TIDMWEY
RNS Number : 7358Y
Wey Education PLC
13 May 2019
13 May 2019
WEY EDUCATION PLC
("Wey", the "Group" or the "Company")
Wey Education plc (AIM:WEY) today publishes its interim results
for the six months to 28 February 2019 and reports on a number of
important developments within the business.
Financial Highlights
-- Turnover up 54.7% at GBP2.70m (2018: GBP1.74m)
-- Continued strong growth in both Interhigh and Academy21,
reflected in turnover and gross profit margins
-- Adjusted profit before tax on continuing operations of GBP124k (2018: GBP23k)
-- Loss after tax of GBP895k (2018: GBP153k) after exceptional
items of GBP571k and GBP310k of losses from discontinued operations
in London and overseas
-- Cash balances strong at over GBP4.96m (2018: GBP4.35m)
Operational Highlights
-- Wey now focuses on its two core brands, InterHigh and
Academy21, and their clear market opportunities
-- Investment in academic leadership, AI and quality of educational provision
-- Further development of the IT platform to enable alignment and scalability of both brands
-- Accreditation of Teaching Online qualification, setting standards in education delivery
Commenting on the results, Barrie Whipp (Chairman) said "Wey is
now completely focused on InterHigh and Academy21, our distinct
brands for online education. With significant cash resources, and
businesses with growing underlying financial performance I believe
we have a great foundation for growth in our ever expanding and
exciting market"
This announcement contains information which, prior to its
disclosure by this announcement, was inside information for the
purposes of the Market Abuse Regulation
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)
Mike Coe / Chris Savidge (Corporate
Finance) +44 (0) 117 945 3470
Chairman's Statement
In the first half of the financial year, Wey Education took the
decision to evaluate its investments and activities in a range of
wider brands and geographies. Following the illness and then sad
passing of David Massie, the former Executive Chairman the Board
decided that the best course of action was to concentrate on
developing its two core brands in online education; InterHigh,
where we provide live online schooling, and Academy 21, which
provides alternative provision to educational bodies. The success
of the development of these two businesses is reflected in the
growth of the Wey Group at the turnover level, where we achieved
54.7% growth, with a full six month contribution from Academy 21 in
the current period.
The Company's vision is for the Wey Group to become a provider
of online education to a level where it is, in terms of numbers of
students, the largest secondary school in the country and for it to
go on to become the size of a Multi Academy Trust. This can only be
achieved by the provision of excellent teaching and learning, and I
am pleased to report that the appointment of Wayne Owens in
November 2018 as Executive Head Teacher, working alongside the
Academic Advisory Board, led by Dame Erica Pienaar, has seen
positive improvements in the quality of our provision. We have a
strong ethos of continuous improvement in this area and we aim to
set the standard for online education.
InterHigh continues to grow its student numbers and we have
embedded into its platform the ability to teach older primary
school students which, along with its sixth form capabilities,
means that parents can trust InterHigh to manage two life changing
periods in education.
Academy21 also continues to grow. Its offering of alternative
provision is an area where local authorities and other bodies find
Wey an ideal solution to a range of issues such as capacity,
funding and provision to students in difficult circumstances. The
Academy21 business will be fully integrated into the Wey platform
for the new school year starting in September 2019 allowing for
margins to be improved whilst maintaining educational
standards.
Whilst we have decided not to pursue investments in overseas
territories, Wey is very much "open for business" to international
opportunities. Fundamentally, location is not a barrier to the
provision of our services and we have opportunities to increase
export sales, without committing to infrastructure. Our brands have
been enhanced and simplified to ensure consistency in marketing
campaigns, in which we intend to invest more resources to promote
our longer-term strategy. We are delighted to have entered into a
partnership with Olympic athlete and commentator Colin Jackson as
Wey's brand ambassador.
Our IT platform is allowing us to explore AI opportunities and
we have also recently received accreditation for our Teaching
Online qualification. This will add to our goal of being capable of
achieving early regulatory standards for online education.
Regulation of home schooling is very much a matter of concern at
the highest levels of government and it is our desire that Wey is
seen as a gold standard in online provision.
Financially, the Board has taken the decision to write off the
investments in operations in London and overseas. This amounts to
GBP571,000 of exceptional costs and GBP310,000 of costs classified
as exceptional items or losses from discontinued operations,
however the Board believes there are no further significant costs
related to this challenging process. The Company's cash balance of
GBP4.96m means that we can now focus on the future growth of
InterHigh and Academy21 and invest in marketing and new sales
representation respectively.
Financial Results
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
28 February 28 February 31 August 2018
2019 2018
(restated) (restated)
GBP'000 GBP'000 GBP'000
Total revenue 2,697 1,743 4,192
Gross profit margin 56.4% 51.9% 53.5%
Adjusted EBITDA
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
28 February 28 February 31 August 2018
2019 2018
(restated) (restated)
GBP'000 GBP'000 GBP'000
Operating
Profit/(Loss)
before tax
from
continuing
operations (586) (118) (63)
Add back:
Depreciation 33 15 36
Amortisation
of acquired
intangibles 80 80 160
Equity share
based
awards 59 18 95
Exceptional
income - - (8)
Exceptional
costs 571 43 61
Adjusted
EBITDA 157 38 281
Adjusted PBT
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
28 February 28 February 31 August 2018
2019 2018
(restated) (restated)
GBP'000 GBP'000 GBP'000
Operating
Profit/(Loss)
before tax
from
continuing
operations (586) (118) (63)
Add back:
Amortisation
of acquired
intangibles 80 80 160
Equity share
based
awards 59 18 95
Exceptional
income - - (8)
Exceptional
costs 571 43 61
Adjusted PBT 124 23 245
Adjusted EPS
(p) 0.10 0.02 0.20
Exceptional costs are broken down as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
28 February 28 February 31 August 2018
2019 2018
(restated) (restated)
GBP'000 GBP'000 GBP'000
Termination and restructuring 335 - -
costs
Cost of terminating 227 - -
our London operations
Capital reorganisation
& other legal costs 9 - 18
Acquisition costs - 43 43
---------------- ---------------- ----------------
TOTAL 571 43 61
---------------- ---------------- ----------------
Comparative figures for the prior period have been restated to
reclassify the operations in Kenya, China and Nigeria as
discontinued operations in accordance with IFRS5.
Outlook
InterHigh is a leader in the provision of online education
offering all its students the opportunity for a flexible,
accessible and personal learning solution. In addition, we help
educate students engaged in the arts, sports and those that are
based internationally. All of these markets represent outstanding
opportunities for us to grow the business and with government
increasingly concerned about quality and standards, InterHigh is
extremely well placed to offer education where regulators and
institutions can observe well managed, planned and safe education
for students
In Academy21, we prove that all children can benefit from
education, even where they might be unable to receive teaching in
subjects that they require or where they simply do not fit into the
current educational structure. Academy21 offers institutions
options that can be very difficult to find elsewhere.
In both of Wey's businesses, we have boundless opportunities and
with our narrowed focus we aim to take full advantage of the
excellent platform we have built.
The Board is pleased to have received the support of many
stakeholders in its strategy and now looks forward to planning
growth in our core business.
Wey Education plc
Consolidated Statement of Comprehensive Income
For the six months ended 28 February 2019
Unaudited Unaudited Unaudited
6 months 6 months ended year ended
ended
28 February 28 February 31 August
2019 2018
(restated) 2018
(restated)
GBP'000 GBP'000 GBP'000
Total revenue 2,697 1,743 4,192
Cost of sales (1,177) (838) (1,950)
Gross profit 1,520 905 2,242
Administrative expenses (1,476) (962) (2,157)
Operating profit/(loss) before
non- recurring items: 44 (57) 85
Equity share based awards (59) (18) (95)
Exceptional income - - 8
Exceptional costs (571) (43) (61)
-------------------------------------- ------------- ---------------- ------------
Operating profit/(loss) for
the period before taxation (586) (118) (63)
Finance income 1 - -
Profit/(loss) before tax (585) (118) (63)
Taxation - - 33
------------- ---------------- ------------
Total comprehensive loss
for the period from continuing
activities (585) (118) (30)
Loss for the period from
discontinued activities (310) (35) (166)
Total loss for the period (895) (153) (196)
------------- ---------------- ------------
Basic and diluted loss per
share (p) from continuing
operations (0.44) (0.10) (0.02)
Basic and diluted loss per
share (p) from discontinued
operations (0.24) (0.03) (0.13)
Unaudited Consolidated Statement of Financial Position
As at 28 February 2019
Unaudited Unaudited Audited
As at As at As at
28 February 28 February 31 August 2018
2019 2018
GBP'000 GBP'000 GBP'000
NON CURRENT ASSETS
Goodwill 1,630 1,643 1,630
Intangible assets 496 642 563
Tangible fixed assets 187 126 189
------------- ------------- ----------------
Total non current assets 2,313 2,411 2,382
------------- ------------- ----------------
CURRENT ASSETS
Trade and other receivables 1,497 1,126 732
Cash and cash equivalents 4,955 4,346 4,225
------------- ------------- ----------------
Total current assets 6,452 5,472 4,957
------------- ------------- ----------------
TOTAL ASSETS 8,765 7,883 7,339
------------- ------------- ----------------
EQUITY AND LIABILITIES
EQUITY AND RESERVES
Issued share capital 1,307 1,267 1,307
Share premium 1,515 7,352 7,515
Option reserve 160 95 110
Retained earnings 2,606 (2,478) (2,499)
------------- ------------- ----------------
Total equity and reserves 5,588 6,236 6,433
------------- ------------- ----------------
CURRENT LIABILITIES
Trade and other payables 432 336 203
Accruals, deferred
income, receipts in
advance and refundable
deposits 2,095 1,311 703
Provisions 650 - -
------------- ------------- ----------------
Total current liabilities 3,177 1,647 906
------------- ------------- ----------------
TOTAL EQUITY AND LIABILITIES 8,765 7,883 7,339
------------- ------------- ----------------
Unaudited Consolidated Statement of Changes in Equity
At 28 February 2019
Share Capital Share Premium Share Option Reserve Retained Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 August 2017 1,040 2,868 77 (2,324) 1,661
Loss for the period (153) (153)
Proceeds from share
issues 227 4,772 - - 5,000
Expenses associated with
share issue - (288) - - (288)
Equity based share
awards - - 18 - 18
-------------- -------------- --------------------- ------------------ --------
At 28 February 2018 11,267 7,352 95 (2,478) 6,236
-------------- -------------- --------------------- ------------------ --------
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
-------------- -------------- --------------------- ------------------ --------
Unaudited Consolidated Cash Flow Statement
For the six months ended 28 February 2019
Unaudited Unaudited Audited Year
6 months ended 6 months ended ended
28 February 28 February 31 August 2018
2019 2018
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit/(loss) before
taxation (895) (153) (229)
Adjustments for:
Amortisation 104 95 189
Depreciation 33 15 36
Equity based share
payments 50 18 54
Taxation - - 33
Changes in working
capital:
Trade and other receivables (765) (614) (206)
Trade and other payables 229 69 (65)
Accruals, deferred
income, receipts in
advance and refundable
deposits 1,392 558 (51)
Provisions 650 - -
---------------- ---------------- ---------------------
Net cash generated
from/(used in) operating
activities 798 (12) (239)
---------------- ---------------- ---------------------
Cash flow from financing
activities
Issue of shares - 4,711 4,914
Net cash generated
from financing activities - 4,711 4,914
---------------- ---------------- ---------------------
Cash flow from investing
activities
Acquisition of business
net of cash - (1,338) (1,338)
Interest received 1 - -
Purchase of intangible
assets (37) - (15)
Purchase of fixed assets (32) (20) (102)
Net cash (used in)
investing activities (68) (1,358) (1,455)
---------------- ---------------- ---------------------
Net increase in cash
and cash equivalents 730 3,341 3,220
Cash and cash equivalents
brought forward 4,225 1,005 1,005
Cash and cash equivalents
carried forward 4,955 4,346 4,225
---------------- ---------------- ---------------------
Notes to the Interim Results
For the six months ended 28 February 2019
1. The interim results (approved by the Board of Directors and
authorised for issue on 13 May 2019 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 2018. The
audited accounts for the year ended 31 August 2018, 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 2019 have been prepared in accordance with the accounting
policies expected to apply in respect of the financial statements
for the year ending 31 August 2019.
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 29
February 2019 was 130,707,120 shares (28 February 2018 :
116,650,560 shares 31 August 2018: 122,934,180 shares).
8. On 21 December 2018, the Company completed a capital
reorganisation, transferring GBP6,000,000 from share premium to
retained earnings. This puts the Company in the position of having
distributable reserves.
9. Copies of this report will be available to download from the
investor relations section of the Company's website
www.weyeducation.com.
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END
IR SFDFMSFUSEEI
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