The Fedcap Group Releases First Half Fiscal Year 2024 Operating and Financial Results
New York, NY (May 7, 2024) – The Fedcap Group announced its first half fiscal 2024 operational and financial results, ended March 31, 2024.
Commenting on the results, Christine McMahon, President and CEO of The Fedcap Group noted, “We are pleased with the resilience that Fedcap demonstrated during this period of difficult economic and business conditions, which included growing fixed costs coupled with reduced government funding for several of our programs. Despite these challenges, we were able to increase the number of individuals served and post stable financial results, reflecting the diversity of our programs and revenue sources. As we move ahead in the second half of fiscal 2024, we will continue to prioritize organic growth, acquisitions, and new program launches to deliver positive outcomes for clients and maintain consistent financial results for the organization.”
“In the past six months, we completed several key initiatives, culminating in the successful launch of our innovation incubator and digital skills center, Civic Hall, in New York. Additionally, we launched a new Apex Technical School solar training program in Brooklyn, New York—increasing the education portfolio to 18 programs in four states, and we strategically expanded our presence through key acquisitions, notably the Teaching the Autism Community Trades School in Denver, Colorado. Our ongoing success in securing new contracts has enabled us to extend our service reach, exemplified by our latest workforce contract in Tennessee. Due to our exceptional service delivery, we’ve earned an extension for our UK Restart workforce contract. These are emblematic of initiatives that have proven positive track records with respect to benefits to individuals and society, and they are scalable to other geographies in which we are providing services.”
The Fedcap Group operates across four key practice areas—education, workforce development, health, and economic development—through 23 nonprofit subsidiaries in 106 locations across the United States, Canada, and the United Kingdom. In the first half of fiscal 2024, The Fedcap Group served over 146,000 individuals, marking a 4.3% increase from the previous year.
The Education Practice, representing 17% of total revenue, continued its rapid growth with new programs, acquisitions, and locations. In the first half of fiscal 2024, Fedcap opened Civic Hall, the state-of-the-art innovation incubator and digital skills training center in the heart of the New York tech sector; acquired the Teaching the Autism Community Trades school in Denver, Colorado; and launched a new Apex Technical School solar training program in Brooklyn, New York—increasing the portfolio to 18 programs in four states.
As the largest practice area contributing 40% of total revenue, the Workforce Development Practice continued its strong performance. Over 12,000 individuals were placed in jobs—a 113% increase since 2021. Notably, the individuals trained and placed by Fedcap continue to achieve solid job retention rates, with 89% retaining their positions for at least 30 days, 81% for 90 days, and 79% for 180 days.
The Health Practice, representing 6% of total revenue, continued its upward trajectory on the strength of the Single Stop case management and benefits screening program. We screened over 30,000 individuals for federal and state benefits that yielded an average of $19,000 per household. Across the Fedcap global footprint saw a 4.2% increase in wellness services provided—serving nearly 25,000 people.
Contributing 37% to total revenue, the Economic Development Practice continues to provide sustainable, well-paying employment. With a focus on fostering employment opportunities for individuals with disabilities, The Fedcap Group directly employed over 1,000 individuals at salary levels above the industry average.
Fedcap launched its international business in 2017 and it has grown to 35 locations in Canada and the UK. In the first half of fiscal 2024, its largest UK contract, Restart, which serves the long term unemployed—was extended for an additional two years.
For the first half of FY2024, Fedcap achieved revenue of $183.5 million stable with the similar period in fiscal 2023 and in line with its expectation for full fiscal year 2024 revenues of approximately $375 million, making this another record year for the Group.
As of March 31, 2024, The Fedcap Group had $27.5 million in cash and investments, total assets of $409.9 million, and long-term debt of $158.3 million. Notably, The Fedcap Group’s net assets increased to $98.6 million—nearly tripling from fiscal 2020 levels.
The Fedcap Group maintains a robust business development pipeline of more than $215 million and is tracking another $536.5 million in prospective opportunities. The Fedcap Group has achieved a consistent win rate of 95% on recompetes.
The company’s financial stability has been significantly strengthened by its strategic intent to diversify revenue sources, notably by augmenting the percentage of fee-for-service government contracts. Currently, these programs represent 14% of Group revenues, but based on the current program pipeline, Fedcap anticipates that fee-for-service contracts will increase to from 20% to 25% of revenues by the end of fiscal 2025 and grow from there in subsequent years. This change in mix will provide Fedcap with further resilience in future periods.
“The Fedcap Group will continue to diversify its business operations and revenue sources through a mix of new programs, service footprint expansions, and acquisitions to optimize our funding from a variety of revenue types and programs.”
“Looking ahead to the remainder of fiscal 2024 and beyond, we will continue to focus on high demand markets for our services, including addressing health issues that serve as barriers to work, exporting our successful clean energy program to the UK, and deploying innovative programs to meet the needs of the perpetually underserved disability community. At the same time, we will maintain our commitment to education and training, with a view toward assisting individuals gain meaningful employment in sectors that offer good starting salaries and significant opportunities for advancement,” Ms. McMahon concluded.
For nearly ninety years, The Fedcap Group has developed scalable, innovative, and potentially disruptive solutions to some of society’s most pressing needs. The Fedcap Group provides educational services to every age group, vocational training, and job attainment in high-growth industries, as well as support services such as behavioral health services—all targeted to helping people achieve long-term self-sufficiency. The Fedcap Group also invests its time and resources in broader system change—working in partnership with federal, state, and local government to improve the way services are designed, funded, and delivered.
Jim Malatras, 212-727-4200, (JMalatras@fedcap.org)
