Today Wey Education issued a trading update saying:
Group turnover for the year to 31 August 2020 is expected to be significantly ahead of market forecasts and to be in excess of £7.5m
With WH Ireland previously forecasting revenues of £6.7m for FY2020 this represents a 12% beat. While I was surprised they didn’t issue a 28th January AGM trading statement, today’s announcement is entirely consistent with them not having confidence that they had reached the 10%+ materiality threshold (the point at which they would have required them to update the market) at the time of the AGM.
On profits they effectively warn not to extrapolate higher turnover into higher profits:
The board is taking advantage of the increased turnover to invest in these areas at a greater rate than initially planned to accelerate its growth plans. Notwithstanding the additional cost of these investments the Company still expects to meet market forecasts for profit for the current year ending 31 August 2020.
This is a good, steady update which should not come as a surprise to the market.
[Edit: The updated note from WH Ireland is essential reading and can be obtained from Research Tree at a 10% discount using this link.
Wey Education will be discussed at length in Small Caps Live tomorrow at 11am]