An apology
On Friday 11 September 2026 we published an article headlined “ESS reports lower revenue as investment in SIMS Next Gen continues”. That article was materially misleading and has been withdrawn from our website, newsletter and social channels. It substantially relied upon AI for drafting and was not adequately reviewed against the underlying statutory accounts before publication. We apologise unreservedly to Education Software Solutions Ltd (“ESS”), to ParentPay Group and to our readers. The article below replaces it and has been checked by reference to the filed accounts for the year ended 30 November 2025.
ESS, the ParentPay Group subsidiary that supplies SIMS as well as a range of other services to schools, further and higher education organisations and public libraries, reported revenues of £69.2m for the year ended 30 November 2025, down 3.5% on a like-for-like basis from the previous financial year.
ESS reported operating profit of £8.8m (2024: £11.6m), profit before tax of £9.0m (2024: £12.1m) and profit after tax of £6.8m (2024: £9.2m), but those figures are after netting off a £10m annual royalty payable to ESS’s immediate parent and a step-up in amortisation to £6.1m (2024: £3.7m). On the measures management uses, ESS earnings excluding exceptionals, royalties and share based payments (“Adjusted EBITDA”) were £25.1m (2024: £27.3m), with half of the £2.2m decline attributable to a precautionary £1.0m net-of-VAT provision and the remainder linked to the fall in school MIS revenue.
In the school segment MIS churn was partly offset by growth in FMS revenues and by the trend for retained school MIS customers to take support and hosting services from ESS rather than from external providers, lifting average spend per customer.
ESS is a business of considerable scale yet only accounts for 55% of ParentPay Group revenues of £125.2m and 52% of ParentPay Group Adjusted EBITDA of £48.3m.
At the year end, circa 14,000 educational establishments were contracted to use one or more of ESS’s MIS, financial management, messaging, parental engagement or library products and services, with the group as a whole supplying 30,000 schools and educational establishments in the UK, Europe and internationally.
A group-level investment programme
The most striking feature of the accounts is the scale of product investment — and it is a programme that covers the entire ParentPay Group rather than just ESS.
The programme covers SIMS Next Generation, a cloud-native version of the group’s financial management product FMS, known as Finance Next Generation, and the integration of those platforms with a unified version of the group’s payments, messaging, parental engagement and catering products. It also involves significant updates to the group’s further and higher
education MIS and its various library management platforms.
In total 770 engineering and product employees and a further 330 contract staff are currently engaged in the programme.
Across the group, £21.3m of software develop
ment costs were capitalised during the year (2024: £17.7m), of which ESS accounted for £17.1m (2024: £14.5m). The group’s cumulative capitalised costs in the programme are now just under £85m, with ESS accounting for just over £67m of that sum, of which £43.5m relates to MIS and FMS. The group has approved further capitalised expenditure of £26.4m for the year ending 30 November 2026.
On timing, the accounts are clear: even though the scope of the programme has increased significantly since its inception in October 2021, the programme remains on track for completion by the end of calendar 2026 — the original target end date. This will allow the group to retire its legacy MIS and finance solution during the course of 2027.
Development is expected to continue at much the same pace in 2027 and beyond, but at a materially lower cost from the end of 2027 as external contractors are released and in-house teams take their place. Capitalised expenditure is therefore expected to fall materially in 2027 as are operating costs once legacy systems have been fully retired.
ESS reports that it has continued to release numerous SNG and FNG components during the financial year, with many more released in 2026 to date. The business expects to have materially surpassed the functionality available in SIMS and FMS in its Next Generation versions of these products by the end of calendar 2026.
Headcount
ESS’s average employee numbers fell from 453 to 401 during the year.
The accounts explain that this is because new joiners are now employed centrally within the ParentPay Group rather than within the ESS entity. At group level, average employee numbers rose from 1,153 to 1,269, driven by an increase in product and development staff.
Looking ahead
At group level, ParentPay Group trading income was £125.2m (2024: £125.5m restated), with cost of sales down 12%, gross margin improving to 86%, and Adjusted EBITDA up 5.9% to £48.3m — equivalent to 38.6% of revenues including transaction processing interest income.
The group’s UK payments, parental engagement and catering business grew revenues 7.5% to £42.1m with Adjusted EBITDA up 24.2% to £19.0m, despite the continued extension of free school meal provision.
The Dutch business grew revenues 10% to £7.5m, and the German business is now the leading provider of school payment services in Germany with roughly 60% of the adopted market.
Since the year end the group has acquired Schulmenueplaner.de GmbH in Germany (January 2026), School Hire Lettings Limited (March 2026) and Infowijs BV in the Netherlands (May 2026), while exiting the Dutch primary parental engagement and website market.
WhichMIS? view
Read at group level, these are the accounts of a substantial business funding a very large platform transition entirely from its own cashflow, while continuing to grow its payment, parental engagement and digital CPD business in Europe and beyond.
Key facts for SIMS and FMS users are the committed investment in the Next Generation programme; some £43.5m to date with a further £26.4m of group capitalised expenditure approved for 2026, alongside the group’s statement that the Next Generation programme remains on track for completion by the end of calendar 2026.
The scale of the product and development resources employed by ParentPay Group appears to be beyond that of any of its UK competitors and if ParentPay continues to fund development at this pace for 2027 and beyond it will be interesting to see whether competitors will be able to keep up.