TIDMMIND
RNS Number : 3895O
Mind Gym PLC
10 June 2022
Mind Gym PLC
("MindGym", the "Group" or the "Company")
Full year results for the year ended 31 March 2022
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 2022.
Financial highlights
12 months 12 months Change
to 31 Mar to 31 Mar
2022 (FY22) 2021 (FY21)
-------------------------------------
Revenue GBP48.7m GBP39.4m +24%
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Digitally-enabled revenues(1) GBP37.4m GBP30.5m +23%
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Gross profit margin 87.1% 87.4% -0.3pps
-------------- -------------- ---------
Adjusted (LBT)/PBT(2) GBP(0.5)m GBP0.3m n/a
-------------- -------------- ---------
Statutory (loss)/profit GBP(0.5)m GBP(0.4)m n/a
before tax
-------------- -------------- ---------
Adjusted Diluted EPS 1.59p 0.30p +1.29p
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Diluted EPS 1.59p (0.23)p +1.84p
-------------- -------------- ---------
Total Dividend per share nil nil
-------------- -------------- ---------
Cash at bank GBP10.0m GBP16.8m -40%
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Capital expenditure GBP6.1m GBP3.2m +91%
-------------- -------------- ---------
Adjusted EBITDA cash conversion(3) 95% 418% -323pps
-------------- -------------- ---------
(1) Digitally enabled revenues are virtual live delivery
(including virtual licensing), and digital products (currently
eWorkouts and Performa).
(2) Adjustments include restructuring costs in FY21. These
adjustments are detailed in Note 6.
(3) Adjusted EBITDA cash conversion defined as Adjusted cash
generated from operations/Adjusted EBITDA.
Financial and operating highlights
-- Robust performance in line with the Board's expectations,
with revenues surpassing pre-Covid levels:
o Revenues of GBP48.7m were up 25 per cent on FY21 (in constant
currency) and up 5 per cent on pre-Covid levels (FY20).
o Repeat revenues (defined as revenues from clients that have
purchased in the current year and in one or more of the previous
three years) were 86% (2021: 78%).
o Adjusted LBT of GBP0.5m was down GBP0.8m on FY21 - prior year
excluded GBP0.7m of restructuring costs (adjusted due to the
unprecedented impact of COVID). The FY22 loss includes GBP0.5m of
non-recurring cost.
-- MindGym retains a strong financial position to support investments in future growth:
o Net cash of GBP10.0m (31 March 2021: GBP16.8m), following
investments (digital capex of GBP5.6m) during the financial year in
our new digital products.
o H2 FY22 cash-burn (GBP2.0m) was substantially lower than H1
FY22 (GBP4.8m).
o During the year, the Group entered into a GBP10m debt facility
(GBP6m RCF, GBP4m accordion), which was undrawn as at 31 March
2022. This provides the flexibility to support investment in future
growth.
-- Good progress with MindGym's Digital strategy:
digitally-enabled revenues up 23% versus FY21, with Performa
successfully launched:
o Digitally-enabled revenues (virtual live, eWorkouts and
Performa) of GBP37.4m, were up 23 per cent versus FY21 and up 158
per cent versus FY20 (when the majority of deliveries were still
in-person) and represented 77 per cent share of revenue (77 per
cent in FY21 and 32 per cent in FY20).
o The continued high mix of virtual live delivery (vs. in
person) resulted in a gross profit margin of 87.1% (FY21: 87.4%),
broadly in line with prior year.
o Performa, MindGym's digital 1:1 coaching SaaS platform, was
launched in January 2022, generating more than GBP0.5m annualised
revenue in its first 12 weeks.
o 10X which was acquired in administration for GBP0.1m, has been
shown in a large scale
co-validated study to be more accurate at predicting behaviour
than the leading questionnaires on the market. This will be
integrated into MindGym's planned upcoming digital product
'Behavioural Change Platform' (BCP), which is expected to be
launched in FY24.
-- Leadership team: New CFO appointment
o Dominic Neary joined the Board as Chief Financial Officer on 1
January 2022, bringing highly relevant expertise for MindGym's next
phase of growth.
Current Trading and Outlook
-- R obust top line growth anticipated in FY23, despite the
macro economic headwinds, benefitting from the launch of Performa
and our new Points of View ("PoVs") on Leadership and
Wellbeing.
-- FY23 expected to return to profitability as we see leverage
of the investments that were made in FY22 to support growth
expectations in the years to come.
Octavius Black, Chief Executive Officer of MindGym, said:
"MindGym made progress during a turbulent year delivering a
robust performance in line with the Board's expectations,
surpassing pre-Covid revenue.
Our digital strategy has seen the successful launch of our
latest product, Performa, our 1:1 digitally enabled coaching
service. Performa has distinct competitive advantages in this new,
fast-growing market including our proprietary Precision Coaching
methodology and our ability to integrate with MindGym's library of
existing content to deliver integrated solutions to challenges like
leadership and inclusion. The more than GBP0.5m in annualised
revenue generated in the first 12 weeks is a promising indication
of what's to come.
MindGym's future digital transformation will increasingly be
powered by data and this has been enhanced by the acquisition of
10X Psychology's IP, which will enable us to deliver highly
personalised, mass customisation and equip clients to target their
investment on what works best.
"We have had a good start to the new financial year and,
notwithstanding economic uncertainty, have confidence that
organisations will increasingly turn 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@mhpc.com .
Enquiries:
Mind Gym plc
Octavius Black, Chief Executive Officer +44 (0)20 7376
Dominic Neary, Chief Financial Officer 0626
Liberum (Nominated Adviser and Broker)
Bidhi Bhoma
Nick How
Edward Mansfield +44 (0)20 3100
Kane Collings 2200
MHP Communications (Public Relations Advisor) +44 (0)20 3128
Reg Hoare 8990
Katie Hunt mindgym@mhpc.com
Charlie Protheroe
About MindGym
MindGym 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 .
MindGym 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
@themindgym
Statement of the Board Chair
MindGym's purpose is to partner with the world's best companies
and help them optimise their Human Capital.
The depth and duration of the COVID pandemic surprised and
tested society and business more than any event in the last 75
years. Government policy and spending expanded at unprecedented
levels, and all businesses faced unprecedented risks and
opportunities.
Early on, MindGym took two critical decisions
Ø Firstly, the business pivoted to digital. In-person coaching
was largely replaced with digitally-enabled solutions which were
more than 95% of delivery in FY22. MindGym successfully expanded
its proven ability to operate Live delivery, at scale.
Ø Secondly, recognising the opportunity that this has provided,
MindGym has invested in excess of GBP8m in building new digital
products, and a further GBP6.6m primarily in FY22, ensuring that
the organisation had the appropriate structure to support this
growth: primarily in Marketing, Innovation and Digital structures.
This provides the infrastructure to roll-out our new digital
products (Performa and BCP), and the more than doubling in Points
of View ("PoV") innovation that we have seen in FY22.
These investments are paying back. During FY 2022, we have seen
revenue growth of 24% and are ahead of pre-COVID growth levels.
Performa was launched successfully in January 2022, and BCP is in
the pipeline for a launch in FY24.
In the long term, the Global 'human performance' market
continues to be very attractive. It remains highly fragmented (no
single player has more than 1% market share) and has an attractive
long-term growth profile.
Short to medium term risks remain. Whilst we are exiting COVID,
in-person visits to clients can still be challenging, and large
events have not yet recovered to their pre-COVID levels.
Our role in society
MindGym's social objectives are a core part of who we are. In
2009, we launched ParentGym, a programme providing free parental
training to parents of children aged 2-11. In FY22, this has helped
over 650 families and we have also partnered with the Prison Advice
and Care Trust (PACT), recently launching our first training to
parents in prison. Many of our employees use their charity days to
support this and other charities.
MindGym has also conducted a third-party analysis of its
operational greenhouse gas emissions for the last financial year.
The report will be used to set a reduction objective through the
'Science Based Targets' initiative.
The Board
We welcomed Dominic Neary, our new CFO who joined the Board in
December 2021. He replaces Richard Steele who played a significant
part in launching MindGym on the AIM market, and to our development
since, including to supporting us through the worst of COVID.
Dominic's experience at Just Eat, MoneySuperMarket and Reckitt
Benckiser has already proven to be valuable,
and we look forward to working with him to grow our business
over the coming years.
Dividend
MindGym's dividend policy during COVID has been to freeze
dividend payments. This has allowed the business to focus on
investment in growth over the coming years. As stated above, these
investments are beginning to pay back, particularly with the recent
launch of Performa and once the Board has greater clarity on the
performance of its digital investments, and of the broader economic
outlook, we will revisit our dividend policy.
Ruby McGregor-Smith ,
Board Chair
CEO's review
In the last two years, business and society have changed
fundamentally. Widespread homeworking came suddenly and has reset
employees' expectations of what they do and where they do it.
Employees' expectations of their employers have changed in other
important ways too. From the issue of race to the recent invasion
of Ukraine by Russia, corporations are now expected to lead on the
issues of the day, or face being challenged by their employees
internally, as vociferously as by customers on social media.
It's not just social and political trends. Employees also
increasingly demand that employers take responsibility for their
wellbeing, provide flexibility, deliver on a purpose beyond profit,
have diverse talent, build an inclusive culture and nourish their
development.
Company leaders have struggled to keep up. As a result, the
corporate world is experiencing the Great Resignation as an
unprecedented number of employees quit their job for something new
. As one of our clients put it: "The war for talent is over; the
employee won."
These macro changes put Human Capital and corporate culture at
the centre of the business agenda. The 'human performance' market
is large, profitable, growing and massively disaggregated. There is
no single player with more than 1% share despite major Tech and
Consulting businesses actively investing and acquiring, and private
equity funding a flurry of start-ups. In the coming years, we are
likely to see the emergence of a few dominant players. Our strategy
is designed to establish MindGym as one of the dominant players in
this market with our combination of market leading IP, strong
relationships with clients and an engaging digital platform driven
by data.
Digital Transformation
In January 2022, we launched Performa, our new, highly scalable,
1:1 coaching platform, based on our proprietary Precision Coaching
methodology. This delivers greater performance improvements in a
fraction of the time compared to conventional coaching . We are
encouraged by early feedback and, in the first 12 weeks post
launch, Performa has generated annualised revenue in excess of
GBP0.5m.
The development of our new 'Behavioural Change Platform' (BCP)
is due to launch in FY24.. Initially this will be offered to the
more than 500,000 participants who currently attend live sessions
each year, and will greatly increase the level of sustained change
to behaviour and performance. Ultimately this will be the single
digital journey through which all participants engage with MindGym
and its content, and provide a fully integrated 'Behaviour Change
Ecosystem' for clients.
Data Driven
Data is the fuel which will drive the Digital ecosystem by both
enabling mass customisation and providing clients with insight on
where and how to invest for maximum impact. During FY23, we will
launch a new suite of custom-built proprietary diagnostics in areas
such as leadership, inclusion and wellbeing, to add to our existing
portfolio which includes JX, our proprietary diagnostic that
measures judgement.
We are very pleased by the recent acquisition (for GBP0.1m) of
'10X Psychology"s full suite of IP assets on diagnostics. This is
the result of c. GBP10m of investment by Peter Saville, the
respected psychologist behind SHL and Saville Assessment, and has
been shown to be more accurate than the leading psychometric tools
on the market. This will be integrated into BCP which will be
launched in FY24.
Market-leading IP
MindGym leads the market on resesarch-based Points of View
(PoVs) on universal human capital challenges. Over the last 10
years we have published papers and launched supporting products on
Performance, Management, DEI, Ethics, Personal effectiveness and
re-organisation. This year's investment in innovation means that we
can significantly increase the pace of new launches, starting with
Leadership Development in H1 and followed by Wellbeing in H2.
This content is supported by a growing library of >200 live
workshops which have been tested on over three million
professionals, over 100 digital eWorkouts, and our proven ability
to deliver live at scale to audiences in excess of 1,000 at a time,
using our growing pool of c. 400 MindGym accredited coaches in over
40 countries, and over 1,000 accredited in-house coaches.
Delighting Clients and building long-lasting relationships
We have worked with 62% of the FTSE 100 and 56% of the S&P
500. The quality of our work continues to result in high levels of
repeat revenue (c. 86% in FY22).
Performance
MindGym navigated COVID well due to its strong balance sheet and
proven experience in digital - for over a decade, we have been
running live virtual programmes with hundreds of coaches and, in
recent years, have built a library >100 digital programmes.
This allowed us to pivot to digital quickly in FY21, and in
FY22, revenues of GBP48.7m, were up 24% on the prior year, of which
77% were digitally enabled (FY21 77%). Digitally enabled revenues
of GBP37.4m included GBP5.4m of digital products (mostly eWorkouts,
and a nominal amount of revenue from Performa).
MindGym invested in Opex in FY22 to create the infrastructure
for growth as it pivots the business to digital, and as a result,
reported LBT was in line with expectations at GBP0.5m (FY21: LBT of
GBP0.4m).
People and Culture
I am immensely grateful to our determined team whose spirit,
ingenuity and generosity have 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.
As you would expect, we invest significantly in learning and
development for our team too, 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. Our Board is 37% female and 25% are from a
minority ethnic background. Our Executive team is 57% female and
29% from a minority ethnic background. We are committed to report
on our gender pay gap during FY23 and take appropriate
measures.
Social Impact
ESG has been at the core of MindGym from before its inception.
We started the business 21 years ago with the mission 'to help
people use their minds more effectively to get more out of life and
give more to others'. This remains core to the work we do.
In 2009, we launched ParentGym which delivers up to 2,000 free
parenting workshops a year in areas of social deprivation. In 2022,
we formed a partnership with PACT (the Prison Advice and Care
Trust) to support prisoners who are also parents; we have also
trained PACT workers to deliver ParentGym in UK prisons.
Looking ahead
Despite the macro economic headwinds including Russia's invasion
of Ukraine, we anticipate robust top line growth in FY23, with the
launch of Performa and our new PoVs on Leadership and Wellbeing.
Leveraging the FY21 investments in our infrastructure, will also
see us return to profitability.
We have a strong reputation built over two decades, working with
the world's leading companies, an incredible team generating
market-leading IP, transformational digital products, and the right
strategy to deliver a proposition that will change forever the way
companies care for, develop and lead people. The opportunity is
immense and we are ready to realise it
Octavius Black
Chief Executive Officer
Financial review
In FY22, MindGym has seen revenue growth of 24% to GBP48.7m (FY
21: GBP39.4m), with an LBT of GBP0.5m (FY 21: LBT GBP0.4m). FY22
included investment in overheads to create the infrastructure which
will support substantial growth in the coming years. The LBT
includes a GBP0.5m non-recurring cost related to the cost control
programme in the final quarter which has offset the increase in
annualised overheads that this investment would otherwise have
generated.
Revenues
Digitally-enabled revenues have grown by 23% in FY22,
representing 77% (FY21: 77%) of group sales, despite a small shift
towards in-person delivery during the year.
MindGym has seen double-digit growth in both EMEA and the
US.
Investment in the new US regional structure, which grew revenues
31% in FY22, now provides a platform from which we believe we can
target substantial revenue expansion in the coming years. We are
seeing regional growth throughout the country, with notable
opportunities in the West.
EMEA has grown at 14% in FY22, and investments in organisational
structures are enabling MindGym to win large projects from clients
which should lead to even stronger relationships in the future
GBP000's Year to Year to
March 31(st) March 31(st) Change
2022 2021 %
Group Statutory View 48,668 39,383 + 24%
EMEA 19,715 17,241 + 14%
US 28,953 22,142 + 31%
Revenue mix by type compared to previous year
FY22 FY21 % change
Delivery 64% 55% +9%
Design 11% 13% -2%
Digital 11% 16% -5%
Licensing and certification 6% 8% -2%
Other (e.g. project management) 7% 6% 1%
Advisory 1% 2% -1%
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Total 100% 100%
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Product mix has seen a significant shift towards live delivery
as companies have invested in virtual delivery in the second year
of COVID.
Digital sales mix has declined from 16% to 11% in FY22; this is
the result of eWorkouts sales being down 14% compared to FY21. H2
FY21 sales were impacted by high sales in the second half as
companies looked for areas to re-direct their learning and
development spend during COVID. eWorkouts are up 26% on pre-COVID
levels, and are expected to continue to grow in the years ahead.
Performa sales in FY22 were minimal. The new 1:1 SaaS coaching
platform was launched in January 2022, and generated more than
GBP0.5m of annualised revenue in its first twelve weeks. Performa
sales are spread across the lifetime of the license - typically
twelve months, and most of these revenues will be recognised in
FY23.
Gross Profit
Gross profit as a percentage of revenue at 87.1% was broadly in
line with prior year (FY21 87.4%). This was reflected in the
regions with Gross profit margin in the US of 87.2% (FY21: 87.7%),
slightly higher than in EMEA with 87.0% (FY21: 87.0%). The marginal
decline in the US was primarily caused by the high level of
eWorkout sales in the US in FY21.
We are seeing a gradual increase of in-person delivery from some
of our clients - in-person delivery was only 0.5% of total delivery
during FY21. This has a higher cost of delivery, but the margin
impact in FY22 was offset by minor savings in cost of sale. Going
forward, this trend will continue., although we do not expect a
fundamental shift. This trend will impact the gross margin
percentage, however relative pricing ensures that absolute margins
are protected.
Year ended 31 March 2022
EMEA US Global
Delivery 60% 66% 64%
Design 13% 10% 11%
Digital 12% 11% 11%
Licensing and certification 6% 6% 6%
Other (e.g. project management) 7% 6% 7%
Advisory 2% 1% 100%
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Total 100% 100% 100%
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Profitability and investment
During FY22, we invested in the infrastructure of our business
to create an organisation that is capable of supporting substantial
growth in the coming years. Adjusted operating expenses excluding
depreciation and amortisation in FY22 of GBP41.2m is a GBP10.5m
increase on pre-Covid levels in FY20 (+GBP8.3m on FY21) reflecting
three 'trends':
-- GBP3.1m primarily reflects inflation and a small amount of volume growth.
-- GBP0.8m reflects an investment in commission levels during COVID which will unwind in FY23.
-- GBP6.6m is 'fuel for growth' investment in our infrastructure:
o in Digital and Marketing (GBP2.9m)
o in Innovation (GBP1.3m)
o in the US region (GBP1m), and
o GBP1.4m behind Talent Acquisition supporting both CAPEX and
OPEX investments.
In Q4, we implemented a cost control programme which offset the
increase in the annualised cost of this infrastructure investment,
that would otherwise have impacted costs in FY23. We continue to
target opex efficiencies in FY23.
Adjusted PBT in FY22 was a loss of GBP0.5m (FY21 adjusted PBT of
GBP0.3m), and this included c.GBP0.5m of expenditure relating to
the cost control programme.
Adjustments to PBT - there were no adjustments to PBT in FY22.
In FY21, the reported LBT of GBP0.4m included GBP0.7m of
restructuring costs which were regarded as adjusting items, due to
the unprecedented nature of COVID.
Taxation
In FY22, MindGym has submitted claims to ensure it obtains the
benefit of R&D tax credits relating to FY20, FY21 (and an
accrual for FY22). At the end of Q4 22 we recorded a deferred tax
asset of c.GBP4m in relation to these R&D credits. This is
offset by a GBP1.3m deferred tax liability being the timing
difference linked to capitalised development costs.
FY22 FY21
Adjusted Adjustments Reported Adjusted Adjustments Reported
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss)
before tax (482) 0 (482) 306 (662) (356)
Tax credit/(charge) 2,084 0 2,084 (9) 133 124
---------- ------------- ---------- ---------- ------------- ----------
PAT (earnings) 1,602 0 1,602 297 (529) (232)
---------- ------------- ---------- ---------- ------------- ----------
ETR % 432.4% 0 432.4% 2.8% 20.0% 34.8%
---------- ------------- ---------- ---------- ------------- ----------
In FY22, the Effective Tax Rate (ETR) is distorted by the
application the R&D credits noted above. MindGym has not
claimed these credits in prior years, however they have been
factored in as part of the current year tax credit and related
deferred tax balances. The rate is further distorted by the change
in tax rates which are substantially enacted and effective from 1
April 2023.
Earnings per share
Adjusted diluted earnings per share increased by 1.29 pence to
1.59 pence (2021: 0.3 pence). On a reported basis, earnings per
share were 1.60 pence (2021: basic loss per share of 0.23
pence).
Dividends
The Board has taken the decision not to pay a final dividend
maintaining the priority to focus on investment for growth in
digital over the coming years. Once the Board has greater
clarity
on the performance of its digital investments, and of the
broader economic outlook, we will revisit our dividend policy.
No dividend has therefore been paid or proposed for the year
ended 31 March 2022.
Cash flow and balance sheet
Cash and cash equivalents have decreased from GBP16.8m in FY21
to GBP10.0m at the end of FY22, including the GBP5.6m investment in
digital capital expenditure. Cash burn more than halved over the
course of the year from GBP4.8m (in H1 FY22) to GBP2.0m (in H2
FY22).
Reported EBITDA was GBP1.2 million, 34% up on FY21 EBITDA of
GBP0.9 million, with cash generated from operations of GBP1.2
million, which was 80% down on the GBP5.9 million cash generated
from operations in the prior year. The working capital reduction
resulted in cash conversion, defined as cash generated from
operations as a percentage of EBITDA, of 95% (FY21: 647%).
Adjusted cash generated from operations was GBP1.2 million
(2021: GBP6.6 million), resulting in Adjusted cash conversion of
95%. Prior Year adjusted cash conversion was 418% reflecting a
doubling in deferred revenues, improvements in receivables, and the
impact of salary deferrals during COVID. Adjusted cash conversion
excludes the effect of restructuring costs in FY21 and is defined
as cash generated from operations before the cash effect of
Adjustments as a percentage of Adjusted EBITDA. Adjusted EBITDA is
defined as Adjusted PBT excluding net finance costs, depreciation
of property, plant and equipment and the amortisation of intangible
assets.
Cash conversion
31 March 31 March
2022 2021
GBP'000 GBP'000
Adjusted cash generated from operations 1,162 6,594
Restructuring costs - 662
Employee options surrender costs - -
Cash generated from operations 1,162 5,932
Adjusted EBITDA 1,228 1,579
Reported EBITDA 1,228 917
Adjusted cash conversion (Adjusted cash from
operations /Adjusted EBITDA) 95% 418%
Cash conversion (cash from operations /EBITDA) 95% 647%
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
GBP1.1m - this improvement was also impacted by high revenues in
March 21. Overdue debt as a percentage of total trade receivables
fell to 9% at the year end (FY21: 11%), with the amount of overdue
debt reducing GBP0.3 million to GBP0.7 million (FY21: GBP1.0
million). Deferred income increased by 2% to GBP4.7m (FY21:
GBP4.6m) as clients continue to secure budgets for their following
financial year. Trade and other payables reduced by GBP1.1m,
reflecting an accrual for salary repayments during COVID.
Tax paid in the year was GBP0.8 million (FY21: GBP0.5 million)
mainly related to US profits.
Capital expenditure was GBP6.1 million (FY21: GBP3.2 million)
which included GBP5.6 million of costs capitalised on developing
our new digital products and GBP0.5m on other tangible fixed
assets.
Lease payments on our offices in the UK and the USA were GBP1.2
million (FY21: GBP1.1m). No dividends were paid in the year (FY21:
GBPnil).
At the year end, the Group had cash of GBP10.0 million (2021:
GBP16.8 million) and net cash of GBP7.8m (FY21: GBP13.7 million)
after deducting the lease liability included on the balance
sheet
Going concern
The Board has reviewed scenario analyses to help assess their
forward-looking assessment of the viability of the Group. The
Directors are confident that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
Board have reviewed scenarios including a range of revenues and
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.
Adjusted performance measures
This announcement contains certain financial measures that are
not defined or recognised under IFRS, including Adjusted PBT and
Adjusted earnings per share. These adjusted measures exclude the
effect of Adjustments. The Group use these measures for planning
and budgeting and for its internal assessment of the operational
performance of each business. Given the term Adjusted is not
defined under IFRS, the Adjusted measures may not be comparable
with similarly titled measures used by other companies.
Reconciliations of the Adjusted measures to their IFRS equivalents
are shown on the face of the Consolidated Statement of
Comprehensive Income, in Note 4 Segmental Analysis and in Note 11
Earnings per share.
Certain statements in this announcement constitute
forward-looking statements. Any statement in this announcement that
is not a statement of historical fact including, without
limitation, those regarding the Company's future expectations,
operations, financial performance, financial condition and business
is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, among
other factors, changing economic, financial, business or other
market conditions. These and other factors could adversely affect
the outcome and financial effects of the plans, and events
described in this announcement and the Company undertakes no
obligation to update its view of such risks and uncertainties or to
update the forward-looking statements contained herein. Nothing in
this announcement should be constructed as a profit forecast.
Dominic Neary
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 March 31 March
2022 2021
Note GBP'000 GBP'000
Continuing operations
Revenue 4 48,668 39,383
Cost of sales (6,284) (4,967)
----------- -----------
Gross profit 42,384 34,416
Administrative expenses (42,733) (34,635)
----------- -----------
Operating loss 4, 5 (349) (219)
Finance income 9 19 30
Finance costs 9 (152) (167)
----------- -----------
Loss before tax (482) (356)
Adjusted (loss)/profit before tax (482) 306
Restructuring costs 6 - (662)
Total adjustments 6 - (662)
----------- -----------
Loss before tax (482) (356)
-------------------------------------------------- ------ ----------- -----------
Tax on loss/profit 10 2,084 124
----------- -----------
Profit/(loss) for the financial period
from continuing operations attributable
to owners of the parent 1,602 (232)
=========== ===========
Items that may be reclassified subsequently
to profit or loss
Exchange translation differences on consolidation 192 (281)
----------- -----------
Other comprehensive income for the period
attributable to the owners of the parent 192 (281)
----------- -----------
Total comprehensive income/(loss) for
the period attributable to the owners
of the parent 1,794 (513)
=========== ===========
Earnings/(loss) per share (pence)
Basic 11 1.60 (0.23)
Diluted 1.59 (0.23)
Adjusted earnings per share (pence)
Basic 11 1.60 0.30
Diluted 1.59 0.30
=========== ===========
MIND GYM PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 31 March
2022 2021
Note GBP'000 GBP'000
Non-current assets
Intangible assets 13 8,175 2,877
Property, plant and equipment 14 2,815 3,406
Deferred tax assets 10 2,846 230
Other receivables 16 217 339
---------- ----------
14,053 6,852
Current assets
Inventories 15 7 -
Trade and other receivables 16 10,063 10,620
Current tax receivable 494 280
Cash and cash equivalents 10,021 16,833
---------- ----------
20,585 27,733
---------- ----------
Total assets 34,638 34,585
========== ==========
Current liabilities
Trade and other payables 17 12,729 13,813
Lease liability 18 856 1,085
Redeemable preference shares 19 50 50
Current tax payable 28 104
---------- ----------
13,663 15,052
---------- ----------
Non-current liabilities
Lease liability 18 1,349 2,081
Total liabilities 15,012 17,133
---------- ----------
Net assets 19,626 17,452
========== ==========
Equity
Share capital 22 1 1
Share premium 213 157
Share option reserve 608 674
Retained earnings 18,804 16,620
---------- ----------
Equity attributable to owners of the
parent Company 19,626 17,452
========== ==========
The financial statements were approved and authorised for issue
by the Board of Directors on [9 June 2022 and were signed on its
behalf by:
Dominic Neary
Chief Financial Officer
MIND GYM PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share option Retained
Share capital Share premium reserve earnings Total equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 1 112 684 16,760 17,557
=============== =============== ============== =========== ==============
Loss for the period - - - (232) (232)
Other comprehensive income:
Exchange translation
differences
on consolidation - - - (281) (281)
--------------- --------------- -------------- ----------- --------------
Total comprehensive loss for
the period - - - (513) (513)
Exercise of options 22 - 45 (308) 308 45
Credit to equity for
share-based
payments 23 - - 298 - 298
Tax relating to share-based
payments 10 - - - 65 65
At 31 March 2021 1 157 674 16,620 17,452
=============== =============== ============== =========== ==============
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 22 - 56 (407) 407 56
Credit to equity for
share-based
payments 23 - - 341 - 341
Tax relating to share-based
payments 10 - - - (17) (17)
At 31 March 2022 1 213 608 18,804 19,626
=============== =============== ============== =========== ==============
MIND GYM PLC CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 March 31 March
2022 2021
Note GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the financial period 1,602 (232)
Adjustments for:
Amortisation of intangible assets 13 325 52
Depreciation of property, plant and equipment 14 1,252 1,084
Profit on disposal of property, plant
and equipment - (2)
Net finance costs 9 133 137
Taxation (credit)/charge 10 (2,084) (124)
(Increase)/decrease in inventories (7) 73
Decrease/(increase) in trade and other
receivables 686 (246)
Decrease/(increase) in payables and provisions (1,084) 4,892
Share-based payment charge 23 341 298
----------- -----------
Cash generated from operations 1,164 5,932
Net tax (paid)/received (812) (521)
Net cash generated from operating activities 352 5,411
----------- -----------
Cash flows from investing activities
Purchase of intangible assets (5,623) (2,834)
Purchase of property, plant and equipment (514) (388)
Proceeds from sale of property, plant
and equipment - 10
Interest received 12 15
----------- -----------
Net cash used in investing activities (6,125) (3,197)
----------- -----------
Cash flows from financing activities
Cash repayment of lease liabilities (1,226) (1,075)
Issuance of ordinary shares 22 56 45
Interest paid (27) -
Dividends paid 12 - -
Net cash used in financing activities (1,197) (1,030)
----------- -----------
Net decrease in cash and cash equivalents (6,970) 1,184
Cash and cash equivalents at beginning
of period 16,833 15,952
Effect of foreign exchange rate changes 158 (303)
----------- -----------
Cash and cash equivalents at the end
of period 10,021 16,833
=========== ===========
Cash and cash equivalents at the end
of period comprise:
Cash at bank and in hand 10,021 15,952
=========== ===========
MIND GYM PLC NOTES TO THE GROUP FINANCIAL STATEMENTS
1. General information
Mind Gym plc ('the Company') is a public limited company
incorporated in England and Wales, and its ordinary shares are
traded on the Alternative Investment Market of the London Stock
Exchange ('AIM'). The address of the registered office is 160
Kensington High Street, London W8 7RG. The group consists of Mind
Gym plc and its subsidiaries, Mind Gym (USA) Inc., Mind Gym
Performance (Asia) Pte. Ltd, and Mind Gym (Canada) Inc. (together
'the Group').
The principal activity of the Group is to apply behavioural
science to transform the performance of companies and the lives of
the people who work in them. The Group does this primarily through
research, strategic advice, management and employee development,
employee communication and related services.
2. Summary of significant accounting policies
Basis of preparation
These consolidated financial statements have been prepared in
accordance with UK adopted international accounted standards and
with 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 with the Companies Act
2006 applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on a
going concern basis under the historical cost convention.
The consolidated financial statements are presented in Pound
Sterling. All values are rounded to GBP1,000 except where otherwise
indicated.
The principal accounting policies in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented unless otherwise
stated.
Going concern
The Group meets its day-to-day working capital requirements from
the cash flows generated by its trading activities and its
available cash resources. As at 31 March 2022, the Group had
GBP10.0 million of cash and GBP2.2m of lease liabilities. Adjusted
cash conversion in the year ended 31 March 2022 was 95% (2021:
418%).
The Group prepares cash flow forecasts and re-forecasts
regularly as part of the business planning process. The Directors
have reviewed forecast cash flows for the forthcoming 12 months for
the Group from the date of the approval of the financial statements
and consider that the Group will have sufficient cash resources
available to meet its liabilities as they fall due. These cash flow
forecasts have been analysed in light of COVID-19 and other
expected medium-term macro-economic impacts and subjected to stress
testing and scenario modelling which the Directors consider
sufficiently robust. The Group continued to be impacted by COVID-19
but has been protected from more severe consequences by our
digitally enabled revenue. The impact of the war in Ukraine and
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 forecast
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 clients predominantly comprising blue-chip corporates,
the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the Annual Report and Accounts.
New standards and interpretations applied for the first time
The Group adopted the following new or amended IFRSs and IFRIC
interpretations from 1 April 2021:
Amendments to IFRS 3 Business Combinations
Amendments to IAS 16 Property, Plant and Equipment
Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest
Rate Benchmark Reform (Phase 2)
Annual Improvements to IFRS Standards 2018-2020 Cycle
The adoption of these amended IFRSs did not have a material
impact on the financial statements.
New standards and interpretations not yet applied
At the date of authorisation of these financial statements the
following standards and interpretations were in issue but not yet
effective for the financial period and have not been applied. The
Directors plan to adopt these standards in line with their
effective dates.
Applicable
from
Amendments to 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
*Not yet endorsed by the UK.
The Directors anticipate that the adoption of these standards
and amendments will have no material impact on the financial
statements.
Basis of consolidation
The consolidated financial statements incorporate those of Mind
Gym plc and its subsidiary undertakings (i.e. entities that the
Group controls when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity).
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Where necessary, amounts reported by subsidiaries
have been adjusted to conform with the Group's accounting
policies.
Foreign currency translation
The Group's presentation currency is Pound Sterling. The results
and financial position of subsidiaries that have a functional
currency different from Sterling are translated into Sterling as
follows:
-- Assets and liabilities are translated at the closing rate at the balance sheet date
-- Income and expenses are translated at average rates of exchange prevailing during the year
All resulting exchange differences are recognised in equity.
Foreign currency transactions are initially recorded at the
exchange rate ruling at the date of the transaction. Foreign
exchange gains and losses resulting from settlement of such
transactions and from the translation at exchange rates ruling at
the balance sheet date of monetary assets or liabilities
denominated in foreign currencies are recognised in profit or
loss.
Revenue recognition
Revenue is recognised when control over a product or service is
transferred to a customer. Due to the short-term nature of the
trade receivables, the Group measures them at the original
transaction price invoiced without discounting.
The Group generates revenue from business-to-business customers
by satisfying the following performance obligations:
-- Delivering coach-led face-to-face and virtual training
sessions. Revenue is recognised at a point in time on the date of
delivery of the session.
-- Developing training programmes customised to specific needs.
Revenue is recognised at a point in time on the completion of all
development work or, at the end of a stage of work when the
contract provides an enforceable right to payment on completion of
a stage.
-- Licensing digital training modules to clients. When
non-cancellable digital modules are provided to the client and
hosted on the client's servers, revenue is recognised at a point in
time on the date the modules are provided to the client. Where the
client has a right to cancel, revenue is recognised at the start of
each committed period. When digital modules are hosted on the
Group's servers, revenue is recognised over time across the life of
the agreement.
-- Training and certifying client staff to act as coaches.
Revenue is recognised at a point in time on the date of delivery of
the certification course.
-- 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 17 under the heading
deferred income. When the performance obligation has been satisfied
but the income has not yet been invoiced, the amount represents a
contract asset and is disclosed in Note 16 as accrued income.
The incremental costs of obtaining a contract principally
consist of commissions paid to the Group's sales team. The sales
team earn commission over time as the revenue they have generated
is recognised. Commission costs are not therefore capitalised.
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.
Government grants
Government grants are not recognised until there is reasonable
assurance the grants will be received and that the Group will
comply with any conditions attached to them. Government grants are
recognised in the income statement over the same period as the
costs for which the grants are intended to compensate.
Government grant income under the Coronavirus Job Retention
Scheme and other schemes reimbursing employee wages is netted
against staff costs and is disclosed in Note 8.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The current tax payable is based on taxable profit for the year.
Taxable profit differs from accounting profit as reported in the
Consolidated Statement of Comprehensive Income because it excludes
items of income or expense that are taxable or deductible in other
years, and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted at
the period-end date.
Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax is
not recognised on temporary differences arising from the initial
recognition of goodwill or other assets and liabilities in a
transaction, other than a business combination, that affects
neither the accounting nor the taxable profit.
Deferred tax is measured on a non-discounted basis using tax
rates and laws that have been enacted or substantively enacted by
the balance sheet date and are expected to apply when the related
deferred tax asset is realised, or deferred tax liability is
settled. Deferred tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities, and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority.
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
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 GBP5.6 million incurred on developing software and new
digital products have been capitalised in the year (see Note 13).
Initial capitalisation is based on management's judgement on which
costs meet the definition of development costs. Costs capitalised
include directly attributable labour costs and purchases of
directly attributable products and services. No overheads have been
capitalised. Initial capitalisation and any subsequent impairment
is also based on management's judgement that technological and
economic feasibility is demonstrated and assumptions regarding the
expected future cash generation of the projects and the expected
period of benefits.
Assumptions and estimation uncertainties
Assumptions and estimation uncertainties at 31 March 2022 that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities in the next
financial year are:
Provisions against trade receivables and accrued income
A provision is initially made against trade receivables and
accrued income for expected lifetime credit losses. Historic credit
losses have been low and the provision rate is based on experience
over the last three years and current and expected economic
conditions. Balances are reviewed on a regular basis and provisions
are increased to reflect any increase in credit risk where
appropriate. The review takes into account factors such as the age
of the debt, current economic indicators for the industry of the
customer, recovery since the reporting date and discussions with
the customer. Provisions are raised where debtors are not
considered recoverable in full or in part. Provisions are released
when subsequent information supports the recovery.
Share-based payments
The Group has share-based payment remuneration for employees
under a Long-Term Incentive Plan. The fair value of share options
at the date of grant is estimated using the Black-Scholes model
based on certain assumptions. The fair value of the share options
for the more complex share scheme granted on 14 July 2021 is
estimated using the Monte Carlo model based on certain assumptions.
These assumptions are set out in Note 23 and include expected share
price volatility, dividend yield, expected life and the numbers of
options expected to vest.
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. The useful
economic lives have been benchmarked against the market and are
deemed reasonable. A sensitivity analysis was performed to assess
the impact of changing the useful economic life of the coaching
platform from three to five years. This would have reduced
amortisation charge for the year ending 31 March 2022 by
GBP103,000.
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 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.
Segment results for the year ended 31 March 2021
Segment result
EMEA America Total
GBP'000 GBP'000 GBP'000
Revenue 17,241 22,142 39,383
Cost of sales (2,237) (2,730) (4,967)
Administrative expenses (18,349) (16,286) (34,635)
---------- ---------- ----------
(Loss)/Profit before inter-segment charges (3,345) 3,126 (219)
Inter-segment charges 2,258 (2,258) -
---------- ---------- ----------
Operating (loss)/profit - segment result (1,087) 868 (219)
Finance income 30
Finance costs (167)
----------
Loss before taxation (356)
==========
Adjusted profit before tax
EMEA America Total
GBP'000 GBP'000 GBP'000
Operating profit - segment result (1,087) 868 (219)
Employee options surrender costs 587 75 662
Adjusted EBIT (500) 943 443
Finance income 30
Finance costs (167)
---------
Adjusted profit before taxation 306
---------
The mix of revenue for the year ended 31 March 2021 is set out
below.
EMEA America Group
Delivery 59.7% 52.5% 55.6%
Design 12.7% 13.3% 13.0%
Digital 15.3% 16.8% 16.2%
Licensing and certification 6.3% 9.0% 7.8%
Other 4.2% 6.9% 5.7%
Advisory 1.8% 1.5% 1.7%
The vast majority of the Group's contracts are for the delivery
of services within the next 12 months. The Group has therefore
taken advantage of the practical expedient in paragraph 121(a) of
IFRS 15 not to disclose information about remaining performance
obligations.
5. Operating profit
Operating (loss)/profit is stated after charging:
31 March 31 March
2022 2021
GBP'000 GBP'000
Coach costs 5,025 3,369
Staff costs (Note 8) 32,977 26,491
Amortisation of intangible assets 325 52
Depreciation of property, plant and equipment 1,252 1,084
Short-term and low-value lease expense 23 35
(Write-back)/impairment of trade receivables (11) (41)
========== ==========
6. Adjustments
31 March 31 March
2022 2021
GBP'000 GBP'000
Restructuring costs - 662
- 662
================================ ==========
Restructuring costs in the year ended 31 March 2021 include
redundancy costs related to the headcount reduction exercise
undertaken in response to the COVID-19 impact on the business.
The cash cost of Adjustments in 2021 was GBP662,000.
7. Auditor remuneration
31 March 31 March
2022 2021
GBP'000 GBP'000
Fees for audit of the Company and consolidated
financial statements 97 88
Fees for audit of the Company's subsidiaries
pursuant to legislation 16 15
---------- ----------
Total audit fees 113 103
Tax compliance services 69 82
Tax advisory services 6 15
Other services 11 10
Total fees payable to the auditor 199 210
========== ==========
8. Employees
Staff costs were as follows:
31 March 31 March
2022 2021
GBP'000 GBP'000
Wages and salaries 28,828 22,464
Social security costs 2,825 2,249
Pension costs - defined contribution plans 983 897
Share-based payments 341 298
Restructuring payroll costs included in adjusted
items - 583
32,977 26,491
========== ==========
Wages and salaries in 2021 are stated net of GBP216,000 of
government grants under the UK Coronavirus Job Retention Scheme and
similar schemes.
The average number of the Group's employees by function was:
31 March 31 March
2022 2021
Delivery 196 170
Support 86 61
Digital 50 20
332 251
========== ==========
The year-end number of the Group's employees by function
was:
31 March 31 March
2022 2021
Delivery 206 174
Support 88 67
Digital 41 35
335 276
========== ==========
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
2022 2021
GBP'000 GBP'000
Salaries, bonuses and other short-term employee
benefits 2,955 2,583
Post-employment benefits 130 53
Termination benefits 311 -
Share-based payments 111 207
Total compensation 3,507 2,843
========== ==========
9. Net finance costs
31 March
31 March 2022 2021
GBP'000 GBP'000
Finance income
Bank interest receivable 12 15
Finance lease income 7 15
--------------- ----------
19 30
--------------- ----------
Finance costs
Bank interest payable (27) -
Lease interest (125) (167)
------- -------
(152) (167)
------- -------
Net Finance Costs (133) (137)
======= =======
10. Tax
The tax (credit)/charge for the year comprises:
31 March 31 March
2022 2021
GBP'000 GBP'000
UK current tax - (191)
UK adjustment in respect of prior periods (42) (97)
Foreign current tax 326 299
Foreign adjustment in respect of prior periods 19 (2)
---------- ----------
Total current tax charge 303 9
---------- ----------
Deferred tax - current year (1,317) (6)
Deferred tax - adjustment in respect of prior
periods (R&D claims) (429) (127)
Effect of changes in tax rates (641) -
---------- ----------
Total deferred tax credit (2,387) (133)
---------- ----------
Total tax (credit)/charge (2,084) (124)
========== ==========
Tax on items credited to equity:
31 March 31 March
2022 2021
GBP'000 GBP'000
Current tax credit on share-based payments - (48)
Deferred tax (credit)/charge on share-based
payments 17 (17)
---------- ----------
Total tax credit in equity 17 (65)
========== ==========
The tax charge for the year can be reconciled to accounting
profit as follows:
31 March 31 March
2022 2021
GBP'000 GBP'000
(Loss)/profit before tax (482) (356)
---------- ----------
Expected tax (credit)/charge based on the standard
rate of tax in the UK of 19% (2021: 19%) (91) (68)
Differences in overseas tax rates 91 71
Expenses not deductible for tax purposes 717 21
Adjustments to tax in respect of prior periods
(R&D claims) (452) (226)
Enhanced R&D deduction (1,722) -
Tax rate changes (641) -
Other tax adjustments 14 78
---------- ----------
Total tax (credit)/charge (2,084) (124)
========== ==========
The main categories of deferred tax assets recognised by the
Group are:
Share-based
Tax losses payments Other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2010 - 85 - 85
Credited/(charged) to income - 31 102 133
Credited/(charged) to equity - 17 - 17
Exchange differences - - (5) (5)
------------ ------------- --------- ---------
At 31 March 2021 - 133 97 230
Credited to income 4,049 15 (1,438) 2,626
Credited to equity - (17) - (17)
Exchange differences - - 7 7
At 31 March 2022 4,049 131 (1,334) 2,846
============ ============= ========= =========
The standard rate of corporation tax in the UK is 19%. The March
2022 Budget Statement announced an increase in the main corporation
tax rate to 25%, with effect from April 2023. This increase was
substantively enacted at the balance sheet date.
The Group has recognised GBP4 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.
11. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the
earnings attributable to shareholders of the Company by the
weighted average number of ordinary shares in issue during the
year. The Company has potentially dilutive shares in respect of the
share-based payment plans (see Note 23). Adjusted earnings per
share removes the effect of restructuring costs in 2021.
31 March 31 March
2022 2021
Weighted average number of shares in issue 100,009,727 99,660,395
Potentially dilutive shares (weighted average) 442,548 587,629
------------- -------------
Diluted number of shares (weighted average) 100,452,275 100,248,024
------------- -------------
31 March 2022 31 March 2021
Basic Diluted Basic Diluted
EPS EPS EPS EPS
GBP'000 pence Pence GBP'000 pence pence
Net profit/(loss) attributable
to shareholders 1,602 1.60 1.59 (232) (0.23) (0.23)
Exclude:
Adjustments - - - 662 0.66 0.66
Tax on adjustments - - - (133) (0.13) (0.13)
Adjusted net profit after tax 1,602 1.60 1.59 297 0.30 0.30
========= ======= ========= ========= ======== =========
12. Dividends
No dividends have been paid or proposed for the year ended 31
March 2022 (2021: nil).
13. Intangible assets
Development
Patents costs Total
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 63 1,927 1,990
Additions - 2,834 2,834
--------- ------------- ---------
At 31 March 2021 63 4,761 4,824
Additions - 5,623 5,623
--------- ------------- ---------
At 31 March 2022 63 10,384 10,447
========= ============= =========
Amortisation
At 1 April 2020 63 1,832 1,895
Amortisation charge - 52 52
--------- ------------- ---------
At 31 March 2021 63 1,884 1,947
Amortisation charge - 325 325
--------- ------------- ---------
At 31 March 2022 63 2,209 2,272
========= ============= =========
Net book value
At 31 March 2021 - 2,877 2,877
--------- ------------- ---------
At 31 March 2022 - 8,175 8,175
========= ============= =========
Development cost additions in the year to 31 March 2022 include
software development costs directly incurred in the creation of new
digital assets.
14. Property, plant and equipment
Fixtures,
Right-of-use Leasehold fittings
asset improvements and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 4,194 254 1,772 6,220
Additions 34 72 316 422
Disposals - - (561) (561)
Exchange differences (307) (5) (83) (395)
-------------- --------------- ---------------- ---------
At 31 March 2021 3,921 321 1,444 5,686
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
============== =============== ================ =========
Depreciation
At 1 April 2020 379 229 1,217 1,825
Depreciation charge 903 5 176 1,084
Disposals - - (553) (553)
Exchange differences (32) - (44) (76)
At 31 March 2021 1,250 234 796 2,280
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
============== =============== ================ =========
Net book value
At 31 March 2021 2,671 87 648 3,406
-------------- --------------- ---------------- ---------
At 31 March 2022 1,904 232 679 2,815
============== =============== ================ =========
At 31 March 2021, capital expenditure of GBP135,000 in respect
of property, plant and equipment was contracted for but not
provided for in the accounts.
15. Inventories
31 March 31 March
2022 2021
GBP'000 GBP'000
Finished goods 7 -
========== ==========
Write-down of inventory amounted to nil (2021: GBP70,000).
The cost of inventories recognised as an expense and included in
cost of sales amounted to GBP112,000 (2021: GBP18,000).
16. Trade and other receivables
31 March 31 March
2022 2021
GBP'000 GBP'000
Non-current
Net investment in sub-lease - 79
Prepayments in respect of property deposits 217 260
217 339
========== ==========
Current
Trade receivables 7,999 9,138
Less provision for impairment (212) (227)
---------- ----------
Net trade receivables 7,787 8,911
Net investment in sub-lease 81 172
Other receivables 82 143
Prepayments 1,170 688
Accrued income 943 706
10,063 10,620
========== ==========
The maturity analysis of the net investment in sub-lease is set
out in Note 18.
Trade receivables have been aged with respect to the payment
terms as follows:
31 March 31 March
2022 2021
GBP'000 GBP'000
Not past due 7,274 8,128
Past due 0-30 days 401 530
Past due 31-60 days 109 185
Past due 61-90 days 25 22
Past due more than 90 days 190 273
7,999 9,138
========== ==========
The movement in the allowance for impairment losses was:
31 March 31 March
2022 2021
GBP'000 GBP'000
At the beginning of the period 227 303
(Write-back)/charges (14) (41)
Utilisation of provision (7) (22)
Foreign exchange adjustment 6 (13)
At the end of the period 212 227
========== ==========
The Group has applied the simplified approach to measuring
expected credit losses, as permitted by IFRS 9, and recognises a
loss allowance based on the lifetime expected credit loss.
17. Trade and other payables
31 March 31 March
2022 2021
GBP'000 GBP'000
Trade payables 1,401 2,514
Other taxation and social security 663 549
Other payables 690 536
Accruals 5,257 5,578
Deferred income 4,718 4,636
12,729 13,813
========== ==========
18. Lease liability
The lease liabilities included in the statement of financial
position are:
31 March 31 March
2022 2021
GBP'000 GBP'000
Current 856 1,085
Non-current 1,349 2,081
2,205 3,166
========== ==========
There are no significant variable leases costs or lease term
judgements. The related right-of-use asset is disclosed in Note
14.
The movements in the lease liability were as follows:
31 March 31 March
2022 2021
GBP'000 GBP'000
At the beginning of the year 3,166 4,386
Lease payments (1,226) (1,075)
Finance cost 121 166
Additions 39 34
Exchange differences 105 (345)
At the end of the year 2,205 3,166
========== ==========
The maturity analysis of the contractual undiscounted cash flows
is:
31 March 31 March
2022 2021
GBP'000 GBP'000
Less than one year 934 1,204
Between one and five years 1,412 2,213
Total future lease payments 2,346 3,417
Total future interest payments (141) (251)
Total lease liability 2,205 3,166
========== ==========
The Group sub-leased its New York office in March 2021. The
Group has classified the sub-lease as a finance lease, because the
sub-lease is for the whole of the remaining term of the head
lease.
The following table sets out a maturity analysis of lease
receivables, showing the undiscounted lease payments to be received
after the reporting date. The related net investment in sub-lease
is disclosed in Note 16.
31 March 31 March
2022 2021
GBP'000 GBP'000
Less than one year 82 180
One to two years - 80
Total undiscounted lease payments receivable 82 260
Unearned finance income (1) (9)
Net investment in the lease 81 251
========== ==========
19. 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.
20. 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 9 June 2022.
21. Financial instruments and financial risk management
Financial instruments by category
Trade and other receivables (excluding prepayments), cash and
cash equivalents and trade and other payables are initially
measured at fair value and subsequently held at amortised cost.
31 March 31 March
2022 2021
GBP'000 GBP'000
Net trade receivables 7,787 8,911
Other receivables 82 143
Prepayments in respect of property deposits 217 260
Cash and cash equivalents 10,021 16,833
---------- ----------
Financial assets at amortised cost 18,107 26,147
========== ==========
Trade payables 1,401 2,514
Other payables 690 536
Lease liabilities 2,205 3,166
---------- ----------
Financial liabilities at amortised cost 4,296 6,216
========== ==========
The Group holds no assets or liabilities that are held at fair
value through income statement or OCI.
As the trade and other receivables and trade and other payables
have a maturity of less than one year, the notional amount is
deemed to reflect the fair value.
Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, to provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure.
The Group's sources of funding currently comprise cash flows
generated from operations, and equity contributed by shareholders.
The Group has no borrowings and is not subject to any externally
imposed capital requirements.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders to the extent allowed by the Company's
articles or issue new shares.
Financial risk management
The Group's risk management is overseen by the Audit and Risk
Committee. The Group is exposed to a variety of financial risks
that result from its operations, including credit risk, liquidity
risk and foreign currency risk. Since the Group has no debt it is
not significantly exposed to interest rate risk. The Group has not
entered into any derivative transactions, such as interest rate
swaps or forward foreign exchange contracts.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks, or the methods used to measure
them from previous periods unless otherwise stated in this
note.
Credit risk
Credit risk arises principally from the Group's trade
receivables from customers and monies on deposit with financial
institutions.
Credit risk on trade receivables is considered to be relatively
low as the Group's customers mainly consist of large credit-worthy
organisations. Credit exposure is spread over a large number of
customers and so there is no significant concentration of credit
risk. Outstanding and overdue balances are regularly reviewed and
resulting actions are put in place on a timely basis. The Group
establishes an allowance for impairment. This is based on a review
of individual balances taking into account the results of credit
control communications and our knowledge about the customer
relationship. See Note 16 Trade and other receivables for further
information on ageing and impairment of trade receivables.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties are
accepted, and management maintain a close relationship with the
Group's banks.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
31 March 31 March
2022 2021
GBP'000 GBP'000
Trade receivables 7,787 8,911
Other receivables 82 143
Prepayments in respect of property deposits 217 260
Cash and cash equivalents 10,021 16,833
At the end of the period 18,107 26,147
========== ==========
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 20). All Group liabilities in the
current and prior year are due within three months of the reporting
date, apart from lease liabilities. The maturity of the lease
liability is set out in Note 18.
Foreign currency risk
The Group operates internationally and is exposed to foreign
currency risk on sales and purchases that are denominated in a
currency other than Sterling. The currencies giving rise to this
risk are primarily the US Dollar and the Euro. Where possible the
exposure is mitigated by a natural hedge. For example, US Dollar
revenues are partially matched by US Dollar costs in the US
subsidiary.
The Group holds cash in the UK in Sterling, Euro and US Dollar
bank accounts and in the USA in US Dollar and Canadian Dollar bank
accounts.
Trade receivables and cash and cash equivalents are analysed by
currency as follows:
GBP USD EUR Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2022
Net trade receivables 2,592 4,581 468 146 7,787
Cash and cash equivalents 6,725 3,018 95 183 10,021
At 31 March 2021
Net trade receivables 2,509 4,806 1,451 145 8,911
Cash and cash equivalents 14,465 1,974 80 314 16,833
The Group does not currently use forward foreign exchange
contracts or currency options to hedge currency risk.
22. Share capital
31 March 31 March 31 March 31 March
2022 2022 2021 2021
Cost Cost
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.00001
at 1 April 99,791,784 1 99,493,210 1
Issue of shares to satisfy
options 313,876 - 298,574 -
------------- ---------- ------------ ----------
Ordinary shares of GBP0.00001
at 31 March 100,105,660 1 99,791,784 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
2022 2022 2021 2021
Cost Cost
Number GBP'000 Number GBP'000
As at 1 April 119,875 - 130,835 -
Issue of new shares to EBT (8,220) - (10,960) -
---------- ---------- ---------- ----------
Ordinary shares of GBP0.00001
at 31 March 111,655 - 119,875 -
========== ========== ========== ==========
Market value at 31 March 151 156
---------- ---------- ---------- ----------
23. Share-based payments
The Group awards options to selected employees under a Long-Term
Incentive Share Option Plan ('LTIP'). The options granted to date
vest subject only to remaining employed up to the vesting date.
Unexercised options do not entitle the holder to dividends or to
voting rights.
The Group operates the Mind Gym plc Share Incentive Plan (SIP).
An initial award of GBP1,000 of free shares was granted in October
2018 to all employees at the IPO price of 146 pence. The shares are
held in an employee benefit trust and vest after three years
subject only to remaining employed up to the vesting date. The
holder is entitled to dividends over the vesting period. Many
employees have elected to leave their shares in the trust 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
2022 2021
GBP'000 GBP'000
Equity settled share-based payments 341 298
========== ==========
The movements in the number of share awards and share options
and the weighted average exercise price of awards are:
31 March 31 March
2022 2021
Weighted Weighted
average exercise average exercise
Number price GBP Number price GBP
Outstanding at the beginning
of the period 2,287,024 0.66 2,183,257 0.63
Granted during the period 2,448,318 0.14 741,070 0.67
Forfeited during the period (2,166,334) 0.14 (327,768) 0.97
Exercised during the period (322,096) 0.17 (309,535) 0.17
Outstanding at the end of the
period 2,246,912 0.66 2,287,024 0.66
------------- ------------------- ----------- -------------------
Exercisable at the end of the
period 4,110 2,055
------------- ------------------- ----------- -------------------
Weighted average fair value
of awards granted (GBP) 1.69 0.27
============= =================== =========== ===================
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
2022 2021
GBP'000 GBP'000
GBP nil 428,770 463,705
GBP0.00001 584,580 427,129
GBP0.77000 316,987 592,537
GBP1.04000 201,981 306,843
GBP1.44500 217,784 -
GBP1.46000 496,810 496,810
----------- -----------
2,246,912 2,287,024
----------- -----------
Weighted average remaining contractual life
(years) 5.8 5.4
=========== ===========
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
=================== ========== ========== ========== ========== ============ ========== =========== ==========
* 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.
24. Controlling party
The Group was controlled by O. Black and J. Cash by virtue of
their joint shareholding in the Company throughout the period.
There were the following related party transactions during the
year and balances at the end of the year:
-- Key management compensation as disclosed in Note 8.
-- Trevor Phillips, a non-executive director of Mind Gym plc, is
also chairman and director of Green Park Interim and Executive
Search which provided services to the Group totalling GBP105,500 in
the year ended 31 March 2022.
-- David Nelson, a non-executive director of Mind Gym plc is
also a partner of Dixon Wilson. Dixon Wilson provided services to
the Group totalling GBP6,410 in the year ended 31 March 2022.
-- Zarina Ward, a key management person is the spouse of Simon
Ward. Simon Ward Search provided services to the Group totalling
GBP75,000 in the year ended 31 March 2022.
25. Events after the reporting period
There were no post balance sheet events.
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END
FR EAKKNEDNAEFA
(END) Dow Jones Newswires
June 10, 2022 02:00 ET (06:00 GMT)
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