2005 Annual Report
On behalf of the Board of Directors of SEG International Bhd
(SEGi), I present to you the Annual Report and Audited Financial
Statements of the Company and the Group for the financial year
ended 31 December 2005.
This year has been an eventful year for the Group albeit a challenging
one. The overall private higher education industry suffered a slowdown
in the last two years and SEGi was no exception. The Group however,
took this opportunity to rationalise its businesses through mergers
and disposals, and undertook an exercise to re-brand itself. The
new SEGi is now leaner and meaner, ready to take on the industry.
REVIEW OF FINANCIAL PERFORMANCE IN 2005
The Group recorded a profit before tax of RM1.0 million on the back
of RM74.9 million revenue achieved for the year under review. The
decline in results compared to the previous year was a reflection of
the overall downturn of the private higher education industry. SEGi
also suffered from the high number of graduating students in 2005
resulting from the exceptionally high number of new enrolments in
2001/2002. This situation has since stabilised and the number of
new enrolments now is much stronger than the previous year.
The Board of Directors is recommending a final dividend of 2 sen
per share less tax for the financial year ended 31 December 2005.
The Group made a definitive move during the year to rationalise
its operations which resulted in cost savings and a reduction of
expenses for the Group. In October 2005, the Group disposed
7 of its colleges and centres which are not profitable. Certain other
colleges in the Group were subsequently merged.
In addition to the above, the Group also renamed all its colleges
from their different brand names, PRIME, Systematic, IBMS, MSC
and Summit to a single brand name, SEGi College. The tag-line, “Passion Guided, Industry Driven” was chosen to reflect the Group’s
offering of courses which prepare the students for the market place
and are industry focused. The entire rationalisation exercise including
the re-branding of the colleges is expected to boost the profits of
the Group for 2006 and beyond.
The Group has further strengthened its position by launching new
3+0 programmes in collaboration with Australian and UK universities
in January 2006. We have also launched or are planning to launch
in the near future new courses in niche areas such as tourism,
hospitality, project management, nursing and games technology.
With our newest partner university, Airlangga University in Indonesia,
the Group will soon be offering medical, dentistry and pharmaceutical
courses in collaboration with this university. Besides Airlangga
University, the Group has also tied up with University of Sheffield,
UK to offer their Engineering degree programmes and Upper Iowa
University, US for their American Degree Programme.
In April 2006, SEGi entered into a contract with the Youth & Sports
Ministry to train a sizable number of youths each year. This contract
will enable the Group to play a key role in the training of youths in
the country that are unable to obtain a place in the Government
training centres. In the same month, SEGi also entered into a
contract with Kumpulan Darul Ehsan Berhad, the investment
arm for the State of Selangor for the setting up of the Centre
for Environmental Protection and Information. This contract entails
training, education and certification on environmental and sustainable
development, amongst other areas.
Besides the academic courses and skill-based trainings offered to
students at our colleges, the Group is also actively sourcing for new
training projects with corporations and Government bodies. SEGi
views such training as an essential part of the Group’s vision of being
the premier education and training provider for all levels of society.
SEGi College Subang Jaya moved into its new 12-storey campus
in January 2006. This state-of-the-art campus that has a capacity
of 6,500 students has attracted many new enrolments to the
college. The construction of the main campus in Kota Damansara is
progressing well and is expected to complete by early 2007.
In February 2006, SEGi and its subsidiaries entered into various
agreements with Amanah Raya Berhad to sell and leaseback 3
properties of the Group located in Subang Jaya and Seri
Kembangan. The entire sale and leaseback exercise when completed
is expected to generate cash proceeds amounting to RM66 million.
These proceeds will substantially reduce the borrowings of the
Group resulting in a significant amount of savings in interest.
On behalf of the Board of Directors, I would like to thank our
shareholders, partner universities and business partners, our students
and valued corporate partners and our regulators and bankers
for the confidence and continued support you have given to us.
My gratitude too, to the management and staff of SEGi Group for
their effort and dedication towards achieving the Group’s objectives.
Our sincere thanks and appreciation also goes to Tan Sri Dato’ Seri
(Dr) Abdullah bin Ayub, my predecessor who has retired last year,
for his invaluable contributions during his many years of tenure with
SEGi. The board also acknowledges and appreciates Mr Kee Lian
Yong, Tan Sri Datuk (Dr) Arshad bin Ayub and Tuan Haji Razi bin
Yaacob for their contributions during their time with the Group.
We believe our efforts in 2005/2006 have laid the groundwork
for strong growth in the current and future years. The brand name
SEGi College is fast becoming a household name amongst college
seekers and the new campus buildings are landmarks to the public.
The leaner operation of the Group after the rationalisation exercise is
beginning to show positive results.
SEGi has also carved a name amongst the private and public
corporations as it is one of the largest, if not the largest, private
training providers in the country. The successful attainment of the new
training projects with the Government and other private corporation
testifies to this and these projects will definitely be a booster to the
PAHAMIN A. RAJAB