Raffles Education

[winston]

Ok, found the answer to my 2nd question above on their debt levels:-

Current financial position is reasonable with cash of $75.8mln and shareholders funds of $382mln versus short term debts of $164.268mln and long term debts of $41.653mln. Interest cover is a healthy 14x.

So, does anyone has an answer to my first question above ?

[ichew]

1. How did the Co recognise their revenue? Is it at the point of registration or when payment is received?

erm think is neither ...

from pg 62 pf AR08
Tuition fees and course fees and related instruction cost are recognized over the period of instruction.
Amounts of fees relating to future periods of instruction are included in tuition fees received in advance.

from pg 50 of IPO
Each year is divided into 4 academic terms beginning in Jan, Apr, Jul, and Oct resp.
Tuition fees r collected in advance b4 commencement of each new term.
Revenue is recognised when students register with us and accrue over the duration of programmes registered.

i take it to mean revenue is recognise after the course had started?
shucks ... guess i really need to go find an acctg text ...

[helios]

Did you all remember what happened at Informatics a few years ago ?

When I have some time, I would need to investigate the following for Raffles:-
1. How did the Co recognise their revenue? Is it at the point of registration or when payment is received?
2. What is the Co's loan borrowings exposure?

incidentally, i took the FA course; the lecturer mentioned that informatics was a case of 'creative accounting'. Revenues were booked at point of registration, if not wrong,

[millionairemind]

February 9, 2009, 6.12 pm (Singapore time)

Raffles Education to invest $300K in new Indon college

By ANGELA TAN

SINGAPORE - Raffles Education Corporation Limited on Monday said it will invest Rp 2.4 billion (S$300,000) in a new Raffles International College in Jakarta, Indonesia.

The new college will offer Advanced Diplomas in Fashion Design, Graphic Design, Interior Design, Multimedia Design, Fashion Marketing and Management, Business Management and Tourism and Hospitality Management.

The new college is not expected to contribute significantly to the group's financial performance in FY2009.

[winston]

From DMG:-

Raffles Education facing biggest test yet
Private education provider Raffles Education Corp recently reported a sterling set of secondquarter results that saw net profit jump 66 per cent to $27 million, while revenue for the quarter rose 38 per cent to $54.2 million.

And the market appears to have responded positively to the news, with the stock ending yesterday at 50.5 cents, 4 per cent up from the closing of 48.5 cents last Thursday, the day that the financial results were released. But market optimism aside, an interesting question to ask is whether Raffles is able to sustain its rapid growth amid the increasingly gloomy economic climate.

Raffles said that the group expects to see continued growth by setting up more colleges in the region, developing its proprietary courseware, through value creation of Oriental University City (OUC), a new acquisition in China, and from strategic acquisitions. And to date, the group has been very successful, as seen from the 47.7 per cent compound annual growth rate in its turnover for the past few financial years. However, it is also clear that a significant part of that rapid growth in revenue stemmed from acquisitions made in previous years.

For example, organic topline growth for FY08 was only 26.5 per cent compared with the 53 per cent total
reported, while the equivalent figures were 22.5 per cent against 37.7 per cent in the preceding year.

A look at its core profit before tax and finance costs paints a similar picture - organic growth was 37.8 per cent compared with the total core earnings growth of 65.8 per cent reported. And so the question is: for how long can the company continue to buy assets to fund its rapid growth, especially when liquidity appears to be drying up in debt and equity markets? Plus, in view of the increasingly bleak economic environment, it is worth noting that growth in Raffles's H1 2009 organic operations came to only 9.7 per cent - a possible sign that business is slowing.

Granted, vocational education is usually seen as counter-cyclical and more students may choose to return to school for upgrading in times of economic uncertainty. However, in emerging markets such as China, private education programmes can sometimes be seen as unnecessary expenditure, especially if it involves substantial amounts of financial commitment.

Therefore, if fees are not cut, it is conceivable that organic growth may slow even further should the economic situation worsen.

To Raffles's credit, it successfully deferred payment of its second OUC instalment of $100 million, as well as two subsequent payments for at least a year without interest, and this will help the company stay liquid in such uncertain economic times. This will also prove important as it needs funding to open up new schools as part of its organic business expansion.

However, attempting to maintain its solid performance is now a different ballgame given the continuing global financial turmoil. The journey ahead may well be the biggest test to date for Raffles.

[winston]

Something is not right with Raffles Education.

Market is very strong today yet it dropped 4.8% on high volume.

Why are people selling ?

[winston]

Anybody following Raffles Education ?

The range high is 0.52 and it's trading at 0.355 now. There's no news. Volume has been quite high so somebody is getting out. Also no news on the SGX website..

Drip Drip ...

[winston]

Dont quite understand this counter. Education is supposed to be stable business. However, the price movement is anything but stable..

Today it's up 14% on no news ...

[sidney]

1. How did the Co recognise their revenue? Is it at the point of registration or when payment is received?

erm think is neither ...

from pg 62 pf AR08
Tuition fees and course fees and related instruction cost are recognized over the period of instruction.
Amounts of fees relating to future periods of instruction are included in tuition fees received in advance.

from pg 50 of IPO
Each year is divided into 4 academic terms beginning in Jan, Apr, Jul, and Oct resp.
Tuition fees r collected in advance b4 commencement of each new term.
Revenue is recognised when students register with us and accrue over the duration of programmes registered.

i take it to mean revenue is recognise after the course had started?
shucks ... guess i really need to go find an acctg text ...

My interpretation is that, cash are collected upfront in each term. And recognised in start of each term when student started to commence lessons. Therefore if interpreted correctly, the revenue recongintion is sound.. right??..

[Poles]

Dont quite understand this counter. Education is supposed to be stable business. However, the price movement is anything but stable..

Today it's up 14% on no news ...

education should never be a business.