Research into Computeach, when will it fail?

In addition I have added some links to media areas at the end of the report including references to
print media reports; you would be advised to read them NOW!

Computeach

 Dun & Bradstreet give the business an ‘N’ classification i.e. a company that has a negative
worth. A business that was set-up as long ago as 1964 isn’t worth a penny after 35 years of
trading
 It has a D&B ‘delinquency score’ which ranks Computeach in the bottom 1/3rd of all
companies in the UK – this is poor

Key financial data

Computeach Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04

Turnover £9.3m £13.0m £14.8m £14.6m £16.7m £14.1m
Pre-tax Profit £5.7m £2.8m -£0.62m £0.93m -£1.9m -£4.2m
Net Worth -£0.65m -£4.8m -£9.1m -£8.6m -£6.8m -£4.9m
Net Current Assets -£0.7m -£1.8m -£4.4m -£2.6m -£2.1m -£2.0m
Total Assets £4.3m £10.9m £11.3m £13.1m £14.2m £15.0m
Employees 48 89 125 126 143 150

Summary:
 Turnover has decreased steadily since 2005
 The company now turns over only 58% of what it did 5 years ago – the business is in decline
 The profits shown in 2008/2009 are ‘manufactured’ and result by bringing forward deferred
income – it bears no reflection to trading performance
 The company has had a negative net worth for the last six years
 A poor trading performance reflects a poorly run business and poor management
 The asset base of the company is 1/3rd of what is was 5 years ago
 The number of Staff (their ability to service clients) has fallen by 2/3rds over the last 5 years
Computeach’s own finance company, Marehill Finance is insolvent:

Marehill Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04

Turnover £355k £255k £487k £618k £709k £198k
Pre-tax Profit £170k -£510k -£1.1m -£267k -£113k -£924k
Net Worth -£2.3m -£2.4m -£1.9m -£742k -£475k -£362k
 This is a dire performance
 This company is dependent upon Computeach, which is barely able to sustain itself let alone
this business
 Marehill will almost certainly go bust, dragging Computeach further into difficulty
Latest Accounts (31st Dec 2009)

Computeach filed these latest accounts several weeks after the Companies House deadline and
will have received a fine for doing so. Looking at the detail contained with the accounts, it is
clear to see why they chose to delay filing them. The picture they reveal is not a pretty one. The
accounts provide further evidence that the business is in difficulty.

Included in the turnover for the year to 31/12/2009 is £7,229,144 of deferred income brought
forward – this represents a massive 77% of the overall total. This shows the extent to which the
figures have been ‘massaged’ to mislead the unwary.

Normally, deferred income would be represented by cash on the balance sheet as the monies
(payment for courses) would have been received in advance, or, be reflected in deferred
debtors. This is not the case with Computeach and it highlights a major problem for the
company – it is running out of cash.

Releasing deferred income to boost turnover has no effect on the company’s cash position and
we see from the accounts that the balance of cash within the company has been steadily
reducing since 2007:

Cash Position Dec-07 Dec-08 Dec-09

Cash in bank £4.48m £2.89m £1.5m

For a healthy business this figure should be increasing, not decreasing. It is likely too that the
position will have worsened in the year to Dec 2010 (unless the company has drastically reduced
its costs). This shortage of cash will be exacerbated as a direct result of bring forward the
deferred income mentioned above. Doing so will leave the business with an estimated
corporation tax liability of £632k, swallowing nearly half of the available cash and in balance
sheet terms, making Computeach technically insolvent. No wonder the accounts were filed late.

The business is haemorrhaging cash, there was a net outflow of £1.4m in 2009 and £1.8m in
2008, it simply cannot continue to operate on this basis – it will go bust.

It is hard to believe that this is the company nominated by Barclay Partner Finance to train the IT
students left stranded as a consequence of Advent Training going bust – out of the frying pan
into the fire... more can be found at the Consumer Action Group http://bit.ly/fiwr3P ,HubPages
http://hubpages.com/hub/BarclayParterFinance , “Legal Action Against Computeach” on
FaceBook http://on.fb.me/hBGVKT Yahoo Answers http://yhoo.it/hvuXyc and please read the
comments at the Daily Mirror http://bit.ly/gH5zAV