Alpha Plus Group

The Group's origins date from the foundation in 1931 of DLD College ‘to provide tuition for the entrance examinations to Oxford and Cambridge universities and to the British Civil Service'. The College has moved campus five times and now occupies a building near Westminster Bridge, where it educates a diverse range of home and international students. Abbey College Manchester was established as a tutorial college in 1990 and now offers GCSE, Foundation and A level courses to local and international students. Abbey College Cambridge was founded in 1994.

St Anthony's School for Boys is the oldest school owned by Alpha Plus. Founded in Eastbourne in 1893, it moved to Hampstead in 1952 and was acquired by the Group in 2009. Its sister school, St Anthony's School for Girls opened in September 2016.

Wetherby School was founded in 1951, close to the site of the new Wetherby Kensington, and moved to its current premises in 1971; although many boys go on to Wetherby Prep, the pre-prep sends large numbers every year to Westminster Under School and St Paul's Junior School. Wetherby Prep School opened in September 2004 and moved to its current premises (Bryanston Square) in September 2009. In June 2018, the Group signed an agreement to lease additional premises at 47 Bryanston Square.[5] The Prep School expanded into the new premises in September 2019 creating 7 additional classrooms and a drama suite with stage lighting, proscenium arch and stage set.

Wetherby Senior School opened in Marylebone in 2015 and continues the traditions established at Wetherby School and Wetherby Preparatory School. In 2017 Alpha Plus Group acquired the lease to Hannah House, a five-story early 20th century property with 26,000sq feet of space. Hannah House has been devoted to expanding facilities at Wetherby Senior School. In accordance with management's expectations, the senior school will continue to be loss making until at least 2021, when the founding students complete their final year.

The Falcons School for Boys, then known as Falkner House Boys, was founded in 1956 and at that time located in Notting Hill. In September 1989 the school transferred to its pre prep site in Burnaby Gardens, Chiswick. The preparatory site opened in Richmond in September 2008. The Falcons School for Girls, located in Putney was acquired in 2001. The Alpha Plus Group accounted for an impairment in the value of two of the Falcons schools by £2.15m in 2019 due to fee reductions and lower than expected pupil numbers.[6]

Pembridge Hall was founded in 1979 and acquired in the 1980s. It regularly sends girls to St Paul's Girls' School, other top London schools and leading Girls' boarding schools, including recent scholarship awards to Downe House, Cheltenham Ladies and Wycombe Abbey.

Chepstow House School started life in Pembridge Villas in 2010 and subsequently moved to Lancaster Road, Notting Hill, where it will educate boys and girls up to the age of 13.

All Alpha Plus preparatory schools send boys and girls on to top English senior schools, often winning entrance scholarships.

The Minors Nursery School was founded in 1975 and moved to its current location after joining the Group in 2004. Most of its children progress to either Wetherby or Pembridge Hall, as do the majority of children at Rolfe's Nursery School, Notting Hill. Davenport Lodge Nursery, Coventry, became part of the Alpha Plus Group in May 2007.

Portland Place School was founded in the late 1990s by the former Head of Chemistry at St Paul's Girls' School, London. The main school is housed in two adjacent, Grade II listed, James Adam houses (built in c1785); two further buildings were leased in 2002 and 2004. The group accounted for an impairment of £1.6 million of the value of Portland Place School in 2019.

The Alpha Plus brand was created in 2002 by Sovereign Capital, from the acquisition of the group of schools and colleges owned by DLD. DV4 Limited, advised by Delancey, acquired the Group from Sovereign Capital in 2007 and expanded the Group through organic growth, opening new schools and acquisitions.

Alpha Plus initiated an expansion of its capacity in 2015. It opened four new schools (Wetherby Senior School, St. Anthony's School for Girls, Wetherby-Pembridge New York and Wetherby Kensington School) and posted financial losses as a consequence of the expansion that oonly added 83 new pupils during the 2016 to 2019 period. With the opening of Wetherby-Pembridge in New York and Wetherby Kensington in London the Group now has 17 schools and 3 colleges.[7]

The failure to attract Prince George to any of the group's schools despite this having been widely expected by the press[8] was criticised in the US media with one New York media outlet describing the situation of the East Upper End parents who had registered their children for the Wetherby-Pembridge school as "royally screwed"[9] and Vanity Fair describing how the New York parents were "fuming about Prince George's school choice".[10]

Alpha Plus was involved in a controversy during the Coronavirus lockdown that was reported by both The Times ("William's former school shamed into cutting fees") and the Financial Times ("For-profit chain caves to parent pressure").

The group originally informed the parents in a letter signed the company's CEO, Mr. Hanley-Browne, that fees would still be fully payable and this provoked a backlash from parents, according to the Financial Times, with one parent stating that “It’s the kind of behaviour you’d expect from a distressed hedge fund” and other cancelling the Direct Debit. As a result of the pressure the group reversed course and wrote to parents announcing it would cut summer fees by 20 per cent at its schools.

The Group accumulated approximately £29 million of losses during the 2016-2019 period (£1.4 million in 2016,  £7.2 million in 2017, £10.4 million in 2018 and £9.9m million in 2019). Those losses together with the modest increase in pupil numbers (just 83 in four years) have led to a controversy about the Group's financial model as well as about its financial viability and ability to repay its debts that has been reported in the financial press.[11][12]

The Group told the Financial Times that "it is a natural sequitur that profits will lag behind any expansion" and that it views recent losses as a natural consequence of expansion since it "created four schools from scratch in the last four years". Nevertheless, the company's annual accounts show that, despite opening four new schools, only 83 pupils had been added by the Group since the beginning of the expansion in 2015 (there were 4,289 pupils in 2015/2016 and 4,372 in 2019/2020).

The Group's management reported in the February 2019 accounts that it had "seen pupil numbers fall" at some schools and that it had "responded by reducing fees" something that had led to an "increase in applications". The value of some of the schools had to be written down later in 2019 following the intervention of the auditor EY that had to engage EY Chartered Valuation Specialist and EY Business Valuation specialist (page 17 of the 2019 FY Accounts):

- Portland Place School: £1.6m impairment

- Falcons School for Boys Pre-Prep: £1.6m impairment

- Falcons School for Girls: £0.55m impairment

Furthermore, the Group's 2017 and 2018 financial statements had to be restated due to an error in the treatment of the deferred tax liabilities.

The Group's equity fell during that same period from £31.4 million in 2015 to £4.6 million in 2019. The Group stated its intention of changing its accounting methods and to adopt the revaluation model following an informal external professional valuation. The Group had a negative working capital of £60 million as at August 2019 and therefore had a significant working capital deficiency. Group revenue in the year ended 31 August 2019 was 6% higher than in the previous year. Reported EBITDA increased to £6.1m (2018:£2.7m).[7]

The 2024 retail bonds are now mainly secured against leasehold assets[13] The Financial Times reported in November 2019 about the significant drop in the price of the Group's retail bonds listed in the London Stock Exchange that have been trading below par reaching a low of £61 in March 2020 with a highly distressed 19% yield to maturity indicating a high probability of default.

The Group was involved in a conflict with the traded unions in relation to its withdrawal from the Teachers' Pension Scheme (TPS). The National Education Union, that represents several hundred teachers across the independent schools that make up the Group, handed out leaflets outside the Group's schools describing the situation of the teachers following the refusal by the group to either negotiate or meet the union in relation to the Group's plan of exiting the Teachers' Pension Scheme.[14]

Glenn Kelly, the union's regional officer dealing with the issue, told the Financial Times that 'It's not my usual day-to-day work — in leafy Notting Hill where children are dropped off by nannies' and added that 'it's a brutal response from an employer that you wouldn't expect in education'".[15]

In a letter addressed to parents, the Group's CEO, Mark Hanley-Browne, explained that teachers would be expected to sign a variation to their contract terminating their Teachers' Pension Scheme and that if they refused to do so the Group would "terminate the current contract of employment of that person, and immediately offer to reengage them on the same terms, except for their pension arrangements."

Alpha Plus Group was not alone in trying to respond to the proposed increase in pension contributions. A Freedom of Information request in August 2019 revealed that sixty-two private schools had already notified the government of their intention to withdraw from the Teachers Pension Scheme

Further to the pension issues, a loan given by the Group to its British Virgin Islands based parent, DV4 Ltd, was also criticised by the National Education Union that in its leaflets asked parents to "Demand Alpha Plus call in the £40m loaned to the parent company" but the Group's CEO, Mark Hanley-Browne, said in his letter to parents that "it has always been intended that this money be used to finance the Group’s expansion in the form of new schools … it is not available to finance day-to-day operational expenditure which, of course, should be covered by school fees".

Alpha Plus Group consulted with teaching staff in thirteen of its schools about a proposal to exit from the TPS in August 2019. The consultation closed in April 2019 and the Group withdrew from the TPS in August 2019. All teachers previously enrolled in the TPS re-enrolled in the Group's Personal Pension Plan. No contracts were terminated as a result of the Group's exit from the TPS and there were no strikes despite the unions' encouragement.

The strategy was, despite the labour dispute and the press coverage, as explained by the Group in page four of the February 2019 accounts, cost-effective for the Group since it reduced the pension contributions by £1.1m in comparison to the situation if the Group had remained in the TPS: "Earlier this year, it was confirmed that employer contributions into the Teachers’ Pension Scheme (“TPS”) would increase from 16.48% to 23.6% of teachers’ salaries with effect from 1 September 2019. This would increase the Group's pension costs by approximately £1.1m per annum."[16]

Following the increase in pension employer's pension contributions, a further 107 independent schools withdrew from the Teachers' Pension Scheme.[17]

• Abbey DLD Colleges
  • Abbey College, Cambridge
  • Abbey College, Manchester
  • DLD College, London

• Alpha Plus Group
• https://ftalphaville.ft.com/2019/01/25/1548410430000/A-business-model-fit-to-educate-royalty/
• https://ftalphaville.ft.com/2019/03/28/1553775803000/The-Alpha-Plus-pension-problem-/
• https://ftalphaville.ft.com/2019/06/06/1559821404000/Alpha-Plus-is-still-losing-money/