Final Results

RNS Number : 2897I
AEC Education plc
29 May 2014
 



29 May 2014

AIM: AEC

 

 

AEC EDUCATION PLC

("AEC" or "the Group")

 

Full Year Results

 for the 12 months ended 31 December 2013

 

Key Points

 

·      London returned to profitably and Ireland produced a small operating profit in this its first full year of trading but results in Singapore and residual costs from the funded operation closed last year impacted severely

 

·      Revenues on continuing activities of £11.3m (2012: £15.1m) showed a reduction of 25% due largely to the reduction  in business in Singapore

 

·      Losses before tax and discontinued activities of £1.73m  (2012: loss before tax of £3.58m)

 

·      Statutory loss before tax of £2.73m (2012: loss before tax of £3.84m)

 

·      Loss per share on continuing activities is 4.17p (2012: loss per share of 6.59p)

 

·      Statutory loss per share of 6.35p (2012: loss per share of 7.18.p)

 

·      Net cash of £1.48m (2012: £2.71m)

 

·      Malaysian revenue held up despite the troubles in Northern Africa  - one of its major markets and it was profitable

 

·      Cyprus returned reduced profits reflecting the impact of the banking crisis in the early part of the year

 

·      Oman failed to gain traction.

 

·      Cinnovation involvement and the wide range of developments now being pursued leads the Board to conclude that these will enable AEC to grow profitably in the immediate future.

 

 

Liam Swords, Chairman of AEC, commented,

 

"The year under review again proved to be very challenging with visa policies continuing to affect the market for London and the impact of the loss of EduTrust status impacting greatly on the results.  The fact that London has returned to profitably and our new operation in Dublin returned an operating profit in its first full year of trading augurs well for 2014.  Additionally, action taken to enable Singapore to target breakeven in 2014 and the opportunity for growth in profits in Malaysia and Cyprus are encouraging signs for a return to profit."

 

Enquiries

 

AEC Education Plc

 

Liam Swords tel: 07725 836 811

 

W H Ireland

 

Andrew Kitchingman / James Bavister            tel: 0207 220 1666

AEC EDUCATION PLC

ANNUAL REPORT

YEAR ENDED 31 DECEMBER 2013

CHAIRMAN'S STATEMENT

 

 

Overview

 

The year under review proved to be one of very mixed fortunes. Trading in our London operation continued to be very challenging but did return a marginal operating profit. Cyprus was affected by the banking crisis in the first and second quarters which reduced its usual level of performance but it did provide a small operating profit. Ireland grew substantially and showed a small operating profit in this its first full year of trading and Malaysia fully regained the ground lost following the Middle East crisis and was profitable. Unfortunately these hard won successes were negated by Oman which continued to lack traction and recorded an Operating Loss. Also our Singaporean operation was severely affected by the withdrawal of its EduTrust status at the beginning of August resulting in very material provisions having to be made for teaching out its international student population.

 

The withdrawal of EduTrust in Singapore meant that it could no longer recruit overseas students and cost levels could not be reduced whilst we applied for reinstatement. The impact was severe in both profit and cash terms and is more fully quantified below. With London, Ireland, Malaysia and Cyprus now in a position to trade profitably and other initiatives taken to stabilize Singapore we should see a return to profitably this year. Additionally the introduction of Cinnovation as a major investor and their interest in assisting growth has meant we have planned some significant new initiatives in Europe in 2014.

 

 

Financial results

 

Group revenues on continuing activities for the year to 31 December reduced by 25% to £11.3m (2012: £15.1m). The reduction was partly due to the continuing impact of the closure of two schools in London the previous year and the continuing negative impact of the current visa policies on student recruitment in the UK. Also the cessation of student recruitment in Singapore caused their revenue to reduce by 36% year on year. The Group's loss before tax from continuing operations was £1.73m (2012: loss before tax £3.58m).

 

The London operation recorded an operating profit of £45k which after finance charges was a loss of £141k. Ireland also recorded an operating profit of £16k which after interest and central charges was a loss of £49k. In Asia, the Singapore college recorded a pre-tax loss of £1.19m and Malaysia returned a profit of £27k. Additionally our share of the profit from our joint venture in Cyprus was £8k which after finance and group charges was a loss of £20k and Oman showed an operating loss of £91k (£241k after charging £150k for the impairment of the Malvern House brand).  The initiatives we have taken in Singapore to reduce costs and to focus on the local market, following an unsuccessful application to regain EduTrust, should return it to breakeven or at worst a marginal loss in 2014.

 

The loss per share was 6.35p (2012: 7.18p). The net cash outflow from operating activities was £1.51m (2012: outflow of £2.42m).

 

Net cash at the end of the year stood at £1.48m (2012: £2.71m).

 

 

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 2013 (2012: 0.00p per share).

 

 

 

 

Business Review

 

In Asia, our operations in Singapore suffered a severe setback resulting from the withdrawal of EduTrust status. The impact was reduced revenue of 25% and a loss before tax of £1.19m - £1.42m after tax. We have reduced the operation down to a level consistent with servicing the local market with a range of vocational programmes with the expectation of breaking even in 2014.

 

Our operations in Malaysia maintained the level of student numbers and revenue generated last year despite the continuing troubles in its markets in Northern Africa. This was achieved by an increase in the revenue from the undergraduate and professional programmes in the local market.  Revenue in Malaysia was about the same as the previous year but profits before tax were reduced to £27k (2012 £70k) because of the need to compete more strongly in the local market. In 2014 we are introducing new Islamic Diplomas as well as a new range of undergraduate business degrees and two new post graduate degrees. All the Asian financial operations are now centred in Malaysia. We are continuing to invest in Malaysia and an ambitious growth programme is expected to show a significant increase in profits in 2014 and to take a further step towards achieving the ultimate objective of becoming a "deemed university" with its own campus.

 

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 and the negative views portrayed by this overseas continued during 2013. This made the market for our remaining UK school in Kings Cross difficult, and this, combined with the reduction in capacity implemented last year, reduced revenue year on year by 36%. The remaining operation produced a small operating profit of £45k (2012 loss £1.38m). The return to profit at operational level was a significant milestone and there is confidence that this success can be built on in 2014. We recorded a loss on discontinued activities of £0.38m due to writing off the residual costs relating to the funded training operation closed last year.

 

Ireland achieved revenue of £1.41m in this its first full year of trading and produced an operating profit of £16k. Finance and central charges created a loss before tax of £49k. Ireland trialled a Summer School last year which mirrored the strong results traditionally achieved in Cyprus so it will add a full Summer School during 2014. This combined with continuing strong growth in the core EFL business leaves it in a position to show significantly improved results in 2014.

 

Our joint venture in Cyprus was severely affected by the banking crisis in the first and second quarters but still achieved about the same revenue as the previous year. Operating profits were affected such that our share of the Joint Venture was £8k and we recorded a loss before tax of £20k after allocating a share of central costs. The agreement signed with UCLan (University of Central Lancashire) in 2014 to deliver pre-sessional English and a University Taster Programme combined with a return to growth provides a strong opportunity for Cyprus to return to its normal level of profit during 2014. 

 

Oman has not lived up to expectation. Student interest is low and it has not yet proved possible to expand into the surrounding regions. The result was an operating loss of £91k (£241k after charging £150k for the impairment of the Malvern House brand). Steps are being taken with our partners to improve the situation.

 

 

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. The level of support as we implemented the necessary changes to ensure the Group returns to sustainable profit growth is very much appreciated by the Board.

 

Prospects

 

2013 was a very difficult year in Singapore and the market in the UK remains constrained by visa restrictions and the negative attitude perceived by overseas students of Government policy. Our investment in the expansion of the Malvern brand internationally as well as London and Malaysia returning to profit leads the Board to expect the Group to show a significantly improved performance in 2014. The recent shareholding taken up by Cinnovation and their strong interest in supporting AEC to achieve its full potential leads the Board to conclude that the wide range of developments now being pursued will enable AEC to grow profitably in the immediate future.

 

 

Liam Swords

Chairman  

 

28 May 2014

 

 

 

AEC EDUCATION PLC



CONSOLIDATED INCOME STATEMENT



FOR THE YEAR ENDED 31 DECEMBER 2013










2013

2012


£

£

Revenue



Sale of services

10,989,755

14,776,108

Other income

314,123

317,086


11,303,878

15,093,194




Cost of services sold

6,978,791

7,573,112

Salaries and employees' benefits

2,770,010

4,212,032

Amortisation of brand, licences and trademarks

144,957

172,593

Depreciation of plant and equipment

437,778

631,754

Other operating expenses

2,213,560

4,192,137

Restructuring of activities

-

729,937

Impairment or write-down of property, plant and equipment

287,390

220,217

Brand impairment

150,000

-

Goodwill impairment

-

882,163

Total operating costs and expenses

12,982,486

18,613,945




Operating loss

-1,678,608

-3,520,751




Share of results of associated companies and joint ventures

-4,320

15,398

Finance costs

-45,875

-70,804







Loss before income tax

-1,728,803

-3,576,157

Income tax (charge)/credit

-235,459

287,382




Loss for the year from continuing activities

-1,964,262

-3,288,775




Loss for the year from discontinued activities

-998,323

-262,007




Loss for the year

-2,962,585

-3,550,782




Attributable to:



Equity holders of the Company

-2,904,688

-3,174,361

Non-controlling interest

-57,897

-376,421


-2,962,585

-3,550,782




Loss per share on continuing activities



 (in pence)



Basic

-4.17

-6.59

Diluted

-4.17

-6.59




Loss per share on discontinued activities



 (in pence)



Basic

-2.18

-0.59

Diluted

-2.18

-0.59




 

 

 

 

AEC EDUCATION PLC



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


FOR THE YEAR ENDED 31 DECEMBER 2013










2013

2012


£

£




Loss for the year

-2,962,585

-3,550,782




Foreign currency translation movements

-19,465

185,517




Other comprehensive (expense)/income for the year

-19,465

185,517




Total comprehensive income for the year

-2,982,050

-3,365,265




Attributable to:



Equity holders of the parent

-2,917,515

-3,020,171

Non-controlling interest

-64,535

-345,094

Total comprehensive income for the year

-2,982,050

-3,365,265













AEC EDUCATION PLC



STATEMENTS OF FINANCIAL POSITION



AS AT 31 DECEMBER 2013







2013

2012

TOTAL ASSETS

£

£

Non-Current Assets



Property, plant and equipment

763,033

1,090,213

Investment in associated companies

16,668

29,395

Investment in joint ventures

26,074

66,653

Intangible assets

3,603,250

4,357,956

Goodwill

420,324

446,558

Deferred tax asset

-

233,031


4,829,349

6,223,806




Current Assets



Inventories

9,229

21,858

Trade receivables

908,710

1,948,591

Other receivables and prepayments

990,959

1,575,099

Tax recoverable

9,806

8,581

Due from joint ventures

95,897

105,438

Due from related parties

3,798

26,165

Cash and cash equivalents

1,475,351

2,706,691


3,493,750

6,392,423




Total Assets

8,323,099

12,616,229




EQUITY AND LIABILITIES



Non-Current Liabilities



Financial liabilities

63,048

94,390

Deferred taxation liability

22,275

24,249


85,323

118,639




Current Liabilities



Trade payables

263,303

652,045

Deferred income

2,160,688

3,813,401

Other payables and accruals

2,247,962

2,969,251

Due to related parties

660,810

24,291

Financial liabilities

112,107

284,564

Provision for income tax

7,736

51,757


5,452,606

7,795,309




Total liabilities

5,537,929

7,913,948




Equity attributable to equity holders of the Company



Share capital

5,362,491

4,419,878

Share premium

896,111

707,588

Reserves

-3,299,285

-381,770


2,959,317

4,745,696

Non-controlling interests

-174,147

-43,415

Total equity

2,785,170

4,702,281




Total Equity and Liabilities

8,323,099

12,616,229




 

 

AEC EDUCATION PLC








CONSOLIDATED STATEMENT OF CHANGES IN EQUITY




FOR THE YEAR ENDED 31 DECEMBER 2013


















Share

Share

Other

Other

Other

Other


Attribut-

Non- controlling



Capital

Premium

Reserves

Reserves

Reserves

Reserves

Total Of

able to

Interests

Total




Share-Based

Retained

Trans-

Capital

Other

Equity






Payment

Earnings

lation

Reserve

Reserves

Holders of






Reserve


Reserve



The Company




£

£

£

£

£

£

£

£

£

       £












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
























Share

Share

Other

Other

Other

Other


Attribut-

Non-


Capital

Premium

Reserves

Reserves

Reserves

Reserves

Total Of

able to

controlling

Total



Share-Based

Retained

Trans-

Capital

Other

Equity

Interests




Payment

Earnings

lation

Reserve

Reserves

Holders of





Reserve


Reserve



The Company




£

£

£

£

£

£

£

£

£

       £












Balance at 1 January 2013

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























Loss for the year

-

  -

 -

-2,904,688

 -

 -

-2,904,688

-2,904,688

-57,897

-2,962,585

Total other comprehensive income

 -

 -

 -

  -

-12,827

  -

-12,827

-12,827

-6,638

-19,465












Total comprehensive income for the year

 -

  -

 -

-2,904,688

-12,827

 -

-2,917,515

-2,917,515

-64,535

-2,982,050












Issue of new shares

942,613

188,523

-

-

-

-

-

1,131,136

-

1,131,136

Share based compensation transfer

  -

  -

-89,700

89,700

 -

  -

-

-

 -

-












Total transactions with owners

942,613

188,523

-89,700

-89,700

  -

 -

-

1,131,136

 -

1,131,136























Non-controlling interest acquired

 -

  -

  -

-

-

-

-

-

-125,489

-125,489

Impairment of carrying value

 -

  -

  -

-

 -

 -

-

-

59,292

59,292












Balance at 31 December 2013

5,362,491

896,111

239,044

-4,833,777

1,124,888

170,560

-3,299,285

2,959,317

-174,147

2,785,170

 

 

 

AEC EDUCATION PLC



CONSOLIDATED STATEMENT OF CASH FLOWS



FOR THE YEAR ENDED 31 DECEMBER 2013







2013

2012


£

£

Cash Flows from Operating Activities



Loss before income tax from continuing activities

-1,728,803

-3,576,157

Loss before income tax from discontinued activities

-998,323

-262,007




Adjustments for:



Amortisation of intangible assets

169,957

172,593

Depreciation of property, plant and equipment

437,778

648,096

Impairment and write down of property plant and  equipment

299,099

220,217

Impairment of intangible assets

600,000

-

Loss on disposal of plant and equipment

88,909

24,334

(Profit)/loss on disposal of subsidiary

-215,308

190,609

Interest expense

45,875

70,804

Interest income

-375

-7,012

Impairment of goodwill and minority interest

59,292

882,163

Share of results of associated companies and joint ventures  

4,320

-15,398


-1,237,579

-1,651,758




Changes in working capital:



Receivables

1,567,976

-690,420

Payables

-2,479,785

-47,085

Inventories

12,629

12,404

Related parties and associated companies

668,427

-80,026


-1,468,332

-2,456,885




Taxation

-39,638

40,510

Net cash used from operating activities

-1,507,970

-2,416,375




Cash Flows from Investing Activities



Interest received

375

7,012

Dividend income received from associated and joint venture companies

-

154,736

Purchases of property, plant and equipment

-528,009

-510,083

Purchase of trademarks and licences

-16,099

-9,594

Disposal of subsidiary

-11,606

2,260,270

Acquisition of subsidiary

-99,541

-133,630

Net cash (used in) /generated by investing activities

-654,880

1,768,711




Cash Flows from Financing Activities



Share issue

1,131,136

-

Interest paid

-45,875

-70,804

Repayment of term loan

-267,376

-255,608

Dividend paid to shareholders

-

-88,397

Dividends paid to non-controlling interests

-

-23,768

Finance leases

63,577

-86,039

Net cash generated by/(used in) financing activities

881,462

-524,616




Effect of foreign exchange rate changes on consolidation

50,048

68,596




Net decrease in cash and cash equivalents

-1,231,340

-1,103,684

Cash and cash equivalents at the beginning of the year

2,706,691

3,810,375

Cash and cash equivalents at the end of the year 

1,475,351

2,706,691







Cash and cash equivalents consist of the following:







2013

2012


£

£




Cash and bank balances

1,475,351

2,700,140

Fixed deposits

-

6,551


1,475,351

2,706,691

 

 

AEC EDUCATION PLC



NOTES TO THE FINANCIAL STATEMENTS



FOR THE YEAR ENDED 31 DECEMBER 2013






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 has authorised the issue of these financial statements on 28 May 2014.







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

 

 

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 are based.






Europe

South East Asia/Middle East

Total

2013

£

£

£

Revenue from external customers

5,080,994

6,222,884

11,303,878

Depreciation, write offs and amortisation

-415,496

-604,629

-1,020,125

Loss before taxation

-270,939

-1,457,864

-1,728,803

Taxation (charge)/credit

-6,460

-228,999

-235,459

Loss on discontinued activities

-380,629

-617,694

-998,323

Loss for the year

-658,028

-2,304,557

-2,962,585





Segmental assets

4,194,708

4,128,391

8,323,099

Segmental liabilities

-4,964,567

-573,362

-5,537,929

Additions to non-current assets

170,478

347,682

518,160

      




         

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 (charge)/credit

47,933

239,449

287,382

Loss on discontinued activities

-

-262,007

-262,007

Loss for the year

-3,353,836

-196,946

-3,550,782





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

 

 

4      Earnings/(Loss) Per Share




 





 

The basic earnings/(loss) per share on continuing activities was based on the loss attributable to shareholders of £1,906,365 (2012: loss of £2,912,354) and the weighted average number of ordinary shares in issue during the year of 45,753,464 shares (2012: 44,198,781 shares).

 





 

The basic earnings/(loss) per share on discontinued activities was based on the loss attributable to shareholders of £998,323 (2012: loss of £262,007) and the weighted average number of ordinary shares in issue during the year of 45,753,464 shares (2012: 44,198,781 shares).

 





 

The diluted earnings/(loss) per ordinary share on continuing activities and the diluted earnings/(loss) per share on discontinued activities are based respectively on the loss attributable to shareholders of £1,906,365 (2012: loss of £2,912,354) and loss attributable to shareholders of £998,323 (2012: loss of £262,007) and the weighted average number of ordinary shares in issue at during the year of 45,753,464 shares (2012: 44,198,781 shares) diluted for the effect of share options and warrants.

 





 

At 31 December 2013 there were 1,950,000 options (2012: 2,840,000 options) outstanding. Of these all 1,950,000 options (2012: 2,840,000 options) 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


£

£

£

£

Group 2013





Cost





As at 1 January 2013

1,205,755

1,979,193

35,602

3,220,550

Additions

111,182

416,827

-

528,009

Disposals

-348,506

-21,594

-36,248

-406,348

Disposals of subsidiary

-8,999

-17,576

-

-26,575

Currency realignment

-42,044

-77,312

646

-118,710

As at 31 December 2013

917,388

2,279,538

-

3,196,926






Accumulated depreciation





As at 1 January 2013

817,861

1,289,727

22,749

2,130,337

Charge for the year

15,698

417,914

4,166

437,778

Impairment in the year - continuing activities

104,705

182,685

-

287,390

Impairment in the year - discontinued activities

11,709

-

-

11,709

Disposals

-278,369

-11,749

-27,321

-317,439

Disposal of subsidiary

-8,999

-17,576

-

-26,575

Currency realignment

-33,907

-55,806

406

-89,307

As at 31 December 2013

628,698

1,805,195

-

2,433,893






Net book value





At 31 December 2013

288,690

474,343

-

763,033






An impairment charge of £100,325 during the year ended 31 December 2013 arose as a result of the decision made in London to cease using the student database during the ensuing year. The balance of £187,065 was a direct consequence of the decision to downsize the operation in Singapore following the loss of EduTrust status as was the £11,709 included within the loss on discontinued activities.







Leasehold property and improvements

Classroom and office equipment

Motor vehicle

Total


£

£

£

£

Group 2012





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

Charge for impairment

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 impairment charge during the year ended 31 December 2012 arose as a result of the closure of two schools and separate offices in London as part of the restructuring.

 

 

6        Intangible Assets










Intangible assets are summarised as follows:











Licences

Brands

Trademarks

Total


£

£

£

£

Group 2013





Cost





As at 1 January 2013

847,494

3,750,000

20,797

4,618,291

Additions

14,317

-

1,782

16,099

Currency alignment

-8,238

-

-

-8,238

As at 31 December 2013

853,573

3,750,000

22,579

4,626,152






Accumulated amortisation





As at 1 January 2013

100,460

150,000

9,875

260,335

Charge for the year - continuing activities

15,589

125,000

4,368

144,957

Charge for the year - discontinued activities

-

25,000

-

25,000

Charge for impairment - continuing activities

-

150,000

-

150,000

Charge for impairment - discontinued activities

-

450,000

-

450,000

Currency alignment

-7,390

-

-

-7,390

As at 31 December 2013

108,659

900,000

14,243

1,022,902






Net book value





At 31 December 2013

744,914

2,850,000

8,336

3,603,250    






Analysed as follows:





Indefinite life

734,046

-

-

734,046

Definite life

10,868

2,850,000

8,336

2,869,204


744,914

2,850,000

8,336

3,603,250











There is an annual amortisation charge for the Malvern House brand made in accordance with the stated accounting policy. In addition, following the loss of EduTrust status by AEC College Pte Ltd and the consequent inability to recruit foreign students, teaching of English language in Singapore which was branded as Malvern House, has now ceased. As a direct consequence the Board has reassessed the carrying value of the Brand attributable to that cash generating unit and concluded that a permanent impairment took place on the cessation of that activity. Accordingly a charge of £450,000 has been made for that permanent impairment of the Malvern House brand within the loss on the discontinued activities in the current year.






In addition, the Board has reviewed all ongoing cash generating units in accordance using the detailed procedures adopted by th Board and concluded that one, the school in Oman, can also no longer support the carrying value of the Malvern House brand with which it was previously attributed. Therefore, as shown in the table above, a further provision of £150,000 was made during the year ended 31 December 2013 to reflect this change. This impairment charge is set out on the face of the Consolidated Income Statement as the entity concerned is a continuing activity.







Licences

Brands

Trademarks

Total


£

£

£

£

Group 2012





Cost





As at 1 January 2012

2,845,940

3,750,000

15,017

6,610,957

Additions

3,814

-

5,780

9,594

Disposal of subsidiary

-2,013,855

-

-

-2,013,855

Currency alignment

11,595

-

-

11,595

As at 31 December 2012

847,494

3,750,000

20,797

4,618,291






Accumulated amortisation





As at 1 January 2012

84,133

-

5,424

89,557

Charge

18,142

150,000

4,451

172,593

Currency alignment

-1,815

-

-

-1,815

As at 31 December 2012

100,460

150,000

9,875

260,335






Net book value





At 31 December 2012

747,034

3,600,000

10,922

4,357,956






Analysed as follows:





Indefinite life

734,046

-

-

734,046

Definite life

12,988

3,600,000

10,922

3,623,910


747,034

3,600,000

10,922

4,357,956

 

 

7      Goodwill







2013

2012

 



£

£


Cost




Balance as at the beginning of the year

446,558

1,141,242


Acquisition of subsidiary

-25,948

591,737


Disposal of subsidiary

-

-678,040


Impairment loss

-

-591,737


Currency alignment

-286

-16,644


Balance as at the end of the year

420,324

446,558








Goodwill has arisen on acquisitions by the Group.




During the year ended 31 December 2013, the Group acquired the non-controlling interest in AEC Bilingual Pte Limited with negative goodwill of £25,948.




During the prior year, 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 the prior year, 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.

 

 

8     Share Capital












Allotted, called up and fully paid








Nominal


Nominal

Nominal


No of

value

No of

value

value


ordinary

ordinary

deferred

deferred

All


shares

shares

shares

shares

shares







At 1 January 2012 10p ordinary shares

44,198,781

4,419,878

-

 -

4,419,878







At 1 January 2013 10p ordinary shares

44,198,781

4,419,878

-

 -

4,419,878







Division of shares to 5p ordinary shares

 -

-2,209,939

44,198,781

2,209,939

-

Shares issue on 23 December 2013

18,852,262

942,613

-

 -

942,613

At 31 December 2013 5p ordinary shares

63,051,043

3,152,552

44,198,781

2,209,939

5,362,491













Until the division of the Company's shares on 20 December 2013 the par value of each existing ordinary share in the capital of the Company was 10p, which was the minimum price at which the Company's ordinary shares could be issued.







At that date the Company's existing ordinary shares had been trading at below the par value of 10p for quite some time, and in order to proceed with the planned subscription, the Company proposed to undertake a capital reorganisation so that the par value of its ordinary shares was reduced to 5p per ordinary share.







At the Extraordinary General Meeting held on 20 December 2013 the Shareholders approved splitting each issued existing ordinary share into one new ordinary share of 5p and one deferred share of 5p. As all rights remain with the new ordinary shares of 5p each these deferred shares are effectively valueless but remain part of the share capital of the Company.













9           Annual Report












The Annual Report will be sent to shareholders by close of business on or around 4 June 2014. Additional copies will be available to the public, free of charge, from the Company's website www.aeceducationplc.co.uk.







 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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