Nord Anglia Education (NORD) Student Enrollment Rose 8% for FY16/17 Year; Offers FY17 Guidance

October 10, 2016 6:06 AM EDT
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Nord Anglia Education, Inc. (NYSE: NORD) announced its starting student enrollment for the 2016/2017 academic year, an update on its China dual curriculum strategy, and its initial outlook for fiscal 2017 Revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS.

Andrew Fitzmaurice, CEO of Nord Anglia Education, commented, "We are very pleased with our starting student enrollment for 2016/2017, which shows continued strong organic enrollment growth. It is encouraging to see the impact that our collaborations with The Juilliard School and the Massachusetts Institute of Technology (MIT) are having on our students. We are opening our students' minds to the latest thinking from some of the world's best educators and this is certainly appreciated by parents. We believe Nord Anglia Education's growing scale and reputation are creating tremendous growth opportunities. We are investing in our future by expanding capacity at existing schools, opening new campuses, seeking to acquire more high quality schools and establishing a dedicated dual curriculum team to take advantage of our exciting opportunity in China."

Starting Student Enrollment for 2016/2017 Academic Year

Starting student enrollment at Nord Anglia Education's 43 schools around the world totaled 36,848 full time equivalent students (FTEs) on September 30, 2016. This represents an 8% organic increase over starting enrollment of 34,177 FTEs on September 28, 2015.

In addition to strong organic enrollment growth, the Company implemented an average increase in tuition fees of 4% across its schools. The average increase in tuition was consistent with the Company's historical increases of 1.5 to 2 times inflation.

The Company opened two new schools for the start of the 2016/17 academic year – the first dual curriculum school in Shanghai and a new campus for the British International School of Houston. Both of these schools have new state-of-the-art facilities in high growth markets. Total capacity across all schools increased 12% to 54,813 seats from 48,998 seats last year. The additional 5,815 seats of capacity comprised 2,250 seats from the new dual curriculum school in Shanghai, 1,200 extra seats by moving the British International School of Houston to a new 2,200 seat campus and 2,365 seats added to the Company's existing schools across the five regions. The resulting utilization rate for the start of fiscal 2017 was 67%. Excluding the new dual curriculum school in Shanghai, the starting utilization rate was 69%.

The tables below set out the regional breakdown of enrollment and capacity as of September 28, 2015 and September 30, 2016:

Full Time Equivalent Students

Sept 2015 FTEs

Organic FTE growth

Sept 2016 FTEs

Organic FTE growth %

China (ex Dual Curriculum)










Middle East





Southeast Asia





North America





China Dual Curriculum











Sept 2015 Capacity

Capacity Expansion

Sept 2016 Capacity

YoY CapacityGrowth

China (ex Dual Curriculum)










Middle East





Southeast Asia





North America





China Dual Curriculum










China Dual Curriculum Strategy

In September 2016, Nord Anglia Education opened its first dual curriculum school in Shanghai, China. The Nord Anglia Chinese International School, Shanghai (NACIS) teaches the Shanghai National Curriculum alongside an international curriculum to students up to the age of 16, and then teaches the International Baccalaureate Diploma program after the age of 16. Starting enrollment at the school on September 30, 2016 was 446 FTEs, which exceeded the Company's initial expectations. Given the strong starting enrollment and early demand trends, the Company anticipates the school to be breakeven on an Adjusted EBITDA basis and cash flow positive in fiscal 2017, its first year, and reach maturity (80% utilization) in its third year. With expenditures to open the new school totaling approximately $31 million, the return on investment in the third year of operation is projected to be 74%.

The combination of our strong brand, academic outcomes, student acceptance into top universities around the world and collaborations with world leading education institutions such as Juilliard and MIT is valued highly by Chinese parents. As a result, Nord Anglia Education has seen an increasing number of opportunities to partner with developers and landlords to open new dual curriculum schools in China.

In order to better assess and pursue this exciting high growth sector, the Company has decided to establish a dedicated China Dual Curriculum team. The new China Dual Curriculum team will be led by Jian Tang, who has been Managing Director for Nord Anglia's China region for the past 15 years. Having co-founded Nord Anglia Education's first school for expats in 2002 and integrated all of the Company's schools in China, Ms Tang has significant experience in the K12 school sector.

The Company is targeting to open one additional China dual curriculum school in September 2017, two additional China dual curriculum schools in September 2018 and five additional China dual curriculum schools in September 2019.

The average capacity of the future China dual curriculum schools is expected to be 2,000 seats. The upfront investment by Nord Anglia Education to open future China dual curriculum schools is expected to be on average $20 million per school and the Company anticipates a similar ramp up and pricing to NACIS.

Beginning in the first quarter of fiscal 2017, the Company plans to report the China dual curriculum schools as a separate segment.

Initial Fiscal 2017 Outlook

Nord Anglia Education's initial guidance for fiscal 2017 Revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS is set out in the table below:


$925 - $945 million

Adjusted EBITDA

$207 - $217 million

Adjusted Net Income

$67 - $72 million

Adjusted Diluted EPS


*** The Street sees FY17 revenue of $945 million with EPS of $0.70.

See "Non-GAAP Supplemental Financial Measures" below for additional information.

The company expects diluted weighted average shares for fiscal 2017 of approximately 104.5 million.

The outlook for Adjusted EBITDA set out above includes the expected negative impact in fiscal 2017 when compared to fiscal 2016 of the following:

  • approximately $8 million additional rent and property taxes on the new campus for the British International School of Houston opened September 2016;
  • approximately $11 million additional rent and property taxes as a result of the sale and leaseback of three school properties in the United States; and
  • approximately $6 million additional expenses following the roll out of the Juilliard collaboration to a further 28 schools in fiscal 2017 (38 schools in total), the first roll out of the MIT program to 10 schools and the new expedition centre in Switzerland.

The company's guidance does not include the impact of unannounced acquisitions. Nord Anglia Education may complete acquisitions at any time during fiscal 2017.

Nord Anglia Education ended fiscal 2016 with a cash balance of approximately $370 million.

Nord Anglia Education will release full year fiscal 2016 results on November 29, 2016 at 6:00am and host a conference call at 8:00am (Eastern Time) to discuss the results.

Conference call details for starting student enrollment, update on China dual curriculum strategy and fiscal 2017 guidance

Nord Anglia Education will host a conference call on October 10, 2016, at 8:00am (Eastern Time).

A live webcast of the conference call will be available via the investor relations section of

Those interested in participating in the conference call should dial:

United States Toll Free 877.407.0784International: 201.689.8560

An audio replay of the conference call will be available through October 24, 2016 via the investor relations section of or by dialing the following:

United States Toll Free 877.870.5176International 858.384.5517Replay Conference ID 13644927

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