2015 Annual Report
SEGi experienced yet another exciting academic year. It was a good year as we excelled for all that we did – in teaching and research, in our interdisciplinary approach and close ties among our five campuses, in our exemplary record of student outcomes, in our expanding global reach and in our strong role in the community, despite the current tough economic climate.
On behalf of the Board of Directors, I present to you the Annual Report and Audited Financial Statements of SEG International Bhd (“SEGi”) and the Group for the year ended 31 December 2015.
Market Outlook
The Strategic Plan for Higher Education outlined the measures and strategies that will continue to make Malaysia an international centre of educational excellence. In order to secure a better future for Malaysia in this globalised and ever-changing world, the Ministry of Higher Education has outlined several priorities to be implemented over the next few years. The government has clearly outlined the strategic thrusts in this strategic plan to make Malaysia an international centre of educational excellence by 2020 through the Malaysia Higher Education Blueprint.
Among the aims are to ensure that Malaysians will have greater access to affordable quality higher education. This will be achieved by optimising the resources of existing public and private higher education institutions. In addition, higher education institutions such as polytechnics and community colleges will be upgraded to shed the image that such institutions offer merely skill-based courses.
The government’s efforts and commitment in providing educational infrastructure would be continued through the 11th Malaysia Plan (11MP).
The efforts of the government and education entrepreneurs to constantly enhance and improve the infrastructure of higher education, human resource development, and curricula in order to provide better quality education for students, have earned the country international recognition. Malaysia has also been recognised for its success in the democratisation of higher education.
Financial Performance
I am pleased to report that amidst a challenging economic climate, the Group achieved a revenue of RM253.2 million and a profit before taxation of RM26.8 million, for the year ended 31 December 2015, an increase of 5% and 10% respectively, as compared to the previous financial year. The increase in revenue and profit as compared to the previous financial year is mainly attributed to better product mix and better demand for higher end programmes.
The Group’s balance sheet continues to be healthy with shareholders’ funds of RM220 million and a low gearing ratio, indicating the Group’s capacity and financial strength to finance future growth.
I am confident that we are certainly on track to deliver a sustainable performance as we steer a steady course towards greater success.
Dividends
The Board maintains a balance approach to dividend payments, ensuring that sufficient funds are maintained for future growth, whilst recognising the need to provide a reasonable return to shareholders. With this in mind, the Board declared two interim dividends in respect of the financial year ended 31 December 2014. The first interim dividend of 5.0 sen per ordinary share was paid on 8 August 2014 while the second interim dividend of 6.0 sen per ordinary share was paid on 26 January 2015. This brings the total dividend paid for the year under review to RM72.62 million.
Dividends
In view of the performance and considering the Group’s funding requirements, the Board declared an interim single tier dividend of RM0.07 per ordinary share in respect of the financial year ended 31 December 2015. This interim single tier dividend amounting to RM50,357,000 was paid on 6 July 2015. The Board of Directors decided on an optimum balance between maintaining a reasonable dividend payout that commensurates with the financial performance of the Group while conserving sufficient internal resources for investment purposes.
As the Board is committed to reward our valued shareholders with consistent returns, I would also like to take this opportunity to announce that the Board has declared an interim single tier dividend of RM0.06 per ordinary share in respect of the financial year ending 31 December 2016. This interim single tier dividend will be payable on 20 April 2016.
Operational Review
SEGi continues to offer affordable, convenient and flexible access to the widest range of programmes, from certificate to postgraduate levels, with partnerships with UK, USA and Australian universities.
We currently have 25,000 students from 80 countries, with most of them are full-time students. Under our Professional and Continuing Education (PACE) programmes, we have young working adults conscious of the need to develop their knowledge and qualifications. PACE provides a unique education model with flexibility of entry, recognition of prior learning, online student adviser services to achieve students’ expectations. Our adult students with basic qualifications (secondary school or pre-University level) represent a higher proportion compared to our full-time students in regular programmes. With PACE, SEGi is able to reach more people with our education development.
Over the past years, SEGi students, alumni and faculty have distinguished themselves and our institution through exceptional accomplishments. Whether it was conducting crucial eye examinations for rural children in the state of Johor or conducting an entrepreneurial workshop for secondary school students, the success of those connected with SEGi confirms that their experiences have led to successful milestone.
The Group’s quest for excellence never ceases. I am pleased to announce that all centres achieved better rating on the Malaysian Quality Evaluation System for Private Colleges (MyQuest) 2014/2015 results as compared to MyQuest 2012/2013 result. SEGi College Subang Jaya achieved MyQuest 6 stars for overall College-Based and in 7 out of 8 clusters, while, SEGi Kuala Lumpur achieved 5 stars for overall College-Based and 6 stars in 4 out of 6 clusters. Our SEGi College Penang and SEGi Sarawak also achieved 5 stars for their overall College-Based.
In 2015, SEGi also won its third Gold trophy at the Reader’s Digest Trusted Brands Awards 2015 and our fourth Silver at the Putra Brand Awards 2015. We were also awarded the Sin Chew Business Excellence Awards 2015.
The great contributor in the SEGi experience is the unique combination of faculties and academicians who excel in their field of teaching are highly committed to the development of the students.
We implemented a new learning management software (LMS), Blackboard Learn. This LMS is used by many credible universities around the world, and with Blackboard Learn, our academicians can create videos, audios, incorporate social media and design interactive assignments. Students will be able to post their feedback in the online student forum, no matter where they are. This software tool is of great use as it makes learning interesting with student mobility experience.
Education is a powerful tool as it is the key to a person’s success. SEGi will continue to innovate in enabling all to gain the qualification they need to excel in life, and to make dreams a reality.
Corporate Developments
Subsequent to the financial year, the Group acquired a wholly owned subsidiary company incorporated in Hong Kong to supplement our existing Hong Kong establishment to recruit and provide related and students services to international students.
Human Capital
SEGi believes that the achievements of an organisation are the results of the combined effort of each individual. In 2015, the Group made a bold move to streamline certain supporting functions to achieve consistency in delivery, quality and transparency. We are confident that the streamlining exercise will create a stronger SEGi brand with a consolidated and similar approach being applied throughout the Group.
SEGi recognises the importance of learning and organisational development. The Group’s continuous efforts to develop and capitalise the expertise and diversity of the experiences of the employees within the Group will enable the Group to identify and develop successors for critical positions from our internal talents. This is in line with the Group’s commitment to continuously identify and develop leadership potential and high performance standards. We believe that as the Group seeks sustainable growth through expansions in its business operations, the development of a strong pool of talents and high potentials will enable the Group to achieve its goals.
Corporate Sustainability
SEGi believes in the promotion of corporate sustainability which should be embedded across the Group in all aspects of the operations and other activities. SEGi is committed to balance the economic, environmental and social aspects of our business decision making, with the interests of various stakeholders that are essential to enhance investors perception and public trust. The Group is committed to operate in a responsible and sustainable manner by actively engaging with our stakeholders, we are ensuring that risks issues are identified, addressed and managed effectively.
Being the leading higher education provider, we recognise that SEGi has an important role in educating future generations about the awareness and research on the sustainable environment. SEGi will raise the sustainability consciousness of students in all cycles of their student life, while seeking opportunities to increase the student experiences in this area. SEGi will ensure continuous and on-going efforts are carried out to establish teaching, research and practices of sustainability throughout the Group.
The Group continues to promote a healthy, safe and productive working and learning environment for the SEGi community to ensure a sustainable working environment for all employees.
The Board has implemented its e-Board paper to promote awareness to waste management and increase recycling and environmental sustainability.
Corporate Responsibility
The Group strongly believes in our corporate responsibility to promote positive social and environmental change, and thus, has actively integrated corporate responsibility initiatives as part of our business operations. We strive to be a socially responsible entity that ensure not only the safety of our workforce and host communities but also the environment in which we operate.
SEGi has been proactive in its commitment to be a responsive corporation. During the year, the Group participated actively in corporate responsibility activities through programmes which included the offering of scholarships, health campaigns, flood rescue operations and environmental awareness campaigns.
Future Outlook and Way Forward
The prospect of the education sector remains bright with the government’s efforts in increasing opportunities for education as well as assisting to finance the education of young people. The Group is cautiously optimistic of the prospects for this year, given the economic uncertainties which are causing the market to be cautious. However, the Group sees a potential in the weakening of the Ringgit to attract more international students to our campuses.
The Group has also widen its offerings to reach out to various segments of students as well as regions in which we operate. Given our broader marketing strategies and course offerings, the Group believes that our financial performance will continue to improve and grow.
Acknowledgements
SEGi has grown from strength to strength with the support from our stakeholders. On behalf of the Board, I would like to take this opportunity to convey my sincere appreciation to all our valued shareholders, global partners, students, regulatory authorities, bankers and business associates for their unwavering trust and continuous support throughout the years.
I wish to accord my heartfelt appreciation to the management and staff for their steadfast commitment and dedication to the Group. I certainly look forward to working with them as we rise above the challenges that this year may bring and embrace our next phase of continuous growth.
Last but not least, I would like to express my gratitude to my fellow Board members for their invaluable contribution to the Group. A special note of thanks to our former Board member, Mr. Tan Chow Yin, for his support and enormous contribution to the Group. We wish him success in his future undertakings. I would also like to extend our gratitude to Dato’ Sri Chee Hong Leong who is resigning in the forthcoming annual general meeting for his continuous support and contribution. We wish him all the best in his future endeavours.
TAN SRI DATO’ SERI MEGAT NAJMUDDIN BIN DATO’ SERI DR HAJI MEGAT KHAS
Chairman
12 April 2015