What Value Education?

September 6, 2022

As children start or return to school, I am sure we are all very conscious of the importance of education in their lives.

As valuers I think even we would struggle to price the intangible value of education.

However, we can obtain data on the value the state puts on primary, secondary and tertiary education.

It is also possible to understand the value parents put on a private education because of the fees they pay.

And the papers seem to love producing statistics on the value of a University degree.

We’ve valued a couple of pre-school nurseries recently.

That market is growing considerably at the moment not least because we have discovered that Working from Home is much more challenging if under 5’s are knocking around the house!

Entrepreneurs have spotted this trending opportunity…

Only this week I was speaking to a property developer who is actively hunting for sites for nursery chains because incumbents are expanding and new entrants are arriving in a market where the market leader has a mere 5% market share.

So we are seeing trading multiples rise, combined with increased opportunity to grow the underlying business.

Even challenging economic conditions tend to have a lower impact on demand for childcare and education.  It is the last piece of spend that parents cut back.  We are currently examining the direct and indirect impact of energy costs of course on profitability, but assume that “something will be done” in that regard.

When it comes to educating ourselves, we have been spending some useful time in August…

We have just valued a company which, in financial terms at least, behaves like a bank – in this scenario there are some very interested scenarios that make it a different type of exercise.  And I have been looking at some interesting research around adjusted EBITDA valuations.

And Finally….

So here we are… the autumn term has started and we all have that back to school feeling don’t we?!

If I was writing the Athla valuations end of year school report in July, it would say:

We are pleased to report that none of the valuations completed by Athla have been challenged by HMRC and all have directly assisted our clients to achieve their financial and strategic objectives. 

The breadth and depth of Athla’s valuation reports is worth noting.  To have covered so many sectors, stages and types of companies ranging from technology start ups to over £100m mature multiple division businesses whilst maintaining standards has given the team a strong grounding grow further next year.

The feed back from our clients has been unusually positive.  It’s rare in the UK that clients say what you have done is “brilliant”, “better than anything I have ever seen (and I have seen over 50 valuation reports from all over the world including from the Big Four,” and “I love your rapid turnaround times,” to name but a few.

Team training has continued to improve the skills of Athla’s valuers and their ability to serve clients well.  Efficiency has also improved considerably. This means that Athla is well positioned to serve a greater number of customers in the next year. 

The new version of the Athla Valuation Tool has enabled Athla to increase the number of valuation methodologies from 7 to 14.

If you are looking at the work the team has produced, I would encourage you to read the various reports where both soft and hard IP have been valued.  I do not know of many other firms who have understood how to value management teams. So often students are expected to master the curriculum. Sometimes a student goes above and beyond this and in the case of Athla, I would draw your attention to the very interesting work completed on valuing IP assets prior to them moving into a corporate or trust structure, but also the deep academic underpinning in each report.  A typical Athla report uses footnotes in a way that would typically be seen in a PhD dissertation.

 Athla should try harder to do more valuations in the 2022/3 academic year, building on the strong foundations it has built the last one.

This isn’t just an exercise in ‘marking our own papers’…

Here are a few recent testimonials from satisfied clients:

“It was the best valuation report [we] have ever seen in their many years of receiving valuation reports.” NTH

“Very positive, and excellent value for money.” CHI

“[the areas which impressed us most were] firstly was the proactivity and speed of responses… and secondly was the interest in our business and ensuring the right approach was taken for us using a professional tool set alongside years of experience in the team” NFamily Club

 If you would like to talk more about what we have learned from the myriad valuations we have completed, why we are fast, but still produce reports that stand high or even higher when compared with those produced by other firms, please do get in touch.  References are also available on request.

Modwenna Rees-Mogg