Final Results

RNS Number : 7392F

AEC Education plc

29 May 2013

 



AIM: AEC

AEC EDUCATION PLC

("AEC" or "the Group")

Full Year Results

 for the 12 months ended 31 December 2012

Key Points

·      Asian operations performed well but overall Group results impacted by significant non-recurring items principally relating to UK activities

·      Revenues on continuing activities of £15.1m (2011: £19.1m).  Total Group revenues of £16.5m including £1.4m contribution from Education Resources Pte Ltd ("ER"), disposed of in October 2012

·      Adjusted loss before tax before non-recurring items of £0.89m  (2011: profit before tax of £0.36m)

Statutory loss before tax of £3.84m (2011: profit before tax of £0.36m) including £2.95m of non-recurring items - of which £2.42m related to UK activities, £0.27 related to set up cost of new colleges in Ireland and Oman and the balance related to the disposal of ER

·      Adjusting for non-recurring items, loss per share of 1.98p (2011: earnings per share of 0.73p)

        Statutory loss per share of 7.15p (2011: earnings per share of 0.73p)

·      Net cash of £2.71m (30 June 2012: £2.90m and 31 Dec 2011: £3.81m)

·      In Asia - Singapore performed strongly, with revenues up 21% and PBT up 50% and Malaysia returned to profitability with revenues up 4% and student numbers back to pre-Arab Spring levels 

·      In UK - completed significant restructuring, including consolidating London activities into one site

·      Newer operations in Dublin and Oman showing encouraging progress; Cyprus JV -  strong progress

·      Board expects the Group to return to profitability in 2013

Liam Swords, Chairman of AEC, commented,

"The year under review proved to be very challenging, with markedly contrasting trading performances from our two key trading regions of Asia and the UK.  Our Asian operations performed well over the period with revenues on continuing activities up 14% year-on-year. By contrast, mainly as a result of poor trading in the UK, in part reflecting the UK government's actions on visas for overseas students, we have taken decisive action resulting in significant one-off write-offs which have impacted results. This tough but necessary action has put our UK activities on a firmer footing for 2013. This, along with our Asian operations performing well and our newer operations in Dublin, Oman and Cyprus gaining traction, leads us to expect that the Group will return to profitability in the current financial year. 

The Group's financial position remains healthy with net cash at the year end of £2.71m and good cash flows."

Enquiries:

AEC Education PLC		Tel: [phone]
Liam Swords, Chairman		M:  [phone]
WH Ireland Limited (NOMAD)		Tel: [phone]
Dan Bate
Biddicks		Tel: [phone]
Katie Tzouliadis/ Alexandra Shilov

CHAIRMAN'S STATEMENT

Overview

The year under review proved to be very challenging, with markedly contrasting trading performances from our two key trading regions of Asia and the UK.  Our Asian operations performed well over the period with revenues on continuing activities up 14% year-on-year. By contrast, mainly as a result of poor trading in the UK, in part reflecting the UK government's actions on visas for overseas students, we have taken decisive action resulting in significant one-off write-offs which have impacted results. This tough but necessary action has put our UK activities on a firmer footing for 2013. This, along with our Asian operations performing well and our newer operations in Dublin, Oman and Cyprus gaining traction, leads us to expect that the Group will return to profitability in the current financial year. 

The Group's financial position remains healthy with net cash at the year end of £2.71m and good cash flows.

Financial results

Revenues on continuing activities for the year to 31 December reduced by 21% to £15.1m (2011: £19.1m). The reduction was partly due to the exclusion of  revenues of £1.4m generated by Educational Resources Pte Ltd up to the time of its disposal in October 2012. Taking this into account Group revenues for the period were £16.5m (2011: £19.1). The Group's statutory loss before tax was £3.84m (2011: profit before tax of £0.36m). This result reflected non-recurring items totalling £2.95m, of which £2.42m of this relates to the Group's UK activities, £0.27m was incurred in the set up cost of the new colleges in Ireland and Oman during the first half year and the balance of £0.26m relates to the disposal of Education Resources Pte Ltd. After adjusting for these non-recurring items, the loss before tax for the year was £0.89m (2011: profit of £0.36m).

In Asia, the Singapore college recorded a pre-tax profit of £0.30m and Malaysia returned a profit of £0.07m.  Additionally our share of the profit from our joint venture in Cyprus, after the deduction of all marketing and sales costs, was £0.07m. Results from the new operations in Dublin and Oman show start up losses of £0.35m and £0.09m respectively.  However, we expect both our operations in Dublin and Oman to move toward profitability in 2013 as well as the English language teaching operations in London. In addition, prospects for our Asian operations in 2013 look encouraging.

Adjusting for one-off items the loss per share was 1.98p (2011: earnings per share of 0.73p) and the statutory loss per share was 7.15p (2011: earnings per share of 0.73p). 

The net cash outflow from operating activities was £2.42m (2011: inflow of £2.03m).

Net cash at the end of the year stood at £2.71m (30 June 2012: £2.90m and 31 December 2011: £3.81m).

Dividend

Given the Group's trading results, the Board does not intend to propose the payment of a final dividend for the year ended 31 December 2012 (2011: 0.20p per share).

Business Review

In Asia, our operations in Singapore performed strongly, with revenues rising by 21% and pre-tax profits up by 50% to £0.30m.  We continued to experience strong demand for our courses and expanded our facilities to meet that demand.  During the year we increased our focus on the direct recruitment of students as well as the local market, with pleasing results. We also strengthened the management team, with the appointment of Dr Chong Chee Leong as head of our Singapore operations in May 2012. He is leading an initiative to build new relationships with overseas universities to strengthen our position.  There has been significant momentum in this business over the last two years, aided by a tightening of quality standards in the private education marketplace by the Singapore Private Education Regulatory Authority and our early attainment of the prestigious EduTrust certification. The government continues to introduce new regulations to ensure that the marketplace operates to the highest standards. We expect our growth rate to steady a little given the strong Singaporean dollar and the slowdown in the country's economic growth but nonetheless remain confident about prospects for continuing expansion and we are moving forwards with our plans to launch a number of new programmes with new university partners in 2013.

Our operations in Malaysia saw a considerable rebound in student numbers, having been affected last year by the Arab Spring which led to a fall in numbers from the high volume markets in Northern Africa.  I am pleased to report that student numbers over the year under review returned to pre-Arab Spring levels, helped by the initiatives we implemented to grow student numbers and diversify into new markets. Revenue in Malaysia increased by 4% over the year and the operations returned to profitability, generating a pre-tax profit of £0.07m. Over half our students took an accounting programme and over 10% took an English language programme, with the majority of these students coming from Northern Africa.  All our Malaysian sites now operate under the 'Malvern House' brand and as well as focusing on new markets in the Middle East, we are building new partnerships with European universities.  In 2013, we are introducing bilingual programmes in logistics delivered in English and Mandarin, and English and Arabic. We continue to invest in Malaysia, in particular to raise the level of our programmes to position the business to take advantage of the opportunities for high performing education institutions in Malaysia to become 'deemed' universities, with their own university campuses.

As we have previously reported, our English language teaching operations in the UK have felt the significant effects of the changing legislation and regulations regarding visas and work permits for overseas students.  International students in private institutions are now not able to subsidise their study costs by working part time and uptake of long term courses has been particularly impacted.  In view of market conditions, we have reduced and restructured our Malvern House operations in London, consolidating all our activities into our Kings Cross site. This restructuring has incurred one-off costs of £0.95m. Additionally, we have closed the operation in the funded business, acquired in March 2012, after significant deficiencies emerged.  The cost of the write-off of this investment as well as the pre-acquisition losses (guaranteed but accounted for as non-recoverable) and the initial trading losses amounted to £1.5m, with £0.88m being impairment of goodwill and the non-controlling interest held by the vendors. Having taken this action, we are currently reviewing our overall position in the UK government funded sector.

In 2011, we established a number of initiatives to expand our English language school provision internationally under the Malvern House brand.  Our joint venture in Cyprus has made excellent progress and returned a pre-tax profit of £0.07m for our 50% stake. As well as a very strong English language summer school, we have expanded its provision and it now has an all-year offering, which is growing very well.  We believe that our Cyprus joint venture should continue to make good progress over 2013.  In the first half of 2012 we also launched colleges in Dublin and Oman and  incurred set-up costs of £0.27m. I am pleased to report that both colleges are progressing well, with student numbers growing.  We expect both colleges to move to profitability in 2013 and believe that they represent an attractive investment, enabling us to build on the strong reputation of Malvern House overseas.

In October 2012, we completed the sale of the Group's non-core examinations subsidiary, Educational Resources Pte Ltd, which provides London Chamber of Commerce & Industry examinations in Asia, to Pearson Education South Asia Pte Ltd for a total consideration of £2.9m cash of which £0.25m is held in escrow for any claims by the purchaser. 

Staff

On behalf of the Board I would like to thank all staff for their hard work and efforts during what has been a very difficult period. It is rewarding to see the positive attitude and support as we have implemented the necessary changes to ensure the Group returns to sustainable profit growth.

Prospects

2012 was a very difficult year in the UK operations but our investment in the expansion of the Malvern House brand internationally as well as the growth of our operations in Singapore and Malaysia and the completion of the restructuring in London gives us confidence that 2013 will see a return to growth and profits.

We still have strong cash balances, strong markets in Asia and new operations that are now gaining traction in Dublin and Oman and we have stabilized the operations in London. The Board feel that the range of developments now being achieved will enable AEC to return toprofitability in 2013.

Liam Swords

Chairman  

28 May 2013

AEC EDUCATION PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£	£
Revenue
Sale of services	14,776,108	18,631,088
Other income	317,086	513,904
	15,093,194	19,144,992
Cost of services sold	7,573,112	9,007,430
Salaries and employees' benefits	4,212,032	4,039,996
Amortisation of development costs	-	6,614
Amortisation of  brand, licences and trademarks	172,593	18,622
Depreciation of plant and equipment	631,754	609,066
Other operating expenses	4,192,137	4,997,893
Restructuring of activities	729,937	-
Write-down of equipment	220,217	-
Impairment loss	882,163	175,763
Total operating costs and expenses	18,613,945	18,855,384
Operating (loss)/profit	(3,520,751)	289,608
Share of results of associated companies and      joint ventures	15,398	128,469
Finance costs	(70,804)	(57,980)
(Loss)/profit before income tax	(3,576,157)	360,097
Income tax credit/(charge)	287,382	(17,925)
(Loss)/profit for the year from continuing activities	(3,288,775)	342,172
(Loss)/profit for the year from discontinued activities	(262,007)	-
(Loss)/profit for the  year	(3,550,782)	342,172
Attributable to:
Equity holders of the Company	(3,174,361)	321,514
Non-controlling interest	(376,421)	20,658
	(3,550,782)	342,172
(Loss)/earnings per share (in pence)
Basic	(7.15)	0.73
Diluted	(7.15)	0.67

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£	£
(Loss)/profit for the year	(3,550,782)	342,172
Foreign currency translation movements	185,517	(16,608)
Other comprehensive income/(expense) for the year	185,517	(16,608)
Total comprehensive income for the year	(3,365,265)	325,564
Attributable to:
Equity holders of the parent	(3,020,171)	304,906
Non-controlling interest	(345,094)	20,658
Total comprehensive income for the year	(3,365,265)	325,564

AEC EDUCATION PLC

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

	2012	2011
TOTAL ASSETS	£	£
Non-Current Assets
Property, plant and equipment	1,090,213	1,485,706
Investment in associated companies	29,395	49,244
Investment in joint ventures	66,653	147,137
Intangible assets	4,357,956	6,521,400
Goodwill	446,558	1,141,242
Deferred tax asset	233,031	-
	6,223,806	9,344,729
Current Assets
Inventories	21,858	53,819
Trade receivables	1,948,591	1,433,028
Other receivables and prepayments	1,575,099	1,788,021
Tax recoverable	8,581	63,637
Due from joint ventures	105,438	44,930
Due from related parties	26,165	1,396
Cash and cash equivalents	2,706,691	3,810,375
	6,392,423	7,195,206
Total Assets	12,616,229	16,539,935

EQUITY AND LIABILITIES
Non-Current Liabilities
Deferred income	-	4,539
Financial liabilities	94,390	374,920
Deferred taxation liability	24,249	83,005
	118,639	462,464
Current Liabilities
Trade payables	652,045	615,835
Deferred income	3,813,401	4,761,323
Other payables and accruals	2,969,251	2,202,642
Due to related parties	24,291	19,040
Financial liabilities	284,564	345,681
Provision for income tax	51,757	82,668
	7,795,309	8,027,189
Total liabilities	7,913,948	8,489,653

Equity attributable to equity holders of the Company
Share capital	4,419,878	4,419,878
Share premium	707,588	707,588
Reserves	(381,770)	2,726,798
	4,745,696	7,854,264
Non-controlling interests	(43,415)	196,018
Total equity	4,702,281	8,050,282
Total Equity and Liabilities	12,616,229	16,539,935

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

	Share Capital	Share Premium	Other Reserves Share-Based Payment Reserve	Other Reserves Retained Earnings	Other Reserves Trans- lation Reserve	Other Reserves Capital Reserve	Total Of Other Reserves	Attributable To Equity Holders Of The Company	Non- controlling Interests	Total
	£	£	£	£	£	£	£	£	£	£
Balance at 1 January 2011	4,419,878	707,588	425,467	906,153	1,000,133	170,560	2,502,313	7,629,779	198,721	7,828,500
Profit/(loss) for the year	-	-	-	321,514	-	-	321,514	321,514	20,658	342,172
Total other comprehensive  income	-	-	-	-	(16,608)	-	(16,608)	(16,608)	-	(16,608)
Total comprehensive income for the year	-	-	-	321,514	(16,608)	-	304,906	304,906	20,658	325,564
Issue of shares in the year	-	-	-	-	-	-	-	-	-	-
Dividends	-	-	-	(88,397)	-	-	(88,397)	(88,397)	-	(88,397)
Share based compensation	-	-	7,976	-	-	-	7,976	7,976	-	7,976
Total transactions with owners	-	-	7,976	(88,397)	-	-	(80,421)	(80,421)	-	(80,421)
Dividend paid to non-controlling interest	-	-	-	-	-	-	-	-	(23,361)	(23,361)
Balance at 31 December 2011	4,419,878	707,588	433,443	1,139,270	983,525	170,560	2,726,798	7,854,264	196,018	8,050,282

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012 (Cont.)

	Share Capital	Share Prem-ium	Other Reserves Share-Based Payment Reserve	Other Reserves Retained Earnings	Other Reserves Trans- lation Reserve	Other Reserves Capital Reserve	Total Of Other Reserves	Attribut-able To Equity Holders Of The Company	Non- controlling Interests	Total
	£	£	£	£	£	£	£	£	£	£
Balance at 1 January 2012	4,419,878	707,588	433,443	1,139,270	983,525	170,560	2,726,798	7,854,264	196,018	8,050,282
Loss for the year	-	-	-	(3,174,361)	-	-	(3,174,361)	(3,174,361)	(376,421)	(3,550,782)
Total other comprehensive  income	-	-	-	-	154,190	-	154,190	154,190	31,327	185,517
Total comprehensive income for the year	-	-	-	(3,174,361)	154,190	-	(3,020,171)	(3,020,171)	(345,094)	(3,365,265)
Dividends	-	-	-	(88,397)	-	-	(88,397)	(88,397)	-	(88,397)
Share based compensation transfer	-	-	(104,699 )	104,699	-	-	-	-	-	-
Total transactions with owners	-	-	(104,699 )	16,302	-	-	(88,397)	(88,397)	-	(88,397)
Non-controlling interest arising on business acquisition	-	-	-	-	-	-	-	-	(160,997)	(160,997)
Dividend paid to non-controlling interest	-	-	-	-	-	-	-	-	(23,768)	(23,768)
Impairment of carrying value	-	-	-	-	-	-	-	-	290,426	290,426
Balance at 31 December 2012	4,419,878	707,588	328,744	(2,018,789)	1,137,715	170,560	(381,770)	4,745,696	(43,415)	4,702,281

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£	£
Cash Flows from Operating Activities
(Loss)/profit before income tax from continuing activities	(3,576,157)	360,097
(Loss) before income tax from discontinued activities	(262,007)	-
Adjustments for:
Amortisation of development expenditure	-	6,614
Amortisation of intangible assets	172,593	18,622
Depreciation of property, plant and equipment	648,096	609,066
Write down of property and equipment	220,217	12,767
Loss on disposal of plant and equipment	24,334	4,243
Loss on sale of subsidiary	190,609	-
Share-based payment charge	-	7,976
Interest expense	70,804	57,980
Interest income	(7,012)	(10,440)
Impairment of goodwill	882,163	175,763
Share of results of associated companies and joint ventures	(15,398)	(128,469)
	(1,651,758)	1,114,219
Changes in working capital:
Receivables	(690,420)	(1,349,114)
Payables	(47,085)	2,148,981
Inventories	12,404	5,422
Related parties and associated companies	(80,026)	(123,886)
	(2,456,885)	1,795,622
Taxation	40,510	236,603
Net cash (used)/generated from operating activities	(2,416,375)	2,032,225
Cash Flows from Investing Activities
Interest received	7,012	10,440
Dividend income received from associated and joint venture companies	154,736	92,065
Purchases of property, plant and equipment	(510,083)	(761,764)
Purchase of trademarks and licences	(9,594)	(12,820)
Disposal of subsidiary	2,260,270	-
Acquisition of subsidiary	(133,630)	-
Acquisition of joint venture	-	(122,039)
Net cash generated/(used) in investing activities	1,768,711	(794,118)

Cash Flows from Financing Activities
Interest paid	(70,804)	(57,980)
Repayment of  term loan	(255,608)	(264,574)
Dividend paid to shareholders	(88,397)	(88,397)
Dividends paid to non-controlling interests	(23,768)	(23,361)
Finance leases	(86,039)	(126,254)
Net cash used in financing activities	(524,616)	(560,566)
Effect of foreign exchange rate changes on consolidation	68,596	40,922
Net (decrease)/increase in cash and cash equivalents	(1,103,684)	718,463
Cash and cash equivalents at the beginning of the year	3,810,375	3,091,912
Cash and cash equivalents at the end of the year	2,706,691	3,810,375

Cash and cash equivalents consist of the following:

	2012	2011
	£	£
Cash and bank balances	2,700,140	3,755,548
Fixed deposits	6,551	54,827
	2,706,691	3,810,375

AEC EDUCATION PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012

1          General

AEC Education plc (the "Company") is a public limited liability company incorporated in England and Wales on 8 July 2004. The Company was admitted to AIM on 10 December 2004. Its registered office is Witan Gate House, 500-600 Witan Gate West, Milton Keynes MK9 1SH and its principal place of business is in Singapore.  The registration number of the Company is 05174452.

The principal activities of the Company are that of investment holding and provision of educational consultancy services. There have been no significant changes in the nature of these activities during the year.

The Board of Directors have authorised the issue of these financial statements on the date of the Statement by Directors.

2          Significant Accounting Policies

Basis of Preparation

The consolidated financial statements of the Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed and adopted for use in the European Union (EU).

The financial statements have been prepared on a going concern basis under the historical cost convention, except that certain financial instruments are accounted for at fair values. The principal accounting policies are set out below.

3          Segmental Information

All revenue and profit before taxation arises from operations in the education sector. Reportable segments are based on the geographical area where operations

Segmental analysis is as follows:

	Europe	South East Asia/Middle East	Total
2012	£	£	£
Revenue from external customers	6,639,932	8,453,262	15,093,194
Depreciation, write offs and amortisation	(703,589)	(320,975)	(1,024,564)
Restructuring costs	(729,937)	-	(729,937)
Impairment loss	(882,163)	-	(882,163)
Loss before taxation	(3,401,769)	(174,388)	(3,576,157)
Taxation credit	47,933	239,449	287,382
Loss on discontinued activities	-	(262,007)	(262,007)
Segmental assets	5,548,024	7,068,205	12,616,229
Segmental liabilities	(5,323,606)	(2,590,342)	(7,913,948)
Additions to non-current assets	892,948	218,466	1,111,414
2011
Revenue from external customers	9,839,306	9,305,686	19,144,992
Depreciation, write offs and amortisation	(373,584)	(260,718)	(634,302)
Impairment loss	-	(175,763)	(175,763)
Profit before taxation	81,788	278,309	360,097
Taxation (charge)/credit	(39,152)	21,227	(17,925)
Segmental assets	6,618,411	9,921,524	16,539,935
Segmental liabilities	(3,294,856)	(5,194,797)	(8,489,653)
Additions to non-current assets	362,439	534,184	896,623

4          Earnings/(Loss) Per Share

The basic earnings/(loss) per share was based on loss attributable to shareholders of £3,174,361 (2011: profit of £321,514) and the weighted average number of ordinary shares in issue during the year of 44,198,781 (2011: 44,198,781) shares.

The diluted earnings/(loss) per ordinary share was based on loss attributable to shareholders of  £3,174,361 (2011: profit of £321,514) and the weighted average number of ordinary shares in issue at during the year of 44,198,781 (2011: 47,899,375) shares diluted for the effect of share options and warrants. At 31 December 2012 there were 2,840,000 options (2011: 3,490,000 options) and no warrants (2011: 262,649) outstanding. Of these all 2,840,000 options (2011: 52,055 options and nil warrants) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

5            Property, Plant and Equipment

		Leasehold property and improvements		Classroom and office equipment		Motor vehicle		Total
		£		£		£		£
Cost
As at 1 January  2012	1,090,106		1,949,260		36,575		3,075,941
Additions	196,615		313,468		-		510,083
Additions on acquisition of  subsidiary	-		9,998		-		9,998
Disposals	(7,650)		(169,640)		-		(177,290)
Disposals on sale of subsidiary	(77,105)		(114,848)		-		(191,953)
Currency  realignment	3,789		(9,045)		(973)		(6,229)
As at 31 December 2012	1,205,755		1,979,193		35,602		3,220,550
Accumulated depreciation
As at 1 January 2012	574,745		999,322		16,168		1,590,235
Charge for the year - continuing activities	234,071		390,523		7,160		631,754
Charge for the year - discontinued activities	6,564		9,778		-		16,342
Write-down of equipment	68,621		151,596		-		220,217
Disposals	(7,650)		(145,306)		-		(152,956)
Disposals on sale of  subsidiary	(60,452)		(108,445)		-		(168,897)
Currency realignment	1,962		(7,741)		(579)		(6,358)
As at 31 December 2012	817,861		1,289,727		22,749		2,130,337
Net book value
At 31 December 2012	387,894		689,466		12,853		1,090,213

The write-down of equipment occurred as a result of the closure of two schools and separate offices in London as part of the restructuring which occurred during the year ended 31 December 2012.

		Leasehold property and improvements		Classroom and office equipment		Motor vehicle		Total
		£		£		£		£
Cost
As at 1 January  2011	770,525		1,684,777		37,646		2,492,948
Additions	331,858		429,906		-		761,764
Disposals	(5,289)		(143,001)		-		(148,290)
Currency  realignment	(6,988)		(22,422)		(1,071)		(30,481)
As at 31 December 2011	1,090,106		1,949,260		36,575		3,075,941
Accumulated depreciation
As at 1 January 2011	346,071		788,578		9,221		1,143,870
Charge for the year	232,112		369,758		7,196		609,066
Disposals	(1,845)		(141,485)		-		(143,330)
Currency realignment	(1,593)		(17,529)		(249)		(19,371)
As at 31 December 2011	574,745		999,322		16,168		1,590,235
Net book value
At 31 December 2011	515,361		949,938		20,407		1,485,706

6          Intangible Assets

Intangible assets are summarised as follows:

	2012	2011
	£	£
Net book values
Licences	747,034	2,761,807
Brands	3,600,000	3,750,000
Trademarks	10,922	9,593
	4,357,956	6,521,400
Analysed as follows:
Indefinite lives	734,046	6,484,051
Definite lives	3,623,910	37,349
	4,357,956	6,521,400

Licences

Licences are summarised as follows:

	2012	2011
	£	£
Cost
At the beginning of the year	2,845,940	2,864,161
Additions	3,814	5,902
Disposal of subsidiary	(2,013,855)	-
Currency alignment	11,595	(24,123)
At the end of the year	847,494	2,845,940
Accumulated amortisation
At the beginning of the year	84,133	68,847
Charge	18,142	16,766
Currency alignment	(1,815)	(1,480)
At the end of the year	100,460	84,133
Net book value	747,034	2,761,807
Analysed as follows:
Indefinite life	734,046	2,734,051
Definite life	12,988	27,756
	747,034	2,761,807

Brands

Brands are summarised as follows:

	2012	2011
	£	£
Cost
At the beginning of the year	3,750,000	3,750,000
At the  end of the year	3,750,000	3,750,000
Accumulated amortisation
At the beginning of the year	-	-
Charge	150,000	-
At the end of the year	150,000	-
Net book value	3,600,000	3,750,000
Analysed as follows:
Indefinite life	-	3,750,000
Definite life	3,600,000	-
	3,600,000	3,750,000

Trademarks

Trademarks are summarised as follows:

	2012	2011
	£	£
Cost
At the beginning of the year	15,017	8,099
Additions	5,780	6,918
At the end of the year	20,797	15,017
Accumulated amortisation
At the beginning of the year	5,424	3,568
Charge	4,451	1,856
At the end of the year	9,875	5,424
Net book value	10,922	9,593
Analysed as follows:
Definite life	10,922	9,593

7           Goodwill

	2012	2011
	£	£
Cost
Balance as at the beginning of the year	1,141,242	1,339,584
Acquisition of subsidiary	591,737	-
Disposal of subsidiary	(678,040)	-
Impairment loss	(591,737)	(175,763)
Currency alignment	(16,644)	(22,579)
Balance as at the end of the year	446,558	1,141,242

Goodwill has arisen on acquisitions by the Group.

During the year ended 31 December 2012, the Group acquired Malvern House Training Solutions Limited with goodwill on consolidation calculated as £591,737.

The goodwill relating to Malvern House Training Solutions Limited was reassessed and a provision to write this down to £nil was created at 31 December 2012.

In addition to the impairment loss of £591,737 a further £290,426 has been charged in the Consolidated Income Statement in respect of the non-controlling interest in Malvern House Training Solutions Limited which gives a total impairment of £882,163.

During the prior year, the impairment of goodwill on acquisitions arose on the provision made against BrainBox Limited of £24,831 on its closure and Smartworks Learning Centre Pte Ltd of £150,932 since it was no longer a profit generating company.

8          Share Capital

	2012	2011
	£	£
Authorised:
50,000,000 ordinary shares of 10p each	5,000,000	5,000,000
Allotted, called up and fully paid:
At the beginning and end of the year
- 44,198,781 (2011: 44,198,781) ordinary shares of 10p each	4,419,878	4,419,878

9           Annual Report

The Annual Report will be sent to shareholders by close of business on or around 4 June 2013. Additional copies will be available to the public, free of charge, from the Company's website www.aeceducationplc.co.uk.

 

END

 

 

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