VANCOUVER, BC / ACCESSWIRE / January 15, 2024 / Global Education Communities Corp. ("GECC" or the "Company") (TSX:GEC)(OTCQX:GECSF) is pleased to report that it has filed on SEDAR+ its consolidated financial statements and related management's discussion and analysis ("MD&A") for its first quarter of fiscal 2024 ended November 30, 2023 (collectively, the "Q1 Filing"). The following is selected financial information for the three months ended November 30, 2023 ("Q1 2024") and comparative results ("Q1 2023"). Please refer to the Q1 Filing in its entirety, which is available under GECC's profile at www.sedarplus.ca.
The following table presents selected financial data from the Q1 Filing with comparisons. All figures are in thousands of Canadian dollars, except share and per share data, unless otherwise noted.
| Q1 2024 | Q1 2023 | % Change 2024(2) | |
| Total revenues | $22,132 | $18,329 | 21 |
| Educational revenues - SSCC | $10,382 | $9,623 | 8 |
| Educational revenues - SSLC / VIC | $3,134 | $2,654 | 18 |
| Educational revenues - CIBT | $621 | $626 | (1) |
| Rental revenues - GECH | $6,556 | $4,946 | 33 |
| Development fees - GECH and Corporate | $952 | $153 | 522 |
| Design and advertising revenues - IRIX | $115 | $79 | 46 |
| Commissions and referral fees - GEA | $372 | $248 | 50 |
| Gross profit (1) | $12,952 | $10,266 | 5 |
| Other expenses | $(9,157) | $(9,033) | 1 |
| Finance costs | (4,722) | (3,580) | 32 |
| Net gain on investment property fair value changes | (390) | 1,134 | -134 |
| Other income, net | 10,448 | (135) | n/m |
| Income (loss) before income taxes | $9,131 | $(1,348) | -778 |
| Income tax recovery (expense) | (642) | 346 | -286 |
| Net income (loss) | $8,489 | $(1,002) | -947 |
| Net income (loss) attributable to GECC shareholders | $3,553 | $(1,399) | -354 |
| Income (loss) per share - GECC shareholders | |||
Basic | $0.05 | $(0.02) | -364 |
Diluted | $0.05 | $(0.02) | -365 |
| EBITDA [Non-IFRS] (1) | $15,025 | $3,951 | 280 |
| Adjusted EBITDA [Non-IFRS](1) | $4,992 | $3,078 | 62 |
| Total assets | $467,732 | $482,557 | (3) |
| Total non-current financial liabilities | $114,149 | $115,551 | (1) |
- See "Non-IFRS Financial Measures" below for more information on each non-IFRS specified financial measure.
- Percentage change amounts reflect the relative change in the individual balance with the impact (negative or positive) on net income.
The following table reconciles these non-IFRS measures to the most directly comparable IFRS measure disclosed in the Annual Financial Statements, which is net income (loss).
| Presented in thousands of Canadian dollars | Q1 2024 | Q1 2023 |
| Net income (loss) | 8,489 | (1,002) |
| Deduct: interest income (1) | - | (7) |
| Add: interest expense | 4,972 | 3,882 |
| Add: income tax (recovery) provision | 642 | (346) |
| Add: depreciation and amortization(2) | 922 | 1,424 |
| EBITDA [non-IFRS] | 15,025 | 3,951 |
| Deduct net gain on fair value changes in investment properties | 390 | (1,134) |
| Deduct gain on sale of property and equipment (3) | 10,378 | - |
| Add loss/deduct (gain) on embedded derivatives, net (4) | (45) | 261 |
| Adjusted EBITDA [non-IFRS] | 4,992 | 3,078 |
- Interest income not associated with operations which is a component of interest and other income, net including in Note 12 to the Q1 2024 Financial Statements.
- Includes amortization of agency fees which is a component of educational direct costs.
- Includes gain from the sale of GEC® Granville.
- Included in finance costs within Note 11 to the Q1 2024 Financial Statements.
"We started the new fiscal year with a strong quarter," said Toby Chu, Chairman, President and Chief Executive Officer of GECC. "During Q1 2024, the Company's total revenue increased by 21% year-over-year, in which SSLC/VIC's international education business showed substantial growth of 18%, complemented by SSCC's domestic education revenue which grew by 8%. Our recruitment and student advisory division, GEA, also grew by 50% year-over-year. The robust domestic and international education sectors drove significant growth to our student housing revenue by 33% year-over-year.
"Overall, GECC's net income before income tax reached $9.13 million, and EBITDA increased to $15 million, an increase of 250% from the same period last year."
Toby continued, "As interest rates have remained steady for the past few months, we are seeing positive signals for potential rate decreases in the coming quarters of 2024, which is positive news for our real estate services division. Furthermore, according to a City of Vancouver Building Permit Report* dated December 2023, the total number of building permits issued for multiple dwellings year-over-year has dropped 65% from 3768 dwelling units to 2281 dwelling units. As the inventory depletes with minimal developments in the replenishment pipeline, the rental crisis will become a greater issue in the coming years, potentially driving the value of property and rental rates higher. Our efforts will continue to be focussed on controlling costs while increasing the pace of our developments and acquisitions."
*https://vancouver.ca/files/cov/statement-of-building-permits-issued-december-2023.pdf
About GECC:
GECC is one of Canada's largest education and student housing investment companies focused on the domestic and global education market since 1994. GECC operates business and language colleges, student-centric rental apartments, recruitment centres and corporate offices at 41 locations in Canada and abroad. Its education subsidiaries include Sprott Shaw College Corp. (established in 1903), Sprott Shaw Language College, Vancouver International College Career Campus and CIBT School of Business & Technology Corp. GECC offers over 150 educational programs in healthcare, business management, e-commerce, cyber-security, hotel management, emergency paramedic, and language training through these schools. In fiscal 2023, GECC serviced over 14,277 domestic and international students through its educational, rental housing and recruitment subsidiaries.
GECC owns Global Education City Holdings Inc. ("GECH"), an investment holding and development company focused on education-related real estate such as student-centric rental apartments and education super-centres. In fiscal 2023, GECH operated fifteen properties under the GEC® brand in Metro Vancouver and provided accommodation services to 92 partner-schools serving 3,200 students from 71 countries. The total portfolio and development budget under the GEC® brand exceeds $1.2 billion.
GECC also owns Global Education Alliance Inc. ("GEA") and Irix Design Group Inc. ("IRIX"). GEA recruits international students for elite kindergartens, primary and secondary schools, colleges and universities in North America. Irix is a leading design and advertising company based in Vancouver, Canada. Visit us online and watch our corporate video at www.GEChq.com.
For more information, contact:
Toby Chu
Chairman, President & CEO
Global Education Communities Corp.
Investor Relations Contact: 1-604-871-9909 extension 319 or | Email: [email protected]
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking information (the "forward-looking statements") about GECC and its plans. Forward-looking statements are statements that are not historical facts. Forward-looking statements in this news release include, without limitation, the potential for interest rates to decrease and for property values and rental rates to increase. The forward-looking statements are subject to various risks, uncertainties and other factors (collectively, the "Risks") that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. The Risks include, without limitation, national and global economic factors, customary risks of the construction industry, unexpected delays or requirements of the applicable municipalities, and the other risk factors identified in the Company's management's discussion and analysis for the financial year ended August 31, 2023. Forward-looking statements are based on the beliefs, opinions and expectations of the Company's management at the time they are made, and the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances should change, except as may be required by law.
NON-IFRS FINANCIAL MEASURES
The Company has included certain non-IFRS financial measures in this news release including: (a) Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"); (b) Adjusted EBITDA which is EBITDA adjusted for the gain (loss) on sale of property and equipment, gain (loss) on change in fair value of the Company's investment properties, the provision for expected credit losses on development and other assets, the impairment of development assets, and the gain (loss) on change in fair value of derivative instruments; and (c) Gross Profit ("Gross Profit") which is the difference between revenue and direct costs of sales. These non-IFRS financial measurements do not have any standardized meaning as prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management uses EBITDA and Adjusted EBITDA metrics to measure the profit trends of the business units and segments in the consolidated group since it eliminates the effects of financing decisions. Management uses Gross Profit to assess how efficiently the Company generates profit from the sale of goods or services. Certain investors, analysts and others utilize these non-IFRS financial metrics in assessing the Company's financial performance. These non-IFRS financial measurements have not been presented as an alternative to net income (loss) or any other financial measure of performance prescribed by IFRS. Reconciliation of the non-IFRS measures have been provided throughout the Company's MD&A, as applicable, filed under the Company's profile on www.sedarplus.ca.
SOURCE: Global Education Communities Corp.