FY2016 has been a challenging year for the Group as it operated in a global macroeconomic environment that is less than favourable. However, with a keen eye for unlocking potential, the Group took the opportunity to enter the US education market and further invest and grow its presence in Europe.
Premier Education Provider
In July 2016, Raffles American School moved into its new premises in Iskandar, Johor, after construction of its Phase 1 has been completed. The design of the campus embraces and accentuates the varying heights and gradients of the sprawling land within the 46-acre site, providing the students, ranging from kindergarten to year 12, with an aesthetically pleasing, secure and functional environment that is conducive to learning and growth. Phase 1 consists of a 3-storey academic block that additionally houses the administrative offices, reading and play-acting rooms and a library. This Phase also consists of age appropriate playgrounds, an Olympic-size swimming pool, gymnasiums and other sports facilities. When fully completed, the campus will have its own unique dormitory set up and boast a planetarium equipped with state of the art technology. It is expected to be the most modern facility of its kind in Malaysia.
During the year, the Group‘s wholly-owned indirect subsidiary, Raffles Asset Italy S.R.L., purchased a 4-storey building at Via Felice Casati, 16, in Milan, Italy. The premises of 4,800 sq. metres, after renovation, will eventually house our design school in Milan with the balance leased out as commercial space. This is in line with the Group’s aim to ultimately invest in the education assets and facilities of every school and college that it operates in order to create good facilities for the students as well as for cost efficiency.
At the extraordinary general meeting held on 25 July 2016, the shareholders have approved the proposed acquisition of Santa Fe University of Art and Design LLC, located in New Mexico, a state in the US. Completion of the acquisition will mark the Group’s maiden entry into America. The acquisition will complement the Group’s existing colleges and schools in Asia-Pacific and is congruous with the Group’s strategy of extending its global reach to higher yield education markets.
Management of Education Assets and Facilities
In October 2015, Oriental University City Holdings (H.K.) Limited (“OUCHK”), the Group’s 75% owned subsidiary that is listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, increased its stake from 14.9% to 19.9% in Axiom Properties Limited, a property development and investment company listed on the Australian Stock Exchange that is also in the business of student accommodation and provision of ancillary education facilities.
In May 2016, OUCHK announced that it had entered into agreements to acquire the land and buildings that are currently leased to our Raffles College in Kuala Lumpur, Malaysia.
OUCHK is actively seeking opportunities to grow its portfolio of education assets and facilities.
Education-Linked Real Estate Investment and Development
In March 2016, OUCHK took a 12.77% stake in 4 Vallees Pte. Ltd. (previously a wholly-owned subsidiary of Raffles Education Corporation Limited), that is involved in the ownership and leasing of hospitality assets and commercial real estate in Switzerland. The Group will continue to seek opportunities in this business segment.
The Group will continue to focus on achieving sustainable growth through improvement in operations, entry into markets with higher returns and embarking on suitable education-related businesses. While the focus is on sustainable growth that will in turn increase the wealth of our shareholders, the Group is ever mindful of the principles of good corporate governance and robust risk management.
The Board and Management will diligently follow through the business plans and strategy to realize in as short a time frame as possible the anticipated additional income streams and growth for the Group. We thank our shareholders, investors, students, business partners, staff and all stakeholders for their continuing support. We also acknowledge the guidance and wise counsel of our Board members.
Mr Chew Hua Seng
Chairman and CEO