Q1 2025 Bright Scholar Education Holdings Ltd Earnings Call
Donald Elliott: Donald Elliott, European American Reservice Professionals In 2009, Igor, Ian and Tom earned loyalty to the government This is what programs in some countries like UK, the North and Canada look like
Speaker Change: Hsuan-Yi Lan, Snow White NOW Directed by Director of Photography Films Cinematographer
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Thank you very much Hello, everyone and welcome to bright Scholar's earnings conference call for the first quarter, all physical 2025, the company's financial and operational results one way or do you are there today and are available online by visiting the IR section of our Bob said I, our adult bright scholar.
Speaker Change: Com. Please note that today's discussion will contain forward looking statements made under the safe Harbor provision of the U S. I would say quite as bad to gauge how reform Act of 1995 forward looking statements and you Bobby how any risks and uncertainties that affect the company's results and then materially differ from.
Speaker Change: Today's view.
Speaker Change: Well that information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U S. D. C. The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
Speaker Change: Additionally, but scholars earnings press release and today's conference call include discussions of all debate GAAP and the non-GAAP financial measures bright scholar's earnings tragedies contacts or a combination of all these non-GAAP measures. Please also note that all numbers are in G. B P.
Speaker Change: Participants on today's call will include our Chief Executive Officer, Mr. Robert <unk>, who will provide a company overview and update on our strategic initiatives with highlights from the quarter I have a chief financial officer. Mr. <unk>. Zhang will then provide details on the company's financial results.
Speaker Change: Period, well then open the call for questions.
Speaker Change: I will now turn the call over to Brad Conner, Chief Executive Officer, Mr. Robert You. Please go ahead Sir.
Speaker Change: Hello, everyone.
Speaker Change: And thank you for joining us on today's call.
Speaker Change: We are pleased to announce that last caller achieved solid quarterly result that would be.
Speaker Change: Evolving.
Speaker Change: Certainly environment in the first physical quarter.
Speaker Change: We mentioned last quarter, we are carefully advancing our dual engine growth strategy, but could probably our overseas schools.
Speaker Change: Sure.
Speaker Change: <unk> Oh global recruitment initiative for prospective international students.
Speaker Change: This quarter, we successfully expanded our product and service offering on our existing China platform are made available in more international markets, including Vietnam, Canada, The United States, Pakistan and Taiwan.
Speaker Change: We have also developed.
Speaker Change: Right.
Speaker Change: Local teams local customers and local engages in these regions should provide consulting services.
Speaker Change: For students to study abroad.
Speaker Change: We've made great progress in optimizing our operation operating efficiency and drove significant increases in our SG&A expenses year over year.
Speaker Change: Leveraging our established global network of schools and ecosystems. We believe we kind of celebrates all of the revenue growth and create sustainable value for both customers and shareholders over the long term.
Speaker Change: Before I move on please note that starting this quarter, we have reorganized our business structure and segment reporting to reflect our T. G I.
Speaker Change: J T.
Speaker Change: Because I've.
Speaker Change: Cindy will give you food breakdown before.
Speaker Change: Financial overview, but I want you pointed out that our previous overseas School business segment is now known simply as all the schools business now.
Now I'd like to discuss the segments performance for the quarter.
Speaker Change: Well its always has to both operational efficiency in more detail.
Speaker Change: The schools business remain our primary revenue source this quarter accounting for around 57% of our total revenue.
Speaker Change: Why would the U K and U V. A G policy has impacted student enrollment to some degree.
Speaker Change: <unk> adjusted our strategic approach to this.
Speaker Change: Response to the changing market conditions.
Speaker Change: This includes leveraging the capabilities of our recruitment team has.
Speaker Change: It's in cooperation with various recruitment channels.
Speaker Change: Jewelry management's active involvement in driving enrollment initiatives.
We are confident that our intensified recruitment efforts and augment it student support services will fortify our competitive position in the market going forward.
Speaker Change: Overall, we are pleased with advancements we have made.
Speaker Change: Our school business during the first physical quota.
Speaker Change: We are deeply committed to enhancing our students' educational success, providing high quality teaching resources and promoting a collaborative learning atmosphere. That's as a result, our work students have consistently excelled in.
Speaker Change: Various aspects of student life, especially academics Dream Dakota, 97, overall Cas Global school students.
Speaker Change: See if Oprah has formed prestige is Russell group universities.
Speaker Change: The more 60 full overhaul CGS students receive offers from world's top 100 universities.
Speaker Change: As ranked by Q Westwood.
Speaker Change: I see a banking one of the higher education speeding ranking systems.
Speaker Change: Moving to operations.
Speaker Change: Chief I'll go leaner and more efficient.
Speaker Change: Operations, we optimized our internal operational management and streamlines logistics protesters.
Speaker Change: In the first fiscal quarter.
Speaker Change: For example.
Speaker Change: Through our recent pilot also thinking catching and cleaning services, we optimized the schools cost structure like cotton administrative expenses do you see improved operational efficiency and quality.
Speaker Change: Now Paul resources to advance educational excellence.
Speaker Change: We also boosted service efficiency and customer satisfaction by leveraging our logistics vendors expertise and technical solutions.
Speaker Change: We will implement a regular evaluations and feedback mechanism to drive ongoing improvements.
Speaker Change: Foster a virtuous cycle that's oh.
Speaker Change: Equity and students are more pleasant and convenient money and leaving environment.
Speaker Change: These initiatives were also I love the schools overall management, ultimately optimizing both educational outcome and logistics.
Speaker Change: We move forward, our focus will shift towards integrating advanced technologies that streamline processes and drive innovation.
Speaker Change: Fueling sustained growth and resilience.
Speaker Change: Increasingly competitive landscape.
Speaker Change: In summary.
Speaker Change: Oh, well, that's physical quarter performance.
Speaker Change: Our business continued resilience and steady improvement in the face of a dynamic market.
Speaker Change: Priority remains on advancing our dual engine growth strategy, expanding our schools business and.
Speaker Change: Boosting global recruitment to serve more students planning to study abroad.
Speaker Change: Our Mexico.
Speaker Change: For global it caught my initiative is tapping into Nepal, Malaysia, and Thailand, while continuing to.
Speaker Change: To explore north American markets. Meanwhile, we will persist in streamlining our global operations.
Speaker Change: And enhancing efficiencies as we work towards our long term vision.
Speaker Change: And adapt to the evolving environment. Looking ahead, we are confident we can seize the market tends to grow.
Speaker Change: So opportunities to strengthen our market share.
Speaker Change: Our position as a leading global education service provider.
Speaker Change: With that I will turn the call over to our CFO missing D zone.
Speaker Change: Who will discuss all key financial results. Please go ahead Cindy.
Speaker Change: Okay.
Speaker Change: Thank you a lot, but now I'd like to discuss our financial results for the third quarter of fiscal 2025 first let me deal with the changes to our segment reporting.
Robin: Robin mentioned, starting this quarter, we have reorganized our business structure to better reflect our strategic focus.
Robin: Accordingly, we are now reporting the Colo in secondary schools overseas boarding consulting Oh.
Robin: Yes.
Robin: Hum.
Robin: Is that your outlook.
Robin: Could it be a sleep over it.
Robin: In school segment, the overseas consulting business.
Robin: Oh, let's see.
Robin: Bobby consulting Pope portion.
Robin: Complementary education services supplement.
Robin: Finally, all the office segment includes our previous domestic it Kindergarten's Paypal operation services complementary education services, excluding O, which is Bobby consulting Yeah Asian based culture, we changed our presentation, calling from <unk>.
Jacobs: To Jacobs.
Jacobs: Aligned with our business opportunities.
Jacobs: No.
Jacobs: Orange.
Jacobs: Otherwise stated.
Jacobs: We are pleased to kick off they took hold when they come to pass is solid.
Jacobs: Quarterly doubts.
Jacobs: <unk> expenses decreased significantly by 33% year over year.
Jacobs: Drinking by our ongoing efforts to optimize cost structure streamline operations flipped them, all but I think it was on although we organized business structure overseas study consulting business achieved year over year increase across multiple metrics, including revenue.
Jacobs: Yeah edition, we have initial age at a share repurchase plan.
Jacobs: I'm, just calling our commitment to enhance shareholder value.
Jacobs: At our financial results for the first fiscal quarter in more detail.
Speaker Change: Although Robin's Hill from continuing operations was 44.7 million compared to $55 5 million for the same quarter of last fiscal year.
Jacobs: Segment.
Jacobs: Oh, let's just body consulting raffi will increase by five 8% to $99 6 million schools and office laughing, Joe well attempted by one 7 million.
Jacobs: 9.4 million respectively.
Jacobs: Well its clothing from continuing operations was 13 million compared to 17.9 million for the same quarter of last fiscal year.
Jacobs: Gross margin from continuing operations was 29, 2% compared to 73.5% for the same quarter of last fiscal year.
Jacobs: Adjusted gross profit from continuing operations was $13 2 million compared to 18 million for the same quarter of last fiscal year.
Jacobs: Yeah.
Jacobs: From continuing operations decreased by 32%.
Jacobs: Oh, Yeah, Oh, yeah, two eight.
Jacobs: Eight point Formula.
Jacobs: The decrease was mainly due to the improvements in operational efficiency in all the schools.
Jacobs: Adjusted EBITDA was six point formula compared to sell them or sell them point 6 million the same quarter last fiscal year.
Jacobs: Now turning to a possibility we recorded income of $4 million on continuing operations.
Jacobs: Two 5 million for the same quarter of last fiscal year.
Jacobs: Adjusting net income was $4 4 million compared to $5 1 million for the same quarter last fiscal year.
Jacobs: Moving to our balance sheet.
Jacobs: November 13th my plenty of times before.
Jacobs: We have passed on cash equivalents restricted cash.
Jacobs: 47 points, possibly alarm com called to 54 3 million as of August 31st 2024.
So I'll come back to my remarks, I would like to briefly update you on the boards of by that point.
Jacobs: Approved a share repurchase plan on bleach and a weak comparable maybe approach it up to you I thought at 1.2 million of the company.
Jacobs: That would be us over the last 12 months.
Jacobs: Pulp alone so all counted on.
Jacobs: The company's gross strategies business operations and outlook.
Jacobs: I believe that's the case.
Jacobs: The external environment, coupled with all the songs that launch up on both of them, who form a compelling opportunities to put money to do.
Jacobs: They've already yeah, Oh no value.
Jacobs: Looking ahead, we will continue to optimize our operations to enhance profitability, but it's only on the high growth high return business.
Jacobs: Maintaining our healthy balance sheets and are constantly adapt to new engine growth strategy, we are well positioned to pop to mind on the market commander growing potential deliver exceptional education to our students.
Jacobs: It's creating sustainable shareholder value.
Jacobs: Okay. This concludes all our prepared remarks today, we will now open the call to questions are probably.
Jacobs: Please go ahead.
Jacobs: We will now begin the question and answer session.
Jacobs: To ask a question you May Press Star then one on your Touchtone phone.
Jacobs: If you were using a speakerphone please pick up your handset before pressing the keys.
Jacobs: Is it any time your question has been addressed and you would like to withdraw your question. Please press Star then two.
Jacobs: For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your question in English.
Jacobs: At this time, we will pause momentarily to assemble our roster.
Jacobs: Yeah.
Yeah.
Jacobs: Hum.
Jacobs: Yeah.
Jacobs: Yeah.
Jacobs: Yeah.
Jacobs: Yeah.
Jacobs: Okay.
Jacobs: Okay.
Jacobs: Yeah.
Jacobs: Yeah.
Jacobs: Yeah.
Jacobs: Once again, if you would like to ask a question. Please press Star then one to join the question queue.
Jacobs: Okay.
Jacobs: Hmm.
Speaker Change: The first question comes from human UN with X <unk> Fund management. Please go ahead.
Speaker Change: Hi, Thank you for taking my question can.
Speaker Change: Can you share the average enrollment for the overseas schools in our 2025.
Speaker Change: Well the last quarter.
Speaker Change: Okay.
Speaker Change: Alright.
Speaker Change: Robert speaking.
Speaker Change: Thank you for your question.
Speaker Change: Hum.
Speaker Change: Enrolment number are you, referring our current existing students.
Speaker Change: For this quarter.
Speaker Change:
Speaker Change: Or is it.
Speaker Change: Well or sometime.
Speaker Change: You can take over for January intake.
Speaker Change: The you know like the upcoming school year, yes.
Speaker Change: Okay.
Speaker Change: I have I have the new intake for September.
Speaker Change: September in January.
Speaker Change: I'm not sure I'm.
Speaker Change: He has to total enrollment at the amount at the moment. So for September 20th 24, we are good at 1000.
Speaker Change: 103, new students.
Speaker Change: And for them.
Speaker Change: January 25, we have 213 new students.
Speaker Change: So that will be.
Speaker Change: So all total I don't have the exact number but it's going to be very close to 3000 in total.
Speaker Change: Got it thank you.
Speaker Change: Yeah.
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: Once again, if you would like to ask a question. Please press star one to enter the question queue.
Speaker Change: Hmm.
Tim Nolan: The next question comes from Tim Nolan with next capital. Please go ahead.
Speaker Change: And your line is now open you may ask your question.
Tim Nolan: Alright, sorry, I was on mute.
Speaker Change: Yeah. So management could you help me understand the movement in cash.
Speaker Change: In our in the last quarter, because I saw that the net cash used in operating activities with.
Speaker Change: Seven 2 million and the net cash <unk>.
Speaker Change: <unk> generated for them.
Speaker Change: Investing with fault I.
Speaker Change: So can you help me understand what went in there.
Speaker Change: And then the second question is regarding the decision to buy back shares.
Speaker Change: My observation is.
Speaker Change: Liquidity in desktop it's already quite low.
Speaker Change: So how do you think about.
Speaker Change: Maintain paying dividends.
Speaker Change: And buying back share.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Thanks for the question.
For the first for the first question is can be down.
Speaker Change: I would like to ask a question to answer the question are you do you.
Speaker Change: But your question is about the cash and cash equivalents movement between the last quarter and this quarter right.
That's it yes.
Speaker Change: Specifically in the <unk>.
Speaker Change: Cash used in operating activities.
Speaker Change: And our cash generated from investing activities.
Speaker Change: Okay.
Speaker Change: So in general though.
Speaker Change: Hum.
Speaker Change: One brief questions and ensure three aspects.
Speaker Change: First it is a cash generating.
Speaker Change: In our <unk>.
Speaker Change: Although our operation activities.
Speaker Change: Alright.
Speaker Change: It is a we call it around 517 million GBP four equating Oh, the operating activity.
Speaker Change: But in Boston.
Speaker Change: Although the investing activities, we we generate a 3.6 million GBP Oh.
Speaker Change: For the financing activities response for fall <unk>.
Hum.
Speaker Change: Exchange gain or loss.
Speaker Change: It was a it was a costly box for BRL 43 million.
Speaker Change: MTBE and that readout.
Speaker Change: The cash decrease and for all the for all the operating activity.
Mainly attributable to adapt we received two issuance and accommodation to see otherwise before the good times speaking so we generate we think the cash otherwise in August and then we spend our money back for.
Speaker Change: For other for Alba teach it for all the for all the costs and expenses, especially for all the commissions to equipment for the new recruitment that's mainly Ah.
Speaker Change: Out.
Speaker Change: Decrease in other operational activities and for the second question is about the cash repurchase and dividends I would like to in watch Robert to answer the questions. Thank you.
Speaker Change: Yes. Thank you for the question.
Speaker Change: So share buybacks and dividends has always been a question presented to the board to make a decision over the past.
Speaker Change: You know a few of them.
Speaker Change: Hum.
Speaker Change: Board meetings.
Speaker Change: So a decision was made for sure.
Speaker Change: Share buybacks was based on number one that we think we have.
Speaker Change: Our cash reserves to support our operational requirements and also the capex related in the schools.
Speaker Change: And number two is looking at our financial performance.
Speaker Change: Last year I think as has been the first year that we have just breakeven on the on the net profit level there'll be havent really accumulated a sizable.
Speaker Change: <unk> distributable profits.
Speaker Change: Sure.
Speaker Change: Last year, and Bob and Judy Yeah.
Speaker Change: This financial year, so once we reach reach.
Speaker Change: But we think it's a normalized profit level will be considering dividend over.
Speaker Change: Share buybacks I in terms of in terms of the liquidity.
Speaker Change: Yes, we have observed the liquidity is very low in the market at the moment. However.
Speaker Change: However, we think.
Speaker Change: It is probably because number one is.
Speaker Change: The market claims issues.
Speaker Change: Very far off on the intrinsic value of the company. So there's very little interest in the.
Speaker Change: Shareholders now shareholders right.
Speaker Change: Groups to trade.
Speaker Change: And number two is.
Speaker Change: The market cap at the moment is it's too small Zhu for any meant for any meaningful trading so I'm thrilled that share buyback.
Speaker Change: Decision I think.
Speaker Change: <unk> tried to provide.
Speaker Change: Provide the company.
Speaker Change: The market with confidence that we think that the management has confidence in the future operations in the public wells.
Speaker Change: In the coming coming quarters and years, so that will encourage a more you referenced coming into the markets and ones.
Speaker Change: Sure.
Speaker Change: I think the share value move towards bringing true intrinsic value of the company.
Speaker Change: Liquidity will improve.
Speaker Change: I think it adds a.
Speaker Change: A positive outcome for calling shareholders and then and also for any shareholders that time.
Speaker Change: Ill take diesel between entities to Dubai.
Speaker Change: Do you buy stocks.
Speaker Change: This is a reason for people to start trading and buying and selling to schools and that will increase the liquidity.
Speaker Change: For the market.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Robert could I could I follow up with you got to your first answer.
Robert You: Yes. Please.
Speaker Change:
Speaker Change: So are you you said that.
Speaker Change: The company because.
Speaker Change: It was not profitable before so.
Speaker Change: Yeah, Theres not enough cash I'm, sorry, there was not.
Speaker Change: In that mid two beautiful.
Speaker Change: Do you mean distributable retained earnings.
Speaker Change: I mean getting equity yeah.
Speaker Change: I think that the company has carried retained earnings in the balance sheets.
Speaker Change: But that one is I think it was accumulated over.
Speaker Change: A long time.
Speaker Change: So.
Speaker Change: While that bandwidth for the Oh, what a man was over the last you know.
Speaker Change: A few years during the pandemic I think that the company has been in a loss making situation.
Speaker Change: And only last financial year, the company has turnarounds into the profitability. So we start to accumulate.
Speaker Change: Distributable earnings again, what I mean.
Speaker Change: That was a real will be more comfortable if the retaining earnings grow.
Speaker Change: After this turnaround exercise has.
Speaker Change: Finished.
Speaker Change: And then we'll be looking at to distribute with your earnings in a more stable and consistent manner.
Speaker Change: Having to Oh did you.
Speaker Change: The earnings or coffee, it's fun.
Speaker Change: The year is no way back.
Speaker Change: So so right now that would be the accumulated the tenant names it's positive.
But you would prefer to pay.
Speaker Change: Pay from current year earnings. So you want to wait for current year earnings to be more.
Speaker Change: Sustainable that's why you want.
Speaker Change: To pay out dividend or do they kind of shareholder return activity.
Speaker Change: Yes, that's right we want to be.
Speaker Change: We.
Speaker Change: Promote the debate is bullish people want wanted it to be sustainable and consistent.
Speaker Change: Right right.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: You might have I have one last question is Oh I can get back in the line.
Speaker Change: There aren't any investor.
Speaker Change: Asking.
Speaker Change: Mask or do we have any other.
Speaker Change: Yeah.
Speaker Change: Question.
Speaker Change: In the Q.
Speaker Change: Yeah.
Speaker Change: Okay. I think you can go ahead please.
Yeah, So I noticed that.
Speaker Change: You know sort of you have been trying to reposition the company.
Speaker Change: See that be a that.
Speaker Change: There have been changes in the way that you categorized the different segments.
There have been changes in reporting currencies.
Speaker Change: So so maybe.
Speaker Change: You know you could could you give us a vision give me the vision of where like.
I like how you wanted to position the company five years from now what will bright scholar.
Speaker Change: How how do you one right Carla it there'll be no one.
Speaker Change: Two are two other stakeholders 510 years from now.
Speaker Change: What kind of company.
Speaker Change: What are your focus.
Speaker Change: You know, which.
Speaker Change: Market, our student group Youre targeting that sort of thing.
Speaker Change: Yeah.
Speaker Change: Yeah. That's a very good question on that internally we have been.
Speaker Change: I'm thinking about this really hard and very very serious and I think.
Speaker Change:
Speaker Change: I think we counted in our previous earnings call, we have emphasized the new strategy.
Speaker Change: That recorded a dual engine strategy going forward. So one of the growth engine will be our school species.
Speaker Change: I mean international school business.
Speaker Change: In international markets.
Speaker Change: The moment.
Speaker Change: We have the biggest at school.
Speaker Change: Market wise is in the U K and that's exactly why we change our reporting currency to them.
Speaker Change: British pound because thats the main revenue source.
Speaker Change: We will be used to.
Speaker Change: U K is a foundation just like a lot of them of the K 12 Education group.
Speaker Change: And explore expanding opportunities beyond just U K.
Speaker Change: So we you know we are.
Speaker Change: We are interested in market.
Speaker Change: Markets like the U S, where we already have one school and we are also interested in developing.
Speaker Change: Developing markets like Middle East South America Asia.
Speaker Change: Actively looking at opportunities to grow our presence in this area. So I would say even five three to five years' time.
Speaker Change:
Speaker Change: The school business will still be the main bases for.
Speaker Change: Glasgow, though and we will be a much more.
Speaker Change: <unk>.
Speaker Change: Our international or global.
Speaker Change: Education group.
Speaker Change: So I think I think we'll have more.
Speaker Change: Schools around the world infrequent three to five Years' time.
Speaker Change: And as for the other engine of growth engine is international student recruitment.
Speaker Change: In our recruitment.
Speaker Change:
Speaker Change: These days.
Speaker Change: Historically, Brian School has a big platform in China.
Speaker Change: That record of students from China to send them overseas.
Speaker Change: And over the years I think we have accumulated in tenancies human capital and know how for them for the margins I think we can duplicate that services to other parts of the world, especially to developing countries like.
Speaker Change: Southeast Asia, like India, Pakistan, and South America, and these are the growing market for international students I think all know how can definitely help our students.
Speaker Change: Students in these markets to study overseas.
Speaker Change: You know I've been in countries like the U K U S.
Speaker Change: Canada, Australia.
Speaker Change: Extra et cetera. So in five Years' time, I think we'll have a much larger network.
Speaker Change: International students.
Speaker Change: Recruitment.
Platform.
Speaker Change: So overall blast golar will be.
Speaker Change: We will try to become a major K 12 education service provider.
Speaker Change: Or international education that means we will be providing educational services.
Speaker Change: Well the only owing to the schools, but also drive international student recruitment.
Speaker Change: I think at the moment, we are the biggest international group in terms of student recruitment.
Speaker Change: The U K.
Speaker Change: And and we are in a very good position and we have a very good foundation to grow that.
Speaker Change: Into a global market.
Speaker Change: Market so that is the.
Speaker Change: The strategy we are currently pursuing.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Hope that answers. Thank you so much water, yes, yes. It does thank you so much I appreciate it.
Thank you.
Speaker Change: Once again, if you would like to ask a question. Please press Star then one.
Speaker Change: The question queue.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to the company for any closing remarks.
Speaker Change: Thank you once again for joining us today. If you have further questions. Please feel free to contact with Golar.
So the contact information provided on our website.
Speaker Change: Yeah.
Speaker Change: This concludes the conference call you may now disconnect your lines.
Speaker Change: Thank you.