AEC Education

Far East-focused education training and examinations play AEC is delivering strong growth in resilient markets.

AEC, which provides educational courses up to post-graduate degree level in Singapore, Malaysia, Vietnam and China, as well as London Chamber of Commerce and Industry (LCCI) exams and qualifications across Asia, earned marks by growing sales 21% organically to more than £3.2m in the half to June.

Pre-tax profits powered 31% higher to £403,000, earnings rose to 1.3p (2008: 1.2p) and AEC ended the half with £3.15m in net cash, having raised more than £1.6m of fresh cash during the half.

‘Pretty pleased’ with the results, chairman Liam Swords says that in spite of wider economic tumult, the company’s Far Eastern education markets remain resilient, with students ‘often seeking to enhance their employment prospects via well-regarded educational programmes and qualifications’. Accordingly, he highlighted ‘excellent’ performances from Malaysia and Singapore, with China ‘still showing growth, albeit slower than we expected’.

Shortly after the period-end, AEC took ‘another major step forward’ with the cash and shares-based acquisition, capped at just below £4m, of London-based Malvern House in a deal almost doubling its size. Offering English language learning courses for foreign students, as well as business administration and other courses, Malvern has brought a UK presence and will enable AEC to tap into strong demand for UK-based study from the Far East. Expecting to announce further acquisitions in the coming 12 months, Swords says AEC remains focused on the delivery of further organic growth.

Comfortably on track to meet full year forecasts – house broker WH Ireland predicts £1.2m of pre-tax profit from £9.45m sales and earnings of 2.3p – the shares are trading on less than eleven times forward earnings and look an educated bet.