CIBT Reports Financial Results for Fiscal Year Ending August 31st 2015
December 2nd, 2015, Vancouver, BC – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to report that it has filed on SEDAR its annual consolidated financial statements and related Management’s Discussion Analysis for its fiscal year ending August 31st 2015. To review the filing, please visit www.sedar.com.
“Fiscal 2015 was a transformative year for the Company because of the successful integration of our self-sustaining education business with our rapidly expanding student housing portfolio, to which we negotiated the addition of nearly $100 million in student housing properties in conjunction with equity investment partners during the year,” said Toby Chu, President and CEO, Vice Chairman of CIBT. “At the start of the year we set out to prove a business model that aggressively acquired real estate assets in order to take advantage of the increasing demand for Vancouver real estate and the limited supply of housing solutions for students living in the Greater Vancouver area. We are now able to take our existing students as well as the increased number of international students entering Canada every year and provide them with clean, safe and convenient housing solutions while generating value for our shareholders in the form of gains on real estate ownership, ongoing rental revenue, and additional fees for identifying undervalued properties.”
“We have already begun to see the benefits and success of our new strategy with the purchase of GEC Viva Suites, up $8 million in property value in just 7 months with a factored-in discount for conservative reasons,” continued Toby Chu. “While our shareholders will continue to see further valuation gains from other properties we acquired this year, it is part of our strategy to monetize on some of these assets in the near future and provide additional returns to our shareholders.”
“Moving into 2016, CIBT will continue to add properties to our student housing portfolio while also seeking school acquisition opportunities as part of its core business objective. While the education business is not expected to grow at a rapid pace due to the competitive market environment, it remains a clear benefit to our strategy as international students enrolled in our schools and our partner schools continue to act as a pipeline feeding our student housing properties.”
Summary highlights of CIBT’s fiscal 2015 financial report are as follows:
| Selected Financial Information |
12 Months Ended |
12 Months Ended |
|
August 31, 2015 |
August 31, 2014 |
|
| Total revenues |
$32,178,951 |
$30,916,154 |
| Educational revenues – CIBT |
$2,260,260 |
$2,371,950 |
| Commission revenues – GEA |
$619,077 |
$843,022 |
| Educational revenues – SSDC |
$24,988,426 |
$25,218,361 |
| Design and advertising revenues – IRIX |
$1,082,119 |
$860,989 |
| Rental revenues – GEC |
$647,046 |
$0 |
| Development fees – Corporate |
$2,582,023 |
$1,621,832 |
| General and administrative expenses |
$19,335,528 |
$19,729,134 |
| Share-based payment expense |
$15,909 |
$15,992 |
| Foreign exchange gain (loss) |
$227,728 |
$98,720 |
| Gain (loss) on fair value changes in investment properties |
$7,615,175 |
$0 |
| Income tax recovery (provision) – net |
($962,396) |
$503,978 |
| Income (loss) – Continuing operations |
$6,000,774 |
($1,717,434) |
| Income (loss) – Discontinued operations |
$0 |
$7,030,395 |
| Net income (loss) |
$6,000,774 |
$5,312,961 |
| Income (loss) per share |
$0.02 |
$0.08 |
| Net income (loss) – CIBT Education Group Inc. shareholders |
$1,040,020 |
$5,159,490 |
| Income (loss) per share – CIBT Education Group Inc. shareholders |
$0.02 |
$0.08 |
| Total assets |
$80,666,757 |
$41,696,200 |
| Long-term liabilities |
$24,340,590 |
$1,116,723 |
| EPS before Non-Controlling Interest |
$0.09 |
$0.10 |
| EPS after Non-Controlling Interest |
$0.02 |
$0.08 |
Total income for fiscal year 2015 increased to $32.17 million from $30.91 from fiscal 2014.
The Company generated revenue of approximately $2.58 million from student housing development fees, and $0.65 million of rental income from these properties. Rental income was generated from 7 months of operations, since the Company took possession of GEC Viva Suites while the property was under renovation to accommodate additional beds.
Gain on Fair Value Changes in Property includes changes to the property value of GEC Viva Suites. Fair values of other properties negotiated during fiscal 2015 were not included in this report and will be included in future reports as we take possession of those properties over time.
Despite increase in revenue, General Administrative Expenses decreased by 2%.
Net Profit increased from $5.31 million to $6.00 million, an increase of 13%.
Earnings per share before Non-Controlling Interest is $0.09 per share, and after Non-Controlling Interest is $0.02 per share.
“In fiscal 2015, the Company negotiated three student housing properties with co-investors at each project level,” continued Mr. Chu. “Such arrangement allows CIBT to expand rapidly without diluting the share structure of CIBT. As a result of our investment structure, we own a carrying equity interest in all of the properties we manage. Firstly, CIBT benefits from development fees for seeking and identifying the suitable project. Secondly, CIBT also receives a management fee which is based on the gross rental income of each property, which is recorded as housing rental income. Thirdly, CIBT also has the right, through its equity ownership, to share the annual net profit generated from each property. Lastly and most importantly, CIBT will participate in any future gain from the sale of the property. Given the rising property prices in Vancouver and ongoing shortage of rental housing in Vancouver (less than 0.5% vacancy rate in some areas of downtown Vancouver according to CMHC), management believes the valuation gain from these properties will generate far more value and substantial returns to shareholders upon exit.
As the Company’s student housing business now has a proven track record, CIBT plans to increase its capital base in fiscal 2016 by raising new equity or convertible debt, and utilize the new capital to increase its ownership in all future projects, hence reducing the Non-Controlling Interest so that the net earnings per share can be re-directed to CIBT shareholders.
Subsequent to the year end, the Company assumed management of another downtown Vancouver hotel. The plan is for CIBT subsidiary, GEC Holdings, to hold an equity interest in the investment vehicle in addition to managing the student hotel. CIBT received a structuring fee of $1.8 million for arranging this transaction. The purchase of this property was completed on November 18th, 2015. Total purchase price paid by the investment vehicle was approximately $40 million.
The Company is currently working on several other projects including the Education Super Center and other prospective student housing properties throughout Metro Vancouver with anticipated purchase prices ranging from $19.5 million to $170 million each.”
About CIBT Education Group:
CIBT Education Group Inc. is an education management company focused on the global education market since 1994. Listed in Canada on the Toronto Stock Exchange and in the U.S. on the OTCQX International, CIBT owns and operates a network of business, technical and language colleges in North America and Asia. CIBT offers cooperative joint programs in 12 countries with campuses, recruitment offices and training centers enrolling over 7,000 students annually. Its education business is operated through Sprott Shaw College (established in 1903), Acsenda School of Management, CIBT School of Business China, and Global Education Alliance Recruitment Centers in China and other overseas countries. Through these subsidiaries, CIBT offers recognized and approved business and management degrees, programs in college preparation, healthcare, hotel management and tourism, English language training, English Teacher Certifications, junior and high school preparation programs for overseas study, and other career/vocational training. CIBT also owns Irix Design Group, a leading design and advertising company based in Vancouver, Canada, Global Education Alliance (“GEA”) and Global Education City Holdings Inc. (“GEC”). GEA recruits international students for many elite kindergarten, primary, secondary schools and universities in North America. GEC is an investment holding and management company with a special focus on education related real estate projects in Canada. Visit us online at http://www.cibt.net and watch our corporate video at http://cibt.net/about/.
For more information contact:
Toby Chu
Vice-Chairman, President & CEO
CIBT Education Group Inc.
Investor Relations Contact:1-604-871-9909 extension 318 | Email: info@cibt.net
FORWARD LOOKING STATEMENTS:
Some statements in this news release contain forward-looking information (the “forward-looking statements”) about CIBT Group and its future plans. Forward-looking statements are statements that are not historical facts. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors (collectively, “Risks”) that could cause the company’s actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. With respect to the statement in this news release as to the expected number of job openings in B.C. by 2022 in the areas of skilled trades and technical occupations, the Risks include uncertainties as to the actual development of the B.C. economy. Forward-looking statements are based on the beliefs, opinions and expectations of CIBT Group’s management at the time they are made, and CIBT Group does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances should change, except as may be required by law.