LONDON (Alliance News) - Shares fell in Wey Education PLC on Tuesday as it reported that it sank to a loss in the first half of its financial year as a result of exceptional losses and higher costs, despite double-digit revenue growth.
Shares in the education provider dropped 28% to 19.10 pence in late morning trade in London on Tuesday.
For the six months to the end of February, Wey Education sunk to a pretax loss of GBP153,000 from a profit of GBP11,000 for the same period a year before, due to a rise in administrative costs to GBP997,000 from GBP641,000 and an exceptional loss of GBP43,000.
On an adjusted basis, pretax profit nearly doubled to GBP145,000 from GBP75,000 a year before.
Revenue however rose by 44% to GBP1.7 million from GBP1.2 million, including a GBP249,000 contribution from Academy 21, which outperformed expectations following its acquisition at the end of December for GBP1.6 million.
During the period, Wey Education established a Chinese subsidiary and secured an agreement for a joint venture in China to teach English, and also reached an agreement to establish a joint venture in Nigeria for teaching the English and Nigerian curriculum.
"The completion of the Academy 21 acquisition accelerates the company's growth in the business-to-business market, and we are very pleased with its development so far. The announcements regarding the joint ventures in China and Nigeria is very significant for the group's growth as they have the potential to be transformational," said Executive Chairman David Massie.
"Naturally, there is some cost involved in developing these initiatives, but the company has the necessary financial resources for such, and the board considers the potential is so great, that the price is one worth paying," Massie added.
