SmallCapNews | Building a brand: Education Development International plc

Search Site

Latest News

Features

Company Profiles

About

Advertise

Building a brand: Education Development International plc

05 June 2009

A RECENT surge in the number of taxi drivers signing up to improve their road, safety and customer services skills has been hailed by one AIM company as a major contributor to healthy half-year profits.

Nigel Snook, who heads the educational qualifications and assessments group Education Development International plc (EDI), says that while the taxi driver-driven boost may be short-lived, the sales spike says a lot about the resilience of the company in an economic downturn.

Indeed, after spending nearly 10 years carefully building a presence in the market for organising and handing out qualifications and assessments, Snook and his team are now intent on jockeying for a top position.

But faced with competing against the well-known brand and incumbent market leader, City & Guilds, EDI has had to take a piecemeal approach to winning over customers that even Snook admits can have deep-seated habits.

This week EDI unveiled soaring half-year revenues of £12.78m, up 33%, and pre-tax profits up 449% to £3.64m. An injection of more than £0.9m came as local authorities around the UK piled on pressure for local cab drivers to take formal qualifications.

According to Snook the figures “really have exceeded expectations” and there are signs that despite the wider economic conditions, investment in education and training services, particularly in the public sector, is continuing to grow.

Acquisition trail

EDI is the sum of 10 years of corporate manoeuvring that started with the creation of GOAL Ltd in 1999, a move to AIM the following year and then a merger with the London Chamber of Commerce and Industry Examinations Board (LCCI) in 2002.

Snook, who joined in 2001, has since overseen seven bolt-on acquisitions, the most recent of which was that of vocational awarding body ASET Group Ltd in November 2007. He says the latest deal has turned out to be a “gem”.

But while acquisitions have played a major part in bolstering EDI’s profile, Snook insists that much of the grafting in recent years has focused on cajoling further education establishments and private sector companies to look again at where they source their awards and qualifications. Success here has hinged on EDI’s ability to build its reputation whilst keeping one eye on a consistent brand message.

“When you’re a new entrant to market with something new and different, the question of how you actually enter the market is really quite important,” he says.

“When we bought LCCI it did have a toe-hold in the UK vocational qualifications market with a handful of big private sector customers and some high-volume products.

“They had worked out that they couldn’t compete with City & Guilds and go into further education colleges because those colleges needed a fairly wide range of awarding services covering a lot of occupations and industries. LCCI simply couldn’t create that list overnight.”

As a result, LCCI’s strategy was to service the market with a restricted product range and a restricted number of private sector customers and offer administrative services that exceeded the market norms. For Snook and his team, the question this posed was how to build on the brand but also keep a lid on the 2.5% royalty that was being triggered on using the LCCI name.

“The decision we took was that the LCCI brand was critical in the international markets where it had been well established for decades,” Snook said. “In the UK we had started to use the GOAL brand for a while but quite quickly people started referring to us as EDI.”

With a brand name to build on, the EDI team put aside any further efforts to make a noise in the market and instead concentrated on building a reputation for its customer service.

“We got our heads down and we extended the product range so we could do more with our existing customers,” he said. “And that’s what some of the acquisitions and investment were about. We started to build a sales team up, knock on more doors and get around the trade shows to just keep levering it forward all the time.”

With more acquisitions, the company was routinely faced with having to reinforce the EDI name so that it didn’t get lost among the new purchases – the likes of which included Qualifications For Industry (QFI) and the Joint Examinations Board (JEB).

Last summer, Snook and his team turned a final corner and reinvigorated the EDI branding with the help of a team of design consultants. A string of adverts in the Times Educational Supplement worked to highlight the brand alongside quotes from satisfied customers.

Snook also sent around 4,000 letters to further education college principals and private sector companies around the country, re-introducing them to EDI’s services. Simultaneously, the company was accredited to award the UK Government’s new deployment qualification, which served to enhance its profile even further.

“We felt by last summer that the business had got big enough and we had become well established enough to put our heads above the parapet,” he said. “By then, people had got to know us – and they knew we weren’t just another small awarding body, we were becoming a serious player.

“A number of things came together that made the timing auspicious. We had arrived with a clear, confident brand, we had stopped using our sub brands and we were out there in people’s faces.”

The result was a continuation of the company’s strengthening grip on the market. In the first half of this year the company signed deals with supermarket group Sainsbury’s and training provider ESG – not to mention an army of taxi drivers. Investors have responded positively: the company’s share price has risen from around 41p to 108p in a year, which now values it at around £62.5m.

“It is possible to go into a market and say here’s a fantastic new product – nobody has bought one yet or tested it, but we’re spending millions telling you how brilliant it is,” Snook said. “But the other approach is to quietly test markets, build a reputation and reference-sell a product. In this market, as in any service market, it is what people say about you, not what you say about yourself.”

Ben Hobson, SmallCapNews.co.uk