Loyalist Group, the owner and operator of a number of ESL schools across Canada, has announced the closure of three of its school campuses this month, as stock prices reach a new 52-week low.
PGIC campus in Victoria, KGIC Halifax and Cornerstone Academic College in Vancouver will be closing as part of Loyalist Group’s new “Optimization Plan” that it hopes will benefit the company by up to CAN$15m.
“The Plan is designed to take unnecessary costs out of the organisation”
“While these sites may have played an important role in the past, at this point in time, we believe a consolidation of real estate strengthens not just the individual school brands but also the company as a whole,” Loyalist Group said in a press release.
According to Languages Canada, there are around 200 students affected by the schools’ closures.
The Vancouver campus of Cornerstone Academic College and PGIC (Victoria) closed last Friday, with the Halifax campus of KGIC closing on October 2.
Speaking with The PIE News, Loyalist Group’s president and chief executive officer, Shawn Klerer, said the campus closures were part of the company’s “Optimization Plan”.
“The campuses were strategically selected taking into account geography, efficiency and duplication with other Loyalist schools,” he said.
“We have every intention to make the closures seamless to our students and have taken every step to ensure they are well taken care of as well as the staff at those campuses.”
Gonzalo Peralta, executive director of Languages Canada, told The PIE News that the closures were “orderly”.
“Management of the schools have taken the necessary steps to ensure the students were looked after, by placing them at another location of a Loyalist school, transferring them to another accredited programme, or providing a refund,” he said.
He added that Languages Canada “protects international students ensuring they are safe, well looked after, and are able to complete their paid studies”.
With Loyalist Group’s “Optimization Plan”, the company said it hopes to “return the business to profitability”, according to a statement.
“The Plan is designed to take unnecessary costs out of the organisation, leverage owned assets, and capitalise on new revenue streams and is targeted to benefit the company by up to $15m,” it said.
Klerer also added that “it is designed to make Loyalist a much stronger company, which will benefit the industry as a whole”.
However, the company’s stocks have reached a new 52-week low this week of 0.055.
According to The Globe and Mail, “Over the last five days, shares have lost 15.38% and are down 87.91% for the last year to date”.
“Our current students are moving to other schools within Loyalist Group”
In June, Loyalist Group reported a loss of CAN$19.5m in last year’s financial statements, as their stocks plummeted to 0.07.
Adding to the complications, teachers from the PGIC Vancouver campus went on strike in June after negotiations over wages with Loyalist Group hit an impasse.
Loyalist Group also announced more management changes earlier this month. Frank Salvati, who was appointed the position of Chief Financial Officer in June, is departing the company. Former Corporate Controller, Hoon Lee, will take up the position of interim CFO.
And a new position of Executive Vice President, Finance has been created, which Sandeep Manak, former CFO of Slate Office REIT, will fill.
Peralta added that Loyalist Group’s four language schools which are Languages Canada members “are accredited and in compliance with Languages Canada membership requirements”.
