Final Results

RNS Number : 7392F
AEC Education plc
29 May 2013
 



AIM: AEC

 

 

AEC EDUCATION PLC

("AEC" or "the Group")

 

Full Year Results

 for the 12 months ended 31 December 2012

 

Key Points

 

·      Asian operations performed well but overall Group results impacted by significant non-recurring items principally relating to UK activities

 

·      Revenues on continuing activities of £15.1m (2011: £19.1m).  Total Group revenues of £16.5m including £1.4m contribution from Education Resources Pte Ltd ("ER"), disposed of in October 2012

 

·      Adjusted loss before tax before non-recurring items of £0.89m  (2011: profit before tax of £0.36m)

Statutory loss before tax of £3.84m (2011: profit before tax of £0.36m) including £2.95m of non-recurring items - of which £2.42m related to UK activities, £0.27 related to set up cost of new colleges in Ireland and Oman and the balance related to the disposal of ER

 

·      Adjusting for non-recurring items, loss per share of 1.98p (2011: earnings per share of 0.73p)

        Statutory loss per share of 7.15p (2011: earnings per share of 0.73p)

 

·      Net cash of £2.71m (30 June 2012: £2.90m and 31 Dec 2011: £3.81m)

  

·      In Asia - Singapore performed strongly, with revenues up 21% and PBT up 50% and Malaysia returned to profitability with revenues up 4% and student numbers back to pre-Arab Spring levels 

 

·      In UK - completed significant restructuring, including consolidating London activities into one site

 

·      Newer operations in Dublin and Oman showing encouraging progress; Cyprus JV -  strong progress

 

·      Board expects the Group to return to profitability in 2013

 

 

 

Liam Swords, Chairman of AEC, commented,

 

"The year under review proved to be very challenging, with markedly contrasting trading performances from our two key trading regions of Asia and the UK.  Our Asian operations performed well over the period with revenues on continuing activities up 14% year-on-year. By contrast, mainly as a result of poor trading in the UK, in part reflecting the UK government's actions on visas for overseas students, we have taken decisive action resulting in significant one-off write-offs which have impacted results. This tough but necessary action has put our UK activities on a firmer footing for 2013. This, along with our Asian operations performing well and our newer operations in Dublin, Oman and Cyprus gaining traction, leads us to expect that the Group will return to profitability in the current financial year. 

 

The Group's financial position remains healthy with net cash at the year end of £2.71m and good cash flows."

 

 

 

 

 

Enquiries:

 

AEC Education PLC


Tel: +44 (0)20 8308 4241

Liam Swords, Chairman


M:  +44 (0)7775 787427




WH Ireland Limited (NOMAD)


Tel: +44 (0)161 832 2174

Dan Bate






Biddicks


Tel: +44 (0) 20 3178 6378

Katie Tzouliadis/ Alexandra Shilov



 

 

 

 

CHAIRMAN'S STATEMENT

 

Overview

 

The year under review proved to be very challenging, with markedly contrasting trading performances from our two key trading regions of Asia and the UK.  Our Asian operations performed well over the period with revenues on continuing activities up 14% year-on-year. By contrast, mainly as a result of poor trading in the UK, in part reflecting the UK government's actions on visas for overseas students, we have taken decisive action resulting in significant one-off write-offs which have impacted results. This tough but necessary action has put our UK activities on a firmer footing for 2013. This, along with our Asian operations performing well and our newer operations in Dublin, Oman and Cyprus gaining traction, leads us to expect that the Group will return to profitability in the current financial year. 

 

The Group's financial position remains healthy with net cash at the year end of £2.71m and good cash flows.

 

Financial results

 

Revenues on continuing activities for the year to 31 December reduced by 21% to £15.1m (2011: £19.1m). The reduction was partly due to the exclusion of  revenues of £1.4m generated by Educational Resources Pte Ltd up to the time of its disposal in October 2012. Taking this into account Group revenues for the period were £16.5m (2011: £19.1). The Group's statutory loss before tax was £3.84m (2011: profit before tax of £0.36m). This result reflected non-recurring items totalling £2.95m, of which £2.42m of this relates to the Group's UK activities, £0.27m was incurred in the set up cost of the new colleges in Ireland and Oman during the first half year and the balance of £0.26m relates to the disposal of Education Resources Pte Ltd. After adjusting for these non-recurring items, the loss before tax for the year was £0.89m (2011: profit of £0.36m).

 

In Asia, the Singapore college recorded a pre-tax profit of £0.30m and Malaysia returned a profit of £0.07m.  Additionally our share of the profit from our joint venture in Cyprus, after the deduction of all marketing and sales costs, was £0.07m. Results from the new operations in Dublin and Oman show start up losses of £0.35m and £0.09m respectively.  However, we expect both our operations in Dublin and Oman to move toward profitability in 2013 as well as the English language teaching operations in London. In addition, prospects for our Asian operations in 2013 look encouraging.

 

Adjusting for one-off items the loss per share was 1.98p (2011: earnings per share of 0.73p) and the statutory loss per share was 7.15p (2011: earnings per share of 0.73p). 

 

The net cash outflow from operating activities was £2.42m (2011: inflow of £2.03m).

 

Net cash at the end of the year stood at £2.71m (30 June 2012: £2.90m and 31 December 2011: £3.81m).

 

Dividend

 

Given the Group's trading results, the Board does not intend to propose the payment of a final dividend for the year ended 31 December 2012 (2011: 0.20p per share).

 

Business Review

In Asia, our operations in Singapore performed strongly, with revenues rising by 21% and pre-tax profits up by 50% to £0.30m.  We continued to experience strong demand for our courses and expanded our facilities to meet that demand.  During the year we increased our focus on the direct recruitment of students as well as the local market, with pleasing results. We also strengthened the management team, with the appointment of Dr Chong Chee Leong as head of our Singapore operations in May 2012. He is leading an initiative to build new relationships with overseas universities to strengthen our position.  There has been significant momentum in this business over the last two years, aided by a tightening of quality standards in the private education marketplace by the Singapore Private Education Regulatory Authority and our early attainment of the prestigious EduTrust certification. The government continues to introduce new regulations to ensure that the marketplace operates to the highest standards. We expect our growth rate to steady a little given the strong Singaporean dollar and the slowdown in the country's economic growth but nonetheless remain confident about prospects for continuing expansion and we are moving forwards with our plans to launch a number of new programmes with new university partners in 2013.

Our operations in Malaysia saw a considerable rebound in student numbers, having been affected last year by the Arab Spring which led to a fall in numbers from the high volume markets in Northern Africa.  I am pleased to report that student numbers over the year under review returned to pre-Arab Spring levels, helped by the initiatives we implemented to grow student numbers and diversify into new markets. Revenue in Malaysia increased by 4% over the year and the operations returned to profitability, generating a pre-tax profit of £0.07m. Over half our students took an accounting programme and over 10% took an English language programme, with the majority of these students coming from Northern Africa.  All our Malaysian sites now operate under the 'Malvern House' brand and as well as focusing on new markets in the Middle East, we are building new partnerships with European universities.  In 2013, we are introducing bilingual programmes in logistics delivered in English and Mandarin, and English and Arabic. We continue to invest in Malaysia, in particular to raise the level of our programmes to position the business to take advantage of the opportunities for high performing education institutions in Malaysia to become 'deemed' universities, with their own university campuses.

As we have previously reported, our English language teaching operations in the UK have felt the significant effects of the changing legislation and regulations regarding visas and work permits for overseas students.  International students in private institutions are now not able to subsidise their study costs by working part time and uptake of long term courses has been particularly impacted.  In view of market conditions, we have reduced and restructured our Malvern House operations in London, consolidating all our activities into our Kings Cross site. This restructuring has incurred one-off costs of £0.95m. Additionally, we have closed the operation in the funded business, acquired in March 2012, after significant deficiencies emerged.  The cost of the write-off of this investment as well as the pre-acquisition losses (guaranteed but accounted for as non-recoverable) and the initial trading losses amounted to £1.5m, with £0.88m being impairment of goodwill and the non-controlling interest held by the vendors. Having taken this action, we are currently reviewing our overall position in the UK government funded sector.

In 2011, we established a number of initiatives to expand our English language school provision internationally under the Malvern House brand.  Our joint venture in Cyprus has made excellent progress and returned a pre-tax profit of £0.07m for our 50% stake. As well as a very strong English language summer school, we have expanded its provision and it now has an all-year offering, which is growing very well.  We believe that our Cyprus joint venture should continue to make good progress over 2013.  In the first half of 2012 we also launched colleges in Dublin and Oman and  incurred set-up costs of £0.27m. I am pleased to report that both colleges are progressing well, with student numbers growing.  We expect both colleges to move to profitability in 2013 and believe that they represent an attractive investment, enabling us to build on the strong reputation of Malvern House overseas.

In October 2012, we completed the sale of the Group's non-core examinations subsidiary, Educational Resources Pte Ltd, which provides London Chamber of Commerce & Industry examinations in Asia, to Pearson Education South Asia Pte Ltd for a total consideration of £2.9m cash of which £0.25m is held in escrow for any claims by the purchaser. 

 

Staff

 

On behalf of the Board I would like to thank all staff for their hard work and efforts during what has been a very difficult period. It is rewarding to see the positive attitude and support as we have implemented the necessary changes to ensure the Group returns to sustainable profit growth.

 

Prospects

 

2012 was a very difficult year in the UK operations but our investment in the expansion of the Malvern House brand internationally as well as the growth of our operations in Singapore and Malaysia and the completion of the restructuring in London gives us confidence that 2013 will see a return to growth and profits.

 

We still have strong cash balances, strong markets in Asia and new operations that are now gaining traction in Dublin and Oman and we have stabilized the operations in London. The Board feel that the range of developments now being achieved will enable AEC to return toprofitability in 2013.

 

 

Liam Swords

Chairman  

 

28 May 2013

 

 

 

  

 

 

 

 

AEC EDUCATION PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

 

 

 


2012

2011


£

£

Revenue



Sale of services

14,776,108

18,631,088

Other income

317,086

513,904

 

15,093,194

19,144,992




Cost of services sold

7,573,112

9,007,430

Salaries and employees' benefits

4,212,032

4,039,996

Amortisation of development costs

-

6,614

Amortisation of  brand, licences and trademarks

172,593

18,622

Depreciation of plant and equipment

631,754

609,066

Other operating expenses

4,192,137

4,997,893

Restructuring of activities

729,937

-

Write-down of equipment

220,217

-

Impairment loss

882,163

175,763

Total operating costs and expenses

18,613,945

18,855,384

 

Operating (loss)/profit

(3,520,751)

289,608




Share of results of associated companies and

     joint ventures

15,398

128,469

Finance costs

(70,804)

(57,980)

 

(Loss)/profit before income tax

 

(3,576,157)

 

360,097

Income tax credit/(charge)

287,382

(17,925)




(Loss)/profit for the year from continuing activities

(3,288,775)

342,172

 

(Loss)/profit for the year from discontinued activities

 

(262,007)

 

-




(Loss)/profit for the  year

(3,550,782)

342,172




Attributable to:



Equity holders of the Company

(3,174,361)

321,514

Non-controlling interest

(376,421)

           20,658


(3,550,782)

342,172




(Loss)/earnings per share (in pence)



Basic

(7.15)

0.73

Diluted

(7.15)

0.67

 

 

 

 

  

 

 

 

 

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

   

 


2012

2011


£

£




(Loss)/profit for the year

(3,550,782)

342,172

 



Foreign currency translation movements

185,517

(16,608)




Other comprehensive income/(expense) for the year

185,517

(16,608)




Total comprehensive income for the year

(3,365,265)

325,564




Attributable to:



Equity holders of the parent

(3,020,171)

304,906

Non-controlling interest

(345,094)

20,658

Total comprehensive income for the year

(3,365,265)

325,564




 

 

  

 

 

 

 

 

AEC EDUCATION PLC

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

 


2012

2011

TOTAL ASSETS

£

£

 

Non-Current Assets



Property, plant and equipment

1,090,213

1,485,706

Investment in associated companies

29,395

49,244

Investment in joint ventures

66,653

147,137

Intangible assets

4,357,956

6,521,400

Goodwill

446,558

1,141,242

Deferred tax asset

233,031

-


6,223,806

9,344,729




Current Assets



Inventories

21,858

53,819

Trade receivables

1,948,591

1,433,028

Other receivables and prepayments

1,575,099

1,788,021

Tax recoverable

8,581

63,637

Due from joint ventures

105,438

44,930

Due from related parties

26,165

1,396

Cash and cash equivalents

2,706,691

3,810,375


6,392,423

7,195,206




Total Assets

12,616,229

16,539,935

 

EQUITY AND LIABILITIES



Non-Current Liabilities



Deferred income

-

4,539

Financial liabilities

94,390

374,920

Deferred taxation liability

24,249

83,005


118,639

462,464




Current Liabilities



Trade payables

652,045

615,835

Deferred income

3,813,401

4,761,323

Other payables and accruals

2,969,251

2,202,642

Due to related parties

24,291

19,040

Financial liabilities

284,564

345,681

Provision for income tax

51,757

82,668


7,795,309

8,027,189




Total liabilities

7,913,948

8,489,653

 

Equity attributable to equity holders of the Company



Share capital

  4,419,878

    4,419,878

Share premium

 707,588

 707,588

Reserves

(381,770)

2,726,798


4,745,696

7,854,264

Non-controlling interests

(43,415)

196,018

Total equity

4,702,281

8,050,282




Total Equity and Liabilities

12,616,229

16,539,935

 

 

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

 

 

 

 

Share

Capital

Share

Premium

Other

Reserves

Share-Based

Payment

Reserve

Other

Reserves

Retained

Earnings

Other

Reserves

Trans-

lation

Reserve

Other

Reserves

Capital

Reserve

 

Total Of

Other

Reserves

Attributable

To Equity

Holders

Of The Company

Non- controlling

Interests

 

Total

 

£

£

£

£

£

£

£

£

£

       £

 

 

Balance at 1 January 2011

 

 

 

4,419,878

 

 

 

707,588

 

 

 

425,467

 

 

 

906,153

 

 

 

 

 

1,000,133

 

 

 

170,560

 

 

 

2,502,313

 

 

 

7,629,779

 

 

 

198,721

 

 

 

7,828,500

 

Profit/(loss) for the year

 

-

 

-

 

-

 

321,514

 

-

 

-

 

321,514

 

321,514

 

20,658

 

342,172

 

Total other

comprehensive  income

 

 

        -

 

 

       -

 

 

         -

 

 

           -

 

 

(16,608)

 

 

       -

 

 

(16,608)

 

 

(16,608)

 

 

-

 

 

(16,608)

 

Total comprehensive income for the year

 

 

-

 

 

-

 

 

-

 

 

321,514

 

 

(16,608)

 

 

-

 

 

304,906

 

 

304,906

 

 

20,658

 

 

325,564

 

Issue of shares in the year

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 -

 

 

Dividends

 

 

-

 

 

-

 

 

-

 

 

(88,397)

 

 

 

-

 

 

 

-

 

 

 

(88,397)

 

 

 

(88,397)

 

 

 

-

 

 

 

(88,397)

             

 

Share based compensation

 

 

           -

 

 

            -

 

 

7,976

 

 

            -

 

 

          -

 

 

         -

 

 

7,976

 

 

7,976

 

 

        -

 

   

  7,976

Total transactions with owners

 

-

 

-

 

7,976

         (88,397)

 

           -

 

          -

 

(80,421)

 

(80,421)

 

          -

 

(80,421)

 

Dividend paid to non-controlling interest

 

 

          -

 

 

       -

 

 

   -

 

 

-

 

 

      -

 

 

     -

 

 

-

 

 

-

 

    

 (23,361)

 

 

  (23,361)

 

Balance at 31 December 2011

 

 

4,419,878

 

 

707,588

 

 

433,443

 

 

1,139,270

 

 

 

983,525

 

 

170,560

 

 

2,726,798

 

 

7,854,264

 

 

196,018

 

 

8,050,282

 

 

 

 

 

 

 

  

 

 

 

 

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012 (Cont.)

 

 

 


Share

Capital

Share

Prem-ium

Other

Reserves

Share-Based

Payment

Reserve

Other

Reserves

Retained

Earnings

Other

Reserves

Trans-

lation

Reserve

Other

Reserves

Capital

Reserve

 

Total Of

Other

Reserves

Attribut-able

To Equity

Holders

Of The Company

Non- controlling

Interests

 

Total

 

£

£

£

£

£

£

£

£

£

       £

 

 

Balance at 1 January 2012

 

 

 

4,419,878

 

 

 

707,588

 

 

 

433,443

 

 

 

1,139,270

 

 

 

 

983,525

 

 

 

170,560

 

 

 

2,726,798

 

 

 

7,854,264

 

 

 

196,018

 

 

 

 8,050,282

 

Loss for the year

 

-

 

-

 

-

 

(3,174,361)

 

-

 

-

 

(3,174,361)

 

(3,174,361)

 

(376,421)

 

(3,550,782)

Total other

comprehensive  income

 

        -

 

       -

 

         -

 

           -

 

154,190

 

       -

 

154,190

 

154,190

 

31,327

 

185,517

 

Total comprehensive income for the year

 

 

-

 

 

-

 

 

-

 

 

(3,174,361)

 

 

154,190

 

 

-

 

 

(3,020,171)

 

 

(3,020,171)

 

 

(345,094)

 

 

(3,365,265)

 

 

Dividends

 

 

-

 

 

-

 

 

-

 

 

(88,397)

 

 

-

 

 

-

 

 

(88,397)

 

 

(88,397)

 

 

-

 

 

(88,397) 

 

Share based compensation transfer

 

    

      -

 

 

          -

 

 

(104,699 )

 

 

104,699

 

  

       -

 

 

       -

 

 

-

 

 

-

 

 

        -

   

 

-

Total transactions with owners

 

-

 

-

 

 (104,699 )

             16,302

 

           -

 

          -

 

(88,397)

 

(88,397)

 

          -

 

(88,397)

 

Non-controlling

interest arising on business acquisition

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(160,997)

 

 

 

(160,997)

 

Dividend paid to non-controlling interest

 

 

         -

 

 

       -

 

      

   -

 

 

-

 

   

      -

 

    

     -

 

 

-

 

 

-

 

       

 (23,768)

 

 

  (23,768)

 

Impairment of carrying value

 

 

          -

 

  

       -

 

      

   -

 

 

-

 

   

      -

 

     

     -

 

 

-

 

 

-

 

       

290,426

 

 

290,426

 

Balance at 31 December 2012

 

 

4,419,878

 

 

707,588

 

 

328,744

 

 

(2,018,789)

 

 

 

1,137,715

 

 

170,560

 

 

(381,770)

 

 

4,745,696

 

 

(43,415)

 

 

4,702,281

 

 

  

 

 

 

 

 

 

 

AEC EDUCATION PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

 


2012

2011


£

£

Cash Flows from Operating Activities



(Loss)/profit before income tax from continuing activities

(3,576,157)

360,097

(Loss) before income tax from discontinued activities

(262,007)

-




 Adjustments for:



 Amortisation of development expenditure

-

6,614

 Amortisation of intangible assets

172,593

18,622

 Depreciation of property, plant and equipment

648,096

609,066

 Write down of property and equipment

220,217

12,767

 Loss on disposal of plant and equipment

24,334

4,243

 Loss on sale of subsidiary

190,609

-

 Share-based payment charge

-

7,976

 Interest expense

70,804

57,980

 Interest income

(7,012)

(10,440)

 Impairment of goodwill

882,163

175,763

 Share of results of associated companies and joint ventures

(15,398)

(128,469)


(1,651,758)

1,114,219




 Changes in working capital:



 Receivables

(690,420)

(1,349,114)

 Payables

(47,085)

2,148,981

 Inventories

12,404

5,422

 Related parties and associated companies

(80,026)

(123,886)


(2,456,885)

1,795,622




 Taxation

40,510

236,603

 Net cash (used)/generated from operating activities

(2,416,375)

2,032,225

 

 

 

 Cash Flows from Investing Activities

 

 

 Interest received

7,012

10,440

 Dividend income received from associated and joint venture companies

154,736

92,065

 Purchases of property, plant and equipment

(510,083)

(761,764)

 Purchase of trademarks and licences

(9,594)

(12,820)

Disposal of subsidiary

2,260,270

-

Acquisition of subsidiary

(133,630)

-

Acquisition of joint venture

-

(122,039)

Net cash generated/(used) in investing activities

1,768,711

(794,118)

 

 

Cash Flows from Financing Activities



Interest paid

(70,804)

(57,980)

Repayment of  term loan

(255,608)

(264,574)

Dividend paid to shareholders

(88,397)

(88,397)

Dividends paid to non-controlling interests

(23,768)

(23,361)

Finance leases

(86,039)

(126,254)

Net cash used in financing activities

(524,616)

(560,566)




Effect of foreign exchange rate changes on consolidation

68,596

40,922




Net (decrease)/increase in cash and cash equivalents

(1,103,684)

718,463

Cash and cash equivalents at the beginning of the year

3,810,375

3,091,912

Cash and cash equivalents at the end of the year 

2,706,691

3,810,375




 

Cash and cash equivalents consist of the following:


2012

2011


£

£




Cash and bank balances

2,700,140

3,755,548

Fixed deposits

6,551

54,827


2,706,691

3,810,375

 

 

 

 

 

 

 

 

 

 

 

AEC EDUCATION PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012

 

 

1          General

 

AEC Education plc (the "Company") is a public limited liability company incorporated in England and Wales on 8 July 2004. The Company was admitted to AIM on 10 December 2004. Its registered office is Witan Gate House, 500-600 Witan Gate West, Milton Keynes MK9 1SH and its principal place of business is in Singapore.  The registration number of the Company is 05174452.

 

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 nature of these activities during the year.

 

The Board of Directors have authorised the issue of these financial statements on the date of the Statement by Directors.

 

 

2          Significant Accounting Policies

 

Basis of Preparation

 

The consolidated financial statements of the Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed and adopted for use in the European Union (EU).

 

The financial statements have been prepared on a going concern basis under the historical cost convention, except that certain financial instruments are accounted for at fair values. The principal accounting policies are set out below.

 

 

3          Segmental Information

 

All revenue and profit before taxation arises from operations in the education sector. Reportable segments are based on the geographical area where operations

 

Segmental analysis is as follows:

 

 

 

Europe

South East Asia/Middle East

 

       Total

          2012

 

£

£

         £

          Revenue from external customers

6,639,932

8,453,262

15,093,194





          Depreciation, write offs and amortisation

(703,589)

(320,975)

   (1,024,564)





          Restructuring costs

(729,937)

-

(729,937)





          Impairment loss

(882,163)

-

(882,163)





          Loss before taxation

(3,401,769)

(174,388)

(3,576,157)

    




          Taxation credit

47,933

239,449

287,382





          Loss on discontinued activities

-

(262,007)

(262,007)





          Segmental assets

5,548,024

7,068,205

12,616,229





          Segmental liabilities

(5,323,606)

(2,590,342)

(7,913,948)





         Additions to non-current assets

892,948

218,466

1,111,414

       

          2011








         Revenue from external customers

9,839,306

9,305,686

19,144,992





         Depreciation, write offs and amortisation

(373,584)

(260,718)

    (634,302)





         Impairment loss

-

(175,763)

(175,763)

    




         Profit before taxation

81,788

278,309

       360,097

    




         Taxation (charge)/credit

(39,152)

21,227

      (17,925)





         Segmental assets

6,618,411

9,921,524

16,539,935

          




         Segmental liabilities

(3,294,856)

(5,194,797)

(8,489,653) 





         Additions to non-current assets

362,439

534,184

896,623

 

 

 

4          Earnings/(Loss) Per Share

 

The basic earnings/(loss) per share was based on loss attributable to shareholders of £3,174,361 (2011: profit of £321,514) and the weighted average number of ordinary shares in issue during the year of 44,198,781 (2011: 44,198,781) shares.

 

The diluted earnings/(loss) per ordinary share was based on loss attributable to shareholders of  £3,174,361 (2011: profit of £321,514) and the weighted average number of ordinary shares in issue at during the year of 44,198,781 (2011: 47,899,375) shares diluted for the effect of share options and warrants. At 31 December 2012 there were 2,840,000 options (2011: 3,490,000 options) and no warrants (2011: 262,649) outstanding. Of these all 2,840,000 options (2011: 52,055 options and nil warrants) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

 

                                                                                                                                 

5            Property, Plant and Equipment

 


 

Leasehold

property and improvements

 

Classroom and office equipment

 

 

Motor

vehicle

 

 

  Total

 


£

£

       £

  £

Cost





 

As at 1 January  2012

 1,090,106

   1,949,260

    36,575

3,075,941

 

Additions

196,615

313,468

-

510,083

 

Additions on acquisition of  subsidiary

-

9,998

-

9,998

 

Disposals

(7,650)

(169,640)

-

(177,290)

 

Disposals on sale of subsidiary

(77,105)

(114,848)

-

(191,953)

 

Currency  realignment

3,789

(9,045)

(973)

(6,229)

 

As at 31 December 2012

1,205,755

1,979,193

35,602

3,220,550

 






 

Accumulated depreciation





 

As at 1 January 2012

  574,745

    999,322

    16,168

 1,590,235

 

Charge for the year - continuing activities

234,071

390,523

7,160

631,754

 

Charge for the year - discontinued activities

6,564

9,778

-

16,342

 

Write-down of equipment

68,621

151,596

-

220,217

 

Disposals

(7,650)

(145,306)

-

(152,956)

 

Disposals on sale of  subsidiary

(60,452)

(108,445)

-

(168,897)

 

Currency realignment

1,962

(7,741)

(579)

(6,358)

 

As at 31 December 2012

817,861

1,289,727

22,749

2,130,337

 






 

Net book value





 

At 31 December 2012

387,894

689,466

12,853

1,090,213

 

 

 

The write-down of equipment occurred as a result of the closure of two schools and separate offices in London as part of the restructuring which occurred during the year ended 31 December 2012.

 


 

Leasehold

property and improvements

 

Classroom and office equipment

 

 

Motor

vehicle

 

 

 

Total


     £

£

       £

£

Cost





 

As at 1 January  2011

    770,525

   1,684,777

    37,646

2,492,948

 

Additions

    331,858

     429,906

            -

  761,764

 

Disposals

      (5,289)

    (143,001)

            -

(148,290)

 

Currency  realignment

      (6,988)

      (22,422)

     (1,071)

   (30,481)

 

As at 31 December 2011

 1,090,106

   1,949,260

    36,575

3,075,941

 






 

Accumulated depreciation





 

As at 1 January 2011

  346,071

    788,578

      9,221

1,143,870

 

Charge for the year

  232,112

    369,758

      7,196

  609,066

 

Disposals

     (1,845)

   (141,485)

         -

 (143,330)

 

Currency realignment

     (1,593)

     (17,529)

       (249)

 (19,371)

 

As at 31 December 2011

  574,745

    999,322

    16,168

 1,590,235

 






 

Net book value





 

At 31 December 2011

   515,361

    949,938

   20,407

1,485,706

 






 

 

 

6          Intangible Assets

 

Intangible assets are summarised as follows:

 


2012

2011


£

£

Net book values



Licences

747,034

2,761,807

Brands

3,600,000

3,750,000

Trademarks

10,922

9,593


4,357,956

6,521,400




Analysed as follows:



Indefinite lives

734,046

6,484,051

Definite lives

3,623,910

37,349


4,357,956

6,521,400




 

 

Licences

 

Licences are summarised as follows:


2012

2011


£

£

Cost



At the beginning of the year

2,845,940

2,864,161

Additions

3,814

5,902 

Disposal of subsidiary

(2,013,855)

-

Currency alignment

11,595

(24,123)

At the end of the year

847,494

2,845,940




Accumulated amortisation



At the beginning of the year

84,133

68,847

Charge

18,142

16,766

Currency alignment

(1,815)

(1,480)

At the end of the year

100,460

84,133

 



Net book value

747,034

2,761,807




Analysed as follows:



Indefinite life

734,046

2,734,051

Definite life

12,988

27,756


747,034

2,761,807

        

 

Brands

 

Brands are summarised as follows:


2012

2011


£

£

Cost



At the beginning of the year

3,750,000

3,750,000

At the  end of the year

3,750,000

3,750,000




Accumulated amortisation



At the beginning of the year

-

-

Charge

150,000

-

At the end of the year

150,000

-




Net book value

3,600,000

3,750,000

 



Analysed as follows:



Indefinite life

-

3,750,000

Definite life

3,600,000

-


3,600,000

3,750,000

 

 

 

 

 

 

Trademarks

 

Trademarks are summarised as follows:


2012

2011


£

£

Cost



At the beginning of the year

15,017

8,099

Additions

5,780

6,918

At the end of the year

20,797

15,017




Accumulated amortisation



At the beginning of the year

5,424

3,568

Charge

4,451

1,856

At the end of the year

9,875

5,424

 



Net book value

10,922

9,593




Analysed as follows:



Definite life

10,922

9,593

 

 

7           Goodwill

 


2012

2011


£

£

Cost



Balance as at the beginning of the year

     1,141,242

     1,339,584

Acquisition of subsidiary

591,737

-

Disposal of subsidiary

(678,040)

-

Impairment loss

(591,737)

(175,763)

Currency alignment

(16,644)

(22,579)

Balance as at the end of the year

446,558

1,141,242




 

Goodwill has arisen on acquisitions by the Group.

 

During the year ended 31 December 2012, the Group acquired Malvern House Training Solutions Limited with goodwill on consolidation calculated as £591,737.

 

The goodwill relating to Malvern House Training Solutions Limited was reassessed and a provision to write this down to £nil was created at 31 December 2012.

 

In addition to the impairment loss of £591,737 a further £290,426 has been charged in the Consolidated Income Statement in respect of the non-controlling interest in Malvern House Training Solutions Limited which gives a total impairment of £882,163.

 

During the prior year, the impairment of goodwill on acquisitions arose on the provision made against BrainBox Limited of £24,831 on its closure and Smartworks Learning Centre Pte Ltd of £150,932 since it was no longer a profit generating company.

           

  

 

8          Share Capital

 


2012

2011


£

£

Authorised:



50,000,000 ordinary shares of 10p each

5,000,000

5,000,000




Allotted, called up and fully paid:



At the beginning and end of the year



- 44,198,781 (2011: 44,198,781) ordinary shares of 10p each

4,419,878

4,419,878




 

9           Annual Report

 

The Annual Report will be sent to shareholders by close of business on or around 4 June 2013. Additional copies will be available to the public, free of charge, from the Company's website www.aeceducationplc.co.uk.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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