TIDMWEY
RNS Number : 5103C
Wey Education PLC
18 April 2017
18 April 2017
WEY EDUCATION PLC
("Wey" or "the Company" or "the Group")
Unaudited Interim Results for the six months ended 28 February
2017
Momentum growing in core business
Turnover up 73%
Maiden Profit
Wey Education plc (AIM:WEY) the education group operating the
UK's only online fee paying secondary school, is pleased to
announce its unaudited interim results for the six months ended 28
February 2017.
HIGHLIGHTS:
-- Turnover increased by 73% to GBP1,211,171 (2016: GBP700,215)
-- Maiden profit before tax of GBP11,244 (2016: loss GBP466,582)
-- Basic EPS of 0.01p (2016: loss 0.69p)
-- Cash balances of GBP1,030,432 (2016: GBP1,014,179) after
increased investment
-- New IT Platform well advanced in rollout to provide base for further growth
-- Result for the full year anticipated to be "much better" than 2015/16
Commenting on the results, David Massie (Chairman) said:
"These results show a substantial improvement over previous
years and we are yet to see the impact of the various initiatives
commenced over the last 18 months where the real benefits will be
seen in 2017/18 and beyond. Our product is one for the digital age
and we see numerous opportunities for expansion. We will continue
to invest with the aim of increasing the Group's size, product
range and international coverage. We continue to research the
Chinese and other markets. We are now in our best ever position and
are looking forward to the second half with confidence and
excitement."
Enquiries:
Wey Education plc
+44 (0) 20 7518
David Massie (Chairman) 9700
+44 (0) 7785 957
958
WH Ireland Limited
(Nominated Adviser and Broker)
Mike Coe / Ed Allsopp (Corporate +44 (0) 117 945
Finance) 3470
CHAIRMAN'S STATEMENT
These are the Company's interim results for the six months to 28
February 2017.
Turnover for the reported six months increased by 73% on the
comparative period to GBP1,211,171 (2016: GBP700,215).
Profit before and after tax was GBP11,244 (2016: loss
GBP466,582) and was calculated after depreciation and amortisation
costs of GBP84,299 (2016: GBP82,596), share based payments of
GBP42,485 (2016: GBP13,673) and exceptional items of GBP58,606
income (2016: GBP295,538 costs).
Earnings per share were 0.01p (2016: loss 0.69p).
The Group is debt free and had cash balances of GBP1,030,432 as
at 28 February 2017 (2016: GBP1,014,179).
The benefits of the various initiatives taken over the last 18
months to ensure that the Group is well equipped for substantial
sustainable expansion have yet to be reflected in results. The real
benefit of those initiatives will start to be felt in the 2017/18
financial year and particularly thereafter.
The original InterHigh business continues to perform well. As
previously announced, student recruitment in the period under
review was strong and the student roll reached record levels during
the Spring Term. It continues to serve its traditional pupil base
of those seeking online home schooling for personal reasons which
include bullying, anxiety, dedication to sport, music or the
theatre. Increasingly the school recruits pupils for whom online
education provides a cost-effective method of independent
schooling. Parents find that their children achieve comparable
results with other independent schools at a fraction of the
price.
A new premium selective school (which might be likened to an
online grammar school), Infinity Education, is to have its main
launch for two year iGCSE and A level courses this September. While
pupil numbers for 2017/18 are expected to be modest, rapid
expansion is expected from 2018/19 onwards and particularly 2019/20
when the first graduates of the new school will have established
its academic capabilities.
The Group has created "Wey ecademy" to offer B2B services to
third parties, including Local Authorities, other schools etc. who
do not require the full services of the Group's online schools. The
marketing team is being built and this area has considerable
potential, though given the nature of the demand, the average
period of a pupil's attendance is likely to be measured in months'
rather than in years. However, the Group believes that not only
does Wey ecademy have a place in the market but it offers an
attractive proposition to Local Authorities and other education
providers seeking a solution for displaced children. Wey ecademy
offers a clear pathway to take pupils from "non-attendance",
through to iGCSEs and A levels and, for the most outstanding
pupils, the ability to study at Infinity Education as an entry
point to the best universities in the UK and overseas.
Significant investment has been made by the Group over the last
18 months to improve the in-house standards of its educational
offering and bring those in line with best practice in the U.K.
independent sector. This has included creating three new positions
of Assistant Heads for the schools and improved safeguarding,
teacher monitoring and development. The recently created Academic
Advisory Board, chaired by non-executive director, Dame Erica
Pienaar and supported by Dr. Elizabeth Sidwell, the former Schools
Commissioner for England, has been mandated by the Board to
continually improve standards across the Group and ensure the best
outcomes for all pupils attending the Group's schools.
In tandem with this development in human resources the Group,
last year, commissioned a new IT Platform to ensure that it has the
IT resources to handle substantially increased pupil numbers and to
utilise the latest technology to enhance the learning experience.
The new IT Platform which both provides the online teaching
platform and also automated schools management is now substantially
complete and is gradually being introduced with a view to general
adoption across the Group from the beginning of the 2017/18
academic year. First impressions are that the Platform enhances
both the teacher and pupil experience while providing automated
data capture and administration to management. The Platform has
been developed considerably below the budget anticipated at the
time of the Company's admission to AIM in December 2015 and is
scalable to a level consistent with the Group's ambitions.
The primary method of marketing to prospective pupils and
parents is online and based upon this success and technical review
the Company intends to further enhance its digital marketing over
the coming year.
The Group continues to explore the Asian market and during the
period has initiated technical trials and is currently running a
pilot class in China to test practicalities. Interactive online
teaching of the type the Group provides is not well known in the
Chinese market and the Group is taking particular care to ensure
that it meets the relevant regulatory requirements before it enters
this market.
The Group is concentrating its administration services at its
office in Crickhowell, Wales in accordance with its strategy of
"one Company, several brands" and is aligning job responsibilities
so that all staff including teachers are available to work across
all of the Group's activities.
It was previously announced that Tom Scott, the COO, would be
leaving the Group, and he resigned as a director with effect from
13 April 2017.
Outlook
The Company believes that turnover for the second half will be
substantially ahead of the comparative period in 2015/16 and
similar to that in the reported period. The financial result for
the year is anticipated to be much better than that achieved for
the year ended 31 August 2016. While it is pleasing for the Company
to post a maiden interim pre-tax profit in the period under review,
the Board considers the expansion opportunities open to it to be
attractive and the Group will continue to invest in increased
marketing and development both in the UK and overseas throughout
the second half of the current financial year.
Preliminary results for the year to 31 August 2017 are likely to
be announced in October 2017 but a further announcement will be
made on progress prior to the Close Period for such results.
The Company is now in its best ever position and the Board looks
forward to the second half with both confidence and excitement as
to the challenges ahead. Looking forward, the Board sees no reason
why financial growth should not accelerate further if any of the
current initiatives come to fruition.
Shareholder Discount Scheme
The Group has a shareholder discount scheme entitling
shareholder's holding a qualifying shareholding to a 10% discount
on future fees for themselves, their children or grandchildren
attending InterHigh or Infinity Education. Full details are
available on the Company's website.
David L. Massie
Chairman
18 April 2017
Consolidated Statement of Comprehensive Income
For the six months ended 28 February 2017
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 29 February 31 August
2017 2016 2016
GBP'000 GBP'000 GBP'000
Total Revenue 1,211 700 1,516
Cost of Sales (575) (396) (800)
---------- ------------ ----------
Gross Profit 636 304 716
Administrative expenses (641) (454) (1,108)
Equity based share payments (43) (14) (12)
Exceptional items 59 (296) (398)
---------- ------------ ----------
Operating profit/(loss)
for the period before
taxation 11 (460) (802)
Finance Costs - (4) (4)
---------- ------------ ----------
Profit/(loss) before tax 11 (464) (806)
Taxation - - -
---------- ------------ ----------
Total Comprehensive loss
for the period from continuing
activities 11 (464) (806)
Loss from discontinued
operations - (3) (19)
Retained profit/(loss)
for period 11 (467) (825)
========== ============ ==========
Total Comprehensive profit/(loss)
for the period 11 (467) (825)
========== ============ ==========
Profit/(loss) from continuing
activities 11 (464) (806)
========== ============ ==========
Unaudited Consolidated Statement of Financial Position
As at 28 February 2017
Unaudited Unaudited Audited
As at As at As at
28 February 29 February 31 August
2017 2016 2016
GBP'000 GBP'000 GBP'000
NON CURRENT ASSETS
Goodwill 201 201 201
Intangible assets 736 684 630
Tangible assets 49 28 29
Total non current assets 986 913 860
------- ----------- ---------
CURRENT ASSETS
Trade and other receivables 287 377 217
Cash and cash equivalents 1,030 1,014 910
Total current assets 1,317 1,391 1,127
------- ----------- ---------
TOTAL ASSETS 2,303 2,304 1,987
======= =========== =========
EQUITY AND LIABILITIES
EQUITY AND RESERVES
Issued share capital 988 958 958
Share premium 2,783 2,696 2,696
Share option reserve 91 62 48
Profit and loss account (2,398) (2,063) (2,410)
Total equity and reserves 1,464 1,653 1,292
------- ----------- ---------
CURRENT LIABILITIES
Trade and other payables 839 651 695
Total current liabilities 839 651 695
------- ----------- ---------
TOTAL EQUITY AND LIABILITIES 2,303 2,304 1,987
======= =========== =========
Unaudited Consolidated Cash Flow Statement
For the six months ended 28 February 2017
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 29 February 31 August
2017 2016 2016
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit/(Loss) before taxation
- Continuing operations 11 (464) (806)
- Discontinued operations - (3) (19)
Adjustments for:
Amortisation 80 80 160
Depreciation 4 2 5
Interest expense - 4 4
Equity based share payments 43 14 12
Changes in working capital:
Trade and other receivables (70) (158) 2
Trade and other payables 263 96 216
Net cash generated from/(used in) operating activities 331 (429) (426)
------------ ------------ -------------
Cash flow from financing activities
Funding provided by related parties - (305) (267)
Issue of shares - 1,663 1,663
------------ ------------ -------------
Net cash generated from financing activities - 1,358 1,396
------------ ------------ ---------------
Cash flow from investing activities
Acquisition of business net of cash - - (77)
Interest paid - - (38)
Development costs (187) - (26)
Purchase of fixed assets (24) (13) (16)
------------ ------------ ---------------
Net cash (used in) investing activities (211) (13) (157)
Net increase in cash and cash equivalents 120 916 813
Cash and cash equivalents brought forward 910 98 97
Cash and cash equivalents carried forward 1,030 1,014 910
============ ============ ===============
Notes to the Interim Results
For the six months ended 28 February 2017
1. The interim results (approved by the Board of Directors and
authorised for issue on 18 April 2017) are neither audited nor
reviewed and do not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The financial
information for the preceding period is extracted from the
statutory accounts for the financial year ended 31 August 2016. The
audited accounts for the year ended 31 August 2016, upon which the
auditors issued an unqualified opinion, and which did not contain a
statement under Section 498 (2) and (3) of the Companies Act 2006,
have been delivered to the Registrar of Companies. As permitted,
this interim report has been prepared in accordance with UK AIM
Rules and not in accordance with IAS 34 'Interim Financial
Reporting', therefore it is not fully in compliance with IFRS.
2. Wey Education plc is a public limited company incorporated in
the United Kingdom. The Company is domiciled in the United Kingdom
and its ordinary shares are traded on the AIM market of the London
Stock Exchange plc.
3. The consolidated interim results have been prepared in
accordance with the recognition and measurement principles of IFRS
including standards and interpretations issued by the International
Accounting Standards Board, as adopted by the European Union. They
have been prepared using the historical cost convention.
4. The preparation of the interim results requires management to
make estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the reporting date. If in the future such
estimates and assumptions, which are based on management's best
judgement at the reporting date, deviate from the actual
circumstances, the original estimates and assumptions will be
modified as appropriate in the year in which the circumstances
change. The interim results are presented in sterling and all
values are rounded to the nearest thousand pounds (GBP'000) except
where otherwise indicated.
5. The interim results of the Group for the period ended 28
February 2017 have been prepared in accordance with the accounting
policies expected to apply in respect of the financial statements
for the year ending 31 August 2017.
6. There is no tax charge for the period due to the availability
of tax losses brought forward.
7. The basic earnings per share is calculated on the weighted
average number of shares in issue during the period. The weighted
average number of ordinary shares in issue for the six months to 28
February 2017 was 96,446,001 shares (29 February 2016: 66,627,485
shares and 31 August 2016: 81,299,404 shares).
8. Copies of this report will be available to download from the
investor relations section of the Company's website
www.weyeducation.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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