MindChamps' Q2 net profit surges 83%

Mr David Chiem, founder and group CEO of the MindChamps Group, with students.
Mr David Chiem, founder and group CEO of the MindChamps Group, with students.PHOTO: MINDCHAMPS

Growing student numbers and global franchises boost pre-school group's performance

MindChamps PreSchool posted an 83 per cent year-on-year jump in net profit to $1.26 million for the second quarter ended June 30, underpinned by growing student numbers and global franchises.

Revenue rose 60 per cent to $7.65 million, thanks to the acquisition of seven pre-school centres in Australia and Singapore, as well as higher franchise income mainly from the sale of a master franchise licence in China. Earnings per share for the quarter clocked 0.52 cent, up from 0.38 cent previously.

Gross profit for the quarter under review came to $4.89 million, up 78 per cent, in line with the higher revenue and partly offset by higher cost of sales.

Administrative expenses also swelled during the quarter, rising 84 per cent to $3.96 million due to higher staff costs and increased administrative costs incurred by newly acquired centres.

As of June 30, the group had 13 company-owned company-operated centres (COCOs) and 51 franchisee-owned franchisee-operated centres (FOFOs), up from six COCOs and 40 FOFOs a year ago.

For the six-month period, net profit rose 16 per cent to $1.6 million, while revenue was 48 per cent higher at $13.66 million.

  • AT A GLANCE

  • REVENUE: $7.65 million (+60%)

    NET PROFIT: $1.26 million (+83%)

In a separate announcement, MindChamps PreSchool said its indirect wholly owned subsidiary, MindChamps Early Learning & Care @ Eastwood, is acquiring the business and assets of two pre-school centres in Sydney from Smart Child Care for about A$5.9 million (S$5.9 million).

The assets to be acquired include the authorisations of the Australian government agency to provide childcare and education services at each respective pre-school centre, the intellectual property rights and licences for each respective business, and the plant and equipment of each respective pre-school centre.

MindChamps Early Learning & Care @ Eastwood will also be entering into new leases with the respective landlords of each of the pre-school premises. The purchase will be funded from a combination of MindChamps' initial public offering proceeds and an acquisition loan.

Shares in MindChamps yesterday closed at 67 cents, down half a cent. The results were announced after the close of markets.

A version of this article appeared in the print edition of The Straits Times on August 07, 2018, with the headline 'MindChamps' Q2 net profit surges 83%'. Print Edition | Subscribe