Singapore’s Big Winner of the Week: Overseas Education Ltd

Shares of private education provider, Overseas Education Ltd (SGX: RQ1), or OEL for short, have ballooned by some 15% since last Friday to close at S$0.58 this week.

Given that the Straits Times Index (SGX: ^STI), Singapore’s market barometer, had moved in the opposite direction, OEL takes the cake for being one of the biggest winners in the stock market this week.

OEL operates the Overseas Family School, a private foreign system school in Singapore. The school, which offers the K-12 International Baccalaureate curriculum for children aged between three and 18 years old, has over 3,800 students enrolled in it. It’s currently driven by around 500 staff members from over 30 nationalities.

In the third-quarter of 2015, OEL’s quarterly revenue came down by 5.6% year-on-year to S$23.5 million. The decline was due to “softening of student enrolment numbers particularly in junior schools.”

Moving down the income statement, OEL clocked in a net profit of S$1.8 million in the quarter as compared to S$5.3 million a year ago, a slump of around 67%. The poor showing was largely because of a 205% uptick in depreciation charges after completion of a newly completed campus in Pasir Ris and increased finance costs due to bond borrowings.

Speaking of the bond borrowings, OEL had issued $150 million in bonds in April last year for the construction of the aforementioned Pasir Ris campus. The bonds are due in April 2019.

Despite the weak quarterly results, OEL had declared a special dividend of 1.375 Singapore cents per share in celebration of 24 fruitful years at its old campus near Orchard Road and a successful transition to its new premises.

The firm is currently valued at around 11 times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.