GEMS full year net profit rises 2.5 per cent amid rising revenues

Dubai-based school operator's income buoyed by higher average revenue per student

Teachers are increasingly discouraged to remain in their profession. Reem Mohammed/The National

GEMS Education, the largest private school operator in Dubai, said on Monday its 2017 financial year net profit rose 2.5 per cent, boosted by increased average revenue per student. Net income in the twelve months ended August 31 rose to US$129.6 million versus $126.5m in the same period last year, the company said in a statement posted on the website of Nasdaq Dubai. The company's revenues rose 17.3 per cent to $926.2m in the 12 months ended August 31 from $789.7m in the same period last year. Average revenue per student rose 6.6 per cent to $8,079 in the 12-month period from $7,579 in the same period last year.

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"This has been another year of continued reinvestment in our schools," said Dino Varkey, GEMS chief executive.

"Over the last four years, we have invested well over $1 billion to build 16 new schools, upgrade our infrastructure and develop our teachers' capabilities across the board. Our commitment to improving the quality of education is central to GEMS Education, and the reason for investing back into the business."

The company said that enrollment rose to 114,644 in the 12 months ended August 31, a 10 per cent increase from the previous year when enrollment rose to 104,200.

GEMS said that it had secured a $1.25 billion seven-year loan after the end of August of which $900m had been drawn. GEMS said that the syndicated loan was led by Abu Dhabi Islamic Bank, Emirates NBD Capital, HSBC Bank Middle East, Mashreq Bank and Noor Bank.

The company also said that it had secured a $250m five-year revolving credit facility.

Separately, GEMS Education is said to have chosen JP Morgan, Credit Suisse and Bank of America Merrill Lynch to lead the GEMS's initial public offering, according to Reuters. The sale of shares to the public could give the company a market capitalization of between $4.5bn and $5bn. The sale is expected in 2018 and the company will be listed on the London stock exchange. GEMS Education has more than 250 schools in 14 countries.