News blog
Stagecoach Theatre Arts
- BY: Andrew Hore |
- POSTED: 03/02/2008 |
Children’s theatre and dance schools franchise owner Stagecoach Theatre Arts has returned to profit at the interim stage.
Stagecoach, which sells franchises to operate acting and dancing classes for children in the evenings and at weekends, has cut its cost base and significantly improved the profitability of the eponymous UK business.
Stagecoach has 620 schools in the UK as well as 681 Early Stages classes for younger children. There are 35,884 students. This business is still growing and there is scope for more franchisees.
Revenues were flat at £3.1m in the six months to November 2007 but a loss of £51,000 was turned into a profit of £261,000. The second half of the year is always stronger. Stagecoach made a profit of £375,000 in the year to May 2007.
What holds back the overall performance of the group are the international businesses. These haven’t taken off as hoped and they are losing modest amounts of money. Stagecoach is changing the way it runs the German and US businesses,. Germany is now wholly owned and the US is managed from the UK with much larger regional franchises now being sold. Stagecoach has also granted franchise development rights in Greece.
Longer-term, management has high hopes for its new retail website, www.stagecoachshop.co.uk. Stagecoach doesn’t take any of the stock onto its own books so this reduces the financial worries about the venture. The business has a ready-made audience of children and their families. The website sells clothing, toys and plays. It was launched last November so there was no significant contribution to the latest results.
The business has net cash of £1.1m and it will consider paying a dividend next year.
Following the results the shares rose 9.5p to 58.5p thanks to a speculative buy recommendation on www.growthcompany.co.uk. That values the company at £5.8m.
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