Send schools market remains buoyant as demand for services continues to grow, says Christie & Co

Overview

The SEND schools market is still buoyant due to the growing demand for suitable settings that support the needs of children who are unable to access mainstream education. This is supported by the Government’s pledge to increase core school funding by £3.5 billion in 2023/24, of which almost £1 billion will go towards high needs. As a result, operators are keen to meet demand by establishing new SEND provisions across the UK.

​In 2023, Christie & Co continued to see former independent schools coming to the market, the majority of which were sold in swift and competitive processes to SEND and specialist childcare service providers. Demand for organic growth, and the opportunity to buy businesses with established earnings continued to outstrip supply.

​Pricing

In 2023, an overall combination of economic shifts, funding challenges, cost pressures, margin erosion, and the increased cost of capital all contributed to a market reset in 2023, resulting in a 3.3 per cent decrease in pricing across childcare and education businesses, which follows some aggressive positive index movements in prior years.

Market Sentiment

 As part of its annual sentiment survey, the company surveyed childcare and education professionals across the country to gather their views on the year ahead. Encouragingly, 44 per cent of people said that they are positive about the year ahead – an 11 per cent rise on survey figures reported in the previous year – while just 14 per cent feel negative. When asked about their sale and acquisition plans in 2024, 71 per cent said they are planning to buy and/or sell this year.

The Finance Landscape​

In 2023, Christie Finance witnessed a 26 per cent rise in the number of childcare and education finance instructions, with a significant increase in leasehold operators seeking funding to purchase the freehold premises, ultimately increasing the value of the business that can be utilised as a springboard to aid future expansion.

Market Predictions

In 2024, Christie & Co expects:

• Demand will continue for SEND school placements 
• More SEND schools are predicted to open in 2024 
• The SEND market will continue to grow, fuelled by demand, but fees and costs are likely to be in sharp focus as budget restraints tighten
  
  

Courteney Donaldson, Managing Director - Childcare & Education at Christie & Co, comments, “2023 proved to be an exceptionally busy year for our agents, valuation, and consultancy teams with their expertise and their services being called upon by a wide range of business owners, banks, lenders, and investors seeking formal advice for sale, refinancing and secured lending purposes.

“During 2023, the market remained incredibly buoyant, with demand from buyers for high-quality operational SEND businesses showing no signs of abating. A highlight of the past year was our involvement in one of the largest transactions of 2023, the sale of Outcomes First Group (OFG), one of the UK’s leading SEN providers, operating 56 high-quality schools that serve over 3,000 students between three and 25 years of age. We were delighted to provide valuation advice to our clients Stirling Square and OFG in this landmark transaction. From an organic business development perspective, where we have seen mainstream independent school closures across the UK, there has been no shortage of SEND school providers stepping in to acquire those assets to invest, refurbish, and re-open them as dedicated SEND provisions. Looking ahead to 2024, against a backdrop of further anticipated funding scrutiny, we expect to see further growth in nationwide capacity, we also predict that buyer demand will remain strong.”

For the full Business Outlook 2024 report, visit: https://www.christie.com/news-resources/business-outlook/2024/

For further information on this press release, contact:
Phoebe Burrows, Corporate Communications Manager
P: 07540 063 598 or E: phoebe.burrows@christie.com