# Wey Education PLC Q&A: Preliminary Results (LON:WEY)

- Link: https://www.directorstalkinterviews.com/wey-education-plc-qa-preliminary-results-lonwey/412739157
- Published: 2017-11-02T12:31:54+00:00
- Author: Amilia Stone

**Wey Education PLC** (LON:WEY) Chairman David Massie caught up with DirectorsTalk
for an exclusive interview to discuss their preliminary results

 

**Q1: Preliminary results out this morning, can you summarise them for us?**

**A1**: Yes, I think there were three main factors. Firstly, we had reported that
turnover had grown 60% over the year to £2.4 million, second, we recorded our first
ever profit before tax, a small profit of £17,630 but it compares with a loss of
£800,000 last year, and third we announced that we had completed the development
of our new learning platform which had been launched to a very positive reaction
from teachers and students alike.

 

**Q2: So, what would you say then were the highlights?**

**A2**: Obviously those items that I’ve just mentioned are the obvious highlights
but there were a lot of other good things that took place. Building on hard work
done, we launched our B2B division which we’ve said is doing very well and we have
created an Academic Advisory Board, headed up by 2 very experienced people from 
the education world, which monitors and controls standards for us. Basically, we
put ourselves in a position to develop further growth, this year, next year and 
thereafter.

 

**Q3: Now, I see that you say turnover has increased 40%, 50% and 60% in the last
three years, what have been the key drivers for this growth?**

**A3**: I think two things, one is quality and the other is marketing. People are
seeing that online education works and gets results but also since we bought our
first school, InterHigh, 2.5 years ago, we have increased marketing spend, I think
in the first year I think there was about £20,000 spent, in the next year about 
£70,000 and last year about £150,000 and it seems perfectly clear that the more 
you make your product known to potential customers, the more you get.

So, I think the combination of trying to make people more aware of what we offer
and then actually delivering quality when they buy the service has led to that turnover
growth.

 

**Q4: Do you think you can maintain that sort of momentum going forward?**

**A4**: Well, we’re very positive, in my preliminary statement today I not only 
say that we hope to maintain that momentum for the current year but further out 
than that. We believe that we’re in a good place at the current time, we have a 
good team of people and the Learning Platform that we’ve brought into action this
year is scalable to almost any size and so we’re looking to push more volume through
that.

 

**Q5: So, what do you hope for in the current year?**

**A5**: Wey Education have two active divisions, InterHigh, our original school,
and we hope to see further substantial organic growth there this year, our B2B business
is developing very rapidly, I say in the announcement that we’re already ahead at
the end of October where we hope to be at Christmas time so that’s very positive
so those are our two big hopes.

The next two things are that we have two businesses in development, Infinity Education,
our premium school and also Quoralexis, our new language school and we’re hoping
to develop those this year, we don’t expect a big contribution from this year but
to lay the ground work so that in future years we get very positive results from
those.

 

**Q6: You mentioned that following customer feedback you are redirecting your premium
school Infinity to overseas markets, why is that?**

**A6**: We had an interesting reaction from customers, we were positioning Infinity
to be a selective school whereas InterHigh is a non-selective school. Customers 
came forward and were saying to us that they’re very satisfied with the academic
results that InterHigh achieves, we’ve announced that from our reported results 
96% of our students taking our IGSCE English got an A*-C this year so that’s extremely
credible. Our brokers have analysed that if we were measured by every bricks and
mortar school, we would be just outside of the top 100 of non-selective schools 
and given that we take students of all abilities, that is really an excellent result.

Customers basically said to us that they don’t need Infinity in the UK, InterHigh
delivers what’s on the tin and so what we’ve decided to do is to direct Infinity
towards the overseas markets where perhaps customers don’t understand our non-selective
system and want to be in more of an academic school. So, that’s what lies behind
the decision.

 

**Q7: So, what are the prospects for your new language school Quoralexis?**

**A7**: We are really excited about Quoralexis. We’re using the same Learning Platform
that we’ve developed for the schools, so we have no additional costs that come from
that, but we’re entering into an extremely large market. We’ve started teaching 
English as a foreign language although in due course we hope to add other language
to it, but the English as a foreign language or EFL market is a global enormous 
market, there are 150 million in China currently trying to learn English alone and
of course there are all other areas of the world as well.

We think that our product, which is English taught from the UK by native English
speakers, will be very attractive to the premium end of the market. This year will
be development for us, but we do expect revenues and then we expect it to take off
towards the end of this current financial year and for the years after that, so 
everyone is very excited about that.

The other feature for us is that, for the first time, it takes Wey Education out
of just teaching secondary children because we will teach English to somebody of
3 years old or somebody of 70 years old and this is part of a development of the
business that will widen us out of just secondary school education.

 

**Q8: You mentioned earlier increasing marketing this year, what kind of things 
can we expect to see?**

**A8**: Earlier in the interview I mentioned the result of the increased marketing
spend that we have undertaken over the last couple of years and how that’s come 
through in sales, we will maintain that, we will expand our online marketing, much
of which is through Google, Facebook, Twitter and similar. As part of our search
engine optimisation campaign, it’s becoming apparent that there is a role for complementary
marketing to increase brand awareness, online advertising is fine, but somebody 
has to be looking for you they’ve got to be searching for an online school, what
you need to do is to make them aware of the possibility that there are actually 
online schools that they can look at so that you’ll see in effect reinforcement 
marketing to get brand awareness. This may be digital name boards, it may be a little
bit of print, we’re even thinking about whether there’s some targeted TV advertising
that can achieve recruitment within our cost parameters.

 

**Q9: In your statement you talked about adopting artificial intelligence, does 
AI have role in education?**

**A9**: I think AI is going to have a dramatic role in education. The balance will
be to maintain the personal contact between teacher and student but of course we’re
already skilled at that because being online we have different challenges to those
in a bricks and mortar school. The prospects of AI are absolutely staggeringly attractive
to the student, the relationship that he will be able to have with his learning 
buddy or with a hidden teacher who he doesn’t even have to realise is AI and the
feedback that it could give him and the encouragement that it could give him is 
enormous.

We’re looking at all sorts of development in this area, we don’t quite know which
way the market is going to go, we’re not intending to invest a lot of money in development
ourselves, but billions of dollars are being spent by other companies in developing
AI products and we’re looking to be an early adopter. We think that we can both 
improve the product by the use of artificial intelligence and at the same time we
should get some cost advantages because we’ll be able to substitute a machine in
some places where we have a human cost at the moment.

So, nobody quite knows how it’s going to unfold but I think looking at a 3/5/10 
year horizon, AI has a tremendous role in education.

 

**Q10: Finally, are there any updates from your broker, W H Ireland, as to the likely
results going forward?**

**A10**: Yes, I believe they’ve published a new research note today, I suspect it’s
probably available via their website or any of your listeners and readers’ brokers,
in which they have analysed where the Wey Education PLC stands today and the prospects
for the next 3 years and have given some updated forecasts to the market of what
they expect to happen.

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