Apax Leaders earns nearly 3 billion VND a month

Mr. Nguyen Ngoc Thuy's English language center system reported that revenue from new students has recovered, reaching 2.8 billion VND in July, but is still lower than its peak period.

At a recent shareholders' and investor meeting, Mr. Nguyen Anh Tuan, CEO of Apax Leaders, stated that the English language learning chain has seen a continuous increase in revenue from new students. From 465 million VND in April, this figure rose to approximately 2.78 billion VND in July.

This result was achieved after Apax Leaders underwent restructuring from the end of 2022 to the first quarter of this year. Prior to the restructuring period, the company recorded zero revenue due to numerous scandals related to inconsistent teaching quality, unpaid teacher salaries leading to a shortage of instructors, and delayed compensation for tuition fees to parents when branches closed.

Apax Leaders currently operates 37 centers, primarily concentrated in the North. By the end of July, the number of students reached over 11,100, double the number at the end of March. However, this figure is significantly lower than the pre-crisis period – 120 centers with approximately 120,000 students. Recently, parents have continued to withdraw tuition fees at the reopened branches.

Furthermore, the management explained that the revenue increase also stemmed from the relaunch of the Chungdahm program – a program that helped Apax grow from a single English center into a large system with 130 teaching locations at its peak. Simultaneously, the educational chain also focused on IELTS certification training, considered a currently high-demand learning trend.

"The revenue figures mentioned above are nothing compared to what we've seen so far, as we haven't focused on boosting enrollment or business yet, but rather on improving quality," Mr. Tuan remarked.

In fact, the revenue figures are very low compared to the company's pre-crisis business results. Between 2018 and 2020, Apax Holdings – a company under Egroup and behind Apax Leaders – typically reported average monthly revenue of 100 billion VND. In the third quarter of 2020 alone – before the pandemic – the company peaked at over 600 billion VND in revenue, averaging 200 billion VND per month.

From now until the end of the year, Apax Leaders aims to have 20,000 students to generate revenue of 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.

"If Egroup prepares sufficient finances, Apax's work speed will double," Mr. Tuan said.

In response to a request from Apax Leaders, Mr. Nguyen Ngoc Thuy, Chairman of Egroup, said he is arranging the necessary financing. He further requested that investors suspend interest payments from this point onwards and reduce past interest rates. "Financial costs are a significant burden, making it very difficult for the group to recover," Mr. Thuy explained.

To alleviate the financial burden, Mr. Thuy said they will continue to swap debt for products as before, including real estate, investment packages to restructure English language centers, English language learning packages, and household appliances. For those who do not participate in the debt swap, the Egroup leader said they "need to wait" until the company has sufficient resources or accesses investment funds.

In July, the company made advance payments to elderly, sick, or disadvantaged investors. The company received 73 eligible applications and completed payments of 2 million VND per person for 69 cases.

An investor in Hanoi, along with his family, invested approximately 3 billion VND in the Egroup ecosystem, claiming that the criteria for early payment were too difficult and the payout amount too low. His parents had invested a large portion of their retirement savings in Egroup. Recently, the family's income has decreased, forcing them to borrow from the bank. The investor argues that while his family is facing financial difficulties, they don't meet Egroup's criteria. The reason is that his parents suffer from heart disease and diabetes, but are under 80 years old and haven't been hospitalized for more than a month.

"I contacted Egroup several times and only received the response that we needed to wait longer. Each time, both parents became visibly discouraged," he shared.

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

Looking ahead, Mr. Thuy affirmed that the entire ecosystem will follow a model of "expanding while reducing debt." This model differs from the previous mindset of rapid growth through borrowing, which led to a crisis.

Alongside revitalizing the English language teaching chain, Mr. Thuy also wants to integrate various ecosystems in the same location. The new model will have Apax Leaders as the flagship, then combine other brands, notably the CMS math center.

"August is a crucial period for the education sector as we prepare for the start of the new school year. If we can regain the Southern market, it will create a major impetus for the group's recovery," Mr. Thuy expected.

On the stock market, after several rounds of forced selling, Egroup now only holds 14.68 million IBC shares of Apax Holdings - its only listed subsidiary, behind Apax Leaders, Igarten kindergarten, Firbank Australia multi-level school, etc. Thus, Egroup has lost its parent company status, with its ownership stake in Apax Holdings currently at 17.66%.

IBC shares are currently under a warning and trading restrictions due to delays in submitting audited financial statements, the 2022 annual report, and the 2023 shareholders' meeting. Furthermore, the company has yet to publish its financial reports for the first two quarters of 2023. Mr. Thuy explained that internal governance issues, staff shortages, and ongoing restructuring have affected the completion of the financial report. The company plans to hold its annual meeting in November.

Tat Dat

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