TIDMAEC
RNS Number : 2897I
AEC Education plc
29 May 2014
29 May 2014
AIM: AEC
AEC EDUCATION PLC
("AEC" or "the Group")
Full Year Results
for the 12 months ended 31 December 2013
Key Points
-- London returned to profitably and Ireland produced a small
operating profit in this its first full year of trading but results
in Singapore and residual costs from the funded operation closed
last year impacted severely
-- Revenues on continuing activities of GBP11.3m (2012:
GBP15.1m) showed a reduction of 25% due largely to the reduction in
business in Singapore
-- Losses before tax and discontinued activities of GBP1.73m
(2012: loss before tax of GBP3.58m)
-- Statutory loss before tax of GBP2.73m (2012: loss before tax of GBP3.84m)
-- Loss per share on continuing activities is 4.17p (2012: loss per share of 6.59p)
-- Statutory loss per share of 6.35p (2012: loss per share of 7.18.p)
-- Net cash of GBP1.48m (2012: GBP2.71m)
-- Malaysian revenue held up despite the troubles in Northern
Africa - one of its major markets and it was profitable
-- Cyprus returned reduced profits reflecting the impact of the
banking crisis in the early part of the year
-- Oman failed to gain traction.
-- Cinnovation involvement and the wide range of developments
now being pursued leads the Board to conclude that these will
enable AEC to grow profitably in the immediate future.
Liam Swords, Chairman of AEC, commented,
"The year under review again proved to be very challenging with
visa policies continuing to affect the market for London and the
impact of the loss of EduTrust status impacting greatly on the
results. The fact that London has returned to profitably and our
new operation in Dublin returned an operating profit in its first
full year of trading augurs well for 2014. Additionally, action
taken to enable Singapore to target breakeven in 2014 and the
opportunity for growth in profits in Malaysia and Cyprus are
encouraging signs for a return to profit."
Enquiries
AEC Education Plc
Liam Swords tel: 07725 836 811
W H Ireland
Andrew Kitchingman / James Bavister tel: 0207 220 1666
AEC EDUCATION PLC
ANNUAL REPORT
YEAR ENDED 31 DECEMBER 2013
CHAIRMAN'S STATEMENT
Overview
The year under review proved to be one of very mixed fortunes.
Trading in our London operation continued to be very challenging
but did return a marginal operating profit. Cyprus was affected by
the banking crisis in the first and second quarters which reduced
its usual level of performance but it did provide a small operating
profit. Ireland grew substantially and showed a small operating
profit in this its first full year of trading and Malaysia fully
regained the ground lost following the Middle East crisis and was
profitable. Unfortunately these hard won successes were negated by
Oman which continued to lack traction and recorded an Operating
Loss. Also our Singaporean operation was severely affected by the
withdrawal of its EduTrust status at the beginning of August
resulting in very material provisions having to be made for
teaching out its international student population.
The withdrawal of EduTrust in Singapore meant that it could no
longer recruit overseas students and cost levels could not be
reduced whilst we applied for reinstatement. The impact was severe
in both profit and cash terms and is more fully quantified below.
With London, Ireland, Malaysia and Cyprus now in a position to
trade profitably and other initiatives taken to stabilize Singapore
we should see a return to profitably this year. Additionally the
introduction of Cinnovation as a major investor and their interest
in assisting growth has meant we have planned some significant new
initiatives in Europe in 2014.
Financial results
Group revenues on continuing activities for the year to 31
December reduced by 25% to GBP11.3m (2012: GBP15.1m). The reduction
was partly due to the continuing impact of the closure of two
schools in London the previous year and the continuing negative
impact of the current visa policies on student recruitment in the
UK. Also the cessation of student recruitment in Singapore caused
their revenue to reduce by 36% year on year. The Group's loss
before tax from continuing operations was GBP1.73m (2012: loss
before tax GBP3.58m).
The London operation recorded an operating profit of GBP45k
which after finance charges was a loss of GBP141k. Ireland also
recorded an operating profit of GBP16k which after interest and
central charges was a loss of GBP49k. In Asia, the Singapore
college recorded a pre-tax loss of GBP1.19m and Malaysia returned a
profit of GBP27k. Additionally our share of the profit from our
joint venture in Cyprus was GBP8k which after finance and group
charges was a loss of GBP20k and Oman showed an operating loss of
GBP91k (GBP241k after charging GBP150k for the impairment of the
Malvern House brand). The initiatives we have taken in Singapore to
reduce costs and to focus on the local market, following an
unsuccessful application to regain EduTrust, should return it to
breakeven or at worst a marginal loss in 2014.
The loss per share was 6.35p (2012: 7.18p). The net cash outflow
from operating activities was GBP1.51m (2012: outflow of
GBP2.42m).
Net cash at the end of the year stood at GBP1.48m (2012:
GBP2.71m).
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 2013 (2012: 0.00p per share).
Business Review
In Asia, our operations in Singapore suffered a severe setback
resulting from the withdrawal of EduTrust status. The impact was
reduced revenue of 25% and a loss before tax of GBP1.19m - GBP1.42m
after tax. We have reduced the operation down to a level consistent
with servicing the local market with a range of vocational
programmes with the expectation of breaking even in 2014.
Our operations in Malaysia maintained the level of student
numbers and revenue generated last year despite the continuing
troubles in its markets in Northern Africa. This was achieved by an
increase in the revenue from the undergraduate and professional
programmes in the local market. Revenue in Malaysia was about the
same as the previous year but profits before tax were reduced to
GBP27k (2012 GBP70k) because of the need to compete more strongly
in the local market. In 2014 we are introducing new Islamic
Diplomas as well as a new range of undergraduate business degrees
and two new post graduate degrees. All the Asian financial
operations are now centred in Malaysia. We are continuing to invest
in Malaysia and an ambitious growth programme is expected to show a
significant increase in profits in 2014 and to take a further step
towards achieving the ultimate objective of becoming a "deemed
university" with its own campus.
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 and the negative views portrayed by
this overseas continued during 2013. This made the market for our
remaining UK school in Kings Cross difficult, and this, combined
with the reduction in capacity implemented last year, reduced
revenue year on year by 36%. The remaining operation produced a
small operating profit of GBP45k (2012 loss GBP1.38m). The return
to profit at operational level was a significant milestone and
there is confidence that this success can be built on in 2014. We
recorded a loss on discontinued activities of GBP0.38m due to
writing off the residual costs relating to the funded training
operation closed last year.
Ireland achieved revenue of GBP1.41m in this its first full year
of trading and produced an operating profit of GBP16k. Finance and
central charges created a loss before tax of GBP49k. Ireland
trialled a Summer School last year which mirrored the strong
results traditionally achieved in Cyprus so it will add a full
Summer School during 2014. This combined with continuing strong
growth in the core EFL business leaves it in a position to show
significantly improved results in 2014.
Our joint venture in Cyprus was severely affected by the banking
crisis in the first and second quarters but still achieved about
the same revenue as the previous year. Operating profits were
affected such that our share of the Joint Venture was GBP8k and we
recorded a loss before tax of GBP20k after allocating a share of
central costs. The agreement signed with UCLan (University of
Central Lancashire) in 2014 to deliver pre-sessional English and a
University Taster Programme combined with a return to growth
provides a strong opportunity for Cyprus to return to its normal
level of profit during 2014.
Oman has not lived up to expectation. Student interest is low
and it has not yet proved possible to expand into the surrounding
regions. The result was an operating loss of GBP91k (GBP241k after
charging GBP150k for the impairment of the Malvern House brand).
Steps are being taken with our partners to improve the
situation.
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.
The level of support as we implemented the necessary changes to
ensure the Group returns to sustainable profit growth is very much
appreciated by the Board.
Prospects
2013 was a very difficult year in Singapore and the market in
the UK remains constrained by visa restrictions and the negative
attitude perceived by overseas students of Government policy. Our
investment in the expansion of the Malvern brand internationally as
well as London and Malaysia returning to profit leads the Board to
expect the Group to show a significantly improved performance in
2014. The recent shareholding taken up by Cinnovation and their
strong interest in supporting AEC to achieve its full potential
leads the Board to conclude that the wide range of developments now
being pursued will enable AEC to grow profitably in the immediate
future.
Liam Swords
Chairman
28 May 2014
AEC EDUCATION PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
GBP GBP
Revenue
Sale of services 10,989,755 14,776,108
Other income 314,123 317,086
11,303,878 15,093,194
----------- -----------
Cost of services sold 6,978,791 7,573,112
Salaries and employees' benefits 2,770,010 4,212,032
Amortisation of brand, licences and trademarks 144,957 172,593
Depreciation of plant and equipment 437,778 631,754
Other operating expenses 2,213,560 4,192,137
Restructuring of activities - 729,937
Impairment or write-down of property, plant
and equipment 287,390 220,217
Brand impairment 150,000 -
Goodwill impairment - 882,163
Total operating costs and expenses 12,982,486 18,613,945
----------- -----------
Operating loss -1,678,608 -3,520,751
----------- -----------
Share of results of associated companies
and joint ventures -4,320 15,398
Finance costs -45,875 -70,804
Loss before income tax -1,728,803 -3,576,157
Income tax (charge)/credit -235,459 287,382
Loss for the year from continuing activities -1,964,262 -3,288,775
Loss for the year from discontinued activities -998,323 -262,007
Loss for the year -2,962,585 -3,550,782
----------- -----------
Attributable to:
Equity holders of the Company -2,904,688 -3,174,361
Non-controlling interest -57,897 -376,421
----------- -----------
-2,962,585 -3,550,782
----------- -----------
Loss per share on continuing activities
(in pence)
Basic -4.17 -6.59
----------- -----------
Diluted -4.17 -6.59
----------- -----------
Loss per share on discontinued activities
(in pence)
Basic -2.18 -0.59
----------- -----------
Diluted -2.18 -0.59
----------- -----------
AEC EDUCATION PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
GBP GBP
Loss for the year -2,962,585 -3,550,782
Foreign currency translation movements -19,465 185,517
----------- -----------
Other comprehensive (expense)/income for
the year -19,465 185,517
----------- -----------
Total comprehensive income for the year -2,982,050 -3,365,265
----------- -----------
Attributable to:
Equity holders of the parent -2,917,515 -3,020,171
Non-controlling interest -64,535 -345,094
----------- -----------
Total comprehensive income for the year -2,982,050 -3,365,265
----------- -----------
AEC EDUCATION PLC
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
2013 2012
TOTAL ASSETS GBP GBP
Non-Current Assets
Property, plant and equipment 763,033 1,090,213
Investment in associated companies 16,668 29,395
Investment in joint ventures 26,074 66,653
Intangible assets 3,603,250 4,357,956
Goodwill 420,324 446,558
Deferred tax asset - 233,031
4,829,349 6,223,806
----------- -----------
Current Assets
Inventories 9,229 21,858
Trade receivables 908,710 1,948,591
Other receivables and prepayments 990,959 1,575,099
Tax recoverable 9,806 8,581
Due from joint ventures 95,897 105,438
Due from related parties 3,798 26,165
Cash and cash equivalents 1,475,351 2,706,691
----------- -----------
3,493,750 6,392,423
----------- -----------
Total Assets 8,323,099 12,616,229
----------- -----------
EQUITY AND LIABILITIES
Non-Current Liabilities
Financial liabilities 63,048 94,390
Deferred taxation liability 22,275 24,249
----------- -----------
85,323 118,639
----------- -----------
Current Liabilities
Trade payables 263,303 652,045
Deferred income 2,160,688 3,813,401
Other payables and accruals 2,247,962 2,969,251
Due to related parties 660,810 24,291
Financial liabilities 112,107 284,564
Provision for income tax 7,736 51,757
----------- -----------
5,452,606 7,795,309
----------- -----------
Total liabilities 5,537,929 7,913,948
----------- -----------
Equity attributable to equity holders of
the Company
Share capital 5,362,491 4,419,878
Share premium 896,111 707,588
Reserves -3,299,285 -381,770
----------- -----------
2,959,317 4,745,696
Non-controlling interests -174,147 -43,415
----------- -----------
Total equity 2,785,170 4,702,281
----------- -----------
Total Equity and Liabilities 8,323,099 12,616,229
----------- -----------
AEC EDUCATION PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Share Share Other Other Other Other Attribut- Non-
controlling
Capital Premium Reserves Reserves Reserves Reserves Total able Interests Total
Of to
Share-Based Retained Trans- Capital Other Equity
Payment Earnings lation Reserve Reserves Holders
of
Reserve Reserve The
Company
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
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
Share Share Other Other Other Other Attribut- Non-
Capital Premium Reserves Reserves Reserves Reserves Total able controlling Total
Of to
Share-Based Retained Trans- Capital Other Equity Interests
Payment Earnings lation Reserve Reserves Holders
of
Reserve Reserve The
Company
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1
January 2013 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
Loss for the
year - - - -2,904,688 - - -2,904,688 -2,904,688 -57,897 -2,962,585
Total other
comprehensive
income - - - - -12,827 - -12,827 -12,827 -6,638 -19,465
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
Total
comprehensive
income for the
year - - - -2,904,688 -12,827 - -2,917,515 -2,917,515 -64,535 -2,982,050
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
Issue of new
shares 942,613 188,523 - - - - - 1,131,136 - 1,131,136
Share based
compensation
transfer - - -89,700 89,700 - - - - - -
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
Total
transactions
with owners 942,613 188,523 -89,700 -89,700 - - - 1,131,136 - 1,131,136
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
Non-controlling
interest
acquired - - - - - - - - -125,489 -125,489
Impairment of
carrying value - - - - - - - - 59,292 59,292
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
Balance at 31
December 2013 5,362,491 896,111 239,044 -4,833,777 1,124,888 170,560 -3,299,285 2,959,317 -174,147 2,785,170
----------------- ---------- -------- ------------ ----------- ---------- --------- ----------- ----------- ------------ -----------
AEC EDUCATION PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
GBP GBP
Cash Flows from Operating Activities
Loss before income tax from continuing activities -1,728,803 -3,576,157
Loss before income tax from discontinued
activities -998,323 -262,007
Adjustments for:
Amortisation of intangible assets 169,957 172,593
Depreciation of property, plant and equipment 437,778 648,096
Impairment and write down of property plant
and equipment 299,099 220,217
Impairment of intangible assets 600,000 -
Loss on disposal of plant and equipment 88,909 24,334
(Profit)/loss on disposal of subsidiary -215,308 190,609
Interest expense 45,875 70,804
Interest income -375 -7,012
Impairment of goodwill and minority interest 59,292 882,163
Share of results of associated companies
and joint ventures 4,320 -15,398
-1,237,579 -1,651,758
Changes in working capital:
Receivables 1,567,976 -690,420
Payables -2,479,785 -47,085
Inventories 12,629 12,404
Related parties and associated companies 668,427 -80,026
-1,468,332 -2,456,885
Taxation -39,638 40,510
Net cash used from operating activities -1,507,970 -2,416,375
----------- -----------
Cash Flows from Investing Activities
Interest received 375 7,012
Dividend income received from associated
and joint venture companies - 154,736
Purchases of property, plant and equipment -528,009 -510,083
Purchase of trademarks and licences -16,099 -9,594
Disposal of subsidiary -11,606 2,260,270
Acquisition of subsidiary -99,541 -133,630
Net cash (used in) /generated by investing
activities -654,880 1,768,711
----------- -----------
Cash Flows from Financing Activities
Share issue 1,131,136 -
Interest paid -45,875 -70,804
Repayment of term loan -267,376 -255,608
Dividend paid to shareholders - -88,397
Dividends paid to non-controlling interests - -23,768
Finance leases 63,577 -86,039
----------- -----------
Net cash generated by/(used in) financing
activities 881,462 -524,616
----------- -----------
Effect of foreign exchange rate changes
on consolidation 50,048 68,596
Net decrease in cash and cash equivalents -1,231,340 -1,103,684
Cash and cash equivalents at the beginning
of the year 2,706,691 3,810,375
----------- -----------
Cash and cash equivalents at the end of
the year 1,475,351 2,706,691
----------- -----------
Cash and cash equivalents consist of the
following:
2013 2012
GBP GBP
Cash and bank balances 1,475,351 2,700,140
Fixed deposits - 6,551
1,475,351 2,706,691
----------- -----------
AEC EDUCATION PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
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 has authorised the issue of these financial
statements on 28 May 2014.
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
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.
Europe South East Total
Asia/Middle
East
2013 GBP GBP GBP
Revenue from external customers 5,080,994 6,222,884 11,303,878
----------- ------------- -----------
Depreciation, write offs and amortisation -415,496 -604,629 -1,020,125
----------- ------------- -----------
Loss before taxation -270,939 -1,457,864 -1,728,803
----------- ------------- -----------
Taxation (charge)/credit -6,460 -228,999 -235,459
----------- ------------- -----------
Loss on discontinued activities -380,629 -617,694 -998,323
Loss for the year -658,028 -2,304,557 -2,962,585
Segmental assets 4,194,708 4,128,391 8,323,099
----------- ------------- -----------
Segmental liabilities -4,964,567 -573,362 -5,537,929
----------- ------------- -----------
Additions to non-current assets 170,478 347,682 518,160
----------- ------------- -----------
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 (charge)/credit 47,933 239,449 287,382
----------- ------------- -----------
Loss on discontinued activities - -262,007 -262,007
----------- ------------- -----------
Loss for the year -3,353,836 -196,946 -3,550,782
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
----------- ------------- -----------
4 Earnings/(Loss) Per Share
The basic earnings/(loss) per share on continuing activities
was based on the loss attributable to shareholders of GBP1,906,365
(2012: loss of GBP2,912,354) and the weighted average number
of ordinary shares in issue during the year of 45,753,464 shares
(2012: 44,198,781 shares).
The basic earnings/(loss) per share on discontinued activities
was based on the loss attributable to shareholders of GBP998,323
(2012: loss of GBP262,007) and the weighted average number
of ordinary shares in issue during the year of 45,753,464 shares
(2012: 44,198,781 shares).
The diluted earnings/(loss) per ordinary share on continuing
activities and the diluted earnings/(loss) per share on discontinued
activities are based respectively on the loss attributable
to shareholders of GBP1,906,365 (2012: loss of GBP2,912,354)
and loss attributable to shareholders of GBP998,323 (2012:
loss of GBP262,007) and the weighted average number of ordinary
shares in issue at during the year of 45,753,464 shares (2012:
44,198,781 shares) diluted for the effect of share options
and warrants.
At 31 December 2013 there were 1,950,000 options (2012: 2,840,000
options) outstanding. Of these all 1,950,000 options (2012:
2,840,000 options) 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 Classroom Motor Total
property and office vehicle
and improvements equipment
GBP GBP GBP GBP
Group 2013
Cost
As at 1 January 2013 1,205,755 1,979,193 35,602 3,220,550
Additions 111,182 416,827 - 528,009
Disposals -348,506 -21,594 -36,248 -406,348
Disposals of subsidiary -8,999 -17,576 - -26,575
Currency realignment -42,044 -77,312 646 -118,710
-------------------- -------------- ----------- ------------
As at 31 December 2013 917,388 2,279,538 - 3,196,926
-------------------- -------------- ----------- ------------
Accumulated depreciation
As at 1 January 2013 817,861 1,289,727 22,749 2,130,337
Charge for the year 15,698 417,914 4,166 437,778
Impairment in the year - continuing
activities 104,705 182,685 - 287,390
Impairment in the year - discontinued
activities 11,709 - - 11,709
Disposals -278,369 -11,749 -27,321 -317,439
Disposal of subsidiary -8,999 -17,576 - -26,575
Currency realignment -33,907 -55,806 406 -89,307
-------------------- -------------- ----------- ------------
As at 31 December 2013 628,698 1,805,195 - 2,433,893
-------------------- -------------- ----------- ------------
Net book value
At 31 December 2013 288,690 474,343 - 763,033
-------------------- -------------- ----------- ------------
An impairment charge of GBP100,325 during the year ended 31 December
2013 arose as a result of the decision made in London to cease
using the student database during the ensuing year. The balance
of GBP187,065 was a direct consequence of the decision to downsize
the operation in Singapore following the loss of EduTrust status
as was the GBP11,709 included within the loss on discontinued
activities.
Leasehold Classroom Motor Total
property and office vehicle
and improvements equipment
GBP GBP GBP GBP
Group 2012
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
Charge for impairment 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 impairment charge during the year ended 31 December 2012 arose
as a result of the closure of two schools and separate offices
in London as part of the restructuring.
6 Intangible Assets
Intangible assets are summarised
as follows:
Licences Brands Trademarks Total
GBP GBP GBP GBP
Group 2013
Cost
As at 1 January 2013 847,494 3,750,000 20,797 4,618,291
Additions 14,317 - 1,782 16,099
Currency alignment -8,238 - - -8,238
As at 31 December 2013 853,573 3,750,000 22,579 4,626,152
=========== ========== =========== ===========
Accumulated amortisation
As at 1 January 2013 100,460 150,000 9,875 260,335
Charge for the year - continuing
activities 15,589 125,000 4,368 144,957
Charge for the year - discontinued
activities - 25,000 - 25,000
Charge for impairment - continuing
activities - 150,000 - 150,000
Charge for impairment - discontinued
activities - 450,000 - 450,000
Currency alignment -7,390 - - -7,390
As at 31 December 2013 108,659 900,000 14,243 1,022,902
=========== ========== =========== ===========
Net book value
At 31 December 2013 744,914 2,850,000 8,336 3,603,250
=========== ========== =========== ===========
Analysed as follows:
Indefinite life 734,046 - - 734,046
Definite life 10,868 2,850,000 8,336 2,869,204
744,914 2,850,000 8,336 3,603,250
=========== ========== =========== ===========
There is an annual amortisation charge for the Malvern House brand
made in accordance with the stated accounting policy. In addition,
following the loss of EduTrust status by AEC College Pte Ltd and
the consequent inability to recruit foreign students, teaching
of English language in Singapore which was branded as Malvern
House, has now ceased. As a direct consequence the Board has reassessed
the carrying value of the Brand attributable to that cash generating
unit and concluded that a permanent impairment took place on the
cessation of that activity. Accordingly a charge of GBP450,000
has been made for that permanent impairment of the Malvern House
brand within the loss on the discontinued activities in the current
year.
In addition, the Board has reviewed all ongoing cash generating
units in accordance using the detailed procedures adopted by th
Board and concluded that one, the school in Oman, can also no
longer support the carrying value of the Malvern House brand with
which it was previously attributed. Therefore, as shown in the
table above, a further provision of GBP150,000 was made during
the year ended 31 December 2013 to reflect this change. This impairment
charge is set out on the face of the Consolidated Income Statement
as the entity concerned is a continuing activity.
Licences Brands Trademarks Total
GBP GBP GBP GBP
Group 2012
Cost
As at 1 January 2012 2,845,940 3,750,000 15,017 6,610,957
Additions 3,814 - 5,780 9,594
Disposal of subsidiary -2,013,855 - - -2,013,855
Currency alignment 11,595 - - 11,595
As at 31 December 2012 847,494 3,750,000 20,797 4,618,291
=========== ========== =========== ===========
Accumulated amortisation
As at 1 January 2012 84,133 - 5,424 89,557
Charge 18,142 150,000 4,451 172,593
Currency alignment -1,815 - - -1,815
As at 31 December 2012 100,460 150,000 9,875 260,335
=========== ========== =========== ===========
Net book value
At 31 December 2012 747,034 3,600,000 10,922 4,357,956
=========== ========== =========== ===========
Analysed as follows:
Indefinite life 734,046 - - 734,046
Definite life 12,988 3,600,000 10,922 3,623,910
747,034 3,600,000 10,922 4,357,956
=========== ========== =========== ===========
7 Goodwill
2013 2012
GBP GBP
Cost
Balance as at the beginning
of the year 446,558 1,141,242
Acquisition of subsidiary -25,948 591,737
Disposal of subsidiary - -678,040
Impairment loss - -591,737
Currency alignment -286 -16,644
------------ --------------
Balance as at the end of the
year 420,324 446,558
------------ --------------
Goodwill has arisen on acquisitions by the Group.
During the year ended 31 December 2013, the Group acquired the
non-controlling interest in AEC Bilingual Pte Limited with negative
goodwill of GBP25,948.
During the prior year, the Group acquired Malvern House Training
Solutions Limited with goodwill on consolidation calculated as
GBP591,737.
The goodwill relating to Malvern House Training Solutions Limited
was reassessed and a provision to write this down to GBPnil was
created at 31 December 2012.
In the prior year, in addition to the impairment loss of GBP591,737
a further GBP290,426 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 GBP882,163.
8 Share Capital
Allotted, called up and
fully paid
Nominal Nominal Nominal
No of value No of value value
ordinary ordinary deferred deferred All
shares shares shares shares shares
At 1 January 2012 10p ordinary
shares 44,198,781 4,419,878 - - 4,419,878
----------- ----------- ----------- ---------- ----------
At 1 January 2013 10p ordinary
shares 44,198,781 4,419,878 - - 4,419,878
Division of shares to 5p
ordinary shares - -2,209,939 44,198,781 2,209,939 -
Shares issue on 23 December
2013 18,852,262 942,613 - - 942,613
----------- ----------- ----------- ---------- ----------
At 31 December 2013 5p ordinary
shares 63,051,043 3,152,552 44,198,781 2,209,939 5,362,491
=========== =========== =========== ========== ==========
Until the division of the Company's shares on 20 December 2013
the par value of each existing ordinary share in the capital
of the Company was 10p, which was the minimum price at which
the Company's ordinary shares could be issued.
At that date the Company's existing ordinary shares had been
trading at below the par value of 10p for quite some time,
and in order to proceed with the planned subscription, the
Company proposed to undertake a capital reorganisation so that
the par value of its ordinary shares was reduced to 5p per
ordinary share.
At the Extraordinary General Meeting held on 20 December 2013
the Shareholders approved splitting each issued existing ordinary
share into one new ordinary share of 5p and one deferred share
of 5p. As all rights remain with the new ordinary shares of
5p each these deferred shares are effectively valueless but
remain part of the share capital of the Company.
9 Annual Report
The Annual Report will be sent to shareholders by close of
business on or around 4 June 2014. 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
END
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