Mind Gym PLC shares dropped sharply on Monday, as it warned its financial results are set to disappoint following weak trading amid macroeconomic headwinds.

The London-based personal and business coaching service said it expects revenue to fall to around £21 million in the six months ended September 30, from £26.8 million a year before. It also expects to achieve a loss at earnings before interest, tax, depreciation and amortisation level, compared to positive Ebitda of £1.9 million the year before.

Additionally, Mind Gym warns its annual revenue and profit will be ‘significantly’ lower than current market expectations.

Shares in the AIM-listed firm plunged 37% to 35.00 pence each in London on Monday morning.

In the financial year ended March 31, 2023, it recorded revenue of £55.0 million and pretax profit of £3.0 million.

Mind Gym explained that it saw a ‘challenging’ macroeconomic environment over the period. A larger number of its clients took a cautious approach, which has delayed timeframes and procurements of new projects. Additionally, some clients have undertaken restructuring efforts, which has consequently delayed training and spending commitments.

These effects were ‘particularly marked’ in the US, while its performance in Europe, Middle East & Asia has been ‘more resilient’, save for the delay of a £2 million framework which has been pushed back into the second half.

Mind Gym said it is continuing to focus on reducing its cost base. Its planned capital expenditure in the second half is being materially scaled back compared to the first six months. It will focus on what its clients are already buying, including its one-to-one coaching offer, Performa, as well as diagnostics.

However, despite the tough macroeconomic climate, Mind Gym maintains there are some factors working in its favour.

‘Businesses continue to operate in a tight labour market with a shortage of skills. As companies seek to attract, retain and develop talent, they continue to see a compelling need to invest,’ the firm explained.

‘We remain confident in the strategy and long-term prospects of the business and our ability to grow revenues and improve profitability.’

The firm predicts the second half is likely to be stronger than the first, with revenue to be ‘broadly similar’ to the prior year level, and Ebitda margins to come in slightly ahead.

It will announce its half-year results on December 1.

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