Wey Education PLC Replacement: Half-year Report

Fecha : 12/05/2020 @ 05:34
Fuente : UK Regulatory (RNS & others)
Emisora : Wey Education Plc (WEY)
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Wey Education PLC Replacement: Half-year Report

Wey Education (LSE:WEY)
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De May 2020 a Jul 2020

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TIDMWEY

RNS Number : 6468M

Wey Education PLC

12 May 2020

The following amendment has been made to the 'Half-year Report' announcement released on 12 May 2020 at 07.00 a.m. under RNS No 5474M.

An incorrect breakdown of exceptional costs had been presented in Note 10 "Exceptional Costs" for the year ended 31 August 2019. This has been corrected below.

All other details remain unchanged.

The full amended text is shown below.

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 GBP3.87m (2019: GBP2.70m) 

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

-- Profit before and after tax of GBP215k (2019: loss after tax of GBP895k after exceptional items and discontinued operations)

   --    Cash balances over GBP6.6m (2019: GBP4.9m) 
   --    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      Unaudited      Audited 
                            6 months       6 months         year 
                               ended          ended        ended 
                         29 February    28 February    31 August 
                                2020           2019         2019 
                             GBP'000        GBP'000      GBP'000 
 Total revenue                 3,870          2,697        6,049 
 Gross profit margin           62.0%          56.4%        59.5% 
 

Adjusted PBT

 
                             Unaudited                             Unaudited                 Audited 
                              6 months                              6 months                   year 
                                 ended                                 ended                  ended 
                           29 February                           28 February                31 August 
                                  2020                                  2019                   2019 
                               GBP'000                               GBP'000                               GBP'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      Unaudited      Audited 
                                                       6 months       6 months         year 
                                                          ended          ended        ended 
                                                    29 February    28 February    31 August 
                                                           2020           2019         2019 
                                                        GBP'000        GBP'000      GBP'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      Unaudited      Audited 
                                         As at          As at        As at 
                                   29 February    28 February    31 August 
                                          2020           2019         2019 
                                       GBP'000        GBP'000      GBP'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                   129              -            - 
  9) 
 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 
                                  GBP'000         GBP'000                GBP'000             GBP'000   GBP'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         Unaudited                Audited 
                                     6 months ended    6 months ended             year ended 
                                        29 February       28 February              31 August 
                                               2020              2019                   2019 
                                            GBP'000           GBP'000                GBP'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                          (22)                 -                      - 
  lease repayments 
 
 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 (GBP'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          As at      As at 31 
                                29 February    28 February        August 
                                       2020           2019          2019 
                                         No            No.           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 GBP6,000,000 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 GBP199,395 and associated lease liabilities of GBP195,396.

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:

 
                                                         GBP 
 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               Unaudited                Audited 
                             6 months ended          6 months ended             year ended 
                                28 February             28 February         31 August 2019 
                                       2020                    2019 
                                                         (restated)             (restated) 
                                                            GBP'000                GBP'000 
 Termination and 
  restructuring costs                           -               335                    252 
 Cost of terminating 
  our London operations                         -               227                    175 
 Capital reorganisation 
  & other legal costs                           -                 9                      9 
 TOTAL                                          -               571                    436 
                          -----------------------  ----------------       ---------------- 
 

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 rns@lseg.com or visit www.rns.com.

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