Interim Results for the six months ended 30 June 2007
AEC Education plc
Interim 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 : mailto: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 66 60
companies
Profit/(loss) on ordinary activities 147 (108)
before taxation
Tax on profit on ordinary activities (33) -
Profit/ (loss) on ordinary activities 114 (108)
after taxation
Minority interests - 4
Profit / (loss) for the period 114 (104)
(Accumulated Loss) / Retained (242) 30
Profits brought forward
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 147 (104)
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 34.96 34.96
Resources Pte Ltd services in
(Singapore) education, related services
and business training