Mind Gym Plc Share News (MIND)

(Sharecast News) - Staff performance company Mind Gym updated the market on its trading for the financial year ending 31 March on Monday, in light of the Covid-19 coronavirus outbreak.
The AIM-traded firm said underlying trading remained strong between the half year-end on 30 September, and the end of January , but said it had since experienced a material impact on revenues from the outbreak of coronavirus.

As the virus had spread from region to region, it said it had observed an increased number of cancellations of booked sessions from clients, and a "material reduction" in new bookings.

Mind Gym said that, given the uncertainty about the extent and duration of the virus outbreak, it was difficult to accurately forecast the full-year impact, but said it was currently anticipating revenues to be in the range of a 10% to 15% increase on the prior year, which was below its previous expectations of revenue growth for the year.

While the company said it was focussed on tight cost control, the sudden fall in revenues so close to the end of the financial year provided limited opportunity to reduce planned expenditure and investment.

As a result, adjusted profit before tax was now expected to be between ?5.8m and ?7.3m.

The board said the strong focus on cash was ongoing, and its cash balance as at 31 March was expected to remain in line or above market consensus expectations for ?14.0m.

The group said it was closely following and regularly monitoring the advice from the World Health Organization, as well as regional and local government advice, and added that it was continuing to assess the situation carefully.

It said it had taken "rapid and decisive" actions to mitigate the potential impact, including working with clients and coaches to switch live face-to-face coaching sessions to virtual web-ex sessions, and promoting its digital proposition as an alternative to live sessions.

Mind Gym said it was also tracking the movement of its staff and coaches and implementing a policy of a minimum two-week self-isolation period, and was minimising travel requirements and accelerating the adoption of remote working practices.

As it had previously planned, the board said it would provide a further trading update on its full year results to 31 March on 27 April.

"Our primary concern now is the health and welfare of our clients, colleagues and coaches," said chief executive officer Octavius Black.

"In a fast-changing environment we continue to assess the impact of Covid-19 on our business, supporting clients with our digital products and managing costs as required."

Black said the firm's cash generative business model and strong cash balance provided resilience during such volatile times.

"We remain committed to our investment in product and people and are confident that this will deliver long term value to shareholders."

At 1249 GMT, shares in Mind Gym were down 34.38% at 105p.