Beacon College operator to widen teaching footprintHealth & Beauty | 12 Mar 2018
Hong Kong-based BExcellent Group Holdings, a private supplementary secondary school education services provider, is reviving its initial public offering.
The company has filed draft documents for the second time after a 2015 attempt was not realized.
Apart from providing private supplementary secondary school education services and operating private secondary day schools, BExcellent also offers ancillary education services and products for pre-school, kindergarten, primary and secondary school students, and individuals pursuing further education, or other interest learning and personal development.
All of its services are provided through 18 teaching centers on Hong Kong Island, Kowloon and the New Territories, where there are 127 classrooms.
The core business, under the brand Beacon College, is the private supplementary secondary school education services and it generated more than 87 percent of revenue in the past three years.
The services are meant for students from secondary 1 to secondary 6. About 15 centers offer the services, with 60,391 students enrolled in at least one session as at July 31 last year.
Beacon College services mainly cover subjects for Hong Kong Diploma of Secondary Education Examination, which range from category A to category C. BExcellent focuses exclusively on Category A subjects, which contains four core subjects - Chinese language, English language, math, liberal studies, and 20 elective subjects.
The company operates two private secondary day schools in Yuen Long and Mong Kok under its Beacon Day School brand, which are only available to Secondary 4, 5 and 6 students. This segment only accounted for 3.5 percent of total revenue as at the end July 2017.
It has 474 teaching staff, including 73 tutors, nine day school teachers, 91 full-time and 301 part-time teaching assistants. The top five tutors accounted for more than 60 percent of total revenue from 2015 to 2017. The top tutor generated 40.5 percent, 36.2 percent and 31.5 percent revenue in 2015, 2016 and 2017 respectively.
BExcellent says in the prospectus that since it relies heavily on tutors, in particular the top five teachers, operations and profits may be materially affected if it cannot retain or maintain a good relationship with any of the top five tutors. The period of engagement which BExcellent has entered into with its top five tutors varies from five to 10 years with an expiry date ranging from 2020 to 2021.
The company plans to open and optimize up to 14 teaching centers in Hong Kong after going public. It will set up 10 new teaching centers in locations where its footprint has been established and also improve four existing teaching centers. The IPO prospectus says that a new teaching center of 2,000 square feet will require an investment of about HK$1.1 million to establish. Such a facility could generate HK$4.8 million additional revenue each year. These teaching centers should reach break even in the second year of operation and be fully paid off by the third year.
BExcellent ranked first among providers of private supplementary secondary school education services in Hong Kong as of February 2017, in terms of the total number of classroom seating capacity, according to Euromonitor.