Wednesday, March 28, 2012

MEGB ... Mar12

Its group chief executive officer Datuk Seri Edmund Santhara bought more shares in his beleaguered company on 22 March 2012, forking out some RM7.7mil to mop up 7 million shares at a price of RM1.10. This acquisition raised his shareholding in the company to 23.81% or 97.6 million shares.

The rationale for his acquisition isn't yet clear. Masterskill's other substantial shareholder Siva Kumar M. Jeyapalan was just a passive shareholder, and was not aware of any upcoming plans for the company.
Siva had on Oct 5 2011 emerged as a subtantial shareholder of the education group after acquiring 41.2 million shares or a 10.05% stake in the company at approximately RM1.10 a share.

It had been rumoured earlier that Masterkill could be a takeover target by Khazanah Nasional Bhd or Ekuiti Nasional Bhd. Industry observers said that pricing was likely an issue preventing the buyout deals from materialising so far. But market observers would not rule out a potential deal involving Masterskill, perhaps one that did not take the strict privatisation model.

Masterskill still had an on-going business as well as fixed assets in the form of its campuses. Presently, its main campus is in Cheras, and it has five other smaller campuses in Johor Baru, Ipoh, Kota Baru, Kota Kinabalu and Kuching. Masterskill is also in the process of building its flagship campus in Bangi, Selangor, where it has received RM250mil in financing for the first phase of this project.

Aside from Santhara and Siva, another major shareholder of the company is private equity firm Crescent Point Investment Holdings Ltd with 21.5%.

It recorded a net loss of RM1.57mil for its fourth quarter to Dec 31, 2011 from a previous net profit of RM26.85mil on the back of a 38.81% drop in revenue to RM49.5mil.

For the full year (FY11), net profit was down almost three fold to RM38.14mil from RM102.14mil in FY10 on the back of a 20.77% drop in revenue to RM250.17mil.
The fourth-quarter results were dragged down by weak student intake and higher-than-expected staff costs. For the full year, operating margins almost halved to 26%, partly due to a surge in depreciation.

The 21% decline in full-year revenue resulted mainly from a 35% drop in student intake to 3,500, of which only 250 students enrolled in the second half of the year. The total active students in 2011 stood at 14,000.

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