement in aged
receivables. H2 FY23 cash generation of GBP3.1m compares to a
GBP2.0m cash burn in H2 FY22
o MindGym's GBP10m debt facility remains undrawn
-- Continued progress with MindGym's Digital strategy to build
an integrated Behavioural Change Platform ('BCP') - the digital
journey through which all members engage with MindGym and its
content.
o Continued development of our digital products and our journey
to integrate them as we build our BCP:
-- 85% of live delivery continues to be delivered virtually,
minor investments have supported increased growth in eWorkouts and
interactive tools
-- Early data on the Performa platform and methodology are
positive
o Entering the diagnostics market offering both organisational
and individual assessments and surveys:
-- MindGym will both diagnose the client's needs and provide the
solution, rather than being just one of many possible solutions
providers today, enabling a fully integrated journey
-- In January 2023, MindGym acquired the rights to a diagnostics
platform that will be launched by the end of FY24
-- This will enable clients to self-serve and provide the basis
for MindGym to centralise all data, whilst removing the use of
third party providers
-- The acquisition accelerates the go-live date for a client
ready diagnostics platform by 18 months and reduces the required
uplift in Capex spend in FY24 and FY25
o At the end of FY22, MindGym acquired the 10X individual
psychometric IP for GBP0.1m, which had been a circa GBP10m/7-year
investment by Peter Saville (arguably the leading psychometrician
of the 20(th) century and co-founder of SHL, and Saville
Consulting)
o This was recently integrated into the Performa coaching
platform to provide insight so that coaching can focus and have the
most impact
o In FY25, a standalone psychometric assessment tool (based on
10X) will be built into our recently acquired diagnostics platform,
which will be linked to MindGym's broader portfolio of
solutions.10X has been proven in a large-scale co-validation study
to be more accurate at predicting behaviour than the leading
personality questionnaires on the market
Current Trading and Outlook
-- Despite continued macro-economic headwinds we expect to make further progress in FY24:
o Underpinned by significant framework agreements, which are
expected to scale up in H2
o Improving EBITDA margins in FY24 as we progress towards our
medium term target of 15%-20%
-- MindGym retains a strong balance sheet with net cash expected to grow after planned Capex
-- Our confidence in the Group's prospects is underpinned by the
investments we have made to date delivering scalable growth and the
accelerating pace of our digital pipeline development
Octavius Black, Chief Executive Officer of MindGym, said:
MindGym delivered a robust performance during FY23 both in terms
of revenue growth and an encouraging return to profitability.
The award of significant new framework agreements in the year
from major corporations, highlights the growing demand in the
market as well as MindGym's capability.
Our Digital strategy is delivering well, including our Performa
coaching product and refreshed eWorkouts. With the addition of
diagnostics products in FY24 we are accelerating our journey
towards a fully integrated Behavioural Change Platform ('BCP').
We have had a solid start to the new financial year and,
notwithstanding continued economic uncertainty, have confidence
that organisations are increasingly turning to MindGym and our
unique portfolio of proven solutions to address their talent and
culture challenges."
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@mhpgroup.com
.
Enquiries
Mind Gym plc +44 (0) 20 7376 0626
Octavius Black (CEO)
Dominic Neary (CFO)
Liberum (Nominated Adviser and
Broker) +44 (0) 20 3100 2000
Nick How
Edward Mansfield
Cara Murphy
MHP (for media enquiries) +44 (0) 20 3128 8100
Reg Hoare mindgym@mhpgroup.com
Katie Hunt
Veronica Farah
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
MindGym's purpose is to partner with the world's best companies
and help them optimise their Human Capital.
This year, has seen broad economic headwinds across many
industries arising from cost of living pressures, rising interest
rates, high inflation and low economic growth. Whilst this creates
pressure and uncertainty for our clients and their employees, the
resultant restructuring and reorganization by businesses has
created opportunities for MindGym, evidenced by the significant
framework activity we have secured, and MindGym has continued to
prosper accordingly.
At the start of the year we moved into an endemic state of
COVID-19 and welcomed a return to more face-to-face gatherings,
both internally and also with our clients who represent 60% of the
FTSE100 and 55% of the S&P100. We have also increased the level
of engagement with our investors and wider stakeholders with the
addition of an 'Investor Meet Company' event in December 2022.
Return to profitability despite the uncertain environment
I am pleased to report a return to profitability driven by
scalable growth and operational efficiencies in FY23, even amidst
the uncertainty of the current environment. Our data and strategic
focus lead us to believe that these trends will continue into FY24
and beyond.
Accelerating both our Core and Digital strategies
We have made significant strategic progress, focusing on both
Core and Digital products.
MindGym has leveraged its innovative, ever-growing science-based
IP in Human Behavioural Change, and our close working relationships
with the world's leading businesses to increase our share of
Learning and Development ('L&D') budgets with notable large
framework wins driving growth. FY23 also saw some important
strengthening of the leadership team in EMEA, which has shown
increased growth rates in the second half, and recently in the
Americas.
Additionally, we expanded our digital offerings as we continue
to build an integrated Behaviour Change Platform ('BCP') to better
serve our clients' data and learning needs. We saw steady progress
as we continue to build the BCP. Digitally-enabled revenues of
GBP37.6m grew by 1 per cent vs FY22, representing 68% of revenues
(FY22: 77%) as we saw increases in face-to-face deliveries with the
lifting of COVID restrictions. Pure digital revenues are a growing
segment of this, and increased their product mix to 13% of Group
revenue vs 11% in FY22.
The Board
We maintain a significant breadth of experience across our
Board, which has remained unchanged since the prior year. We would
like to extend congratulations to our Independent Non-Executive
Director Sir Trevor Phillips, who received a knighthood for his
services to equality and human rights in the 2023 New Year Honours
list, and to Octavius Black, our Co-Founder & CEO, who received
a CBE for his services to entrepreneurship, business, life sciences
and community during the year.
Dividend
No dividend has been paid or proposed for the year ended 31
March 2023. The Board will continue to keep the appropriateness of
dividend payments under periodic review and will next provide an
update at the time of the H1 FY24 interim results announcement.
Outlook
The long term drivers of the Global 'human performance' market
are very attractive. In the short to medium term, given the
macro-economic challenges, we anticipate some cautiousness from
clients, however our data-backed insights and solutions continue to
demonstrate value to our diversified client base. We expect to make
further progress in FY24, with the investments we have made to date
delivering scalable growth.
Ruby Mcgregor-Smith
Board Chair
12 June 2023
CEO's review
The talent agenda has never been more central. Companies are
facing a shifting macro environment and fundamental changes due to
globalisation, COVID's transformation of the workplace, the
navigation of the great resignation, and increasing stakeholder
pressures on issues such as ESG and corporate behaviour. These
factors are impacting our clients' core business KPI's such as
engagement, retention, and quality, and therefore, represent a
significant business challenge to their success.
MindGym has a strong reputation built over 21 years of IP and
content, tested on over five million members, and consistently
delivers programmes to client populations in excess of 10,000
members at a time, in over 40 countries across the world. Along
with an incredible team generating market-leading IP, our digital
products journey is progressing well, providing greater access, and
more data, as we head towards the BCP.
Growing profitably
MindGym partners with the world's foremost companies to optimise
their human capital. The market for our services is vast, growing
rapidly, and highly fragmented.
Our historic strategic investments are now seeing scalable
growth and increasing profitability, and the pace of our digital
pipeline development has accelerated with a reduction in the
required uplift in Capex spend in FY24 .
Strategic
In FY23, we made significant progress with our strategy of
growing our share of L&D budgets and building the digital
BCP.
Growth in our core business
Crystal Metcalfe joined as Managing Director of our EMEA
business in Q1 FY23 which has seen regional growth reach 20% in
FY23. This reflects general improvements across all practices, and
notable recent successes in large framework agreements - in
particular the +GBP10m global energy framework we announced at the
half year.
More recently, Cindy Steagall joined our US business as
Executive Vice President at the end of the financial year. In FY23,
the US business grew by 8%, benefitting from FX impact. We have
every confidence that US performance will continue to improve, and
note that there are some early favourable tailwinds, including the
award of an initial framework agreement with a large automotive
company at the end of the year.
We continue to lead in innovation and remain the global leader
with our clients
At the end of FY22 we launched our Leadership Point of View
('POV') with the related whitepaper launched at the start of FY23.
Our new Wellbeing POV ('Wellworking') was launched during H1 FY23;
the whitepaper will be published during H1 FY24, when we will also
be launching a series of new Wellworking live and eWorkout
products.
In May, we hosted the world's largest gathering of c.160 CHROs
and their deputies at our 'CHRO Summit' at the Royal Opera House in
London, where we discussed the latest trends in the HCM market. The
depth and breadth of attendance underscores the value our clients
see in the innovative solutions that MindGym brings to this sector.
At this event, we also launched our Precision coaching whitepaper,
in line with the full scale launch of Performa.
We are leveraging our investment to grow more profitably
In FY23, the Company returned to profit before tax, with EBITDA
margins of 10% (FY22: 3%). Our investments of prior years in
people, processes and systems are expected to support continuing
financial performance improvement through FY24 and beyond.
A great example of this is our new shared service centre ('SSC')
in Gateshead, which has been enabled by our operations and system
investments. This is significantly improving the quality of our
deliveries, whilst increasing the scalability of our business
model. Enhanced client satisfaction and freed up resources pave the
way for greater value creation and improved profitability.
Accelerated digital product development
We have made considerable progress as we continue to build
MindGym's BCP:
-- 100+ bite size eWorkouts for self-paced digital learning
enhanced to deliver greater accessibility with further content and
UX improvement in FY24
-- Performa, our 1:1 coaching product supported by our
proprietary coaching methodology and custom digital platform, was
fully launched at our CHRO summit alongside the publication of our
new research paper 'Precision Coaching: better, faster, always
whatever your goal'. We will continue to add new features and UX
enhancement through FY24
-- We are developing MindGym proprietary organisational
diagnostics which we will be beta testing in FY24 with a view to
launch in FY25. This is alongside integration of our 10X individual
diagnostics
-- By acquiring the rights to a diagnostics platform, we have
enabled an accelerated journey to our self-serve platform, which we
plan to launch by the end of FY24 - 18 months ahead of schedule
-- We continue to anticipate the integration of live delivery
and all our digital solutions in our Behavioural Change Platform,
which is the critical key to unlocking Data and the significant
value proposition that this represents
High-performance culture
I am immensely grateful to our determined team whose spirit,
ingenuity and generosity has set MindGym up not only for the
success of today, but to transform how millions of people employed
by our clients will think, feel and behave for years to come. We
strive to make sure our people work with a resilient mindset whilst
we also empower them by ensuring we invest significantly in
learning and development, using internal and external resources
where appropriate. We also sponsor colleagues in their masters,
doctorates and a range of other external qualifications.
We benefit from and remain deeply committed to the diversity of
our organisation. We maintain an internal DE&I committee
consisting of employees across the business, geared at implementing
best practice across MindGym as a whole.
ParentGym
MindGym has a strong track record with all our stakeholders. In
2009, we launched ParentGym, a programme providing free training to
parents of children aged 2-11, and in FY23, we ran sessions with
over 650 families with the aim of helping them to grow our next
generation. This included a partnership with the Prison Advice and
Care Trust (PACT) and running a bespoke programme to support
parents in prison and their families. Many of our employees use
their charity days to support PACT and other charities.
Looking ahead
Notwithstanding continued economic uncertainty, our investments
made to date for scalable growth are starting to provide a return,
underpinned by the award of significant framework agreements and
the pace of our digital pipeline development. With the addition of
diagnostics products in FY24 we are accelerating our journey
towards a fully integrated Behavioural Change Platform ('BCP'). We
are confident that organisations will increasingly turn to MindGym
and our unique portfolio of proven solutions to address their
talent and culture challenges.
The opportunity is immense and we are ready to realise it.
Octavius Black
Chief Executive Officer
Financial review
The market for Human Capital Management continues to grow,
driven by the increasing rate of change in society over the last
three years. In FY23, we saw revenues grow at +13% (+5% constant
FX) to GBP55.0m.
Digitally-enabled revenues of GBP37.6m grew by 1 per cent vs
FY22, representing 68% of revenues (FY22: 77%) as we saw increases
in face-to-face deliveries with the lifting of COVID restrictions.
Whilst the margin percentage on face-to-face delivery is lower than
for virtual delivery, the absolute profit per session for
face-to-face is higher. We do not anticipate a fundamental change
in the current mix of delivery going forward, but the financial
implications of this would be unlikely to be significant.
Pure digital revenues which are a growing segment of digitally
enabled revenues, increased their product mix to 13% of Group
revenue vs 11% in FY22, following a minor refresh of and increased
accessibility within the eWorkouts portfolio, coupled with the
early impact of Performa revenues.
We anticipate that large corporate frameworks will be an
increasingly important part of our growth strategy; notably, the
large energy framework win in H1 FY23 as well as that of, an
attractive opportunity in the automotive sector in H2 FY23.
Earnings before interest, taxation, depreciation and
amortisation ('EBITDA') has increased to 10% (FY22: 3%). Profit
before tax ('PBT') has increased by GBP3.4m from GBP(0.5)m in FY22
and this, coupled with ongoing R&D tax savings, resulted in a
diluted EPS of 2.84p which is ahead of prior year (FY22: 1.59p). We
anticipate future benefits from our ongoing savings programmes and
the scalability of our operations, as we progress towards our
medium term target of 15%-20%.
Our balance sheet position remains strong with cash at GBP7.6m.
The overdue debt balance at the year-end of GBP0.4m is at an
all-time low and in line with previous years, bad debt is
negligible. We retain an undrawn credit facility of GBP10m, which
provides flexibility for future opportunities.
Improved performance and profitability
Revenue growth of 13% for the full year
MindGym saw +20% growth achieved across EMEA fueled by the
impact of the significant framework agreement won in H1 FY23, as
well as the strengthening of the management team at the start of
the year. The US saw single-digit growth of 8%, reflecting the
beneficial impact of FX; ongoing improvements to the US management
team in H2 FY23 are anticipated to drive revenue growth in
FY24.
GBP000's Year to Year to
March 31(st) March 31(st) Change
2023 2022 %
Group Statutory
View 55,011 48,668 + 13%
EMEA 23,742 19,715 + 20%
US 31,269 28,953 + 8%
Delivery revenues have continued to grow throughout FY23, albeit
their relative contribution has been overshadowed by the significant
growth of Design and Advisory, which reflects the large framework
agreements won by MindGym in FY23. High D&A revenues are a strong
signal for future delivery revenues as the first 6-9 months of
these frameworks are often scoping, which is followed by delivery
revenue thereafter as the projects are implemented.
Digital revenues continue to demonstrate robust growth, with
the revenue mix increasing versus FY22, reflecting underlying
strong performance in digital eWorkouts and interactive tools,
and the increasing take up of Performa. Other services have been
impacted by lower translation-related revenues versus FY22.
Revenue mix by type compared to previous year
FY23 FY22 % change
Delivery 60.3% 63.7% -3.4%
Design 17.2% 11.2% 6.0%
Advisory 1.4% 1.4% -
Digital 13.1% 11.2% 1.9%
Licensing and certification 5.6% 6.0% -0.4%
Other services 2.4% 6.5% -4.1%
Total 100% 100%
---------- --------- -------------
Gross profit
Gross margin at 88.4% was ahead of prior year (FY22 87.1%). This
was reflected in both regions with gross margin in the US of 88.4%
(FY21: 87.2%) and in EMEA of 88.5% (FY22: 87.0%).
The improvement in margin reflects some ongoing savings
initiatives, but is largely the result of the increased mix of
Design work, the costs of which are included within administrative
costs. In FY24, we anticipate a shift in revenues from Design to
Delivery, particularly as our significant framework agreements from
H1 FY23 moves into the delivery phase in FY24. We have seen a
moderate shift back towards in-person delivery - to date this shift
has been somewhat slower than anticipated (in-person percentage
margins are lower than virtual delivery, but absolute profit per
in-person delivery is higher).
Year ended 31 March 2023
Revenue type EMEA US Global
Delivery 60.2% 60.6% 60.3%
Design 19.0% 15.7% 17.2%
Digital 13.4% 12.8% 13.1%
Licensing and certification 3.3% 7.5% 5.6%
Other services 2.4% 2.3% 2.4%
Advisory 1.7% 1.1% 1.4%
--------- -------- ---------
Total 100% 100% 100%
--------- -------- ---------
Year ended 31 March 2022
Revenue type EMEA US Global
Delivery 60.2% 66.0% 63.7%
Design 13.4% 9.8% 11.2%
Digital 11.9% 10.7% 11.2%
Licensing and certification 5.8% 6.3% 6.0%
Other services 6.8% 6.2% 6.5%
Advisory 1.9% 1.0% 1.4%
--------- -------- ---------
Total 100% 100% 100%
--------- -------- ---------
Profitability and investment
PBT of GBP3.0m is a +GBP3.4m increase on the loss before tax of
GBP0.5m in FY22. FY23 PBT margins were up +638 bpts on FY22,
reflecting in equal parts, operational gearing, ongoing savings
programmes across the business, and the implementation of a shared
service centre midway through the year. Management's ongoing
actions will continue to see margin improvement in FY24 and FY25
from these three levers.
CAPEX
MindGym's capex levels fell to GBP5.1m in FY23 (from GBP6.1m in
FY22). This reflects the organisational redesign in Q4 FY22 which
further integrated the business, and at the same time increased the
pace of product development. We continue to target more efficient
ways of delivering the BCP, and the recent acquisition of the
rights to a diagnostics platform, has accelerated this by 18
months, whilst reducing the required uplift in Capex spend in FY24
and FY25.
Taxation
In FY23, MindGym has submitted further claims to ensure it
obtains the benefit of R&D tax credits relating to FY23. At the
end of FY23 we recorded a deferred tax asset of GBP5.3m in relation
to these R&D credits. This is offset by a GBP2.2m deferred tax
liability being the timing difference linked to capitalised
development costs.
FY23 FY22
Reported Reported
GBP'000 GBP'000
---------- ----------
Profit/(loss) before
tax 2,964 (482)
Tax credit/(charge) (29) 2,084
---------- ----------
PAT (earnings) 2,935 1,602
---------- ----------
ETR % 0.98% 432.4%
---------- ----------
In FY23, the Effective Tax Rate (ETR) continues to be distorted
by the application of the R&D credits noted above. MindGym has
factored these credits in as part of the current year tax charge
and related deferred tax balances. The effect of these tax credits
in the UK is offset by the tax profitability of the US entity,
resulting in overall ETR of 0.98%.
Earnings per share
Diluted earnings per share increased by 1.25 pence to 2.84 pence
(2022: 1.59 pence). Basic earnings per share were 2.93 pence
(2022:1.60 pence).
Dividends
No dividend has been paid or proposed for the year ended 31
March 2023. The Board will continue to keep the appropriateness of
dividend payments under periodic review and will next provide an
update at the time of the H1 FY24 interim announcement.
Operational efficiencies and enablement
We have recently launched a new operational centre of
excellence, our shared service centre ('SSC') based in Gateshead,
UK. The creation of the SSC drives increased efficiency in our
business processes and focus on seamless delivery for our clients.
The SSC will also use data analytics to assist with our strategic
decision-making and shape our operational leverage. The continued
focus on automation and AI technology will help deliver increased
efficiency and client satisfaction overall.
Cash flow and balance sheet
Cash and cash equivalents have decreased from GBP10.0m in FY22
to GBP7.6m at the end of FY23, including the FY23 GBP4.9m
investment in digital capital expenditure.
EBITDA was GBP5.3 million, 331% up on FY22 EBITDA of GBP1.2
million, with cash generated from operations of GBP4.4 million,
which was 278% up on the GBP1.2 million cash generated from
operations in the prior year. Cash generation in H2 FY23 was
GBP3.1m vs.GBP2.0m cash consumption in H2 FY22.The working capital
reduction resulted in cash conversion, defined as cash generated
from operations as a percentage of EBITDA, of 83% (FY22: 95%).
Cash conversion
31 March 31 March
2023 2022
GBP'000 GBP'000
Cash generated from operations 4,393 1,164
Reported EBITDA 5,294 1,228
Cash conversion (Cash from operations /EBITDA) 83% 95%
Over the year, we again reduced the time taken to invoice
clients and improved the collection of overdue receivables which
contributed to the favourable Net Trade Receivables movement of
GBP1.2m. Overdue debt as a percentage of total trade receivables
fell to 7% at the year end (FY22: 9%), with the amount of overdue
debt reducing GBP0.3 million to GBP0.4 million (FY22: GBP0.7
million). Deferred income decreased by 6% to GBP4.4m (FY22:
GBP4.7m) as clients continue to secure budgets for their following
financial year. Trade and other payables reduced by GBP1.3m,
reflecting greater utilisation of holiday and lower commission
payments.
Tax paid in the year was GBP0.8 million (FY22: GBP0.8 million)
mainly related to US activity .
Capital expenditure was GBP5.1 million (FY22: GBP6.1 million)
which included GBP4.9 million of costs capitalised on developing
our new digital products and GBP0.2m on other tangible fixed
assets.
Lease payments on our offices in the UK and the USA were GBP1.3
million (FY22: GBP1.2m). No dividends were paid in the year (FY22:
GBPnil).
At the year end, the Group had cash of GBP7.6 million (2022:
GBP10.0 million) and net cash of GBP4.5m (FY22: GBP7.8 million)
after deducting the lease liability included on the balance
sheet.
Going concern
The Board has reviewed scenario analysis 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 has reviewed scenarios including a range of revenues and
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 in excess of 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.
Forward-looking statements
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.
Dominic Neary
Chief Financial Officer
12 June 2023
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 March 31 March
2023 2022
Note GBP'000 GBP'000
Continuing operations
Revenue 4 55,011 48,668
Cost of sales (6,360) (6,284)
----------- -----------
Gross profit 48,651 42,384
Administrative expenses (45,568) (42,733)
----------- -----------
Operating profit/(loss) 4, 5 3,083 (349)
Finance income 8 55 19
Finance costs 8 (174) (152)
----------- -----------
Profit/(loss) before tax 2,964 (482)
Tax on profit/(loss) 9 (29) 2,084
----------- -----------
Profit for the financial period from
continuing operations attributable to
owners of the parent 2,935 1,602
=========== ===========
Items that may be reclassified subsequently
to profit or loss
Exchange translation differences on consolidation 297 192
----------- -----------
Other comprehensive income for the period
attributable to the owners of the parent 298 192
----------- -----------
Total comprehensive income for the period
attributable to the owners of the parent 3,232 1,794
=========== ===========
Earnings per share (pence)
Basic 10 2.93 1.60
Diluted 2.84 1.59
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 31 March
2023 2022
Note GBP'000 GBP'000
Non-current assets
Intangible assets 12 12,320 8,175
Property, plant and equipment 13 3,691 2,815
Deferred tax assets 9 3,229 2,846
Other receivables 15 230 217
----------- ----------
19,470 14,053
Current assets
Inventories 14 53 7
Trade and other receivables 15 9,527 10,063
Current tax receivable 779 494
Cash and cash equivalents 7,587 10,021
----------- ----------
17,964 20,585
----------- ----------
Total assets 37,416 34,638
=========== ==========
Current liabilities
Trade and other payables 16 11,423 12,729
Lease liability 17 1,121 856
Redeemable preference shares 18 50 50
Current tax payable 20 28
----------- ----------
12,614 13,663
----------- ----------
Non-current liabilities
Lease liability 17 1,988 1,349
Total liabilities 14,602 15,012
----------- ----------
Net assets 22,814 19,626
=========== ==========
Equity
Share capital 21 1 1
Share premium 242 213
Share option reserve 496 608
Retained earnings 22,075 18,804
----------- ----------
Equity attributable to owners of the
parent company 22,814 19,626
=========== ==========
The financial statements were approved and authorised for issue
by the Board of Directors on 12 June 2023 and were signed on its
behalf by:
Dominic Neary
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 2021 1 157 674 16,620 17,452
========== ========== ========== =========== =========
Profit for the period - - - 1,602 1,602
Other comprehensive income:
Exchange translation differences
on consolidation - - - 192 192
---------- ---------- ---------- ----------- ---------
Total comprehensive income
for the period - - - 1,794 1,794
Exercise of options - 56 (407) 407 56
Credit to equity for share-based
payments 22 - - 341 - 341
Tax relating to share-based
payments 9 - - - (17) (17)
At 31 March 2022 1 213 608 18,804 19,626
========== ========== ========== =========== =========
Profit for the period - - - 2,935 2,935
Other comprehensive income:
Exchange translation differences
on consolidation - - - 297 297
--- ----- ------ -------- --------
Total comprehensive income
for the period - - - 3,232 3,232
Exercise of options - 29 (39) 39 29
Debit to equity for share-based
payments 22 - - (73) - (73)
At 31 March 2023 1 242 496 22,075 22,814
=== ===== ====== ======== ========
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 March 31 March
2023 2022
Note GBP'000 GBP'000
Cash flows from operating activities
Profit for the financial period 2,935 1,602
Adjustments for:
Amortisation of intangible assets 12 743 325
Depreciation of property, plant and equipment 13 1,468 1,252
Net finance costs 8 119 133
Taxation (credit)/charge 9 29 (2,084)
(Increase) in inventories (46) (7)
Decrease in trade and other receivables 524 686
(Increase) in payables and provisions (1,306) (1,084)
Share-based payment (credit)/charge 22 (73) 341
-----------
Cash generated from operations 4,393 1,164
Net tax (paid)/received (766) (812)
-----------
Net cash generated from operating activities 3,627 352
----------- -----------
Cash flows from investing activities
Purchase of intangible assets 12 (4,888) (5,623)
Purchase of property, plant and equipment 13 (240) (514)
Interest received 8 54 12
----------- -----------
Net cash used in investing activities (5,074) (6,125)
----------- -----------
Cash flows from financing activities
Cash repayment of lease liabilities (1,298) (1,226)
Issuance of ordinary shares 29 56
Interest paid (52) (27)
Net cash used in financing activities (1,321) (1,197)
----------- -----------
Net decrease in cash and cash equivalents (2,768) (6,970)
Cash and cash equivalents at beginning
of period 10,021 16,833
Effect of foreign exchange rate changes 334 158
----------- -----------
Cash and cash equivalents at the end
of period 7,587 10,021
=========== ===========
Cash and cash equivalents at the end
of period comprise:
Cash at bank and in hand 7,587 10,021
=========== ===========
MIND GYM PLC NOTES TO THE GROUP FINANCIAL STATEMENTS
1. General information
The financial information for the year ended 31 March 2023 and
the year ended 31 March 2022 does not constitute the company's
statutory accounts for those years.
Statutory accounts for the year ended 31 March 2022 have been
delivered to the Registrar of Companies. The statutory accounts for
the year ended 31 March 2023 will be delivered to the Registrar of
Companies in due course.
The auditors' reports on the accounts for 31 March 2023 and 31
March 2022 were unqualified, did not draw attention to any matters
by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006.
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 UK adopted international accounting standards and
within the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards, including
interpretations issued by the International Financial Reporting
Interpretations Committee ('IFRIC'), and within 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 Pounds
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 2023, the Group had GBP7.6
million of cash and GBP3.1m of lease liabilities.
The Group prepares cash flow forecasts and re-forecasts
regularly as part of the business planning process. The Directors
have reviewed forecasted 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 inflationary
pressure and other medium-term macro-economic impacts and subjected
to stress testing and scenario modelling which the Directors
consider sufficiently robust. The impact of these inflationary
pressures are further discussed in the Board Chair's report. 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 forecasted cash flows to give rise to a
material risk over going concern is
sufficiently remote.
As a result of these assessments, the Group's strong cash
position and its 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 did not adopt any new or amended IFRSs and IFRIC
interpretations from 1 April 2022.
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
for periods
starting on
or after
Amendments to IAS 1: Classification of Liabilities 1 January
as Current or Non-current 2023
Amendments to IAS 8: Definition of Accounting 1 January
Estimates 2023
Amendments to IAS 1 and IFRS Practice Statement 1 January
2 - Disclosure of Accounting policies 2023
Amendments to IAS 12 - Deferred Tax related to 1 January
Assets and Liabilities arising from a Single Transaction 2023
Amendments to IFRS 17 - Initial Application of 1 January
IFRS 17 and IFRS 9 - Comparative information 2023
Amendments to IAS 1: Classification of Liabilities 1 January
as Current or Non-current 2024
Amendments to IFRS 16: Lease Liability in a Sale 1 January
and Leaseback 2024
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 at the date of the transaction. Foreign exchange
gains and losses resulting from settlement of such transactions,
and from the translation at exchange rates 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.
-- Digital coaching platform and coaching sessions. Revenue is
recognised over time, across the life of the agreement and in line
with expected customer usage levels.
Any advance consideration received from clients represents a
contract liability and is disclosed in Note 16 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 15 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.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised
during the period of time that is necessary to complete and prepare
the asset for its intended use or sale. Other borrowing costs are
expensed in the period in which they are incurred and reported in
finance costs.
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.
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.
The Group has taken advantage of HMRC's Small-Medium Enterprise
(SME) Research and Development tax relief scheme. This has resulted
in an enhanced deduction on eligible activities and is a
significant component of both the tax credit in the Consolidated
Statement of Comprehensive Income and deferred tax asset recognised
in the balance sheet.
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
-- Trademarks 10 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 GBP4.8 million incurred on developing software and new
digital products have been capitalised in the year (see Note 12).
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 2023 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:
Useful economic life of intangible assets
The useful economic lives of capitalised development costs,
which are key estimates, are assessed by management. In assessing
the useful economic lives of the coaching platform, Performa,
management took factors into account such as the speed of change in
technology used across these types of Digital products. Initially
management assessed the useful economic life of Performa as 3
years, however, following a detailed review of the underlying code
base management have determined that a 5-year useful economic life
is more appropriate. The policy has been amended accordingly and
implemented from 1 April 2022. The useful economic lives have been
benchmarked against the market and are deemed reasonable. A 3 or 4
year useful economic life would have increased the amortisation
charge for the year ending 31 March 2023 by GBP501,000 or
GBP317,000 respectively.
Recognition of deferred tax asset
The availability of future taxable profits against which tax
losses carried forward can be used is an estimation uncertainty.
Management has determined that it is likely that the carried
forward losses of GBP21 million (generating a GBP5.3 million
deferred tax asset) will be utilised against future taxable
profits. Based on latest management forecasts, the Group is
expecting to generate taxable profits over the next 5 years. There
is no expiration date on the losses. These losses have mainly
arisen on enhanced deductions arising from claims under the UK
Research and Development regime for small and medium-sized
companies, and not from day-to-day operations. Supporting this
assertion is the existence of a deferred tax liability on the
associated intangible assets of GBP2.4 million and new business
opportunities and framework agreements which have been secured.
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 2023
Segment result
EMEA America Total
GBP'000 GBP'000 GBP'000
Revenue 23,742 31,269 55,011
Cost of sales (2,740) (3,620) (6,360)
Administrative expenses (23,092) (22,476) (45,568)
---------- ---------- ----------
(Loss)/profit before inter-segment charges (2,090) 5,173 3,083
Inter-segment charges 5,067 (5,067) -
---------- ---------- ----------
Operating profit - segment result 2,977 106 3,083
Finance income 55
Finance costs (174)
----------
Profit before taxation 2,964
==========
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 2023 is set out
below.
EMEA America Group
Delivery 60.2% 60.6% 60.3%
Design 19.0% 15.7% 17.2%
Digital 13.4% 12.8% 13.1%
Licensing and certification 3.3% 7.5% 5.6%
Other 2.4% 2.3% 2.4%
Advisory 1.7% 1.1% 1.4%
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.
Segment results for the year ended 31 March 2022
Segment result
EMEA America Total
GBP'000 GBP'000 GBP'000
Revenue 19,715 28,953 48,668
Cost of sales (2,572) (3,712) (6,284)
Administrative expenses (23,705) (19,028) (42,733)
---------- ---------- ----------
(Loss)/profit before inter-segment charges (6,562) 6,213 (349)
Inter-segment charges 5,084 (5,084) -
---------- ---------- ----------
Operating (loss)/profit - segment result (1,478) 1,129 (349)
Finance income 19
Finance costs (152)
----------
Loss before taxation (482)
==========
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 2022 is set out
below.
EMEA America Group
Delivery 60.2% 66.0% 63.7%
Design 13.4% 9.8% 11.2%
Digital 11.9% 10.7% 11.2%
Licensing and certification 5.8% 6.3% 6.0%
Other 6.8% 6.2% 6.5%
Advisory 1.9% 1.0% 1.4%
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 profit/(loss) is stated after charging:
31 March 31 March
2023 2022
GBP'000 GBP'000
Coach costs 4,960 5,025
Staff costs (Note 7) 34,962 32,977
Amortisation of intangible assets 743 325
Depreciation of property, plant and equipment 1,468 1,252
Short-term and low-value lease expense 18 23
Write-back of trade receivables (106) (11)
============ ==========
6. Auditor remuneration
31 March 31 March
2023 2022
GBP'000 GBP'000
Fees for audit of the Company and consolidated
financial statements 134 97
Fees for audit of the Company's subsidiaries
pursuant to legislation 24 16
------------ ----------
Total audit fees 158 113
Tax compliance services 20 69
Tax advisory services - 6
Other services 15 11
Total fees payable to the auditor 193 199
============ ==========
7. Employees
Staff costs were as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
Wages and salaries 31,036 28,828
Social security costs 2,944 2,825
Pension costs - defined contribution plans 1,055 983
Share-based payments (73) 341
34,962 32,977
============ ==========
The average number of the Group's employees by function was:
31 March 31 March
2023 2022
Delivery 218 196
Support 79 86
Digital 44 50
341 332
============ ==========
The year-end number of the Group's employees by function
was:
31 March 31 March
2023 2022
Delivery 241 206
Support 86 88
Digital 46 41
373 335
============ ==========
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
2023 2022
GBP'000 GBP'000
Salaries, bonuses and other short-term employee
benefits 2,624 2,955
Post-employment benefits 72 130
Termination benefits - 311
Share-based payments (109) 111
Total compensation 2,587 3,507
============ ==========
Details of Directors' remuneration and share options are set out
in the Annual Report on Remuneration on pages 87 to 92.
8. Net finance costs
31 March 2023 31 March 2022
GBP'000 GBP'000
Finance income
Bank interest receivable 54 12
Finance lease income 1 7
----------------- ---------------
55 19
----------------- ---------------
Finance costs
Bank interest payable (52) (27)
Lease interest (122) (125)
----------------- ---------------
(174) (152)
----------------- ---------------
(119) (133)
================= ===============
9. Tax
The tax (credit)/charge for the year comprises:
31 March 31 March
2023 2022
GBP'000 GBP'000
UK current tax - -
UK adjustment in respect of prior periods - (42)
Withholding tax 8 -
Foreign current tax 73 326
Foreign adjustment in respect of prior periods 322 19
------------ ----------
Total current tax charge 403 303
------------ ----------
Deferred tax - current year (131) (1,317)
Deferred tax - adjustment in respect of prior
periods (R&D claims) (154) (429)
Effect of changes in tax rates (89) (641)
------------ ----------
Total deferred tax credit (374) (2,387)
------------ ----------
Total tax (credit)/charge 29 (2,084)
============ ==========
Tax on items credited to equity:
31 March 31 March
2023 2022
GBP'000 GBP'000
Current tax credit on share-based payments - -
Deferred tax (credit)/charge on share-based
payments - 17
------------- ----------
Total tax credit in equity - 17
============= ==========
The tax charge for the year can be reconciled to accounting
profit as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
Profit/(loss) before tax 2,964 (482)
------------ ----------
Expected tax charge/(credit) based on the standard
rate of tax in the UK of 19% (2022: 19%) 563 (91)
Differences in overseas tax rates 11 91
Expenses not deductible for tax purposes 846 717
Adjustments to tax in respect of prior periods
(2022: R&D claims) 168 (452)
Enhanced R&D deduction (1,466) (1,722)
Tax rate changes (89) (641)
Other tax adjustments (4) 14
------------ ----------
Total tax (credit)/charge 29 (2,084)
============ ==========
The main categories of deferred tax assets recognised by the
Group are:
Intangible
Tax losses assets Other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 - - 230 230
Credited to income 4,049 (1,526) 103 2,626
Credited to equity - - (17) (17)
Exchange differences - - 7 7
------------ ------------ --------- ---------
At 31 March 2022 4,049 (1,526) 323 2,846
Credited to income 1,205 (848) 15 372
Credited to equity - - - -
Exchange differences - - 11 11
At 31 March 2023 5,254 (2,374) 349 3,229
============ ============ ========= =========
The standard rate of corporation tax in the UK is 19% until 31
March 2023. The March 2022 Budget Statement announced an increase
in the main corporation tax rate to 25%, which will take effect
from 1 April 2023. This increase was substantively enacted at the
balance sheet date.
The Group has recognised GBP5.3 million of deferred tax assets
relating to carried forward tax losses. These losses have been
recognised as it is probable that future taxable profits will allow
these deferred tax assets to be recovered. The Group has performed
a continuing evaluation of its deferred tax asset valuation
allowance on an annual basis to estimate whether sufficient future
taxable income will be generated to permit use of the existing
deferred tax assets.
The Group has recognised a corresponding GBP2.4 million of
deferred tax liabilities relating to timing differences on
intangible assets.
Other deferred tax assets includes deferred tax on shared based
payments in the UK and other temporary timing differences.
10. 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).
31 March 31 March
2023 2022
Weighted average number of shares in issue 100,143,571 100,009,727
Potentially dilutive shares (weighted average) 3,141,506 442,548
------------- -------------
Diluted number of shares (weighted average) 103,285,077 100,452,275
------------- -------------
31 March 2023 31 March 2022
Basic Diluted Basic Diluted
EPS EPS EPS EPS
GBP'000 pence Pence GBP'000 pence pence
Net profit/(loss) attributable
to shareholders 2,935 2.93 2.84 1,602 1.60 1.59
11. Dividends
No dividends have been paid or proposed for the year ended 31
March 2023 (2022: nil).
12. Intangible assets
Development
Patents costs Total
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2021 63 4,761 4,824
Additions - 5,623 5,623
--------- ------------- ---------
At 31 March 2022 63 10,384 10,447
Additions 58 4,830 4,888
Disposals - (41) (41)
--------- ------------- ---------
At 31 March 2023 121 15,173 15,294
========= ============= =========
Amortisation
At 1 April 2021 63 1,884 1,947
Amortisation charge - 325 325
--------- ------------- ---------
At 31 March 2022 63 2,209 2,272
Amortisation charge 3 740 743
Disposals - (41) (41)
--------- ------------- ---------
At 31 March 2023 66 2,908 2,974
========= ============= =========
Net book value
At 31 March 2022 - 8,175 8,175
--------- ------------- ---------
At 31 March 2023 55 12,265 12,320
========= ============= =========
Development cost additions in the year to 31 March 2023 include
software development costs directly incurred in the creation of new
digital assets.
13. 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 2021 3,921 321 1,444 5,686
Additions 39 186 328 553
Disposals - - (301) (301)
Exchange differences 128 12 38 178
-------------- --------------- ---------------- ---------
At 31 March 2022 4,088 519 1,509 6,116
Additions 1,937 2 238 2,177
Disposals - - - -
Exchange differences 164 17 46 227
-------------- --------------- ---------------- ---------
At 31 March 2023 6,189 538 1,793 8,520
============== =============== ================ =========
Depreciation
At 1 April 2021 1,250 234 796 2,280
Depreciation charge 885 53 314 1,252
Disposals - - (301) (301)
Exchange differences 49 - 21 70
At 31 March 2022 2,184 287 830 3,301
Depreciation charge 1,013 86 369 1,468
Disposals - - - -
Exchange differences 38 1 21 60
-------------- --------------- ---------------- ---------
At 31 March 2023 3,235 374 1,220 4,829
============== =============== ================ =========
Net book value
At 31 March 2022 1,904 232 679 2,815
-------------- --------------- ---------------- ---------
At 31 March 2023 2,954 164 573 3,691
============== =============== ================ =========
14. Inventories
31 March 31 March
2023 2022
GBP'000
Finished goods 53 7
============ ==========
Write-back of inventory amounted to GBP32,000 (2022:
GBPnil).
The cost of inventories recognised as an expense and included in
cost of sales amounted to GBP392,000 (2022: GBP112,000).
15. Trade and other receivables
31 March 31 March
2023 2022
GBP'000 GBP'000
Non-current
Prepayments in respect of property deposits 230 217
230 217
============ ==========
Current
Trade receivables 6,730 7,999
Less provision for impairment (102) (212)
------------ ----------
Net trade receivables 6,628 7,787
Net investment in sub-lease - 81
Other receivables 80 82
Prepayments 1,125 1,170
Accrued income 1,694 943
9,527 10,063
============ ==========
Trade receivables have been aged with respect to the payment
terms as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
Not past due 6,282 7,274
Past due 0-30 days 336 401
Past due 31-60 days 74 109
Past due 61-90 days 12 25
Past due more than 90 days 26 190
6,730 7,999
============ ==========
The movement in the allowance for impairment losses was:
31 March 31 March
2023 2022
GBP'000 GBP'000
At the beginning of the period 212 227
Write-back (110) (14)
Utilisation of provision (5) (7)
Foreign exchange adjustment 5 6
At the end of the period 102 212
============ ==========
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.
16. Trade and other payables
31 March 31 March
2023 2022
GBP'000 GBP'000
Trade payables 1,257 1,401
Other taxation and social security 744 663
Other payables 396 690
Accruals 4,606 5,257
Deferred income 4,420 4,718
11,423 12,729
============ ==========
17. Lease liability
The lease liabilities included in the statement of financial
position are:
31 March 31 March
2023 2022
GBP'000 GBP'000
Current 1,121 856
Non-current 1,988 1,349
3,109 2,205
============ ==========
The related right-of-use asset is disclosed in Note 13.
The movements in the lease liability were as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
At the beginning of the year 2,205 3,166
Lease payments 1,948 (1,226)
Finance cost 122 121
Additions (1,298) 39
Exchange differences 132 105
At the end of the year 3,109 2,205
============ ==========
The maturity analysis of the contractual undiscounted cash flows
is:
31 March 31 March
2023 2022
GBP'000 GBP'000
Less than one year 1,227 934
Between one and five years 2,094 1,412
Total future lease payments 3,321 2,346
Total future interest payments (212) (141)
Total lease liability 3,109 2,205
============ ==========
18. 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.
19. Borrowings
The Group entered into a GBP10 million debt facility (GBP6
million Revolving Credit Facility, GBP4 million accordion) on 30
September 2021 which matures after three years. The facility
remains undrawn as at 12 June 2023.
20. 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
2023 2022
GBP'000 GBP'000
Net trade receivables 6,628 7,787
Other receivables 80 82
Prepayments in respect of property deposits 230 217
Cash and cash equivalents 7,587 10,021
------------ ----------
Financial assets at amortised cost 14,525 18,107
============ ==========
Trade payables 1,257 1,401
Other payables 396 690
Lease liabilities 3,109 2,205
------------ ----------
Financial liabilities at amortised cost 4,762 4,296
============ ==========
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 15 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
2023 2022
GBP'000 GBP'000
Trade receivables 6,628 7,787
Other receivables 80 82
Prepayments in respect of property deposits 230 217
Cash and cash equivalents 7,587 10,021
At the end of the period 14,525 18,107
============ ==========
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 has a
surplus of cash in all entities and the GBP10 million debt facility
available (set out in Note 19). 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 17.
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 2023
Net trade receivables 2,981 3,070 351 226 6,628
Cash and cash equivalents 4,659 2,631 136 161 7,587
At 31 March 2022
Net trade receivables 2,592 4,581 468 146 7,787
Cash and cash equivalents 6,725 3,018 95 183 10,021
The Group does not currently use forward foreign exchange
contracts or currency options to hedge currency risk.
21. Share capital
31 March 31 March 31 March 31 March
2023 2023 2022 2022
Cost Cost
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.00001
at 1 April 100,105,660 1 99,791,784 1
Issue of shares to satisfy
options 61,924 - 313,876 -
------------- ---------- ------------- ----------
Ordinary shares of GBP0.00001
at 31 March 100,167,584 1 100,105,660 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
2023 2023 2022 2022
Cost Cost
Number GBP'000 Number GBP'000
As at 1 April 111,655 - 119,875 -
Issue of new shares to EBT - - (8,220) -
---------- ---------- ---------- ----------
Ordinary shares of GBP0.00001
at 31 March 111,655 - 111,655 -
========== ========== ========== ==========
Market value at 31 March 76 151
---------- ---------- ---------- ----------
22. 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. Many
employees have elected to leave their shares in the trust for a
further two years for tax purposes.
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
2023 2022
GBP'000 GBP'000
Equity settled share-based payments (73) 341
============ ==========
The movements in the number of share awards and share options
and the weighted average exercise price of awards are:
31 March 31 March
2023 2022
Weighted Weighted
average exercise average exercise
Number price GBP Number price GBP
Outstanding at the beginning
of the period 2,246,912 0.66 2,287,024 0.66
Granted during the period 2,517,268 0.13 2,448,318 0.14
Forfeited during the period (1,110,690) 0.44 (2,166,334) 0.14
Exercised during the period (61,924) 0.67 (322,096) 0.17
Outstanding at the end of the
period 3,591,566 0.36 2,246,912 0.66
------------- ------------------- ------------- -------------------
Exercisable at the end of the
period 3,461 4,110
------------- ------------------- ------------- -------------------
Weighted average fair value
of awards granted (GBP) 1.09 1.69
============= =================== ============= ===================
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
2023 2022
GBP'000 GBP'000
GBP nil 1,061,246 428,770
GBP0.00001 1,437,007 584,580
GBP0.77000 277,000 316,987
GBP1.02000 248,317 -
GBP1.04000 20,768 201,981
GBP1.44500 50,418 217,784
GBP1.46000 496,810 496,810
------------ -----------
3,591,566 2,246,912
------------ -----------
Weighted average remaining contractual life
(years) 7.2 5.8
============ ===========
Simple share options awarded under the LTIP, SAYE and ESPP are
valued using the Black-Scholes model. Complex share options awarded
under the LTIP are valued using the Monte Carlo 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
LTIP (3-year 14 Jul
vesting) 21** 1.90 Nil 3 36% 0% 0.15% 1.90
LTIP (3-year 14 Jul
vesting) 21** 1.90 Nil 3 36% 0% 0.15% 1.69
LTIP (4-year 14 Jul
vesting) 21** 1.90 Nil 4 36% 0% 0.23% 1.90
LTIP (4-year 14 Jul
vesting) 21** 1.90 Nil 4 36% 0% 0.23% 1.70
LTIP (5-year 14 Jul
vesting) 21** 1.90 Nil 5 36% 0% 0.31% 1.90
LTIP (5-year 14 Jul
vesting) 21** 1.90 Nil 5 36% 0% 0.31% 1.73
1 Aug
SAYE 21 1.70 1.445 3 36% 0% 0.31% 0.53
1 Aug
ESPP 21 1.70 1.445 1 34% 0% 0.15% 0.36
LTIP (3-year 3 Dec
vesting) 21 1.675 Nil 3 36% 0% 0.15% 1.675
LTIP (4-year 3 Dec
vesting) 21 1.675 Nil 4 36% 0% 0.23% 1.675
LTIP (5-year 3 Dec
vesting) 21 1.675 Nil 5 36% 0% 0.31% 1.675
LTIP (3-year 21 July
vesting) 22 1.20 Nil 3 36% 0% 0.15% 1.20
LTIP (4-year 21 July
vesting) 22 1.20 Nil 4 36% 0% 0.23% 1.20
LTIP (5-year 21 July
vesting) 22 1.20 Nil 5 36% 0% 0.31% 1.20
1 Aug
SAYE 22 1.20 1.02 3 36% 0% 0.31% 0.38
1 Aug
ESPP 22 1.20 1.02 1 34% 0% 0.15% 0.26
=================== ========== =========== ========== ========== ============= ========== =========== ========
* includes further options granted on 12 Jun 2020 on the same
terms and with the same valuation assumptions.
* includes further options granted on 3 Dec 2021 on the same
terms and with the same valuation assumptions.
23. 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 7.
-- 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 GBP1,538 in
the year ended 31 March 2023.
24. Events after the reporting period
There were no post-balance sheet events.
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