Wey Education plc (LON: WEY), the educational services group which owns and operates two leading online independent secondary schools and an educational services division delivering lessons and other tuition to third party educational providers, announced today a trading update for its year ending 31 August 2017.
Highlights
· Turnover expected to be at least £2.4 million (2016: £1.5 million) up on the prior year
· Maiden adjusted pre tax profit expected (2016: loss £795,000)
· Pupil numbers ahead of last year
· Business poised for further growth
· Significant growth expected in B2B
· Very attractive opportunities overseas being investigated
· Issue of shares to Chairman in settlement of Director’s fees
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.
Trading Results
The results for the year will demonstrate significant growth in turnover and a vastly improved trading result. Pleasingly the significant increase in turnover reported in the Company’s interim results continued in the second half. Turnover for the year is expected to have increased to at least £2.4 million, an increase of 60% over last year (£1.5 million) reflecting continuing growth in the core business and price increases.
The Company expects to report a pre-tax profit for the year (2016: loss £795,000) adjusted for equity share payments.
Outlook
The Company enters its new financial year with its various divisions well placed to accelerate growth. The recently completed upgrade of the online learning platform has been designed to allow significant, seamless growth over all business divisions and new, additional products are being introduced.
Despite the investment made in IT, personnel and marketing, cash balances remain healthy at around the same level as at 31 August 2016 of £909,000.
Within the schools, recruitment of pupils continues for the new academic year. Overall pupil recruitment is on track with management expectations. Pupils already enrolled to study at InterHigh (www.interhigh.co.uk) are ahead of last year.
The new premium school brand Infinity Education (www.infinityeducation.org.uk) expects to accept its first pupils this September. It is considered this business will be judged by potential customers on its superior academic performance over its first few years of life (through the two year cycle of iGCSEs and A level) and therefore at this stage academic excellence is more important than student numbers. The Company has recently introduced a scholarship program to attract students of the highest calibre. The Company is therefore targeting only a small number of pupils for the current year and only expects a modest contribution to turnover.
Unlike many traditional “bricks and mortar” schools, Wey can continue to recruit pupils throughout the academic year without imposing a maximum number so expects pupil numbers and growth to continue through 2017/18.
The recently established B2B division finished this year well and it is expected that this division will grow significantly in the coming year. A number of potential contracts are under negotiation or have been tendered for.
Wey has recently launched Quoralexis (www.quoralexis.com), an online language school specialising in English as a Foreign Language (“EFL”). This will commence business in September and the Company is encouraged by initial reactions to its product offering.
The Company continues to explore overseas markets where it believes that subject to regulatory compliance, very attractive opportunities exist for its British education products.
Further updates regarding the Company’s prospects will be given in the Preliminary Announcement of the full year’s results to 31 August 2017 which is expected to be released at the end of October 2017 but in summary the Company is planning for further significant growth in the coming financial year.
As stated in the pre close interim trading update issued on 28 February 2017, David Massie, the Chairman of the Company, agreed to have his annual salary of £33,000 for the year to 31 August 2017 satisfied by the issue of new ordinary shares in the Company, to be credited as fully paid at 3.88p being 103.5% of the middle market price which prevailed for the 5 days before the proposal by the Company’s Remuneration Committee on 17 February 2017. This resulted in a total of 950,514 shares to be issued to Mr Massie with half being issued on 28 February 2017 and the other half are to be issued today.
As a result, Wey Education plc is today issuing 425,257 new ordinary shares in satisfaction of the outstanding 50% of Mr Massie’s salary. Application will be made for the 425,257 new ordinary shares to be admitted to trading on AIM, which is expected to take place on 6 September 2017. The new ordinary shares will rank pari passu with the existing ordinary shares in issue.
Taking into account the issue of the 425,257 new ordinary shares the relevant share interest of Mr Massie in the Company will therefore be 20,608,430 ordinary shares, representing approximately 19.82% of the Company’s issued share capital.
In accordance with the provisions of the Disclosure Guidance and Transparency Rules of the FCA, the Company confirms that, following this issue, its issued share capital will comprise 103,968,491 ordinary shares of 1 pence each. All ordinary shares shall have equal voting rights and none of the ordinary shares are held in treasury. The total number of voting rights in the Company immediately following Admission will therefore be 103,968,491.
