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Wey Education Plc

Q&A with David Massie Chairman at Wey Education PLC (LON:WEY)

Wey Education PLC (LON:WEY) Chairman David Massie caught up with DirectorsTalk for an exclusive interview to their latest trading update for its year ending 31 August 2017


Q1: Now David, a positive trading update issued today for Wey Education, can you talk us through the highlights?

A1: Yes, thank you. I think there were three big points that come out of it.

The first is that we confirmed turnover growth of 60% for the year and that means in the last three years we’ve grown turnover by 40%, 50% and 60% respectively. I think that’s a good performance and indicative of the way the company is growing. The second issue is that we have reached critical mass as demonstrated by the maiden profits that we announced, or anticipate for the full year ending today and the third is that this has all been done whilst we both upgraded, renewed and enhanced our IT platform and launched a number of new initiatives.

So, all the staff in the company are to be congratulated on an excellent outcome and a lot of hard work for this year.


Q2: You mentioned that the business -to-business division finished well and that you expect significant growth in the coming year. Firstly, can you explain what the B2B division covers and secondly, what kind of impact we can expect this to have on revenues?

A2: The basic business in the past has been a B2C whereby individual pupils came to study at our schools, the B2B division builds upon something which was there that we used to have. A small number of customers who came to us, either from other schools or from bodies such as local authorities, and create a separate division to concentrate on this whereby those third parties can bring us students without having to necessarily enrol them in our school.

So, in the B2B division, which we call the Wey Academy, we serve other schools where they have a timetabling issue or they have shortage of teachers, without them being worried that our service is so good that anyone that experiences it is immediately going to jump up sticks and move over to one of our schools, we have become a service provider to them. Also, that we serve local authorities who may have a requirement or alternative provision teaching or dealing with children who, for one reason or another, have been displaced from the state sector.

The significance is not only have we created into expanding the business and with its own company but we expect to grow that internally, organically, and we’ll also use the Wey Academy as the main part of our international expansion that is currently taking place.


Q3: Wey Education recently launched Quoralexis, your online school specialising in English as a foreign language, how is this being marketed?

A3: I think, technically tomorrow, its launch date, the 1st September, the new General manager joins us on that day but we have been working on it over the summer and the new website, called Quoralexis, has recently gone live and gives some examples of the sort of things it will do.

Marketing is a combination of both online digital marketing, in accordance with our normal procedures, but Quoralexis is really B2B product in that we see the vast volume of business coming to us from other corporate buyers, particularly overseas and possibly, particularly, in Asia where we know there’s a huge demand to be taught English effectively.

I think that somebody might want to do is to have a look at some other online companies, there are a few in the English language market unlike say our school, there are a few competitors in the online English market, but we think our product and our technology is vastly different. For the potential for a company like this, I would suggest people went and looked a business called VIP Kids which teaches one-to-one English, primarily in China to very small children and last week had a funding round that valued it at $1 billion. So, it shows that investors around the world have great confidence in the continuing demand for English to be taught as a foreign language.


Q4: How does this sit within the scheme of things?

A4: It shares the same IT platform as our schools and educational services so there is very little marginal additional cost involved, just in creating the new platform. Wey Education already have some EFL teachers within our staff but we will be expanding that as the business grows and we see this as being a very positive contribution.

Perhaps its most significant point is, until now, we have taught children generally between the ages of 11-18, Quoralexis is our first step outside that market because we will teach anybody from 3 years old to 70 years old. So, it’s part of the expansion of our online services to a much wider age group.


Q5: David, what are your ambitions for the coming year?

A5: I think three-fold:

1) to continue organic growth within the core business, demonstrating how we’ve grown in the past is sustainable for the future
2) to expand the B2B business so that it becomes a generating, profitable contribution to the group
3) To launch Quoralexis more successfully into the market whilst always looking at international expansion opportunities across all our brands.


Q6: Finally, what should investors be looking out for in terms of news flow over the coming months from Wey Education?

A6: Today was about end of year pre-close announcement, our financial year ends on 31st August, which is pretty common for educational groups, we anticipate to make the formal preliminary announcement by the end of October and that’s the next scheduled announcement. I think after that, they should look for trading updates, any new contracts that we manage to gain across the division, clearly, I haven’t got them signed at the moment because if I had, I’d be announcing them. We will keep the market informed as and when things happen.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.