GEMS Education Profit Surges 77%

GEMS Education has increased profits to US$75 million, up 77 per cent, in the year ending March 31, from $42 million a year earlier according to information released to Abu Dhabi based newspaper, The National.

The number of students enrolled in the group’s schools increased by 13.6 per cent to 90,294, partly on the back of six new schools, helping to increase its total income to $559.5m during the financial year from $455.9m a year earlier. New schools opened in Abu Dhabi, Dubai, Ras Al Khaimah and Kampala.

“We... increased substantially our investment in schools, with over $267 million invested in this same period. [We] will continue our expansion in the current year,” said Dino Varkey, the director of GEMS Education.

Opening new schools is a capital intensive business, and in addition to a $200m sukuk launched on Nasdaq Dubai in November, the group has been looking at additional means of funding, including the possibility of a minority equity sale to Fajr Capital, and sale and lease back agreements.

The company appears also to have been dipping into its own available cash. Balance sheet reserves fell $26.94m during the year to $24.61m.