MindGym (MIND), a leading behavioural change company, delivered double-digit revenue growth and improved profitability in its 2023 results, with ongoing digital transformation and strategic investments helping the company swing to a healthy profit before tax (PBT).
The company reported revenues of £55.0 million for FY23, a 13% increase compared to the previous fiscal year, of which £37.6 million were digitally enabled revenues, a 1% increase compared to FY22, accounting for 68% of total revenues.
Although that’s a lower proportion than last year, it reflected the lifting of COVID restrictions, which resulted in an increase in face-to-face deliveries. And in fact, pure digital revenues grew to 13% of total sales, up from 11% in FY22, driven by a minor refresh and increased accessibility of the eWorkouts portfolio and the early revenues generated from the launch of Performa, MindGym's 1:1 digital coaching platform. Currently, 85% of live delivery is conducted virtually.
Meanwhile, operational gearing, ongoing savings initiatives, and returns from prior investments in scalable operations meant PBT swung from a loss of £0.4m in 2022 to reach £3.0 million. The company also spent £1m less on capital expenditure, at £5.1 million, the result of the organizational redesign carried out in Q4 FY22.
The company generated £3.1 million in cash during H2 FY23, a significant improvement compared to the £2.0 million cash burn experienced in H2 FY22. Importantly, the company's £10 million debt facility remains undrawn, further strengthening its already strong financial position, with £7.6 million of cash in the bank at the end of FY23 despite ongoing investment.
In particular, the company is pushing forward with building its Behavioural Change Platform (BCP), which will serve as the digital journey through which all members engage with MindGym and its content. It also said that it had made significant strides in entering the diagnostics market, integrating advanced psychometric testing into its Performa coaching tool and on track to launch its diagnostics platform at the end of 2024.
Looking forward, the company said its confident of getting to its 15-20% EBITDA margin target over the medium term – having seen margins rise from, 3% to 10% in FY23, pointing to the scaling up of new framework agreement. One important driver was securing the largest-ever framework agreement in H1 FY23 with a global energy company, which is expected to generate revenues exceeding £10 million over the next 24 months. Additionally, MindGym secured an initial framework win with an automotive manufacturer during H2 FY23, with the potential to generate substantial revenues over the next 18 months.