SINGAPORE (May 7): MindChamps Preschool reported 1Q18 earnings ended March fell by 51% to $0.34 million from $0.69 million a year ago on higher cost of sales from expansion.
Revenue in 1Q18 rose 35.6% to $6 million from a year ago mainly due to an increase of $1.5 million in school fees from a higher number of enrolled students following the acquisitions of four preschool centres in Sydney in November 2017.
Correspondingly, MindChamps’ cost of sales increased by 42% to $2.6 million, mainly due to an increase in staff cost, which resulted from an increase in the number of academic staff following the Aussie acquisitions.
Operating administrative expenses increased 63% to $3.4 million led by an increase in other administrative costs of $0.4 million incurred by the new centres in areas such as rental, utilities, depreciation, amortisation, repairs and maintenance and other day-to-day running costs.
It also factored in an increase in staff costs of $0.8 million following an increase in the number of staff in 2017, to support the group’s business expansion overseas and SGX compliance related matters.
Despite these, MindChamps reported a gross profit of $3.4 million with gross profit margin of 57% while operating profit came in at $0.7 million while profit before taxation of $0.5 million for the quarter.
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As at March 31, the group’s cash and cash equivalents stood at $35.8 million.
Looking ahead, MindChamps says with the recently announced acquisition of another four preschool centres in Sydney, Australia, student numbers there will grow, making its Australian operations a strong growth contributor.
Shares in MindChamps closed at 79.5 cents on Monday.
