I am pleased to report another year of record growth in 2008. For 2008, we achieved a record-breaking net profit of S$99.4 million, up 95.9% from the S$50.8 million recorded in FY2007. This was achieved on the back of a 53.2% increase in revenue to S$190.0 million in FY2008.
Excluding extraordinary items for negative goodwill, fair value adjustment, finance and amortization costs amounting to S$14.8 million, our net profit attributable to shareholders was S$84.0 million, reflecting a 70.4% growth as compared to FY2007.
Our strong performance was a result of organic growth, strategic acquisitions in China and economies of scale. We achieved increased student enrolment and course fees as well as new contributions from our acquisitions of Oriental University City (OUC), Hefei Wanbo College (Wanbo) and Shaanxi Electronic Information Institute (Shaanxi) in China.
Good Progress in China and India
In October 2007, we acquired the OUC in Langfang City, Hebei Province. To us, this represents a strategic development that will entrench our leadership position and set us as the largest private education provider in the Asia-Pacific region. A 3.31 million square metre self-contained campus, it houses 19 colleges and 57,000 students. Over the next few years, we intend to start-up more colleges within the campus to provide more education opportunities and attain higher economies of scale.
Apart from this, we have also acquired both Wanbo and Shaanxi in March and May respectively this year. Wanbo provides three-year diploma programmes in science majors, literature and arts whilst Shaanxi focuses on vocational and technical education, including diploma courses in computer science and information technology.
Another exciting development for the Group is our very first partnership in India. The Company has established two joint ventures with Educomp, the largest education company in India. This is a new growth engine for the fast-growing Indian market.
We will continue to be prudent in our expansion approach, with a clear focus on both personnel and financial resources. Indeed, our balance sheet has further strengthened with an increase of 111.3% in net asset value per share to 16.06 cents as at June 30, 2008, with cash and cash equivalents of S$68.5 million.
Aligning for Growth
In line with our restructuring efforts to consolidate and rationalize our assets and achieve better cost controls, we have de-listed both Hartford Education Corporation Limited and China Education Limited (formerly known as Easycall International Limited) during the year under review.
Overall, with these recent developments, we have re-aligned and sharpened our focus and we now operate three universities and 25 colleges across nine countries in the Asia-Pacific region: Singapore, China, India, Vietnam, Malaysia, Thailand, Mongolia, Australia and New Zealand.
We continue to manage 55 International Admissions Offices in 52 major cities spread over 15 countries. These offices form an integral part of our regional recruitment network and remain a key driver to the Group’s student enrolment.
Outlook and Prospects
For the financial year ending June 2009, we expect to maintain our current gearing levels and continue our current policy in paying reasonable dividends. We will fund the acquisitions’ instalments due this year through internally generated funds.
Having experienced various business cycles and steered the Group through a few crises safely, including the Asian financial crisis, the management team is confident that the Group is well-versed to handle future opportunities and challenges. The education industry and our business model are generally resilient in any economic slowdown.
Looking ahead, we will continue to expand our business through the establishment of more colleges in the region, value creation of Oriental University City as well as through strategic acquisitions. The continued development of our proprietary courseware will also reinforce our brand name regionally.
With a scalable business model in the growing education industry and a proven track record, we are confident of continued growth for the future.
A Word of Thanks
In appreciation of the support from our loyal shareholders, we are pleased to propose a final, tax-exempt dividend of 1.0 cent per ordinary share, payable on November 14, 2008, making a total of 2.95 cents per ordinary share.
I would also like to express my gratitude to the Board, our dedicated staff, shareholders, stakeholders and business associates, for their contributions and encouragement towards the growth of the Group.
Mr Chew Hua Seng
Chairman & CEO |
