23rd Aug 2018 12:28
LONDON (Alliance News) - Educational services company Wey Education PLC said Thursday it expects revenue to exceed market expectations in its current financial year as a result of its Academy 21 acquisition.
Shares in Wey Education were trading up 10% at 15.52 pence on Thursday.
In its year to August 31, Wey expects revenue in excess of its GBP4.1 million market expectation, which already represents 70% growth year to year. Underlying profit and loss are expected to remain in line with market expectations.
Revenue in its previously financial year was GBP2.4 million.
The majority of this improvement comes from its Academy 21 acquisition back in December 2017, which is now fully integrated into the company's Wey Ecademy business-to-business division.
UK-based Academy 21 is expected to have increased the company's overall revenue by 25% and profit by 100% when compared to the corresponding period last year.
Revenue in Interhigh, Wey's other UK acquisition, grew 20% over its current financial year with further acceleration expected in its next year.
In total, Wey expects to record an adjusted pretax profit of between GBP400,000 and GBP500,000, including acquisition costs, share based payments, and overseas business developments costs of GBP200,000.
Within those overseas businesses, Wey has incorporated its new Wey Education Nigeria Ltd subsidiary in Nigeria.
At present, this subsidiary is negotiating a technical agreement for licenses to operate as an online education provider in Nigeria. A separate marketing and tuition fee collection contract is also being negotiated, with operations are to commence this autumn.
The company's Chinese operations are also progressing, with a joint venture contract to supply English language classes to Chinese state schools expected to launch in September.
Wey expects the deteriorating relationship between China and the US could provide a benefit to the British curriculum in China, though meaningful revenue contribution from this Chinese business is not expected until next year.
Wey considers itself well-funded to expand in the upcoming year and has a cash balance of more than GBP4 million.
"The board is planning for significant revenue growth in the year ahead, but the extent will be partly dependent on the pace of overseas growth...Wey Ecademy and Academy 21 are now integrated and will in future report as a single business-to-business division. We believe we are the market leader in online alternative provision teaching and we are planning for further expansion," the company said in a statement.
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