Nord Anglia take on GEMS in their own backyard
Earlier this year Nord Anglia’s International Schools Division signed a memorandum of understanding with Dubai-based ETA Star Schools (part of the ETA Ascon Group). The group claims to have launched the ‘first British school in the United Arab Emirates’, in September this year with two more due to open in 2006 and 2007.
The ETA Ascon Group are infrastructure development experts and their partnership with Nord Anglia looks from the outside to be a similar model to that seen in PPPs. The relationship has Nord Anglia acting as the school’s managing agent and being remunerated via royalty fees based on a percentage of turnover. This is a similar arrangement to that Nord Anglia have in Moscow where they manage eight schools with a local partner.
Regrettably, while the Moscow schools have produced considerable profit, recent events (a £2m fall in income) have seen Nord Anglia trying to restructure their partnership agreement. Buried in the notes to their results Andrew Fitzmaurace the Chief Executive notes that if a ‘favourable agreement is not reached the company expects to derive lower profits from the schools in the future’.
It would be interesting to know what GEMS senior management think about having a UK-based competitor setting up in their back yard? What may make this even more galling is that while Nord Anglia is expanding into the Middle East, GEMS expansion in the UK has not been without significant difficulties (as we reported in June).