Interim Results: Northcoders Group delivers profitability with UK investment in IT training driving revenues and growth

Date: 28/09/2021
Author: Northcoders
Company: Northcoders

Northcoders, the Manchester and Leeds-based independent provider of training programmes for software coding, has provided its interim trading update results for the six months ended 30 June 2021 ('H1 2021' or the 'Period').

Financial Highlights

  • Revenue for the Period of £1.085 million (H1 2020: £0.698 million), up 55% despite teaching limited to ‘online only’ for the majority of the Period

  • A return to profitability despite the ongoing Covid-19 pandemic, generating profits before tax of £0.018 million (H1 2020: loss of £0.543 million)

  • Underlying EBITDA of £0.258 million (H1 2020: breakeven) giving adjusted EPS of 0.47 pence

  • Post Period end, successful IPO of the Group raised funds of £3.5 million (before costs) to accelerate the Group’s growth strategy and geographic expansion

  • Q3 FY 2021 trading continues at record levels and as of 20 September 2021 contracted bookings stood at £2.871 million, approximately 96% of the target revenue for FY 2021, giving the Group confidence in delivering FY 2021 results in line with expectations

Business Highlights

  • Core hubs successfully reopened in north of England with Manchester reopening on 4 May and Leeds on 21 June and plans continue for geographic expansion in H2 2021

  • Consumer bootcamp demand reached record levels:

o At the end of August 2021 applications were at 162% of that experienced in the full year in 2019 (the most recent comparable period pre-Covid)

o Number of corporate hiring partners continues to increase, most recently including NHS Digital, Pretty Little Thing and FTSE 100 publishing group, Informa

o Post Period end awarded a £1.65 million government-funded scholarship programme, oversubscribed within five days of launch, giving significant revenue visibility for the second half of the year

o Group continues to progress conversations with Department for Education for similar future public funding options

  • Successfully launched Apprenticeship programme in January 2021 following the government’s Education Skills Funding Agency accreditation:

o Apprentices enrolled on programme in the Period were ahead of management’s expectations at 61 students

o Apprenticeships span the length and breadth of the UK, driving the Group’s geographic reach

o Group is looking into new apprenticeship standards with potential to expand the Apprenticeships offering

  • Corporate Solutions generated increasing revenue, with post Period end contracts with Ove Arup and NHS Digital achieved

  • Group capacity to teach students on programme, across the board, at any one time, increased by 15% vs. 2020 across all types and will increase by a further 74% in Q3 2021

  • Applications expected to accelerate as a result of increased marketing spend post-IPO

Chris Hill (pictured), CEO of Northcoders, said: “2021 has been a hugely successful year for Northcoders so far and I would like to thank all of the team for their efforts. Not only did we successfully complete our IPO and raise fresh capital to accelerate our expansion, but demand for our services has hit record highs, giving us confidence in our ability to deliver returns to our new shareholders.

“As the digital skills gap gains greater public attention and career changes are more widely considered by individuals, we are confident that we are well positioned to capitalise on this growth in the IT training sector. We have a best-in class reputation among consumers and corporates alike, and our recent success in securing government funding gives us strong revenue visibility. We are now training students across the length and breadth of the UK, and believe that the full scope of our business model, combined with the benefits of our public listing, will only serve to continue this expansion.”