Raffles Education books higher profits

25 August 2010 , By The Straits Times

RAFFLES Education Corp eked out a 2.8 per cent rise in full-year net profits to $52.6 million in spite of a smaller pool of eligible students for its schools in China, and a fall in student recruitment amid the global recession.

A drop-off in the number of people taking the national exam for admission to tertiary institutions in China was a key factor accounting for a 6.9 per cent decline in full-year revenue to $188.1 million, the company said.

It operates four schools in China that run the National Education School system for university-eligible students.

Raffles Education, which manages colleges such as the Raffles Design Institute, said personnel expenses rose in the 12 months to June 30 owing to the higher headcount at the company and the setting up of new colleges.

The mainboard-listed firm went on an expansion drive, despite the uncertain recovery, establishing eight new colleges in India, Sri Lanka and Cambodia, after adding five the year before.

It has a portfolio of 36 colleges in 33 cities across 13 countries and is the largest private education firm in the Asia-Pacific.

Raffles Education is currently conducting a feasibility study, with plans on setting up a university campus in Malaysia's fast-growing Iskandar region.

Chairman and chief executive Chew Hua Seng said: 'The results are encouraging in spite of the higher initial expenses incurred with the rapid expansion of colleges in the region... This expansion will put us in good stead as global economies strengthen.'

Earnings per share fell to 2.01 cents from 2.17 cents, while net asset value per share at June 30 this year was 21.39 cents, up from 20.07 cents a year earlier.

The firm gained from the sale of a 10 per cent stake in the Hebei-based Oriental University City (OUC) to Malaysian investment company Khazanah Nasional earlier this year. But its cash holdings at the end of the financial year fell 12 per cent to $101.6 million from a year earlier.

The results were announced after the stock market closed. Its counter closed 1.6 per cent, or 0.5 cent, lower at 29 cents.