Alpha Plus Group made £29 million losses before taxes in 2020 [shock]

[ANewYorkMom]

A fellow mum whose daughter attends Wetherby Pembridge in NY told me that the Alpha Plus Group (owner of Wetherby, Pembridge, Chepstow, Minors, etc.) published the 2020 results this week and that they had made £29 million losses.

Apparently they had already lost £6 million until February 2020 (pre-COVID) but the second half of the year was a complete disaster.

They had been making losses for years (£10m in both 2019 and 2018) since they failed to attract Prince George (pagesix.com/2017/03/29/ues-parents-feel-royally-screwed-by-prince-george-school-pick/) but it remains to be seen whether they will be able to survive the pandemic.

The NY school is unknown and very small, probably 50 pupils mostly European expats and does not seem to be making any impact in the market.

What is the situation of the other UK private schools? Are they also making huge losses or is this Alpha Plus specific?

www.alphaplusgroup.co.uk/wp-content/uploads/2021/01/Alpha-Plus-Holdings-plc-accounts-to-31-August-2020.pdf

Don't know the schools that well myself but a friend who works at one hasn't had a pay rise in 5 years and they structure their staff in a way that there is limited promotion therefore keeping costs down. Which doesn't help staff retention.
I wouldn't touch them if looking for a job but the actual schools are really popular and all have excellent reputations. If I didn't know all this, I would consider them for my children.
I don't know how the other hedge fund/private equity etc owned schools are doing financially either.

Most small private schools struggle financially, especially prep schools. The reason they are able to continue is usually because the sites they operate from are very valuable but if you check their accounts, very few have a significant amount of cash in the bank to see through a difficult year. That's why the parents chomping at the bit for a discount on what they aren't getting during the lockdowns fail to see the bigger picture on how long the school can operate.

@dreamsarefree

Most small private schools struggle financially, especially prep schools. The reason they are able to continue is usually because the sites they operate from are very valuable but if you check their accounts, very few have a significant amount of cash in the bank to see through a difficult year. That's why the parents chomping at the bit for a discount on what they aren't getting during the lockdowns fail to see the bigger picture on how long the school can operate.

Thanks. They don't seem to have much cash at all. £7m in the bank at the end of August but the accounts also indicate (see below) that they ran out of money in December and had to ask for a bridging loan until the parents paid the Spring term fees in January... Not looking good but why should parents not ask for a discount to protect private equity investors?

"On 17 December 2020, the Company drew down a £2.5m interest-free bridging loan from its immediate parent company to supplement working capital resources. This loan was repaid in full on 8 January 2021."

The loss is driven by non cash items (amortisation/revaluation etc)

@WeAreHalfWayThere

The loss is driven by non cash items (amortisation/revaluation etc)

That's incorrect. If you consider the operating leases, the company had a negative operating cash flow.

Plus they keep on having to write down the value of the poorly performing schools (Falcons, etc.) which is a worrying sign.

It is a huge loss and they are losing money year after year.

There was a crazy OP thread a while ago about a similar theme - the financial situation of Pembridge Hall or something. Going on and on about it. Is that you again ? 😬 seriously if you want to make a point about the Alpha Group financial standing you may want to do proper analysis of the available info first, plus there are so many facts that are non public that not sure what is the point after all...

Hi coronateachingagain, no need to be so aggressive or paranoid. Could you please put a link to that thread? What do you think about the losses? Is it normal that they needed a bridge loan in December? Is there any reason why this should not be discussed? Thank you

I would not risk helping the troll @ANewYorkMom, very easy to look at that very similar post yourself, and you will be interested as the other thread was taking paradoxically the same tactic inviting people to comment to keep the thread going without providing any meaningful thought or insight and with rather vague motives
Over and out! (and haven't got the faintest connection to Alpha)

No need to be so aggressive coronateachingagain . I was asking about the losses and about the fact that they needed a £2.5 million emergency loan just a few weeks ago but your only “insight” is to insult me by calling me troll. I insist, is there any reason why this issue should not be discussed?