News blog

AEC Education

• BY: Andrew Hore |
• POSTED: 29/05/2013 |

AEC Education reduced its costs but this could not offset the decline in 2012 revenues and it has passed its dividend. 

Revenues fell from £19.3m to £17m, while an underlying profit of £536,000 was turned into an underlying loss of £1.75. That excludes write-offs of £220,000 and impairment charges of £882,000, as well as £730,000 of restructuring costs in the UK. AEC paid a dividend of 0.2p a share in 2011 but it is not paying one for 2012.

Problems in the UK have offset a decent performance in the Far East, where revenues increased by 14%. Malaysia returned to profit and Singapore increased its profit by 50%. Tighter immigration controls hit the UK operations and activities have been consolidated on one site in London.

The sale of Educational Resources to Pearson raised £2.9m in October last year. That helped to replenish the cash pile after last year’s loss and net cash was £2.71m at the end of 2012. That covers the majority of the company’s market capitalisation. At 6.75p a share, down 0.88p a share, AEC is valued at £2.98m.

The UK restructuring should be enough to return it to profitability, while newer operations in Dublin and Oman should move into profit. House broker WH Ireland has reduced its 2013 profit forecast from £784,000 to £633,000. The shares are trading on around seven times prospective 2013 earnings.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2013_44.pdf