2009 Annual Report
Chairman’s Statement
Quality human capital is critical in ensuring that Malaysia achieves its objectives of becoming a developed nation. It is also not an uncommon fact that training and exposure are the contributing factors in job selection and recruitment. Education is the key for human capital development, as such, Malaysian private higher education providers should continue playing their role as the main contributor towards meeting the country’s human resource needs.
I am proud to report that SEGi continued its consistent track record scaling to greater heights for the year under review. Against the backdrop of rising costs and being vulnerable to external uncertainties and financial volatilities in the global economy, SEGi’s financial performance surpassed expectations yet again. This is a testament to the resilience, strength and recognition of SEGi Group being a market leader.
The Group achieved higher revenue of RM176.9 million and a profit before tax of RM14.6 million, an improvement of 38.8% and 47.8% respectively, as compared to the corresponding period in 2008.
The improvement in performance was generally attributable to the increase in student enrolments of the Group’s institutions.
Dividend
The Board of Directors is recommending a final dividend of 3.5 sen per share, less income tax, for the year ended 31 December 2009, subject to the shareholders’ approval at the forthcoming Annual General Meeting (2008: 3.0 sen).
Operational Review
The Group is undertaking several initiatives designed to stimulate growth amidst economic uncertainty as well as strengthen its leadership position in an intensely competitive marketplace.
During the year, the Group focused on the nursing programme looking at the shortage of qualified people in the related field. SEGi has further upgraded its facilities to cater for allied health science programmes seeing the great demand for quality healthcare. The Group also has obtained approvals from relevant authorities for its MBBS (Bachelor of Medicine, Bachelor of Surgery) programme and is expected to obtain endorsements for an additional four (4) new healthcare related products, namely, BDS (Bachelor of Dental Surgery), Bio-Medical, BPharm and Optometry, as well as the post graduate programme for optometry in 2010.
Since its upgrade to University College status in 2008, SEGi Group has developed and launched a list of academic programmes. I am proud to announce that in 2009, SEGi University College has introduced 14 new homegrown programmes. The Group also collaborated with new reputable partner universities with the view of offering dual qualifications to our students, an ongoing initiative aimed at adding value to our graduates and enhancing their employability.
The management is strategising to upgrade ourselves from University College to University status.
Corporate Development
During the year under review, the Group acquired a plot of leasehold land at Kota Damansara, within the vicinity of the SEGi University College campus. The land will be used for mixed development among which the proposed development will enable SEGi University College to increase accommodation for its students.
The Group also disposed two (2) parcels of land in Kuching, Sarawak. The disposal enables the Group to unlock its capital resources from being tied up in long term assets and allows the Group to better focus on its existing campuses.
On 21 April 2010 and 19 May 2010, SEGi proposed to implement a share split involving the subdivision of every one (1) share into two (2) subdivided shares (“Subdivided Shares”) (hereinafter referred to as “the Proposed Share Split”), a proposed bonus issue of 71,274,204 new Subdivided Shares (“bonus share”) to be credited as fully paid up on the basis of two (2) bonus shares for every five (5) existing Subdivided Shares held after the Proposed Share Split (“the Proposed Bonus Issue”) and a proposed renounceable rights issue of up to 124,729,857 five (5)-year 2010/2015 warrants (“Warrants”) on the basis of one (1) new Warrant for every two (2) Subdivided Shares held at an issue price of RM0.05 each Warrant (“the Proposed Rights Issue”).
The Proposed Share Split is expected to adjust the market price of the SEGi shares and will result in the Subdivided Shares being more affordable which will enable a wider spread of investors to participate in the growth of SEGi. Whereas, the Proposed Bonus Issue will better reflect the Company’s current scale of operations and the assets employed; and together with the Proposed Rights Issue, they will provide the shareholders of SEGi with the opportunity to further increase their equity participation in the Company at a predetermined price over the tenure of the Warrants.
Corporate Responsibility
The Group continued to play its role as a caring and responsible corporate citizen by contributing generously towards community services and sponsorship programmes.
During the year under review, the Group continued to engage with our stakeholders through the implementation of initiatives aimed at building enduring relationships and creating value for our stakeholders. Our activities in 2009 saw the Group’s contribution, participation and support in programmes and projects to enhance healthcare, professional development, disaster relief and preservation of the environment, all geared towards the benefit and betterment of the lives we touch.
In this report, we have outlined in futher detail our continuous efforts in fulfilling our corporate responsibilities to the people, society and environment in which we operate.
The outlook of the Group for the year 2010 is expected to remain positive notwithstanding the economic uncertainty. The Group continues to expand its business with new and niche academic programmes and to provide quality education.
Barring any unforeseen circumstances, for the coming years, the Group will continue to pursue its long term vision and strategies of strengthening and growing its recurrent income base, widening its international footprint, and reviewing and expanding its assets portfolio.
Acknowledgements
On behalf of the Board, I wish to thank our valued shareholders, global partners, students, regulatory authorities, bankers and business associates for their support to the Group. The Group values and looks forward to their continued support as we progress towards new undertakings.
A special thanks and gratitude also go to my fellow board members for their dedication, resourcefulness, commitment and contribution, as well as the management and staff who have played a pivotal role in delivering the results of the Group.
Last but not least, I would like to take this opportunity to welcome the newly appointed Directors, namely, Datu Haji Putit bin Matzen,Mr. Goh Leng Chua and Ms. Hew Moi Lan. We are confident that their wealth of knowledge and experience will bring value and lead the Group to new levels of achievements.
Tan Sri Dato’ Seri Megat Najmuddin
Bin Dato’ Seri Dr. Haji Megat Khas
Chairman
20 May 2010