Grow­ing-pain lapses

Financial Mail - - DIAMONDS & DOGS -

It’s never a huge in­di­ca­tor of con­fi­dence in a com­pany when you sneak a glance at the list of Di­rec­tors’ Deal­ings and ev­ery one of the last 20 trades is a sell. Yes, the num­bers in­volved are small, but you might think some­body could be coaxed into tak­ing one for the team and buy­ing a share or two, just to stave off any pos­si­ble com­men­tary about rats and sink­ing ships. Sadly the tra­jec­tory of Pem­bury’s share price has been down­hill since it listed on the Altx in March.

The group has taken a hatch and despatch ap­proach to the mar­ket, pro­vid­ing schools and re­tire­ment vil­lages to pun­ters at dif­fer­ent ends of the age spec­trum. These are both in­ter­est­ing mar­ket seg­ments, with the likes of Curro show­ing the way in the for­profit, low-cost ed­u­ca­tional field, and an in­creas­ingly age­ing pop­u­la­tion pro­vid­ing a de­mo­graphic boost to the “grey rand” mar­ket. It’s one thing to be in an in­ter­est­ing sec­tor, how­ever, and quite an­other to turn it into prof­its, and this is where Pem­bury has strug­gled, due to what it coyly refers to as “grow­ing pains”.

These have con­sisted of a num­ber of lapses of ac­count­ing, con­trols and com­pli­ance, and have re­quired re­me­dial ac­tion to be taken, sharpish.

Pupil num­bers were lower than pro­jected due to tighter credit pro­ce­dures and the de­lay in the roll­out of new class­rooms, as well as the loss of a num­ber of pupils to larger pri­vate school groups. The good news is that four of the seven cam­puses are con­tribut­ing pos­i­tive earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion and the num­bers should con­tinue to im­prove.

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