UK: Stagecoach Theatre Arts

Last Updated: 10 December 2008

Quoted Business speaks to David Sprigg, joint managing director and founder of Stagecoach Theatre Arts, about how the business is performing at the moment.

Stagecoach Theatre Arts is an Aimlisted, market-leading franchise network of part-time performing arts and sports schools for youngsters. The business has yet to see much negative impact from the downturn in economic activity and managing director David Sprigg believes that the sector is particularly resilient. In fact, Stagecoach's network fees in June and July grew 5% year-on-year, cash balances hit a peak of £2.3m in June and it opened several new UK schools in September.

Bucking the trend

"Our underlying business is actually doing better than it was a year ago," says David. "This is our third recession and we've survived all of them since we started the business in 1988. We put it down to the strength of the brand and the fact that parents tend not to cut back on children's education in tougher times, whereas they will cut back on luxuries such as holidays. We are confident of future success despite having to make a small increase in our term fees."

In 2006, when Stagecoach slipped into losses, it carried out restructuring and cost-cutting measures. "We'd geared up for growth that didn't materialise and this was hitting profitability. We managed to rationalise four divisions into a single head office through natural wastage without any compulsory redundancies."

This has led to a significant reduction in the group's total cost base, from £5.95m in 2007 to £5.65m in 2008. The company grew its franchise network fees to £26.5m in 2007.

Dealing with the credit crunch

"We have a great track record with our franchisees and have never had a failure," explains David. "However, the credit crunch is affecting prospective franchisees' ability to raise finance. Until recently, HSBC usually fast-tracked franchisees by, for example, giving credit approval on the same day. But now they look at lending on a case-by-case basis. It's also harder for existing franchisees to find a buyer if they want to move on."

Spend on marketing is a key requirement of every Stagecoach franchisee's contract. "We benefit from this as the first thing that many smaller operations do when times get difficult is to stop marketing, whereas our franchisees are contractually obliged to continue theirs. More than half of our student recruitment now comes through our website. When smaller players fall away we also benefit from such things as a better choice of venues."

David explains that they are seeing many businesses in the sector up for sale – around one a week at the moment. "They tend to be small, independent, sub-£2m turnover franchise operations. We suspect that the owners are putting themselves up for sale before they go bust and we expect to see more of it."

"We have a good cash position and if an acquisition opportunity came along, we would also anticipate support from existing shareholders. We have spoken to a few of these businesses which are up for sale, but so far we haven't seen any that are big or profitable enough."

Current challenges

Like most Aim companies in the current market, Stagecoach faces the issue of illiquidity in its shares. So Smith & Williamson is working with Stagecoach to help improve this by, among other things, increasing its profile with existing and potential shareholders.

"Smith & Williamson provides a high level of service, but also does the basics very well," says David. "The Corporate Finance team is close to us in a way that's rare. They attend some board meetings and this has been very useful."

Stagecoach has also revamped the presentation of its accounts into a better, glossier document. "We've also benefited from having a good independent research note prepared by Hardman & Co., a professional corporate research firm recommended by Smith & Williamson," says David.

Finally, along with all other Aim-listed companies, Stagecoach has just prepared its accounts under International Financial Reporting Standards (IFRS) for the first time. "Under IFRS we have to restate last year's accounts so that, in theory, shareholders can make comparisons with this year. The problem with this is that it's expensive and time-consuming. I also don't see the point of accounting for share options on the profit and loss account. It takes accounting further away from the cash generation side of the business."

But these niggles aside, David remains extremely positive about prospects for the business in a challenging economic climate. "We like good, old fashioned profitability," he says, and on current form, this appears to be what the company is delivering.

Stagecoach: the facts

  • David Sprigg, a former bank manager, and actress Stephanie Manuel set up Stagecoach Theatre Arts in 1988.
  • Their franchise network of over 650 part-time performing arts and sports schools now teaches more than 40,600 students aged 4 to 16.
  • Franchise operations are predominantly in the UK, but also in the US, Germany, Australia, Canada, Ireland, Malta, Spain and Greece.
  • In Stagecoach's full year results published in August 2008, pre-tax profit was up 89% on the previous year at £0.71m, and 33.4% ahead of its forecast of £0.53m.
  • Students pay £315 a term for three hours of dancing, singing and acting tuition per week from highly-trained professionals. Four to six year olds attend for 90 minutes at half price.
  • The number of franchisees has doubled over the past five years from 156 to 318.
  • The Stagecoach Agency is the largest children's and young performers' agency in the UK.
  • Former students include Jamie Bell and Emma Watson.
  • Stagecoach has experienced uninterrupted growth in franchise network fees to £26.5m in 2007.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.