Raffles Education profit down 24% to S$5.6mn

The group forecasts that its comprehensive and sustainable education business model will propel its growth in the future.

Raffles Education Corporation Limited (“RafflesEducationCorp” or “the Group”), the largest private education provider in the Asia Pacific region, on Thursday reported a revenue of S$41.4 million and a net profit of S$5.6 million for the second quarter of FY2011, ended 31 December 2010 (“FY2011Q2”).

Revenue for FY2011Q2 decreased 12% to S$41.4 million from S$47.2 million reported in FY2010Q2 due mainly to foreign exchange translation loss on Renminbi denominated revenue and the decrease in National Education School students allocated to the Group on account of the decline in the overall number of students in China taking the Gao Kao. FY2011Q2 net profit after tax was S$5.6 million, a 24% decline from S$7.5 million in FY2010Q2.

Over the last few years, the Group has been enhancing its education portfolio, through organic growth, strategic acquisitions as well as developing its education business model. The Group has developed a sustainable growth model comprising twin drivers of education and development of education assets, according to a Raffles Education report.

Mr Chew Hua Seng, Chairman and CEO of RafflesEducationCorp, remarked, “The Group has a comprehensive and sustainable education business model that will propel its growth for many years to come. We are also starting to see results from the expansion of our network of colleges in the region as our new colleges take root. We are therefore confident and are pleased to announce the resumption of dividends starting with the declaration of an interim dividend of 0.15 cents per share for this half year.”

Outlook and Prospects
The Group will continue to build on its strong fundamentals including building depth at its existing colleges, expanding its college network, value creation of Oriental University City, enhancing its academic capability and executing strategic acquisitions.

The Board of Directors has declared a distribution to shareholders of 0.15 cents per share as first interim dividend for FY2011. The dividend rate would be effectively 0.45 cents per share after the proposed share consolidation exercise.

The Company has announced the proposal of a share consolidation of every three existing ordinary shares in the capital of the Company (including treasury shares) into one ordinary share in the capital of the Company on 1 February 2011. The proposal is subject to the approval of the SGX, and the Shareholders by way of ordinary resolution at an extraordinary general meeting to be convened.