Final Results

RNS Number : 4710E

AEC Education plc

31 May 2012

 



AIM: AEC

AEC EDUCATION PLC

("AEC" or "the Group")

Final results for the year ended 31 December 2011

Key Points

·     Group returned to profit - reflecting very strong performance in Singapore and turnaround of UK operations

·     Revenues increased by 6% to £19.1m (2010: £18.1m)

·     Pre-tax profit of £360,000 - stated after £526,000 of one-off costs (2010: pre-tax loss of £439,000)

·     Earnings per share of 0.73p (2010: loss per share of 0.85p)

·     Net cash rose by 23% to £3.81m (2010: £3.09m)

·     Full and final dividend proposed of 0.20p (2010: 0.20p)

·     Further progress post-year end:

- two new colleges opened in Ireland and Oman

- entry into UK government funded sector with acquisition of Skye Training Ltd in March 2012

- appointment of CEO of Singapore operations to head growth in May 2012

·     Board continues to view growth prospects positively

Liam Swords, Chairman of AEC, commented,

"I am pleased to report that AEC returned to profit during the year ended 31 December 2011.  This result was underpinned by a particularly strong performance in our Singapore operations as well as the return to profitability of our English language teaching business in London.

Our plans to develop the Malvern House English language teaching brand outside the UK progressed well and, during the year, we brought our English language offering in Singapore and Malaysia under the Malvern House brand. After the year end, we opened Malvern House English language colleges in Ireland and Oman. In March 2012, we also expanded into a new market in the UK, the government funded sector, with the acquisition of Skye Training Ltd. 

These recent corporate initiatives should provide additional growth potential for the Group and we believe that, with strong cash balances, AEC is well placed to take advantage of the opportunities available. The Board therefore continues to view growth prospects positively."

Enquiries:

AEC Education PLC		Tel: [phone]
Liam Swords, Chairman		M:  [phone]
WH Ireland Limited (NOMAD)		Tel: [phone]
Dan Bate/Robin Gwyn
Biddicks		Tel: [phone]
Katie Tzouliadis/ Sophie McNulty

CHAIRMAN'S STATEMENT

I am pleased to report that AEC returned to profit during the year ended 31 December 2011. This result was underpinned by a particularly strong performance in our Singapore operations as well as the return to profitability of our English language teaching business in London despite the ongoing challenging trading conditions in the UK.

Revenues were up by 6% to £19.1m and profit before tax of £0.36m represented a £0.80m turnaround on last year's loss before tax of £0.44m. This profit was delivered after one-off costs totalling £0.53m, which comprised a £0.35m investment in the expansion of the Malvern House brand overseas together with goodwill impairment of £0.18m relating to the Group's withdrawal from non-core areas.

Our plans to develop the Malvern House English language teaching brand outside the UK progressed well and, during the year, we brought our English language offering in Singapore and Malaysia under the Malvern House brand. After the year end, we opened Malvern House English language colleges in Ireland and Oman. In March 2012, we also expanded into a new market in the UK, the government-funded sector, with the acquisition of Skye Training Ltd ("Skye Training").

The Group's financial position remains strong and net cash at 31 December 2011 was up 23% year on year to £3.81m (30 June 2011: £3.19m and 31 December 2010: £3.09m). We believe that AEC is well placed to take advantage of the opportunities available to us and the Board continues to view growth prospects positively.

Financial results

Revenues for the year to 31 December 2011 rose by 6% to £19.1m (2010: £18.1m). The pre-tax profit for the year was £360k compared with a loss of £439k in 2010. Profits are stated after exceptional costs of £350k relating to investment in the overseas expansion of the Malvern House brand and a goodwill impairment of £176k, following the withdrawal from non-core areas. The profit after tax was £342k (2010: loss after tax of £290k) and earnings per share was 0.73p (2010: loss per share of 0.85p). 

The cash inflow from operating activities was £1.1m (2010: £0.2m) whilst net cash inflow generated from operations was £2.0m (2010: outflow of £0.1m). Net cash at the end of the year stood at a healthy £3.81m (31 December 2010: £3.09m).

Dividend

The positive outlook for AEC has given the Board the confidence to recommend a final and total dividend of 0.20p per ordinary share (2010: 0.20p). This will be paid on 24th August 2012 to shareholders on the register at 13th July 2012, subject to shareholder approval at the Annual General Meeting. The ex-dividend date is 11th July 2012.

Business Development

AEC has performed well despite mixed market conditions across its territories. In Asia, our Singapore operations outperformed, delivering record results, while in Malaysia student numbers were adversely affected by the turmoil in North Africa. Our London operations, which form the hub of our English language teaching provision, returned to growth and profitability although the uncertainty surrounding student visas, especially the entitlement to work while studying, continued to have an impact. We completed the implementation of the Malvern House brand across our overseas English language teaching operations in Singapore and Malaysia, and invested in the establishment of new colleges in Oman and Ireland, which opened post-year end, as well as in Cyprus. These corporate initiatives should provide additional growth opportunities for us.

A major highlight in the year was the performance of our Singapore operations, where revenues increased by over 25% year-on-year. This was supported by structural changes in the private education market which have followed the Singapore government's introduction of new quality standards in 2010 requiring education providers to achieve the EduTrust certification. As one of only 40 providers to have attained the EduTrust Certificate for a four year period, we have been able to take advantage of the market consolidation and expect to see students numbers continue to rise during the course of 2012. Our University of Wales Bachelor and MBA programmes performed exceptionally well with student numbers more than doubling. This is particularly pleasing as we implement strategies to increase our Higher Education provision in Singapore. We are seeking to establish relationships with other UK universities and have also strengthened our recruitment resources in China and the rest of the region. On 1 May 2012, we were pleased to appoint Dr Chong Chee Leong as head of our Singapore operations. He brings over 25 years' experience in the academic sector and previously was deputy chief executive officer and academic dean of one of Singapore's largest independent education and training institutions.

The colleges in Malaysia were affected by a significant drop in the number of students, especially for English language training, from the high volume markets in Northern Africa but were broadly able to maintain overall revenues. Despite this drop and the cost of replacing volumes, operations in Malaysia were breakeven at the pre-tax profit level. The professional programmes all performed well, particularly ACCA and CFA. Our Malvern House brand is now the market leader in Malaysia for the provision of these programmes and was awarded the Gold Standard by ACCA in recognition of its achievements. We have been working on the development of new areas of opportunity during the year and invested further in the markets in Northern Africa where we are beginning to see some return to growth. Malvern House Malaysia now offers a full degree programme with the University of Wales, which is based 'in country'. The college will also continue to raise the level of its programmes to prepare for the opportunities being granted to high performing education institutions in Malaysia to become 'deemed' universities, with their own university campuses.

Malvern House in the UK grew by 5% and returned to profit, reflecting the benefits of the remedial actions taken in the second half of 2010. The market in the UK remained difficult as overseas students in private institutions are now unable to subsidise their study costs by working part time and this has affected long term courses in particular. We expect this will continue to affect our UK performance during 2012 however we are implementing a new business plan to support profitability. After the year-end, in March 2012, we took the decision to expand into the government-funded training sector with the acquisition of Skye Training. Skye Training adds a complementary revenue stream to our UK business and we anticipate the business growing strongly in 2012 and beyond, albeit from a small base.

The expansion of English language teaching overseas under the Malvern House brand continued strongly during the year, with our operations in both Singapore and Malaysia successfully rebranded. Our English language teaching joint venture in Cyprus is profitable and will continue to contribute in 2012. We opened our two new Malvern House colleges in Ireland and Oman in March 2012 and expect both to be in profit in early 2013. The Malvern House results were achieved after the investment of £0.35m in the new locations in Oman and Ireland and in continuing to research potential UK university partnerships. The underlying turnaround from a loss in 2010 to a profit before tax in 2011 was therefore approximately £1.3m.

During the year, the Board also took the decision to scale down activities in Vietnam, following a review of operations and we have reduced costs and the operations to a minimum level.

Educational Resources Ltd ("ER"), the Group's London Chamber of Commerce & Industry examinations subsidiary, experienced a difficult year and investment was increased to seek new opportunities in both new and existing markets. In particular, we are focusing on new markets in India, Pakistan, Nepal and the Philippines. Hong Kong continued to be slow as changes to the education market there impacted further and the market in Malaysia remained very competitive. These conditions resulted in a reduction in revenue of 16% compared to the previous year and profits also declined compared to the previous year. As we grow our college activities, examinations become less of a strategic focus and now represent only 10.8% of our overall revenue.

Staff

On behalf of the Board I would like to welcome the staff from our new operations to the Group and to thank all staff for their hard work and efforts during the period. It is rewarding to see the positive attitude as we have implemented the necessary changes to ensure the Group returns to sustainable profit growth.

Prospects

During 2011, the Board focused on returning the Group to profit and establishing the platform for sustainable growth, including expansion into new geographic locations. In 2012, our focus is on the expansion of the Malvern House brand overseas as well as the growth of our operations in Singapore and Malaysia. In the UK, we are concentrating on the implementation of the new business model at Malvern House in London and the integration of our newly acquired government-funded training business, whose order books show significant growth potential. 

With strong cash balances, AEC is well placed for ongoing development and the Board remains confident that the Group will record increased profitability in 2012.

Liam Swords

Chairman   

30 May 2012

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

					2011		2010
					£		£
Revenue
Sale of services					18,631,088		17,398,279
Other income					513,904		737,867
					19,144,992		18,136,146
Administrative expenses
Cost of services sold					9,007,430		8,872,015
Salaries and employees' benefits					4,039,996		3,993,116
Amortisation of development costs					6,614		9,677
Amortisation of licence and trade marks costs					18,622		18,853
Depreciation of plant and equipment					609,066		452,821
Finance costs					57,980		48,050
Other operating expenses					4,997,893		5,278,709
Impairment loss					175,763		-
Total operating costs and expenses					18,913,364		18,673,241
Operating profit/(loss)					231,628		(537,095)
Share of results of associated companies and joint ventures					128,469		98,486
Profit/(Loss) before income tax					360,097		(438,609)
Income tax					(17,925)		148,723
Profit/(Loss) for the year					342,172		(289,886)
Attributable to:
Equity holders of the Company					321,514		(376,291)
Minority interest					20,658		86,405
					342,172		(289,886)
Earnings/(Loss) per share (in pence)
Basic					0.73		(0.85)
Diluted					0.67		(0.85)

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011

						(Restated)
				2011		2010
				£		£
Profit/(Loss) for the year				342,172		(289,886)
Foreign currency translation movements (see explanatory note below on prior year figure)				(16,608)		296,054
Other comprehensive (expense)/income for the year				(16,608)		296,054
Total comprehensive income for the year				325,564		6,168
Attributable to:
Equity holders of the parent				304,906		(73,264)
Minority interest				20,658		79,432
Total comprehensive income for the year				325,564		6,168

Explanatory note on foreign currency translation movements

The foreign currency translation movements for the prior year have been corrected from £303,027 to £296,054 to include minority interests which were omitted from the table in the Consolidated Statement of Comprehensive Income reported last year. The total comprehensive income for the year was accordingly restated form £13,141 to £6,168.

                          AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

		2011		2010
		£		£
TOTAL ASSETS Non-Current Assets
Property, plant and equipment		1,485,706		1,349,078
Development expenditure		-		19,547
Investment in associated companies		49,244		40,681
Investment in joint ventures		147,137		-
Intangible assets		6,521,400		6,549,845
Goodwill		1,141,242		1,339,584
		9,344,729		9,298,735
Current Assets
Inventories		53,819		59,241
Trade receivables		1,433,028		876,513
Other receivables		1,655,721		874,613
Tax recoverable		63,637		248,093
Prepaid education expenditure		132,300		120,809
Due from joint ventures		44,930		-
Due from related parties		1,396		26,620
Cash and cash equivalents		3,810,375		3,091,912
		7,195,206		5,297,801
Total Assets		16,539,935		14,596,536

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 (CONTINUED)

AS AT 31 DECEMBER 2011

		2011		2010
		£		£

EQUITY AND LIABILITIES
Non-Current Liabilities
Deferred income		4,539		11,020
Financial liabilities		374,920		699,364
Deferred taxation		83,005		27,669
		462,464		738,053
Current Liabilities
Trade payables		615,835		744,701
Deferred income		4,761,323		3,212,467
Other payables and accruals		2,202,642		1,467,170
Due to related parties		19,040		123,220
Financial liabilities		345,681		412,065
Provision for income tax		82,668		70,360
		8,027,189		6,029,983

Equity attributable to equity holders of the Company
Share capital		4,419,878		4,419,878
Share premium		707,588		707,588
Reserves		2,726,798		2,502,313
		7,854,264		7,629,779
Minority interest in equity		196,018		198,721
Total equity		8,050,282		7,828,500
Total Equity and Liabilities		16,539,935		14,596,536

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

	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	Attribut-able To Equity Holders Of The Company	Minority Interests	Total
	£	£	£	£	£	£	£	£	£	£
Balance at 1 January 2010	4,324,878	693,338	317,691	1,348,742	697,106	170,560	2,534,099	7,552,315	143,074	7,695,389
Profit/(loss) for the year	-	-	-	(376,291)	-	-	(376,291)	(376,291)	86,405	(289,886)
Total other comprehensive  income	-	-	-	-	303,027	-	303,027	303,027	(6,973)	296,054
Total comprehensive income for the year	-	-	-	(376,291)	303,027	-	(73,264)	(73,264)	79,432	6,168
Issue of shares in the year	95,000	14,250	(109,250)	-	-	-	(109,250)	-	-	-
Dividends	-	-	-	(66,298)	-	-	(66,298)	(66,298)	-	(66,298)
Share based compensation	-	-	217,026	-	-	-	217,026	217,026	-	217,026
Total transactions with owners	95,000	14,250	107,776	(66,298)	-	-	41,478	150,728	-	150,728
Dividend paid to minority interest	-	-	-	-	-	-	-	-	(23,785)	(23,785)
Balance at 31 December 2010	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

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	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	Attribut-able To Equity Holders Of The Company	Minority 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 minority 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 AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2011

		2011		2010
		£		£
Cash Flows from Operating Activities
Profit/(Loss) before income tax		360,097		(438,609)
Adjustments for:
Amortisation of development expenditure		6,614		9,677
Amortisation of intangible assets		18,622		18,853
Depreciation of property, plant and equipment		609,066		452,821
Plant and equipment written off		12,767		-
Loss on disposal of plant and equipment		4,243		-
Share-based payment charge		7,976		217,026
Interest expense		57,980		48,050
Interest income		(10,440)		(2,874)
Impairment of goodwill		175,763		-
Share of results of associated companies and joint ventures		(126,094)		(98,486)
Net cash flows from operating activities		1,116,594		206,458
Changes in working capital:
Receivables		(1,349,114)		215,199
Payables		2,153,529		(548,692)
Inventories		5,422		34,468
Related parties and associates		(123,886)		15,147
Net cash generated /(used) from operations		1,802,545		(77,420)
Taxation		229,680		(49,868)
Net cash generated /(used) from operating activities		2,032,225		(127,288)
Cash Flows from Investing Activities
Interest income		10,440		2,874
Dividend income received from an associated company		92,065		89,058
Purchases of property, plant and equipment		(761,765)		(438,332)
Purchase of trade marks and licences		(12,821)		(16,797)
Acquisition of joint venture		(122,039)		-
Net cash used in investing activities		(794,118)		(363,197)

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CASH FLOWS

 (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2011

		2011		2010
		£		£
Cash Flows from Financing Activities
Interest paid		(57,980)		(48,050)
(Repayment)/proceeds of  term loan		(264,574)		775,457
Dividend paid to shareholders		(88,397)		(66,298)*
Dividend paid to minority shareholders		(23,361)		(23,785)
Finance leases		(126,254))		(67,112)
Net cash (used)/generated in financing activities		(560,566)		570,212
Effect of foreign exchange rate changes on consolidation		40,922		(207,437)*
Net increase in cash and cash equivalents		718,463		(127,710)
Cash and cash equivalents at the beginning of the year		3,091,912		3,219,622
Cash and cash equivalents at the end of the year		3,810,375		3,091,912

Cash and cash equivalents consist of the following:

	2011		2010
	£		£
Cash and bank balances	3,755,548		3,086,894
Fixed deposits	54,827		5,018
	3,810,375		3,091,912

* These figures have been restated due to the inclusion of the prior year dividend within foreign exchange in error.

AEC EDUCATION PLC AND ITS SUBSIDIARY COMPANIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

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 set out above.

2       Significant Accounting Policies

(1)        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) and IFRS as issued by the International Accounting Standards Board (IASB). References to IFRS should be construed as references to both IFRS as adopted by the EU and IFRS as issued by the IASB.

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.

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 are based.

Segmental analysis is as follows:

	Europe		South East Asia/Middle East	Total
2011	£		£	£
Revenue from external customers	9,839,306		9,305,686	19,144,992
Depreciation and amortisation	373,584		260,718	634,302
Impairment loss	-		175,763	175,763
Profit before taxation	81,788		278,309	360,097
Taxation	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
2010
Revenue from external customers	9,154,823		8,981,323	18,136,146
Depreciation and amortisation	249,048		232,303	481,351
(Loss) /Profit before taxation	(938,282)		499,673	(438,609)
Taxation	(136,238)		(12,485)	(148,723)
Segmental assets	5,816,412		8,780,124	14,596,536
Segmental liabilities	3,470,119		3,297,917	6,768,036

4       Earnings/(Loss) Per Share

The basic earnings/(loss) per share was based on profit attributable to shareholders of £321,514 (2010: loss of £376,291) and the weighted average number of ordinary shares in issue during the year of 44,198,781 (2010: 44,146,726) shares.

The diluted earnings/(loss) per ordinary share was based on profit attributable to shareholders of  £321,514 (2010: loss of £376,291) and the weighted average number of ordinary shares in issue at during the year diluted  for the effect of share options and warrants in existence at the year end of  47,899,375 (2010: 47,899,375) shares.

The fully diluted loss per share reported for the prior year has been restated. In 2010 the fully diluted loss per share was stated as 0.79p which was lower than the basic loss of 0.85p. This treatment was not in accordance with IAS 33 - Earnings per Share.

5.         Intangible assets

									Licences
									2011		2010
									£		£ (Restated)
Cost
At the beginning of the year									2,864,161		2,619,952
Additions									5,902		16,797
Currency alignment									(24,123)		227,412
At the end of the year									2,845,940		2,864,161
Accumulated amortisation
At the beginning of the year									68,847		45,633
Charge									16,766		16,107
Currency alignment									(1,480)		7,107
At the end of the year									84,133		68,847
Net book value									2,761,807		2,795,314
Analysed as follows:
Indefinite life									2,734,051		2,755,533
Definite life									27,756		39,781
									2,761,807		2,795,314
									Brands
									2011		2010
									£		£
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
Net book value									3,750,000		3,750,000
Analysed as follows:
Indefinite life									3,750,000		3,750,000

						Trade  Marks
						2011		2010
						£		£
Cost
At the beginning of the year						8,099		8,099
Additions						6,918		-
At the end of the year						15,017		8,099
Accumulated amortisation
At the beginning of the year						3,568		822
Charge						1,856		2,746
At the end of the year						5,424		3,568
Net book value						9,593		4,531
Analysed as follows:
Definite life						9,593		4,531
Total net book value						6,521,400		6,549,845

6                 Goodwill

		2011			2010
		£			£ (Restated)
Cost
Balance as at the beginning of the year		1,339,584			1,330,907
Impairment loss		(175,763)			-
Currency alignment		(22,579)			8,677
Balance as at the end of the year		1,141,242			1,339,584

Goodwill has arisen on acquisitions by the Group.

The impairment of goodwill on acquisitions arises on the provision made against BrainBox Limited of £24,831 on its closure and Smartworks Learning Centre Pte Ltd of £150,932 since it is no longer a profit generating company. The provision of £175,763 was made as at 31 December 2011 and no currency realignment arises.

7       Share Capital

						2011		2010
						£		£
Authorised:
50,000,000 ordinary shares of 10p each						5,000,000		5,000,000
Allotted, called up and fully paid:
At the beginning of the year
- 44,198,878 (2010: 43,248,781) ordinary shares of 10p each						4,419,878		4,324,878
Issued during the year
- 950,000 ordinary shares of 10p each issued at 11.5p each for acquisition of 65.04% share capital of Educational Resources Pte Ltd						-		95,000
At the end of the year - 44,198,878 (2010: 44,198,878) ordinary shares of 10p each						4,419,878		4,419,878

8        Dividends

					2011		2010
					£		£
Final one-tier dividend paid					88,397		66,298

9          Restatement of Prior Year

The prior year has been restated as follows:

		As originally reported		Re-statements made			Restated position
	Note	2010		2010	note		2010
		£		£			£
TOTAL ASSETS Non-Current Assets
Property, plant and equipment		1,349,078		-			1,349,078
Development expenditure		19,547		-			19,547
Investment in associated companies		40,681		-			40,681
Intangible assets		5,794,317		755,528	a		6,549,845
Goodwill		2,095,112		(755,528)	b		1,339,584
		9,298,735		-			9,298,735
Current Assets
Inventories		59,241		-			59,241
Trade receivables		876,513		-			876,513
Other receivables		1,122,706		(248,093)	c		874,613
Tax recoverable		-		248,093	c		248,093
Prepaid education expenditure		120,809		-			120,809
Due from related parties		26,620		-			26,620
Cash and cash equivalents		3,091,912		-			3,091,912
		5,297,801		-			5,297,801
Total Assets		14,596,536		-			14,596,536

		As originally reported		Re-statements made			Restated position
	Note	2010		2010	note		2010
		£		£			£

EQUITY AND LIABILITIES
Non-Current Liabilities
Deferred income		11,020		-			11,020
Financial liabilities		699,364		-			699,364
Deferred taxation		27,669		-			27,669
		738,053		-			738,053
Current Liabilities
Trade payables		744,701		-			744,701
Deferred income		3,212,467		-			3,212,467
Other payables and accruals		1,462,622		4,548	d		1,467,170
Due to related parties		123,220		-			123,220
Financial liabilities		412,065		-			412,065
Provision for income tax		74,908		(4,548)	d		70,360
		6,029,983		-			6,029,983

Equity attributable to equity holders of the Company
Share capital		4,419,878		-			4,419,878
Share premium		707,588		-			707,588
Reserves		2,502,313		-			2,502,313
		7,629,779		-			7,629,779
Minority interest in equity		198,721		-			198,721
Total equity		7,828,500		-			7,828,500
Total Equity and Liabilities		14,596,536		-			14,596,536

a) Intangible assets

						Licences
						As originally reported		Restated position
						2010		2010
						£		£
Analysed as follows:
Indefinite life						2,000,005		2,755,533
Definite life						39,781		39,781
						2,039,786		2,795,314

The increase in the value of indefinite life licences above is due to the adjustment of £649,831 which is the result of reclassification of Goodwill arising on an earlier acquisition in Smart Eduprocess Group as a licence and now shown as an intangible Asset. After taking account of currency movements of £105,697 since acquisition, a total of £755,528 has been reclassified as licences.

b) Goodwill

	As originally reported		Transfer to Licences		Correction of error		Restated position
	2010		2010		2010		2010
	£		£		£		£
Education
United Kingdom	404,352		-		-		404,352
Singapore	232,379		-		644,354		876,733
Malaysia	1,433,336		(755,528)		(644,354)		33,454
Vietnam	25,045		-		-		25,045
	2,095,112		(755,528)		-		1,339,584

The decrease in goodwill is due to the adjustment of £649,831 which is the result of reclassification of Goodwill arising on an earlier acquisition in Smart Eduprocess Group as a licence and shown as an intangible asset. As noted in a) above, after taking account of currency movements of £105,697 since acquisition, a total of £755,528 has been reclassified as licences.

In addition, goodwill of £644,354 was previously shown as attributable to the cash generating unit in Malaysia but this has been adjusted to show that this as part of the operations under the Cash Generating Unit (CGU) in Singapore.

c) Taxation recoverable

Taxation recoverable has been shown on the face of the statement of financial position.

d) Taxation payable

The prior year statement of financial position has been restated for other taxes incorrectly included within the provision for income tax.

10        Annual Report

 The Annual Report will be sent to shareholders by close of business on or before 7 June 2012. Additional copies will be available to the public, free of charge, from the Company's website www.aeceducationplc.co.uk 

 

END

 

 

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