Yarnton Manor

Oxford Royale Academy is looking to sell off one of its freehold properties for around £10 million, as the pre-university tuition provider attempts to recoup Covid-linked losses, EducationInvestor Global can reveal.

This publication has learnt that Oxford Royale, which sells residential tuition courses to prospective domestic and international university students, has appointed Knight Frank to find a buyer for Yarnton Manor.

The company had previously mandated agents from Carter Jonas, which had lined up a number of suitors, one of which was Oxford International – but the Bowmark Capital-backed pathways provider pulled out of discussions once the pandemic struck, sources said.

Dukes Education, the London-based private school operator, is also understood to have “looked at” Yarnton Manor, a historic Grade II listed Jacobean manor house situated on a 30-acre plot, but ultimately decided against pursuing an acquisition.

The sector in which Oxford Royale operates has been decimated by the Covid-19 pandemic, which halted international travel while preventing in-person tuition from taking place in the UK. Meanwhile, many tuition providers failed to qualify for coronavirus business rates relief and debts have mounted across the sector amid widespread revenue losses and, in many instances, unprofitable pivots to online instruction.

Several sources familiar with Oxford Royale noted that the cost of maintaining Yarnton Manor at present outweighs revenue generated by the asset. Proceeds from the sale of Yarnton Manor would help offset pandemic-linked losses recorded by its owner, they added.

“Residential tuition centres need to be 70% full to make money,” said one source, a veteran of the language-tuition segment who has visited Yarnton Manor. “It’s a bit like the aeroplanes business: if you fly empty planes, you’ll quickly go bust.”

Another source familiar with Yarnton Manor and the tuition sector said: “I think the property is costing a lot and at the moment is probably a bit of a millstone as they can’t make money out of it whilst all the restrictions are in place. I would imagine that they’re still waiting for clarity regarding travel restrictions being lifted this summer and so draining down reserves whilst they try to wait it out.”

Oxford Royale had originally welcomed offers of at least £12 million for Yarnton Manor, which encompasses several residencies currently designed to accommodate students.

However, the company was forced to drop the asking price after an auction overseen by Carter Jonas failed to drum up appetite for the asset, insiders said, which resulted in a fresh sell-side mandate being handed to Knight Frank.

Knight Frank has circulated a brochure – which this publication has seen – to a number of prospective buyers and is seeking offers of “at least around £10 million” for the freehold property, one source said.

Knight Frank’s brochure – which also includes Cater Jonas branding – states that “communications are very good” with Yarnton Manor, situated approximately 12 miles from the M40, providing a transport link to Heathrow Airport, as well as local train services that reach London within an hour.

But a source who knows the asset, Oxford and the university city’s tuition sector well said that Yarnton Manor, “although a gorgeous old building is not in a prime location” as “it’s about six or seven miles away from the city centre”.

Oxford Royale was founded by brothers William and George Humphreys who, along with their father Robert, are directors of its holding company, Oxford Programs Limited.

Accounts for the year ended 30 September 2019 show that Oxford Programs Limited recorded turnover of £15.9 million, pre-tax profits of £1.4 million, and net income totalling £920,688.

In Oxford Programs Limited’s strategic report for this period, William Humphreys addressed the negative impact of Covid-19 on Oxford Royale’s business model but stressed that “the directors have undertaken numerous activities to safeguard the cash flow of the company”.

These included renegotiating terms on an existing bank loan; tapping additional funding from the UK government’s Coronavirus Business Interruption Loan Scheme; utilising grants provided under the country’s job retention scheme; and cost cuts.

The strategic report goes on to say, however, that “if the impacts of Covid-19 continues [sic] into summer 2020, the company may be required to raise additional funding”.

Date published: 19 February 2021

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