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