Increase in pupils boosts profit for Gems Education

Gems, which runs 88 schools in the UAE and abroad, said its profit for the 17 months through August 2015 was $63.6m.

Gems Education said its profit touched US$131.5 million in the year through August because of an increase in enrolment. 

Victor Besa for The National
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Dubai-based Gems Education said profits touched US$131.5 million in the year through August because of an increase in enrolment.

Gems, which runs 88 schools in the UAE and abroad, said its profit for the 17 months through August 2015 was $63.6m.

It earned $789.7m in income through the August financial year. In the 17 months through August 2015, its income was $879.3m.

The company issued a $200m sukuk in 2014.

Student enrolment across Gems schools rose to 104,200 at the end of August, up 6.1 per cent from a year earlier. It also opened one school in the UAE and another in Qatar during the past financial year.

The group expects to continue investments in schools this year, as it spent $287.9m in the year through August. It employed 13,531 people at the end of August, up from 12,599 people a year earlier.

Gems declined to comment.

With a slowdown in the economy, the pressure is on schools to lower fees.

“Schools are not officially changing their fees approved by [Knowledge and Human Development Authority] and [Abu Dhabi Education Council], but they are offering 5 to 10 per cent discount on fees to attract students,” said Mansoor Ahmed, the education analyst at consultancy Colliers International. “People are looking to move their children from premium to affordable schools to manage costs.”

Dubai had 173 private schools with 265,299 students in the 2015-16 academic year. About 60 per cent of the students enrolled in them paid less than Dh20,000 a year in tuition fees.

“There is going to be a slowdown in the high-end and premium schools in the UAE in 2017,” he said.

But as school operators expect the economy to pick up in 2018 until 2020, new financing deals are expected this year to fund construction of new schools.

The IMF expects the UAE’s real GDP to grow at 2.5 per cent this year, up from 2.3 per cent last year.

At the same time, consumer price growth is expected to cool down to 3.1 per cent, from 3.6 per cent last year.

Dubai-based private equity firm Fajr Capital, US investor Blackstone and Bahraini sovereign wealth fund Mumtalakat are minority stakeholders in Gems Education.

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