Hello fellow investors and curious minds!
Today, we’re diving into the latest financial performance of a prominent Malaysian education and training group, as revealed in their quarterly report for the period ended 31 March 2025. This report offers a mixed bag of results, showcasing a dip in current quarter profits but also highlighting robust new student enrolments and exciting strategic expansions that could shape its future trajectory. What’s more, shareholders will be pleased to note a significant dividend declaration.
Let’s break down the numbers and understand the story behind them.
Q1 2025 Financial Highlights: A Closer Look
The first quarter of 2025 presented some challenges for the Group, with key financial metrics showing a decline compared to the same period last year. However, it’s crucial to look beyond just the headline figures and understand the underlying dynamics at play.
Current Quarter (31 March 2025)
- Revenue: RM48.38 million
- Profit Before Tax (PBT): RM2.28 million
- Profit for the period (Net Profit): RM1.88 million
- Basic Earnings Per Share (EPS): 0.15 sen
Preceding Year Corresponding Quarter (31 March 2024)
- Revenue: RM49.67 million
- Profit Before Tax (PBT): RM3.45 million
- Profit for the period (Net Profit): RM3.56 million
- Basic Earnings Per Share (EPS): 0.29 sen
Revenue for the quarter saw a modest decrease of 2.6%, falling to RM48.38 million from RM49.67 million in the corresponding period last year. More significantly, Profit Before Tax (PBT) declined by 33.9% to RM2.28 million, and net profit for the period dropped by 47.2% to RM1.88 million. Consequently, Basic Earnings Per Share (EPS) also saw a 48.2% reduction, settling at 0.15 sen.
The Group attributes this drop in profit primarily to the decline in revenue. However, the report also emphasizes a strong new enrolment of students, the positive effects of which are expected to materialize in the coming quarters.
Detailed Income Statement Summary
For a more granular view, here’s a summary of key items from the condensed consolidated statement of comprehensive income:
| Description | Q1 2025 (RM’000) | Q1 2024 (RM’000) |
|---|---|---|
| Revenue | 48,380 | 49,668 |
| Cost of services | (18,817) | (19,954) |
| Gross profit | 29,564 | 29,714 |
| Other income | 2,570 | 1,935 |
| Distribution expenses | (2,359) | (2,063) |
| Administrative expenses | (11,407) | (11,164) |
| Other expenses | (13,598) | (12,704) |
| Finance costs | (2,589) | (2,378) |
| Profit before tax | 2,283 | 3,452 |
| Income tax | (403) | 111 |
| Profit for the period | 1,880 | 3,563 |
This table further illustrates how various cost components, including administrative and other expenses, have increased, contributing to the lower profit before tax despite a relatively stable gross profit.
Financial Health and Cash Flow
Looking at the balance sheet and cash flow, we observe some shifts:
As at 31 March 2025
- Net Assets Per Share: RM0.0869
- Net Cash Generated from Operating Activities: RM8.93 million
As at 31 December 2024 (for Net Assets) / 31 March 2024 (for Cash Flow)
- Net Assets Per Share: RM0.0954
- Net Cash Generated from Operating Activities: RM5.89 million
Net assets per share stood at RM0.0869 as of 31 March 2025, a decrease of 8.9% from RM0.0954 at the end of the preceding financial year. This is mainly due to a dividend payment of RM12.219 million during the quarter.
On a more positive note, the Group demonstrated robust cash generation from operations, with net cash generated increasing by a significant 51.5% to RM8.93 million for the current quarter, compared to RM5.89 million in the corresponding period last year. This indicates healthy operational cash flow despite the profit decline.
Shareholder Returns: A Welcome Dividend
In a positive development for shareholders, the Board of Directors declared a first interim dividend of 1.00 sen per ordinary share for the financial year ending 31 December 2025. This dividend, amounting to RM12.2 million, was paid on 20 February 2025. This marks a notable return to shareholders, especially when compared to no dividend declared in the corresponding period last year.
Strategic Directions and Future Prospects
Despite the short-term profit dip, the Group is actively pursuing several strategic initiatives aimed at long-term growth and diversification. These efforts reflect a proactive approach to evolving market demands and expanding its reach.
