MindChamps PreSchool reports 2Q19 net profit tumbled 74 percent

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MindChamps PreSchool reported Wednesday its second quarter net profit tumbled 74 percent on-year to S$319,000 as higher expenses offset strong revenue growth.

Revenue for the quarter ended 30 June rose 64 percent on-year to S$12.52 million, the school operator said in a filing to SGX.

That was on an increased number of enrolled students as the number of company-owned company-operated centers (COCOs) more than doubled to 27, from 13 in the year-ago period, MindChamps said.

“With the recently announced acquisitions of another eight preschool centers in Australia and the opening of the first MindChamps preschool center in Malaysia, global student numbers are set to grow further, making MindChamps’ global operations a strong growth contributor,” the company said.

Administrative expenses increased 43 percent on-year in the quarter to S$5.62 million on higher staff costs and day-to-day running costs for the newly acquired centers and overseas expansion, while marketing expenses rose 55 percent on-year to S$255,000, the filing said.

Under non-operating expenses, finance costs were S$571,000, up more than seven times from S$79,000 in the year-ago quarter, mainly on servicing the acquisition loans, MindChamps said. Acquisition expenses rose more than three times to S$304,000 in the quarter from S$95,000 in the year-ago period on professional fees for the acquisitions, the filing said.

The currency translation loss grew to S$500,000 in the quarter from S$31,000 in the year-ago period, mainly on the weakening of the Australian dollar against the Singapore dollar, the filing said.

For the first half, MindChamps posted net profit of S$745,000, down 52 percent on-year, on revenue of S$22.47 million, up 65 percent on-year.

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