A major ICT supplier to schools has entered administration due to “severe cashflow issues”.
Gaia Technologies describes itself on its website as “one of the leading providers of ICT solutions to UK schools” which “manages and maintains IT assets”.
The firm says it has 500 education customers and is on the Department for Education’s approved ICT service suppliers framework.
Administrators are not yet able to say if schools may be affected by the news, but they are hopeful of finding a new buyer for Gaia.
However there are concerns should the company go bust that schools would face having any ICT equipment taken off them.
Mark Orchison, managing director at education technology consultancy agency 9ine, said that schools may not own any ICT equipment they have from Gaia, as they would have an agreement whereby the company updates and replaces the software and technology regularly.
“The risk is that all the assets are owned by Gaia and the school is in a never-ending lifecycle of working with Gaia, they can’t get away from it.
“In addition to that, assets are then securitised on Gaia’s balance sheet as loans… so the risk was that if Gaia ever went bust… that the administrator will call upon those assets to sell them.”
In this case, the assets could be sold back to the school or they will be removed.
Orchison estimates that hundreds of schools are at risk of this happening.
“It’s highly dangerous and it’s something that we raised in 2016 to a multi academy trust,” Orchison said.
The North Wales-based company claims it has provided services to the Ormiston Academies Trust, the JCB Academy in Staffordshire, the Sheffield Community Academy, the Northumberland Church of England Academy, the Drapers’ Academy, among many others.
The Academy Transformation Trust (ATT) was also supplied by the firm.
Anas Mawla, who ran Gaia Technologies, was a trustee at the ATT between 2011 and 2014. During this time, ATT accounts show the trust paid out £558,615 to his company.
TES reported that, up to 2017, the total spent by ATT on Gaia services exceeded £3.1 million.
Ben Woolrych and Anthony Collier, partners at specialist business advisory firm FRP Advisory LLP, were appointed as joint administrators on Friday.
Collier said: “Gaia Technologies has grown rapidly over the last few years having secured a number of significant contracts, but unfortunately severe cashflow issues have resulted in it being placed into administration.
“We are now working to assess the financial position of the company and will be looking to identify parties who will take the business forward. We expect there to be significant interest in the company and encourage any interested party to contact us at the earliest opportunity.”
Between 2007 and 2014, financial results showed a 326 per cent turnover increase from £3.8m to £16m, Business Cloud reports.
In the company’s most recent financial accounts, it says: “We believe our current financial position is secure with already so many won business for the future, solid recurring revenue, sustainable and strong profit streams, and growing managed services adoption in the educational market as well as the public sector in general.”
However the accounts also state the education budget is “still coming under pressure and continues to affect schools spending confidence, not helped by the uncertainty surrounding Brexit, and thus their expenditure in many areas, especially in ICT, as after salaries ICT is seen as the largest cost centre in many schools”.
“This, combined with build projects delays, has affected our turnover this year.”