Gems’ yearly net profit rises 2.5% on revenues

Gems Education, the largest private school operator in Dubai, said yesterday its 2017 financial year net profit rose 2.5 per cent, boosted by increased average revenue per student.

Net income in the 12 months ended August 31 rose to US$129.6 million versus $126.5m a year earlier, the company said in a statement posted on the Nasdaq Dubai website.

The company’s revenues rose 17.3 per cent to $926.2m in the 12 months ended August 31 from $789.7m a year earlier. 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.

“This has been another year of continued reinvestment in our schools,” said Dino Varkey, the 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.”

Gems said that enrolment rose to 114,644 in the 12 months ended August 31, a 10 per cent increase on the previous year’s 104,200.

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

It added that it had secured a $250m five-year revolving credit facility.

Separately, Gems is said to have chosen JP Morgan, Credit Suisse and Bank of America Merrill Lynch to lead its initial public offering, according to Reuters.

The sale of shares to the public could give the company a market capitalisation of $4.5bn to $5bn. The sale is expected next year and the company will be listed on the London stock exchange.

Gems Education has more than 250 schools in 14 countries.