How are UK firms coping in the recession? It's not all doom and gloom, according to this analysis of Nelson Thornes from 'The Assignment Report', the newsletter covering 'the business of education'
Nelson Thornes but the company is launching a new online tutoring service, iTutorMaths. The Infinitas Learning-owned education publisher, has reported a fall in revenue to £32.5m (2009: £35.4m) for the year ended December 31, 2010 according to accounts filed recently at Companies House.Revenue may be down 8 per cent at
UK sales fell 11.5 per cent to £24.0m (2009: £27.1m), in part due to challenges in the domestic market but also due to a reduction in the number of new products available in 2010 compared to the previous year which had seen the roll-out of resources to support the 2009 curriculum changes in both A-Level and GCSE.
Moorhouse Black, the distance learning arm of Nelson Thornes which has now been rebranded NTDL, reported revenue of £1.66m (2009: £1.96m). International sales increased 3 per cent to £8.52m (2009: £8.27m) and represented 26 per cent (2009: 23 per cent) of total revenue but the increase was insufficient to offset the decline in the UK market.
Gross margins improved slightly to 69 per cent (2009: 67 per cent) but after administrative expenses (down 5.9 per cent to £23.1m), distribution costs of ,and a £1.01m write-off relating to, the hiving-up of Moorhouse Black into Nelson Thornes, the company reported an operating loss of £2.18m (2009: £1.37m loss). Excluding the investment write-off, the operating loss was only £1.16m. The fall in administrative costs was in part due to the re-negotiation of the company’s head-office lease which resulted in releasing back to the landlord one of the three floors. Nelson Thornes expects to see the full-year benefit of this rental reduction in 2011.
Year-end stock was down 25 per cent to £3.79m (2009: £5.07m) including work-in-progress which fell to £51,000 (2009: £624,000). The fall in work-in-progress is a result of Nelson Thornes changing its accounting policy for initial development costs on new products whereby these costs are now capitalised as an intangible asset and amortised over three years.
Last month Nelson Thornes launched iTutorMaths, an online GCSE maths tutoring service. iTutorMaths delivers maths tutoring in small groups of between six to ten students and uses tutors based in the UK. The cost of a standard 10-week course is £150 or £15 per one-hour session although Nelson Thornes is offering an introductory discount course price of £75. A three-week, two-lessons-a-week “crammer” course is also available in October for November exams for £99, or £49.50 after discount.
Online tuition is seen as one of the growth opportunities within the UK education industry. In February this year TSL Education acquired a 50 per cent stake in BrightSpark Education, the provider of on-line tutoring services into schools and the home. And the leading GCSE and A-Level awarding body AQA is expected to launch its online tutoring service, mytutor.co.uk, this autumn.
Nelson Thornes is the UK arm of the Bridgepoint Capital owned Infinitas Learning Holding BV. Bridgepoint Capital acquired the then education division of Wolters Kluwer for €774m in May 2007 with debt provided by ING and Société Générale. In addition to the UK, Infinitas has operations in six other European countries - the Netherlands, Sweden, Germany, Belgium, Austria, and Hungary. The business is headquartered in Amsterdam and had total revenue of €292m (2009: €299m) for the year ended 31 December 2010. Infinitas reported an EBIT of €22.4m (2009: €41.9m) for the same period.