Interim Results

AEC Education plc 31 August 2007 AEC Education plc Unaudited Results for the six months ended 30 June 2007 AEC Education plc (the 'Group', 'AEC Education', 'AEC' or the 'Company'), the provider of educational courses up to postgraduate degree levels in Singapore, Malaysia and Vietnam, is pleased to announce it's un-audited interim results for the six months ended 30 June 2007. Highlights • The Group's revenue on continuing operations was up 34% at £1,036K (2006: £773K) • Profits before tax were 14% of revenue providing profits after tax and minority interests of £114K (2006: Loss £104K) • The restructuring of the Group combined with the rationalisation of it's product portfolio and 2 small but focused synergistic acquisitions have provided significant revenue growth and a much improved bottom line for the period For further information, please contact: AEC Education plc Haider M Sithawalla Director - Finance AEC Edu Group Pte Ltd email : hmsithawalla@aec.edu.sg Nabarro Wells & Co Ltd - NOMAD David Nabarro Email : davidnabarro@nabarro-wells.co.uk Phone +44 (0)20 7710 7401 Notes to Editors AEC Education PLC is the UK holding company for a number of companies in Singapore, Malaysia and Vietnam that provide educational services to approximately 16,000 students in the Asia-Pacific region: source of the fastest-growing market for international students. The Group offers class-based instruction at its various educational campuses in the Central Business District of Singapore, Malaysia and Vietnam and distance learning, up to postgraduate levels. It also provides degree qualifications on behalf of several leading international universities, targeting the large volumes of overseas students in that region in line with the Singapore Government's Global Schoolhouse Vision to make Singapore an Education Hub. AEC's aim is to be a leader in quality education through facilitating learning, fostering creativity and developing knowledge, skills and confidence in its students. The Group's recognition by the Singapore Government as a prestigious and forward-moving company is shown by its receipt of four Singapore Quality Class Awards. In August 2006, AEC was again awarded the 'Case Trust' Certification for Private Education Organizations, a student protection scheme for foreign students. This further endorses AEC's position as a recognized quality provider in the education industry. Chairman's Statement Financial Review Unaudited results for the six months period up to 30 June 2007 showed a turnover of £1,036K - 34% higher than for the same period in 2006. During this period, the Group recorded profits after tax and minority interests of £114K. The turnaround in profits reflects the strength of the programs that we introduced towards the end of last year and of and the Company's policy of making small strategic acquisitions. We expect the momentum of these results to continue. Company Strategy We will continue to pursue synergistic acquisitions and partnerships to further build revenue and profits in the future. The newly launched Hospitality program has seen immediate results and we are intending to spread the development of this program throughout our region. We have initiated a twinning program between the Singapore and Vietnam schools for the Hospitality Management program. Further, our market development effort in Vietnam for the LCCI programs is also likely to see rewards during this year. In anticipation of the increased demand in the second half of the year, the school at Ho Chi Minh City has moved to larger premises. Smartworks in Singapore is providing a new platform for us to work closely with University of Southern Australia (UniSA). We are in the midst of finalizing the details for a full-time degree course in Property Management to be launched in Singapore and Vietnam. Going forward, we will be expanding the range of our twinning programs in India, Nepal and China. We also plan to launch a Nursing Aid program later this year or early next year which will feed into the Nursing Diploma programs. A part of our strategy for growth this year is the relocation of our headquarters in Singapore and the associated campus to larger and more modern premises in the Bukat Merah district of Singapore. This new campus will have better infrastructure to meet the increased technology demands of the new media and communication courses that have been introduced recently. It will cater for the growing number of students on campus with a larger number of classrooms and other support facilities. Dividends No interim dividends are recommended by the Board. Outlook The Board is looking at complementary acquisitions in the region in order to expand it presence and catchment area for student recruitment. In the interim, it is also deepening the impact of its newly launched programs by broadening its existing partnerships with established Educational institutions. There will be a cost associated with the relocation of our Singapore headquarters later this year. We anticipate that this will cost £165K which will be written off over 6 years. The Board continues to take the necessary measures to increase revenue and, to implement strategic investment to strengthen long term profitability and return to shareholders. We will also continue to invest in the operations so that relative costs are driven down as we expand the Group's revenue base. Liam Swords (Chairman) UNAUDITED CONSOLIDATED PROFIT AND LOSS STATEMENT Group Group ------- ------- Six months Six months ------------ ------------ To To ---- ---- 30 June 30 June --------- --------- Note 2007 2006 ------ ------ £'000 £'000 --- ------- ------- Unaudited Unaudited Turnover Sales of services and other revenue (4) 1,036 773 Cost of Sales (955) (941) --------- ----------- Operating Profit/(loss) 81 (168) --------- ----------- Profit/(loss) from operations 81 (168) Share of results of associated companies 66 60 --------- ----------- Profit/(loss) on ordinary activities before taxation 147 (108) Tax on profit on ordinary activities (33) - --------- ----------- Profit/ (loss) on ordinary activities after taxation 114 (108) Minority interests - 4 --------- ----------- Profit / (loss) for the period 114 (104) --------- ----------- (Accumulated Loss) / Retained Profits brought forward (242) 30 Profit/(loss) for the period 114 (104) Dividends (6) - - --------- ----------- --------- ----------- (Accumulated loss) carried forward (128) (74) --------- ----------- Earnings / (Loss) per share Pence Pence --------- ----------- Basic (6) 0.8 (0.7) --------- ----------- UNAUDITED CONSOLIDATED BALANCE SHEET Note As at As at ------ ------- ------- 30 June 2007 30 June 2006 -------------- -------------- £'000 £'000 ------- ------- Unaudited Unaudited Fixed assets Intangible Assets 160 5 Tangible Assets 135 166 Investments in associated companies (7) 1,352 1,437 --------- --------- 1,647 1,608 Current Assets Debtors 921 741 Cash at bank and in hand 164 73 --------- --------- 1,085 814 Creditors Amounts falling due within one year (940) (491) --------- --------- Net Current Assets 145 323 --------- --------- Total Assets 1,792 1,931 Deferred taxation - - Minority interest - (3) --------- --------- 1,792 1,928 --------- --------- Capital and Reserves Called up share capital 1,491 1,491 Share Premium 243 243 Reserves 58 194 --------- --------- Total Equity Shareholders funds 1,792 1,928 --------- --------- UNAUDITED CONSOLIDATED CASH FLOW STATEMENT Six months Six months 30 June 2007 30 June 2006 Unaudited Unaudited £'000 £'000 Cash flow from operating activities 72 161 Returns on investment and servicing of finance Interest paid (3) (4) Taxation Taxes paid (23) (11) Capital expenditure and financial investment Purchase of tangible fixed assets (31) (48) Acquisition of subsidiary - (17) ----------- ---------- (31) (65) ----------- ---------- Cash flows from financing activities Increase in finance lease liabilities 20 - Repayment of finance leases - (2) Minority interests - 3 ----------- ---------- 20 1 ----------- ---------- Net increase in cash and cash equivalents 35 82 Cash and cash equivalents at beginning of period 76 (31) ----------- ---------- Cash and cash equivalents at end of period 111 51 ----------- ---------- Cash and cash equivalents consist of the following: Cash and bank balances 164 73 Bank overdraft (53) (22) ----------- ---------- 111 51 ----------- ---------- Reconciliation of profit before tax to cash flow Six months Six months 30 June 2007 30 June 2006 Unaudited Unaudited From operating activities Profit / (loss) before tax (104) 147 Adjustments for: Depreciation & amortisation 27 29 Inventories written off - 37 Provision for doubtful debts - 17 Interest paid 3 4 Share of results of associated companies (66) (60) (Increase)/ decrease in debtors (205) 161 Decrease in creditors 158 66 Decrease in inventories 6 12 Translation 2 (1) -------------------------------------- --------- Cash flow from operating activities 72 161 -------------------------------------- --------- Notes 1. Publication of non-statutory accounts and basis of preparation. The financial information contained in this interim report does not constitute statutory accounts for the period ended 30 June 2007. The financial information for the period ended 30 June 2007 is derived from the unaudited consolidated accounts of AEC Edu Group Pte Ltd for the period, consolidated with the unaudited accounts of the Company on a merger basis. The comparative figures for the period ended 30 June 2006, are those as published in the Company's half year announcement made on 15 September 2006. This report has been approved by the Board of Directors and is unaudited. This report does not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985. 2. General 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 principal activities of the subsidiary companies during the period. 3 Accounting Policies The unaudited results for the six months ended 30 June 2007 have been prepared on the basis of International Financial Reporting standards ('IFRS') and accounting policies consistent with those adopted for the year ended 31 December 2006, and to be adopted in respect of the year ending 31 December 2007. 4 Sale of Services June 2007 June 2006 £'000 £'000 Course fees and registration fees 809 537 Sales of systems and support services 165 169 Other income 62 67 -------------- ------------ 1,036 773 -------------- ------------ 5 Dividend During the current financial period, no dividend has been declared or recommended. 6 Earnings per share Basic earning per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the relevant period. The weighted average number of shares in issue during the period was 14,916,042 (2005: 14,916,042). 7 Investments in Associated Companies Details of associated companies held by AEC Edu Group Pte Ltd as at 30 June 2007 are as follows: Associated companies and Country of Principal activities Equity held by Incorporation (Place of business) the Subsidiary --------------- --------------------- -------------- June June ------ ------ 2007 2006 ------ ------ % % ------ ------ Keris Murni Sdn Provides education services 30 30 Bhd and the operation of education (Malaysia) tuition centers (Malaysia) Pusat Tuisyen Provides education services 30 30 Kasturi Sdn Bhd and the operation of education (Malaysia) tuition centres (Malaysia) Educational Provides consultancy services in 34.96 34.96 Resources Pte Ltd education, related services and (Singapore) business training ------ ------ This information is provided by RNS The company news service from the London Stock Exchange

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