Red driving schools TV ads pays off big time - according to latest published accounts

In the six months from 1st April to 5th October 2008 Red driving school (i.e. LVG Limited) reports a big improvement in driving instructor course sales and profits in comparison with the previous published accounts for the 18 month period from 1st October 2006 to 31st March 2008.

The company reported sales of £18.6 million of which 90.8% (i.e. £16.9 million) was earned from selling driving instructor training courses (i.e. courses to become a driving instructor), 5.8% (i.e. £1.1. million) was earned from operating a driving school and the remaining 3.4% was earned from various other enterprises. At £3,500 (£2,978 ex VAT) per course to become a driving instructor this would suggest in this 6 month period April to September 2008 Red driving school advertising sold in the region of 5,667 driving instructor training courses. This compares to about 12,836 driving instructor training courses sold in the previous 18 months (i.e. about 4,278 on a 6 month for 6 month basis). This is potentially an increase of 30% on the previous accounts performance. Profit after tax was also up from £1.5 million (for the previous 18 month period) to £2 million (for just the 6 month period). Despite the increase in driving instructor training courses sold the number of employed trainers dropped from 166 to 131 (i.e. 20% decrease) while the number of sales staff increased to 143. The company now has more people selling then they have doing the actual training.

The Red driving school recruitement advert "Earn £30,000 (£600 per week) a year as a Red driving instructor" has sold over 18,000 driving instructor training courses in the 2 year period covered by these accounts which is totally disproportionate to the size of the driving school (i.e. a few hundred instructors) and its ability to secure the job and earnings promised if a significant number where ever to qualify. Even household brand names such as BSM and the AA can only support 2,000 and 3,000 respectively. Over the last 10 years the number of courses sold on the back of this job advert for Red driving school is likely to well exceed 50,000 based on previous accounts! At this rate of recruitment Red driving school should be 10 times bigger than the AA and BSM put together!

Clearly the major TV Red driving school advertising is paying off in a big way for the company with increase in instructor course sales and profits. The driving school income is only up by 5% over the 2 year period which would suggest it hasn't grow in real terms after increases in costs but it was noticed that the company has just sold off the whole of its fleet of driving school cars. From now on it would seem anyone joining Red driving school will need to lease a car from another company. This will help protect the Company if there is a down turn in the driving school business as it will not have the problem of having to dispose of any cars in an already depressed car sales marketplace. It also means if the franchise doesnot work out for anyone Red don't get lumbered with a car the instructor will have to take it with him or her.

Anyone can obtain a full copy of the LVG Limited’s accounts from: http://www.companieshouse.gov.uk then proceed to WebCHeck service to obtain information. There is a small charge of about £5.

An average of £3500 per course.......blinking heck batman.......most I've ever taken off anyone is about £1600 at £23 per hour !

So 3500 Divided by DSA "average" of 45 hours is £77.77 per hour.......where do i sign up !

Maybe I've read it wrong.....?

Are Red really charging those prices?

Even at £50 per hour they would be be doing 70 hours......not many at all take that long...maybe 5% max?

come on Oz what da ya think?

Winsor

Yes you have read it wrong. Macca is referring to instructor training courses at £3500 a shot.

5667 people signed up in just 6 months!! That's scary!!

Winsor

I believe that Red give a "would be" instructor about 16 hours 2-to-1 in-car training for Part 2 and 20 hours 2-to-1 for Part 3 plus additional free training as and when slots are available. But on the standard training you are talking about the equivalent of 18 hours 1-to-1 for £3,500 (i.e. £194 per hour). Do bear in mind Red also supply an open learning course materials and classroom training as part of it instructor training course so it is unfair to make such a comparison.

I guess we all pick out different things depending on our role, and we all interpret things differently :-

My angle on those figures was immediately "I wonder what the sales figures were for the 2nd half of the year ??". I think they will be well down on the previous 12 mnths.

Then, looking at the modest profit made by the group...consider this :-

£2m profit = 667 £3k courses (i.e net of vat)

The turnover from the training school was £16.9 m (5634 x £3k courses).

So if the sales figures are down by 10% - which is probably being conservative, the sales figure drops by £1.7m.

Doesnt leave much of that £2m profit does it ?????

The mighty will fall soon....mark my words

Seems like they could show BSM a lesson or two.

Toyota

If anything I would expect sales to rise as we go deeper into recession. All those thousands of construction/steel workers (The Corby effect) with a wad of redundance money being sold the dream, often with free or subsidised training. It has happened during the last two recessions and I sure it will happen again. The difference this time is that the market is already flooded with new or wannabe ADI all undercutting to try to survive.

Who is giving them a "wad of redundance money" ????

They are losing their jobs as their employers are going bust. There will be no big payouts...just statutory redundancy and that will not run to a £3k instructors course. They arent signing up any longer....trust me

12 weeks pay as minimum statutory redundancy payment (conditions apply) + 3 months pay for no notice given for termination of employment + any time worked in hand + subsidised amount for retraining from government = more than enough to invest in the televised dream of £30k + work when want and still pay bills while training.

As opposed to approx £4 to £6k in bank with no job and bills to pay.

Which would you choose after doing no research and watching endless TV adverts about the good life while sat at home twidling thumbs and TV advertising is regulated so must be true ?

Worry not, folks!

The latest radio ad campaign is for people to become fully trained painters and decorators, and earn up to £45000 after training for just 4 weeks and obtaining a C&G qualification!

So the 'Corby effect' will surely attract them in that direction..........

Must have a look under my other halfs side of the matress then, hes a P&D, and has clearly been hiding about 30 grand from me for the last 29 years!!!!!
x

I signed up with Red in Aug 2008 and was promised that 'in my case'!! - previous driving courses etc - it should take about 6 months to get through and be earning. I did not believe it for one minute and in actual fact have discovered it is far slower than even I anticipated. Working full time reduces the time for study and mock tests etc. I passed Part 1 Dec 2008 (not the 5 weeks prophecied by the salesman!). I am now on Part 2. I asked for a Saturday for my 1st module so they would only book 1 week, no more. I called after module 1 and was given 2 more for week days. I have now done those but am told they cannot book more than 1 at a time now. My next module is 2.5 weeks away. So, if it is going to take this long for Part 2 - and even longer for Part 3 - due to their new booking process and lack of instructors (1 in my area - and he covers two areas!) it will be well over the year anticipated before I am earning!! I had thought of giving up my present job to concentrate on the training but even if I did I still cannot get the training any sooner than they are willing to give it!
Having to pay £3695 up front I am beginning to wonder if it is all going to go horribly wrong - when they can't deliver and maintain their side of the deal (and I look for a proportion of my money back!).
On the plus side the money covers a lot of books - about £50 worth plus all their own training books and test papers. It also covers as many lessons as you need. I have been offered no classroom study and have been told they do not do that! I also have to pay all test costs myself - that is harsh after shelling out so much to Red anyway. They are also very hard to contact - area manager details etc are not offered or provided (I will have to find out by asking I guess).
I am keen to get through - but it is hard going at the moment - keeping the pressure on to get the next module.
I haven't decided about the car/franchise yet. I doubt that I will go with them even if they had cars by then as I really want a 5 door. A 3 door is no use to me outside of training hours.

I am also with Red and so far have found them to be OK, nothing excellent but nothing dreadful either. Although I have found their feedback to be very generic and not pupil/student based.

However, I had session 1a on the 18th December, session 1b on the 9th January, session 2 (Mock Theory Test) on the 15th January, session 3 (Mock Hazard Perception Test) on the 28th January and past my ADI PART ONE exam on the 9th February. So it has taken me 8 weeks to pass and complete all of PART ONE, I don't see that being too bad considering the Christmas/New year break and test waiting times.

As for PART TWO - I have already done my session 4 and am booked in for my session 5 on the 21st February. I think things are moving at an OK pace, I would like to to be quicker but its not too bad.

Hopefully things are going to continue this way and I get through the other 2 exams OK, I am dreading PART THREE

Its not part three you need to worry about.
Its finding enough work to keep going once you have passed.Without going down the 5 for £25 route, you need to worry about.

guess who,

Having done their Part 1, we can 'guess' that they have already studied about, sales, marketing, advertising, running a business, etc, before starting the practical elements of their training course. Otherwise it's all going to go pear shape!

Same with other subjects, winter driving for learners and more experienced drivers. MOT certificates, licence documentation and SORN etc. Health and safety. Lighting regulations. Breakdowns. Security. European driving. Auto creep. 4x4s. Trailor towing. First aid. Fire in tunnels. etc, etc, etc, etc.......................

That's providing their Trainer is good, of course....

So thats your definition of a "good trainer" TT.

So in your scheme of things, any trainer that does not teach those topice is classed as a bad trainer. IMO if a trainer had to cover all those things, theyd need a heck of a lot more time to cover them, in return the fees would be prohibited.

Why teach trailer towing to a PDI? They may never have to teach that. Anyway, if the then ADI wished to teach towing, then its up to them to find the relavant course. The same goes for any other 'advanced driver' training, such as 4X4, fire in tunnels that you mention.

MOT certificates, licence documentation and SORN, is already covered on the Part 1.

As usual your talk out the back of your head.

Yet more inane pointless rubbish from this idiot!!!!!

Message to MT from his trainer,

Breathe in, Lift hand, point finger press B, Breath out
Breathe in, Lift hand, point finger press U, Breath out
Breathe in, Lift hand, point finger press L. breath out
Breathe in, Lift hand, point finger press L, breath out
Breathe in, Lift hand, point finger press S breath out
Breathe in, Lift hand, point finger press H breath out
Breathe in, Lift hand, point finger press I, breath out
Breathe in, Lift hand, point finger press T, breath out

I really would like to know where red got their £30,000 pa from. I could manage this but not when I am working the hours I want (another one of the fantastic claims) and paying a ridiculous franchise fee.

Has anyone else noticed the ever increasing variety of Red cars on the road? I think they are trying to force too much growth out of their business. The end is nigh.