MindGym FY26 trading update: H2 rebound, return to adjusted EBITDA profit
MindGym plc (AIM: MIND) has delivered a steadier second half and nudged back into the black on an adjusted EBITDA basis for the year ended 31 March 2026. Revenue was lower year-on-year, but membership sales accelerated, margins improved, and costs came down – signs that the three-year transformation is biting.
The company is two years into a plan to shift from one-off training gigs to being a strategic behavioural-change partner with more recurring revenue. It is not mission accomplished yet, but the trajectory in H2 looks meaningfully better than H1.
Key numbers at a glance
| FY26 revenue | c. £29.7m (down 8% YoY; 6% reduction at constant currency) |
| H2 vs H1 revenue | c. 20% higher in H2 |
| Membership revenue | c. £2.9m (10% of FY26; 17% of H2; prior year: 3%) |
| Gross margin | 88% (FY25: 86%) |
| Adjusted EBITDA | profit of not less than £0.6m (FY25: £1.9m) |
| H1 adjusted EBITDA | loss of £1.0m |
| Net debt at year end | £0.4m (FY25: net cash of £0.6m; improved from £1.0m net debt at 30 Sep 2025) |
| Cost base | c. £5m lower than FY25 |
| Framework agreement context | FY25 included £6.3m from a multi-year framework agreement |
Revenue trends: softer year, stronger finish
Revenue is expected to come in at around £29.7m, down 8% year-on-year. On a constant currency basis – stripping out exchange rate swings – the reduction is 6%, with the note that FY25 benefited from a £6.3m multi-year framework agreement.
The more encouraging piece: H2 revenue was about 20% higher than H1, with growth in each quarter. That momentum, plus a growing base of memberships, is precisely what the transformation plan is aiming for.
Memberships and recurring revenue are building
Memberships are the star of this update. Corporate memberships rose from 13 at the half-year to more than 60 by year-end. In H2, memberships contributed around 17% of revenue; for the full year, roughly £2.9m, or 10% of revenue – up from just 3% in the prior year.
Why it matters: membership and licence models are recurring and typically renew, which smooths revenue and reduces reliance on one-off corporate buying cycles. If MindGym keeps scaling this, the quality and predictability of earnings should improve over time.
Margins up, costs down, profitability back
Gross margin improved to 88% from 86%, which is a healthy move in a tough year. The cost base is about £5m lower than FY25, reflecting the company’s focus on commercial effectiveness and digital delivery of membership and licence products.
Adjusted EBITDA – a measure of operating profit before non-cash charges and exceptional items – is expected to be a profit of not less than £0.6m. That compares with a £1.0m adjusted EBITDA loss in H1, which implies at least £1.6m of adjusted EBITDA generated in H2. It is still below FY25’s £1.9m, but the shape of the year shows the turnaround gaining traction.
Balance sheet and liquidity: modest net debt, facility renewal in progress
Year-end net debt is £0.4m, versus net cash of £0.6m a year ago, but it has improved from £1.0m net debt at 30 September 2025. The overdraft facility is in the process of being renewed. The Board also expects the cash position to improve in the new financial year, supporting continued investment in growth.
Translation: liquidity looks tighter than last year, but it is moving the right way into year-end and management expects further improvement as trading strengthens.
Strategy execution: sales rebuild and digital delivery
Operationally, MindGym has prioritised rebuilding the sales organisation, boosting commercial effectiveness, enhancing digital lead generation, and improving digital delivery for memberships and licences. All of this supports the shift from episodic training to longer-term behavioural change partnerships.
In the CEO’s words, investment in the membership and licensing structure and its delivery platforms “is starting to show through in the results,” and the team aims to keep that progress going into the new year.
Outlook and catalysts: early FY27 tailwinds
The Board is “encouraged” by H2 trading and notes a number of significant contract opportunities that slipped into Q1 FY27, which should add positive momentum. Macroeconomic conditions remain challenging, but management expects the cash position to improve alongside continued investment.
Next stop is full-year results in mid-June 2026, when we should see audited numbers and more detail on renewals, pipeline conversion, and cash flow.
Important note on the profit estimate (Takeover Code)
The UK Takeover Panel has confirmed that the profit estimate in this update constitutes an ordinary course profit forecast under the Code. The directors confirm the estimate remains valid, has been properly compiled, and uses accounting policies consistent with prior periods. It is based on unaudited internal accounts for 11 months to 28 February 2026 plus estimates for March 2026.
Josh’s take: reasons to be cheerful, and what to watch
Positives
- Clear H2 inflection: revenue up c.20% vs H1 and a swing from an H1 adjusted EBITDA loss to a full-year profit.
- Recurring engine building: memberships now 10% of FY revenue (17% in H2), with memberships rising from 13 to 60+ within the year.
- Improving unit economics: gross margin up to 88% and a materially lower cost base.
Watch-outs
- Top-line still down: revenue is c.8% lower YoY, even with a better second half.
- Profitability light: adjusted EBITDA of not less than £0.6m is progress, but well below FY25’s £1.9m.
- Balance sheet: move to £0.4m net debt and overdraft renewal in process – manageable, but worth monitoring.
What matters next for investors
- Membership momentum: growth, renewals, and the share of revenue from recurring sources.
- Sales productivity: evidence that the rebuilt sales organisation is converting the slipped contracts early in FY27.
- Cash trajectory: confirmation of the expected improvement and detail on the renewed facility.
- Margins: whether gross margin gains and the leaner cost base hold through FY27.
Overall, this is a credible step forward. The strategic shift towards memberships and licences is starting to reshape the P&L, and H2’s pick-up suggests the franchise is stabilising. Delivery in early FY27 – especially on those slipped contracts and cash improvement – will be the proof point that the turnaround is sticking.
