Characterising itself as a “disruptive player”, Mind Gym (MIND) is seeking to gain share in the fragmented global learning and development market. While statutory profits were weighed down by IPO-related costs, adjusted cash profits increased by 11 per cent to £8.7m in FY2019.
Digital revenue soared by 72 per cent to £3.6m, albeit from a low base, Currently accounting for 9 per cent of group turnover, management is targeting an increased contribution from these scalable and higher-margin activities. With uptake largely coming from existing customers, the group is benefiting from deepening client relationships – 84 per cent of revenue comes from customers who have engaged with the group at least once in the past three years.
With improvements in working capital, cash generated from operations increased by 53 per cent to £7.5m. This converts to an impressive 142 per cent of adjusted cash profits, but management expects this to fall to 80-90 per cent. It should be noted that this metric is only fully revealing when analysed over several accounting periods.
Liberum forecasts adjusted pre-tax profit of £9.5m and EPS of 7.5p for the March 2020 year-end, rising to £10.8m and 8.4p in FY2021.
| MIND GYM (MIND) | ||||
| ORD PRICE: | 124p | MARKET VALUE: | £123m | |
| TOUCH: | 120-127p | 12-MONTH HIGH: | 189p | LOW: 117p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 14p | NET CASH: | £8.3m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018* | 37.0 | 6.16 | 4.94 | - |
| 2019 | 42.1 | 5.13 | 4.08 | 2.4 |
| % change | +14 | -17 | -17 | - |
| Ex-div: | 1 Aug | |||
| Payment: | 30 Aug | |||
| *Pre-IPO | ||||
