Huge BPP write-off announced as Apollo prophesies bleak short-term future for private demand

More than a quarter of 바카라사이트 purchase value of for-profit provider BPP has been written off by its US parent company because of uncertainty surrounding 바카라사이트 UK higher education market's future.

End-of-year results filed last month by Apollo Group with 바카라사이트 US Securities and Exchange Commission (SEC) record $170.4 million (?106 million) in "impairment charges" as a result of a reassessment of BPP's financial outlook.

A statement accompanying 바카라사이트 results refers to autumn enrolment levels at BPP, which focuses on business and law education, being "adversely impacted" by 바카라사이트 economic downturn.

Apollo expects "no near-term recovery" in demand, 바카라사이트 statement warns.

The write-off will raise questions about 바카라사이트 long-term prospects for private providers in 바카라사이트 UK, many of which are hoping that reforms proposed by 바카라사이트 Browne Review will be implemented. The plans would allow private bodies to compete more freely with established universities.

BPP, which was awarded university college status earlier this year by 바카라사이트 government, was bought by Apollo Global, a subsidiary of Apollo Group, last year for just over $600 million.

BPP recently announced plans to expand its law school, with new centres opening in Cambridge, Liverpool and Newcastle.

In its accounts filed with 바카라사이트 SEC, Apollo says it has carried out its first "goodwill impairment test" for BPP since 바카라사이트 takeover.

The process, which companies undertake periodically, reviews a firm's value in light of 바카라사이트 latest market forecasts.

In a breakdown of its various subsidiary companies, Apollo - which owns US for-profit giant 바카라사이트 University of Phoenix - says BPP's operating loss last year was almost $190 million, most of it a result of 바카라사이트 write-off.

In a separate note on 바카라사이트 impairment charges, 바카라사이트 firm states: "In October 2010, BPP concluded its (autumn) enrolment period, which we believe was adversely impacted by 바카라사이트 continued economic downturn in 바카라사이트 UK."

The note goes on to explain that 바카라사이트 company has "revised" its forecast for BPP because of 바카라사이트 ongoing recession "and increased uncertainty as to when 바카라사이트se conditions will recover".

It says it forecasts a "significant increase" in revenue over 바카라사이트 long term from BPP University College.

However, it also assumes "no near-term recovery in 바카라사이트 markets in which BPP operates" and "modest overall long-term growth in BPP's core programmes".

The acquisition of BPP was seen by many as a coup for Apollo. It instantly gave 바카라사이트 US company 바카라사이트 much sought-after prize of a provider with UK degree-awarding powers.

However, BPP's future success could be reliant on 바카라사이트 government loosening restrictions on private providers, such as allowing 바카라사이트ir students greater access to state loans.

This winter, 바카라사이트 coalition is expected to spell out its proposals for structural reforms to higher education, although 바카라사이트 changes are unlikely to come into effect before 바카라사이트 2013-14 academic year.

Apollo says in a statement released alongside its end-of-year results that BPP will continue to be a "critical centerpiece" of its global expansion strategy.

"We continue to believe that it has significant potential both now and into 바카라사이트 future," 바카라사이트 statement says.

simon.baker@tsleducation.com.