Overseas Education Limited

[GreedandFear]

The raising of fees has brought some relief to bottom line.

Net cash outflow in investing activities is low as the campus is new. But spending will increase after a few years. By then, maybe the student numbers will have already picked up?

I thought it will be a more prudent move for them to back the bonds, instead of paying dividends. Perhaps they have a plan to manage the bonds maturing in 2019?

Retrenchment data will be a key statistic to watch.

I tried to extrapolate the Q4 #s by subtracting 9 months #s from the full year #s. Based on that :

Q4 Revenues $21,918 vs $21,788 for Q3 2016 and $23,938 for Q4 2015
Q4 Opex $20,238 vs $21,138 for Q3 2016 and $21,237 for Q4 2015
Q4 PBT of $1,690 vs $650 for Q3 2016 and $2,701 for Q4 2015

There seems to be a historical pattern that revenues are always a bit higher in Q4 than Q3 (not sure why, the school year starts in June, so any impact from higher enrollment should be in Q3 only) so I don't think the above quarter on quarter improvement is anything to get too excited about. However, the lower QonQ opex numbers do suggest that they are focused on what they can control (ie costs). As I have mentioned in previous posts, this school's capacity utilisation is too low and we just need to wait for the global economy to pick up before OFS is likely to see a jump in student numbers. The big challenge is going to be refinancing the bond in 2018.

Vested