Gems Education increased its profits as it added new schools and more students enrolled across the group.
The Dubai-based company increased profits to US$75 million, up 77 per cent, in the year ending March 31, from $42 million a year earlier.
Its cash and cash equivalents, however, decreased by $26.94m during the year to $24.61m, it said on Thursday. The company did not give any reason for the decrease in the figure.
The group opened six schools across Abu Dhabi, Dubai, Ras Al Khaimah and Kampala during the financial year.
“We also increased substantially our investment in schools, with over $267 million invested in this same period, and [we] will continue our expansion in the current year,” said Dino Varkey, the director of Gems Education.
The group has had a lawsuit filed against its Cayman Island-registered subsidiary, Gems Menasa Topco, at the New York Supreme Court in the past month by a New York property developer for failing to pay an agreed-upon $15m to build a school in Manhattan. The Gems subsidiary was required to maintain liquidity of $150m, according to the lawsuit from 93-94 Second Development.
In May, Bloomberg reported that Dubai’s Fajr Capital and the private equity firm Investcorp were looking to buy a minority stake of 20 to 30 per cent in the parent group, which is valued at $1.5 billion to $2bn.
In the year ending March, Gems increased its total income to $559.5m during the financial year from $455.9m. In November, the company issued a $200m sukuk on Nasdaq Dubai.
Along with the sukuk, Gems has resorted to sale and leaseback deals to raise money over the past few months. Gems said it entered into a sale and leasebacks on three schools in Dubai in the second quarter. It did not give further details.
Last year, in a first for the UAE education sector, Gems entered into a sale and leaseback deal for a Dubai school campus. A US global asset manager and a spin-off of insurer AIG, PineBridge Investments, acquired the school as part of a strategy to create a $200m investment vehicle in the UAE and Saudi Arabia. Also last year, Emirates Reit, the UAE real estate investment trust, entered into a similar deal for a Dubai campus from Gems.
In the past financial year, the number of students enrolled in the group’s schools increased by 13.6 per cent to 90,294. Gems is one of the world’s largest private operator of schools.
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