Half-year Report, Wey Education PLC, 2020-05-12






RNS Number : 5474M
Wey Education PLC
12 May 2020
 

12 May 2020

 

WEY EDUCATION PLC

(“Wey”, the “Group” or the “Company”)

 

Wey Education plc (AIM:WEY) today publishes its interim results for the six months to 29 February 2020 and reports on a number of important developments within the business.

 

Financial Highlights

 

·    Turnover increased by 43% to £3.87m (2019: £2.70m)

 

·    Continued strong growth in both Interhigh and Academy21, reflected in turnover and gross profit margins

 

·    Profit before and after tax of £215k (2019: loss after tax of £895k after exceptional items and discontinued operations)

 

·    Cash balances over £6.6m (2019: £4.9m)

 

·    Strategy to take advantage of enhanced awareness and opportunities in online education.

 

 

 

Operational Highlights

 

·    Expanded Executive Team in place to drive future growth

 

·    Teaching Online qualification implemented

 

·    Enhanced education model and delivery strategy for growth under way

 

 

Commenting on the results, Barrie Whipp (Chairman) said “Wey continues to grow, providing education to a wider range of learners in an environment where online education is experiencing more awareness than ever before. Our financial results demonstrate that our strategy is sound and our strategies are ambitious for further growth.”

 

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) (“MAR”) prior to its release as part of this announcement and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

 

Enquiries:

 

 

Wey Education plc

 

Barrie Whipp (Chairman)

+44 (0) 7778 367 999

Jacqueline Daniell (CEO)

+44 (0) 1873 813 900

Barry Nichols-Grey (Executive Director – Finance)

+44 (0) 1873 813 900

 

 

WH Ireland Limited

(Nominated Adviser and Broker)

 

James Joyce / Chris Savidge (Corporate Finance)

+44 (0) 20 7220 1698

 

 

 

Chairman’s Statement

 

The interim results demonstrate that our focussed strategy is attracting an increasing number of students to Wey. We prioritise a safe, learner-focused online education to students from diverse backgrounds and locations.

In InterHigh, we have seen strong demand from parents and students who now see online education as a genuine alternative. The fact that we have been providing this type of education for nearly fifteen years demonstrates our true understanding of the requirements to succeed. I am pleased that we now provide an education to students in the latter years of primary education through to sixth form.

In Academy 21, an increasing number of local authorities and institutions now invest in our offering where we provide a true form of alternative provision, especially given the increasing numbers of instances where learners cannot fit within the traditional education environment. Our expanded sales team is now more able to cover the entire country and we are hopeful that our wider geographic presence will facilitate more growth.

Revenue growth remains strong and is clearly demonstrated in the figures. Turnover has increased across both brands in our Company and gross margins have seen a small improvement. It should be noted that current year student additions also solidify our base revenue in future years.

Our cash position is very strong and our balance sheet is well structured, with no debt. I was delighted to welcome some new, well-respected institutions to our shareholder base this year, a true indicator of the awareness and respect Wey now enjoys.

At the beginning of the period, the Board took the decision to review and widen our executive team to enable us to grow to the next level. We perceived that we needed to review our educational model, to ensure that we could adopt more interactive and engaging content and that we needed to add a senior marketing professional, the first in our history. I am pleased to say that Dr Sara de Freitas and Esther Clark are already making positive changes to our pedagogy and persona and we hope to see more benefits as their time with Wey goes on.

Growth in revenues without a continued focus on quality is a constant spectre for a good education provider and we are highly cognisant that we must keep learners safe, in a compliant environment with expert teaching. Our introduction of the ATHE approved Teaching Online qualification saw its first cohort pass with flying colours this year and the qualification is now part of our teachers continued professional development.

Landmarks have been achieved though the development and launch of Wey’s revised education model, building an educational infrastructure for delivering a world-class education. Students are now able to experience a sequence of learning techniques reflected not only in the teaching approach but also the teaching mode and technology enhancements utilised.

Recent global challenges have ensured that online education is a subject more in the public eye than ever before. Whilst there will be macro-economic factors in play for an extended period, more people are becoming aware that online education is a real possibility and that organisations cannot simply advise that materials are available online. We continue to focus on our IT Strategy of a single Wey platform with excellent usability and materials. Safe, compliant providers with high quality teaching will certainly benefit from the awareness created in these challenging times.

 

 

Financial Results

 

 

Unaudited

6 months

ended

29 February

 2020

 

Unaudited

6 months

ended

28 February

2019

 

 

Audited

year

ended

31 August

2019

 

 

£’000

 

£’000

 

£’000

Total revenue

3,870

 

2,697

 

6,049

Gross profit margin

62.0%

 

56.4%

 

59.5%

                                                                       

 

Adjusted PBT

 

 

Unaudited

6 months

ended

29 February

2020

 

Unaudited

6 months

ended

28 February

 2019

 

Audited

year

ended

31 August

2019

 

 

£’000

 

£’000

 

£’000

Operating Profit/(Loss) before tax from continuing operations

218

 

                            (586)

 

                                (383)

 

 

 

 

 

 

Add back:

 

 

 

 

 

Amortisation of acquired intangibles

74

 

80

 

160

Equity share based awards

38

 

                                 59

 

                                 109

Exceptional costs

 

                                 571

 

                                 436

Adjusted PBT

330

 

124

 

322

Adjusted EPS (p)

0.24

 

0.10

 

0.25

 

 

 

 

 

Wey Education plc

Consolidated Statement of Comprehensive Income

For the six months ended 29 February 2020

 

 

Unaudited

6 months ended

29 February 2020

 

Unaudited

6 months

ended

28 February 2019

 

Audited

year

ended

31 August 2019

 

 

£’000

 

£’000

 

£’000

 

 

 

 

 

 

 

 

Total revenue

3,870

 

2,697

 

6,049

 

 

 

 

 

 

 

 

Cost of sales

(1,469)

 

(1,177)

 

(2,447)

 

 

 

 

 

 

 

 

Gross profit

2,401

 

1,520

 

3,602

 

 

 

 

 

 

 

 

Administrative expenses

(2,145)

 

(1,476)

 

(3,445)

 

Other income

 

 

5

 

 

 

 

 

 

 

 

Operating profit/(loss) before non- recurring items:

256

 

44

 

162

 

Equity share based awards

(38)

 

(59)

 

(109)

 

Exceptional costs

 

(571)

 

(436)

 

 

 

 

 

 

 

 

Operating profit/(loss) for the period before taxation

218

 

(586)

 

 

(383)

 

 

 Finance expense

 (4)

 

 

 

 Finance income

1

 

1

 

2

 

 

 

 

 

 

 

 

Profit/(loss) before tax

215

 

(585)

 

(381)

 

 

 

 

 

 

 

 

Taxation

 

 

8

 

 

Total comprehensive profit/(loss) for the period from continuing activities

215

 

(585)

 

(373)

 

 

 

 

 

 

 

 

Loss for the period from discontinued activities

 

(310)

 

(312)

 

 

 

 

 

 

 

 

Total profit/loss for the period

215

 

(895)

 

(685)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share for profit/(loss) from continuing operations

 

 

 

 

 

 

-     Basic earnings per share

    0.16

 

(0.44)

 

(0.29)

 

-     Diluted earnings per share

                0.15

 

(0.44)

 

(0.29)

 

 

 

 

 

 

 

 

Basic and diluted loss per share (p) from discontinued operations

 

(0.24)

 

(0.24)

 

 

Unaudited Consolidated Statement of Financial Position

As at 29 February 2020

 

 

 

Unaudited

As at

29 February 2020

 

Unaudited

As at

28 February 2019

 

Audited

As at

31 August

2019

 

 

£’000

 

£’000

 

£’000

 

 

 

 

 

 

 

 

NON CURRENT ASSETS

 

 

 

 

 

 

Goodwill

1,630

 

1,630

 

1,630

 

Intangible assets

357

 

496

 

451

 

Tangible fixed assets

366

 

187

 

    171

 

Total non current assets

2,353

 

2,313

 

 2,252

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Trade and other receivables

1,098

 

1,183

 

498

 

Other receivables

241

 

314

 

237

 

Cash and cash equivalents

6,622

 

4,955

 

4,961

 

Total current assets

7,961

 

6,452

 

5,696

 

 

 

 

 

 

 

 

TOTAL ASSETS

10,314

 

8,765

 

7,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY AND RESERVES

 

 

 

 

 

 

Issued share capital

1,382

 

1,307

 

1,312

 

Share premium

1,652

 

1,515

 

1,530

 

Option reserve

166

 

160

 

201

 

Retained earnings

3,004

 

2,606

 

2,716

 

Total equity and reserves

6,204

 

5,588

 

   5,759

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

Lease liabilities (note 9)

129

 

 

 

Total non-current liabilities

129

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Trade and other payables

500

 

432

 

    324

 

Accruals

375

 

112

 

622

 

Deferred income

1,783

 

1,299

 

25

 

Receipts in advance

121

 

71

 

453

 

Refundable deposits

1,155

 

613

 

765

 

Provisions

 

650

 

 

Lease liabilities

47

 

 

 

Total current liabilities

3,981

 

3,177

 

   2,189

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

10,314

 

8,765

 

   7,948

 

 

Unaudited Consolidated Statement of Changes in Equity

At 29 February 2020

 

 

 

Share Capital

 

Share Premium

 

Share Option Reserve

 

Retained Earnings

 

 

Total

 

£’000

 

£’000

 

£’000

 

£’000

 

£’000

 

 

 

 

 

 

 

 

 

 

At 31 August 2018

1,307

 

7,515

 

110

 

(2,499)

 

6,433

Loss for the period

 

 

 

(895)

 

(895)

Capital reconstruction (note 8)

 

(6,000)

 

 

6,000

 

Equity based share awards

 

 

50

 

 

50

At 28 February 2019

1,307

 

1,515

 

160

 

2,606

 

5,588

 

 

 

 

 

 

 

 

 

 

At 31 August 2019

1,312

 

1,530

 

201

 

2,716

 

5,759

Profit for the period

 

 

 

215

 

215

Issue of shares

70

 

122

 

(68)

 

68

 

192

Equity based share awards

 

 

38

 

 

38

Lapse of options

 

 

(5)

 

5

 

At 29 February 2020

1,382

 

1,652

 

166

 

3,004

 

6,204

 

 

 

 

 

 

 

 

 

 

Unaudited Consolidated Cash Flow Statement

For the six months ended 29 February 2020

 

 

 

Unaudited

6 months ended

29 February 2020

 

Unaudited

6 months ended

28 February 2019

 

 

Audited

year ended

31 August

2019

 

 

 

£’000

 

£’000

 

£’000

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before taxation

215

 

(895)

 

(693)

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

Depreciation and amortisation

151

 

137

 

192

 

Equity based share payments

38

 

50

 

96

 

Taxation

 

 

8

 

Interest received

(1)

 

 

 

Interest paid

4

 

 

 

 

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

Trade and other receivables

(604)

 

(765)

 

(44)

 

Trade and other payables

176

 

229

 

121

 

Accruals, deferred income,   receipts in advance and   refundable deposits

1,569

 

1,392

 

            

                 1162

 

  Provisions

 

650

 

 

Net cash generated from/(used in) operating activities

1,548

 

798

 

848

 

 

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of shares

192

 

 

20

 

Interest paid

(4)

 

 

 

Principal element of lease repayments

(22)

 

 

 

 

 

 

 

 

 

 

Net cash generated from financing activities

166

 

 

20

 

 

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

 

Interest received

1

 

1

 

2

 

Purchase of intangible assets

 

(37)

 

(88)

 

Purchase of fixed assets

(54)

 

(32)

 

(46)

 

 

 

 

 

 

 

 

Net cash (used in) investing activities

(53)

 

(68)

 

(132)

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

1,661

 

730

 

736

 

 

 

 

 

 

 

 

Cash and cash equivalents brought forward

4,961

 

4,225

 

4,225

 

 

 

 

 

 

 

 

Cash and cash equivalents carried forward

6,622

 

 

4,955

 

 

                4,961

 

 

 

 

 

 

 

 

 

 

Notes to the Interim Results

For the six months ended 29 February 2020

 

 

1.     The interim results (approved by the Board of Directors and authorised for issue on 12 May 2020 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 2019.  The audited accounts for the year ended 31 August 2019, 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 (£’000) except where otherwise indicated.

 

5.      The interim results of the Group for the period ended 29 February 2020 have been prepared in accordance with the accounting policies expected to apply in respect of the financial statements for the year ending 31 August 2020.

 

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 periods presented is as follows:

 

         

 

As at

29 February 2020

No

 

As at

28 February

2019

No.

 

As at 31 August

2019

No.

Weighted average number of ordinary shares in issue

136,870,733

 

130,707,120

 

130,781,092

Weighted average diluted number of ordinary shares in issue

139,341,039

 

130,707,120

 

137,388,933

 

 

 

 

 

 

 

 

 

8.       On 21 December 2018, the Company completed a capital reorganisation, transferring £6,000,000 from share premium to retained earnings. This puts the Company in the position of having distributable reserves.

 

9.       The Group applied IFRS 16 from 1 September 2019 and has elected to transition to IFRS 16 using the modified retrospective approach.

 

Initial application of IFRS 16 has affected leases which had previously been classified as operating leases. At 31 August 2019, the Group had no short term or low value operating leases which were exempt from the requirements of IFRS 16. At 1 September 2019, the group recognised right-of-use assets of £199,395 and associated lease liabilities of £195,396.

 

The reconciliation between the amounts disclosed as operating lease commitments at 31 August 2019 and the opening position at 1 September 2019 is as follows:

 

 

 

 

£

Total operating lease commitments at 31 August 2019

 

218,805

Discounted using incremental borrowing rate

 

(23,409)

Total finance lease obligation recognised at 1 September 2019

 

195,396

 

 

 

10. Exceptional costs are broken down as follows:

 

 

Unaudited

6 months ended

28 February 2020

 

Unaudited

6 months ended

28 February 2019

(restated)

 

Audited

year ended

31 August 2019

(restated)

 

 

 

£’000

 

£’000

Termination and restructuring costs

 

335

 

Cost of terminating our London operations

 

227

 

Capital reorganisation & other legal costs

 

9

 

Acquisition costs

 

 

43

TOTAL

 

571

 

43

 

 

11.     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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 

END

 
 

IR SFLFMFESSESI

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