Wey Education plc (AIM:WEY ) 1H20 results to 29 February 2020 reports both operational and financial progress across the group.
Revenue increased by 43% to £3.87m (2019: £2.70m) reflecting strong growth across both Interhigh and Academy21:
In InterHigh, the education group saw strong demand from parents and students who now see online education as a genuine alternative to traditional methods. The Group reported that it now provides 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 are now investing in the Group’s true form of alternative provision of educational services, especially given the increasing numbers of instances where learners cannot fit within the traditional education environment. The Groups expanded sales team is now more able to cover the entire country to provide further growth this year.
The improving sales mix expanded gross margin to 62% (1H19: 56.4%) pushing the Company to adjusted Profit Before Tax to £0.33m (1H19: £0.12m)
Positive Cashflow also strengthened cash balances to over £6.6m (2019: £4.9m) maintaining a debt free balance sheet.
Whilst these results do not reflect any impact from the COVID-19 Pandemic, it is clear that recent global challenges have ensured that online education is a subject more in the public eye than ever before.
More people are now aware that online education is a real possibility and educational providers have never had a better opportunity to redesign how education takes place.
Wey Education’s pedigree in supplying alternative education delivery models for nearly fifteen years is unrivalled, which clearly positions them at the forefront for any opportunities that present themselves in this new education paradigm.
M&A has always been an attractive option for smaller players across the EdTech sector with large multi-national companies happy to pay double digit EV/SALES multiples to establish a foothold in the space.
Shares in WEY have recovered strongly from lows of 14p during March to open today at 23.8p following publication of the half year results.
Furthermore, the Group has added some well-respected institutions to its shareholder register over the past 12 months, which goes come way to indicating its core strengths as an investment opportunity both during the lockdown and as a post lockdown play as restrictions are lifted as educators adopt new technology educational tools that deliver results at lower cost to the current bricks and mortar model.
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."