24/07/2007
After a slip into losses last year, Stagecoach Theatre Arts, the franchisor of a network of performing arts schools, has made some ‘tough decisions’ to get back into the black.
Expansion costs were the main reason for the loss. ‘Last year we could have sat back and made £1.5m profit but we decided to invest in the business,’ states finance director Richard Dawson. ‘We’ve spent a lot on establishing a presence in the US, but this year we’ve cut back on a lot of costs there and we’re now well set.’
Founded in the UK in 1988 by former actress Stephanie Manuel and former bank manager David Sprigg, Stagecoach has grown from three to over 600 stage and sports schools, and almost 700 ‘early-stager’ schools. Its 39,000 students worldwide pay just under £300 a term.
Stagecoach entered the US as a managed-schools business a few years ago but has now converted this into eight franchisees. Dawson says the current aim is simply to increase student numbers and sell more franchises. A marketing push is planned for this autumn but it will be tough to establish a brand with all the competition.
Back on home soil, Dawson believes the company’s second product, SportsCoach, could be ‘as big as, if not bigger than, Stagecoach’. But to do this, management needs to find the right formula. A new cheaper set-up cost is being introduced to attract more franchisees, with a step-up in marketing.
The company is highly cash generative and the loss in 2006 was a first. With costs now reportedly stripped out, upcoming annual results on 15 August could show a return to positive territory.
In a strong sign of confidence, managing director Sprigg recently snapped up £26,400 worth of shares at around the current price. Down from its 2001 issue price of 93p but up from last year’s results-inspired lows, the shares could be worth a punt.
| Market cap: | £6.48m |
| PE Forecast: | n/a |
| Share price: | 65.5p |
| AIM | £5.34m |
54.00p
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| Other company articles: |
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