TOP Edinburgh private school St Margaret's will close at the end of the month after going into administration yesterday.
The governors of 110-year-old institution called in receivers KPMG after it was decided that the school was no longer financially viable and will now close on 29 June.
The school, which charges up to 2,628 a term and has a teaching staff of 100, had been struggling with an average annual operating deficit in the order of 500,000 and falling pupil numbers for at least the past five years, against a turnover of 3million.
The decision was taken mid-afternoon, after which the teaching staff were informed. Later in the evening an e-mail was sent to all parents informing them of the school's imminent closure.
Administrator Blair Nimmo said the school had reached an untenable financial position. He said: "It's had a operating deficits for a number of years, and quite substantial operating deficits. They have addressed these deficits firstly by trying to address the decline in pupils numbers."
It is understood that rolls, which stood at 800 pupils several years ago, declined steeply to close to 350. The school accepts boys up to junior school level, but is an all-girl senior school. There is no apparent single reason as to why pupil numbers dropped.
• St Margaret's - A history
Mr Nimmo said any independent school's financial viability was vulnerable to falling rolls: "You don't need to lose too many pupils before you start falling into an operating deficit."
The school had resorted to selling off parts of its property, but this had limited success: "After a period of time, at least five or six years of trading deficit, that had failed to be addressed, you've got a school that was simply unviable."
Mr Nimmo said the school's situation had been compounded by the financial downturn, which had affected the value of its assets.
The governors had been "simply left with no alternative" but to go into administration. He added that while many staff knew St Margaret's had financial problems, they had not expected it to be shut and were extremely shocked.
The announcement was timed to ensure it would not coincide with exams this week, in case it affected pupils' performance. The school will continue to run as normal until it closes, though a Duke of Edinburgh Award trip planned for today has been cancelled.
One parent, whose two-year-old daughter attends the school's nursery, received the e-mail just after 7:30pm last night. "I'm saddened, because it's a fantastic school. It has done our little one very well, even though she's only two. It's just had an independent audit and came out as a centre of excellence in multiple sections. It's very sad – it's a real loss to Edinburgh."
A parent hotline is to be set up to deal with any queries.
Mr Nimmo said the main aim now was to find new schools for the pupils. Following informal discussions with other local private schools, it appeared there "was a huge appetite and a capacity" to take on the school's roll.