The private tertiary education provider’s revenue for the quarter fell 16.3% to RM46 million from RM55 million in Q1 FY2022.
The first quarter failed to provide the turnaround that SEGi shareholders were hoping for.
For the financial year ended Dec 31, 2022 (FY2022), net profit fell 26.9% to RM8.38 million from RM11.47 million a year earlier. Revenue dropped 11.17% to RM50.75 million from RM57.13 million a year ago.
In its recent filing with Bursa Malaysia, SEGi said the decline in profit was mainly due to the graduating batches of postgraduate foreign students enrolled with its institutions’ intakes in previous financial years, whereas new enrolments are only expected to gradually pick up in 2023 coinciding with the borders reopening, particularly China’s.
On prospects for 2023, it said proactive measures, coupled with digitalisation initiatives, have sustained the group through the pandemic years and will hopefully help propel it to be a stronger organisation in the coming years.
“The group is also expanding the breadth of its offerings beyond tertiary education to now include K-12 education, skill-based and other certification programmes. With adaptability and agility learnt from recent years, we should expect better resilience and better results in the future,” said SEGi.
No dividend was declared for the quarter in contrast to the 3 sen dividend per share declared for the quarter a year ago.
Another disposal by private equity fund
SEGi’s disappointing Q1 results follows on the heels of private equity fund Navis Capital Partners Ltd yet again paring its stake in the group.
Navis Capital disposed of 13 million shares through Pinnacle Heritage Solutions Sdn Bhd on May 8, bringing its total shareholding to 695.36 million shares.
Since September 2022, the fund has disposed of a total of 160.9 million shares in nine tranches.
According to a filing on May 8, group managing director Hii is SEGi’s largest shareholder with a direct stake of 32.4%, and a 24.4% indirect stake through Pinnacle Heritage Solutions Sdn Bhd.
Navis first emerged as a major shareholder of SEGi in April 2012 after it acquired 27.84% stake from the then existing major shareholders Cerahsar Sdn Bhd and Segmen Entiti Sdn Bhd. It then launched an unconditional takeover offer for all the remaining shares in the group for RM1.714 per share.
The offer valued SEGi at RM1.1 billion then. Its shares were unchanged yesterday at 70 sen, giving the group a market capitalisation of RM886 million.
In March 2022, a top executive of SEGi quashed speculation of a possible sale of the company in the near term to a Chinese party. Talk of the sale to a Chinese group first surfaced in February 2020 and resurfaced in late 2021.
SEGi, which operates the SEGi Group of Colleges, was set up more than four decades ago. It has five campuses in the Klang Valley, Penang and Sarawak with a total of about 16,000 students, with 40% international students from 85 nations alongside 9.1% of foreign faculty staff.
Hii’s growing property empire
Given the growth of his private university group has slowed in recent years, Hii has wisely diversified his corporate empire.
His second “crown jewel” is property group HCK Capital Group Bhd (HCK), which he founded over a decade ago and serves as executive chairman.
HCK has built its reputation on its “education city series” which leverages on well-known education brands to increase the desirability of the developments.
One of them is a 4.8ha development named Edusentral in Setia Alam, Selangor, which encompasses the Peninsula International School Australia, office suites, residential suites and retail shop lots.
To further enhance its core business of property development, HCK added a new “platform division”. Its stated aim is to leverage on the Fourth Industrial Revolution (IR 4.0) to enable HCK’s property division to retain its competitive edge in the digital age.
For the financial year ended Dec 31, 2022 (FY2022), HCK posted a net profit of RM11.8 million profit compared to RM1.49 million in FY2021.
Full year revenue rose to RM183.6 million in FY2022 from RM117.06 million in FY2021. The higher profit and revenue were attributed to higher sales and increase in progress development from its various property projects.
HCK is anticipating stronger revenues in FY2023 with the delivery of vacant possession of a few phases of its existing development projects.
HCK’s shares rose 1 sen to RM2.15 yesterday, valuing the group at RM1.02 billion.
Media empire that never took off
Though Hii, 65, is known for his education empire, and in recent years his property ventures, he actually started out in the media industry in his home state of Sarawak as a journalist straight out of school.
He rose up the ranks quickly and became chief editor at both The Borneo Post and now-defunct Sarawak Herald, in Sibu.
Decades later, he reprised his editorial role when he was appointed executive deputy chairman of the country’s leading media company, Star Publications (M) Bhd, in 2008. However, his stint at the MCA-owned paper was relatively short, leaving the hot seat in December 2010.
His desire to build a new media group in Malaysia saw him set up business weekly Focus Malaysia in 2012, and subsequently several newspapers and news portals, all under the HCK group.
However, Hii’s dream of creating a successful media empire never came to fruition given the stiff competition and mounting losses, and his media outlets were eventually closed after several years.