The provider of corporate and staff training solutions said the pandemic has accelerated its digital strategy and led to a “significant shift” to virtual events from face-to-face meetings
() is anticipating “significant growth in both revenue and profits” in the second half of its current year following a difficult first half disrupted by the coronavirus pandemic.
In a trading update for the six months ended September 30, the provider of corporate and staff training solutions said the pandemic has led to an acceleration of its digital strategy and a “significant shift” to virtual events from face-to-face meetings.
However, due to the disruption revenues for the period are expected to be down 40% at £14.5mln with an adjusted pre-tax loss of between £1mln and £1.5mln.
The shift to digital was evident with revenues from virtual live deliveries rising to 78% of total revenues from 32% last year, while standalone digital solutions reported a year-on-year revenue rise of 6% despite declines elsewhere in the business.
Mind Gym also highlighted an improvement in current trading, saying October is forecast to deliver “a marked increase in revenue”, continuing its month-on-month improvement in performance through August and September.
The company also said its pipeline has expanded substantially and that as a result for the second half is expected to see significant revenue and profit growth compared to the first.
“The first six months of the current financial year was a period of great uncertainty as companies focused their attention on the operational challenges of adapting to [coronavirus]. We were successful in pivoting clients to virtual delivery, feedback for which is very strong, and in leading the market again in product development”, said chief executive Octavius Black.
” Growth is returning, showing up in both booked revenues and the opportunity pipeline and we are confident that revenue performance and profitability in [the second half] will be significantly better than [the first half], he added.
Mind Gym also announced the appointment of Trevor Phillips, the founder of the Equality and Human Rights Commission, as an independent non-executive director with immediate effect, while a senior independent non-executive director, Dido Harding, will be stepping down from the board with immediate effect.
“I would like to take this opportunity to thank Baroness Harding for her valuable contribution to the Group since she joined the Board for its successful public listing and subsequent pre-Covid growth. We are extremely grateful for her guidance and support”, said Mind Gym chairman Joanne Cash.
“At the same time, it is a tremendous privilege to welcome Trevor Phillips to our Board and we very much look forward to working with him to address the increasing number of challenges our clients are confronting in these unusual times”, she added.
In a note on Friday, analysts at Mind Gym’s house broker Liberum, which currently has the company under review, said they were keeping estimates withdrawn given the pandemic uncertainty, however, they believed the company is “well placed to emerge stronger from [coronavirus]”.
Liberum also assumed a pre-tax loss for the first half of £1.3mln, although they highlighted that the business is “financially strong with more than £14.5mln of cash on the balance sheet”.
“Mind Gym grew through the last UK recession, which started in 2008. While Mind Gym is now a bigger business, it is still very small in the global training market and therefore continues to have significant market share opportunity through its disruptive approach”, the broker said, adding that the firm is exposed to “some exciting themes” such as diversity & inclusion training which is “the biggest growth category at the moment”.
“The appointment of Trevor Phillips, founding Chairman of the Equality and Human Rights Commission, will also strengthen Mind Gym’s credibility in this area”, Liberum said.
Shares in Mind Gym were 9.1% lower at 85p in early deals on Friday.