Apax Leaders earns nearly 3 billion VND a month

Mr. Nguyen Ngoc Thuy's English center system reported that revenue from new students has recovered, reaching 2.8 billion VND in July, but is still low compared to the peak period.

In a recent shareholder and investor meeting, Mr. Nguyen Anh Tuan - CEO of Apax Leaders, said that this English teaching chain has a continuously increasing revenue from new students. From 465 million VND in April, this index increased to about 2.78 billion VND in July.

This result was achieved after Apax Leaders restructured from the end of 2022 to the first quarter of this year. Before the restructuring period, the company recorded zero revenue due to many scandals of uneven teaching quality, unpaid teacher salaries causing a shortage of teachers, and delayed tuition compensation for parents when branches closed.

Apax Leaders is operating with 37 centers, mainly concentrated in the North. The number of students as of the end of July reached more than 11,100 people, double that of the end of March. However, this number is much lower than the pre-crisis period - 120 centers with about 120,000 students. Recently, the situation of parents continuing to withdraw tuition fees still occurs at the reopened branches.

In addition, the management explained that the increased revenue also came from the re-operation of the Chungdahm program - the curriculum that helped Apax develop from a single English center into a large system with 130 teaching locations in its heyday. At the same time, this educational chain also focused on IELTS certification training, which is considered a learning trend with great demand at present.

"The above revenue figures are nothing, but we have not yet pushed the issue of student recruitment and business, but only focused on improving quality," Mr. Tuan commented himself.

In fact, the above revenue is very low compared to the company's business results before the crisis. During the period 2018-2020, Apax Holdings - a company under Egroup behind Apax Leaders, often reported an average revenue of 100 billion VND per month. In the third quarter of 2020 alone - before the pandemic appeared, this company reached a peak revenue of more than 600 billion VND, earning an average of 200 billion VND per month.

From now until the end of the year, Apax Leaders aims to have 20,000 students to increase revenue to 20 billion VND per month. The key plan is to "reclaim the Southern market" before October this year with at least 8 centers in Ho Chi Minh City reopening.

"As long as Egroup prepares enough finance, Apax's working speed will double," said Mr. Tuan.

Responding to the request from Apax Leaders, Mr. Nguyen Ngoc Thuy - Chairman of Egroup Corporation, said that he is arranging financial resources. He continued to ask investors to stop paying interest from this point and reduce past interest. "Financial costs are a big burden, it will be very difficult for the group to recover," Mr. Thuy explained.

To reduce the financial burden, Mr. Thuy said he would continue to swap debt with products like before, including real estate, investment packages to restructure English centers, English learning packages and household appliances. Those who do not participate in the debt swap, Egroup's leaders said, "need to wait" until the company has enough resources or access to investment funds.

In July, the company paid in advance to investors who were elderly, sick or in difficult circumstances. The company received 73 qualified applications and completed payments of VND2 million per person for 69 cases.

An investor in Hanoi and his family invested about 3 billion VND in the Egroup ecosystem, saying that the approval criteria for advance payment were difficult and the payment amount was too low. His father and mother both invested most of their retirement money in Egroup investment. Recently, the whole family's income has decreased, and they have had to borrow money from the bank. This person said that his family's situation is difficult, but according to Egroup's criteria, it does not meet them. The reason is that his father and mother have heart disease and diabetes, but are still under 80 years old and have not been hospitalized for more than a month.

"I contacted Egroup many times and only received feedback that I needed to wait longer. Each time, the two parents felt visibly discouraged," he shared.

Mr. Nguyen Ngoc Thuy - Chairman of Egroup Corporation, in an online meeting with shareholders and investors, August 2023. Screenshot

In the coming time, Mr. Thuy affirmed that the entire ecosystem will follow the model of "expanding to where, reducing debt to where". This model is different from the mindset of rapid growth by borrowing that the company previously pursued, leading to crisis.

In parallel with the revival of the English teaching chain, Mr. Thuy also wants to combine ecosystems together in the same location. The new model will take Apax Leaders as the leader, then combine other brands, typically the CMS math center.

"August is a very important milestone for the education sector as we prepare to start the new school year. If we can regain the Southern market, it will create great recovery momentum for the group," Mr. Thuy hopes.

On the stock market, after many rounds of liquidation, Egroup only holds 14.68 million IBC shares of Apax Holdings - the only listed subsidiary and behind Apax Leaders, Igarten kindergarten, Firbank Australia inter-school.... Thus, Egroup lost its parent company rights when the ownership ratio at Apax Holdings is at 17.66%.

IBC shares are being warned and restricted from trading due to late submission of audited financial statements, 2022 annual report and late 2023 general meeting of shareholders. In addition, the company has not yet announced its financial statements for the first two quarters of 2023. Mr. Thuy explained that recently, internal management has encountered problems, lack of personnel and is in the process of restructuring, affecting the progress of completing financial statements. The company is scheduled to hold its annual meeting in November.

Siddhartha

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