Our education business currently combines majority stakes in four leading private schools, acquired in 2H19: British-Georgian Academy and British International School of Tbilisi (70% stake), the leading schools in the premium segment; Buckswood International School (80% stake), wellpositioned in the mid-level segment and Green School (80%-90% ownership35), a leading player in the affordable education segment – reads the official report released by GCAP.
According to the report, the third quarter is a usually slow season for the education business, as the schools are not operational during Jul-Aug holidays. The schools have been reopened in September, providing on-campus teaching for learners below 7th grade and distance teaching for the remaining grades in light of COVID-19. However, the schools switched back to full online/distance learning for all grades in November due to the current epidemiological developments in Georgia.
“Due to the pandemic, schools enrolled a significantly lower number of learners at summer schools, leading to 22.9% y-o-y decrease in 3Q20 revenues to GEL 3.2 million. However, 9M20 revenue was up 4.8% y-o-y to GEL 17.1 million, reflecting 1.6% y-o-y growth in the total enrolment as of 30-Sep-20. The intakes remains strong and utilisation rate for 1st graders is c. 90% for 2020-2021 academic year. Despite COVID-19 implications, 9M20 combined school capacity utilization rate of 93.0% increased 1.5ppts y-o-y as follows: up to 94.0% and 752 learners in BGA & BIST (95.1% and 761 learners in 9M19); up to 92.5% and 703 learners in Buckswood (90.0% and 684 learners in 9M19); up to 92.7% and 1,159 learners in Green School (90.2% and 1,128 learners in 9M19). EBITDA decreased by 8.8% y-o-y to GEL 4.2 million and EBITDA margin was down 3.7ppts y-o-y in 9M20. Net loss in 3Q20 and 9M20 reflects foreign currency exchange losses due to local currency depreciation” – reads the report.
GCAP highlights that in light of the COVID-19, the schools were providing distance learning from March 1st until the end of the 2019-2020 academic year. “During the distance learning period, schools offered 21%-25% discounts for tuition fees or roll-over of fees for catering/transportation services. The schools managed to collect extended payments from 2Q20 in 3Q20. Although 3Q20 cash collection was negatively affected by reduced summer school revenue and discounts & roll-overs offered for certain services, operating cash flow was down only by 5.4% y-o-y to GEL 8.2 million in 9M20. Average cash collection rate for 2020-2021 tuition fees at our schools stand at 64% (70% at 30-Sep-19), which is in line with the schools’ cash collection policies” – reads the official statement.
