YEAR END UPDATE - POSITIVE OUTLOOK FOR 2005Board reports reorganisation complete, nursery integration ahead of plan 02/09/2004Nord Anglia Education PLC, the nursery, education and training company (LSE: NAE), today issues a year-end update to shareholders reporting that, having completed its reorganisation, the outlook for the new financial year is positive.The results for the year ending 31 August 2004, expected to be released in late November, will illustrate a period of substantial change for the Group. The results will be impacted by the significant corporate transactions completed during the period and the trading issues highlighted in the 2004 half year results. However, based on the underlying trading performance since the interim results statement in April, the Directors are confident the restructured Group is well positioned for 2005 and beyond. Nurseries The acquisition of Leapfrog Day Nurseries plc and of 28 trading units from Jigsaw Day Nurseries Limited has transformed Nord Anglia´s Nursery Division, creating the UK market leader in terms of number of places offered. The integration of the acquired businesses has proceeded satisfactorily and the initial trading performance of the enlarged Nursery Division is in line with management expectations. Derek Mapp, the former executive chairman of Leapfrog, has made a significant contribution to the integration process on behalf of Nord Anglia. The process is already substantially complete, several months ahead of plan, and the Directors have agreed with Derek that he will cease to provide consultancy services to the Company by 31 August 2004. The Directors would like publicly to thank Derek for his valuable contribution during the integration process. Looking ahead one of the key attractions of the nursery business is that future trading performance can be predicted with a relatively high degree of accuracy as individual units mature. The Directors anticipate a substantially increased contribution from the Nursery Division in the new financial year, reflecting the maturing profile of the Group´s portfolio. Schools Following the sale of the UK Schools in June, the Group´s activities are now focused on the operation of international schools, an activity where the Directors believe there are opportunities for substantial profitable growth and a high return on capital employed. The new operational structure of the Moscow school, highlighted as an issue in the interim statement, has now been established and the outlook for the Schools Division is again satisfactory. The growth of the International Schools portfolio has continued through the planned opening of new school buildings in Shanghai, Budapest, Bratislava and Moscow in September 2004. These new facilities coupled with the new Polish school facilities opened in September 2003 have increased the capacity of pupil places from 3,200 to 4,200. Outsourcing The current year has also been one of significant change for the Outsourcing Division, undertaken against a background of an unhelpful market environment in the sector. At the beginning of the financial year Nord Anglia withdrew from its Direct to Schools activity to concentrate its management resources on securing and successfully delivering larger educational outsourcing contracts. At the interim stage the Board highlighted difficulties within its EduAction joint venture with Amey PLC. Management changes have been effected within EduAction, both in terms of personnel and procedures and the Directors are confident that the problems identified at the interim stage have been rectified. Nord Anglia has also recently lost some elements of the careers guidance contracts operated by Connexions partnerships, which have reverted to former local authority providers. Our experience mirrors that of other private sector providers. However, looking to the future, the Outsourcing Division has significantly increased its tendering capacity with a number of key appointments, notably that of Raza Khan as Business Development Director. The Company will also continue to incur bidding costs in MOD tendering, having be" |
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