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Wey Education PLC schooling the market in online education

Wey acquired InterHigh, Britain's first and only virtual secondary school, last year. The plan is to rapidly grow it by opening doors to the educational establishment in the UK while taking the brand international.

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Out of the classroom: The company has created a the country virtual secondary school.

“Someone had to be mad enough to do it,” says David Massie, chairman of AIM listed Wey Education PLC (LON:WEY), talking about husband and wife team Paul and Jacqueline Daniell.

The couple are founders of InterHigh, the UK’s first and only online secondary school.

They set it up a decade ago; before smartphones and tablets and super-fast broadband revolutionised communications. 

It may have been a mad adventure, but today InterHigh has a student population of around 600 and it employs 40 teachers. 

Wey acquired the business last year and the plan is to rapidly grow it by opening doors to the educational establishment in the UK while taking the InterHigh brand international.

“We have only started to scratch the surface of the market here and have essentially relied on word of the mouth to date to promote the company,” says Massie.

The school caters for GCSE and A-level students who are home-schooled.

Children can log into the virtual classroom via a PC, laptop, tablet or even a smartphone.

The platform is uses is called Blackboard Collaborate, which has been adopted extensively by universities.

The bespoke elements are items such as the virtual library crammed with thousands of lessons and the support services you would find in any bricks and mortar educational establishment.

They have been developed in-house by InterHigh, which owns the intellectual property.

InterHigh has, it seems, made a decent fist of educating its young charges with GCSE results that would put it in the top 15% of schools in the UK.

A quick trawl of the Mumsnet site, the unofficial goods schools guide, provides mainly positive feedback from those who have used InterHigh’s services.

It isn’t yet Ofsted regulated, but Wey is working closely to with the Department for Education (DfE) to get it into the system.

“The law doesn’t cater for online schools. They [Ofsted] say they have to come and inspect the bricks and mortar and there is currently no exemption,” Massie explains.

“We are told it will take a couple of years to change the law, but we are working with them to be the pilot to develop the regulations.”

Massie has some fairly ambitious plans to expand InterHigh.

The fees – at around £2,500 a year – make it by some margin the cheapest independent school in the country.

A price hike may come at some point, but the immediate goal is to lift student numbers.

DfE figures reveal around 80,000 pupils are home schooled, so InterHigh has barely made a dent to the market. 

More aggressive marketing and a further optimisation of its online strategy will help bump up numbers.

However, there are business-to-business opportunities that haven’t been fully exploited by the founders.

For instance, local authorities might use it as a stop-gap for children who have been expelled or excluded.

Individual schools or academies, meanwhile, could ‘buy in’ subjects not currently on the syllabus.

In fact, InterHigh is already delivering Spanish, German, economics and history lessons for Sedgehill School, Lewisham.

The recent AIM-listing of Wey provided the company with the £1.75mln that is being used to overhaul the site to make it scalable. It also wiped out the firm’s debts and provided it with the money to see the business through to profitability.

Based on research by the City broker WH IRELAND, that landmark of profitability should be achieved in the next financial year.

Ireland sees revenues for the current year of £1.5mln, rising to £3.2mln and then £5mln, generating pre-tax profits of £400,000 in 2017 and £900,000 12 months later.

Analyst Matthew Davis expects InterHigh to have a roster of around 800 students at the start of the school year in September, up from around 600 currently. 

Massie reckons it is possible to push the figure up to 2,000 in 18 months – and that is without tapping into the overseas market.

The company already has a sales person in Africa, but the biggest opportunity resides in Asia and China in particular.

The People’s Republic is a hothouse for education, where schooling is done on an almost industrial scale.

“Ten thousand students is not a pipe-dream for the Asian business if we find the right partner,” says the Massie.

On those numbers and with a premium price of, say, £5,000 you’d have a very significant, cash generative business.

First, though, Wey must, as Massie says, find the right partner in Asia, before then carefully scaling up the business there.

“The great unknown is whether we can deliver on the Asian market. If we do deliver on the Asian market then that business in a very short few years will be much bigger than the UK business,” says Massie, who is off shortly to China, a market he knows very well.

The serial entrepreneur, who also runs corporate finance house IAF Capital, has high hopes for InterHigh.

“I have for many years been involved with smaller companies for 25 years and have never been more excited in a business at this stage in its development,” he said.

Quick facts: Wey Education

Price: 10.25 GBX

AIM:WEY
Market: AIM
Market Cap: £13.98 m
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