Prestariang made a headline on last Thursday by making a double announcements.
The first announcement was the acquisition of Time Out Skills Academy Sdn Bhd at a 80% equity interest with total purchase consideration of RM0.64m. The purchase is to be wholly funding by cash. With a cash balances of RM34m at the date of 30th June 2013, the group will have no problem for this internal funding. According to the announcement, the acquisition is to help the group focus on providing skills training programs to the oil & gas industry. Finally, the group has officially has the capacity and medium to provide training to the oil & gas industry.
It was followed by a contract by the Yayasan Peneraju Pendidikan Bumiputera to provide skills training certification for 240 students. The total programme cost is around RM2m with a training period of 2 years. More importantly, it also stated that the contract is subject to ANNUAL renewal for future intakes, subject to satisfactory performance. Thus, there will be more contracts and higher students intake if the programme performance is good. This will provide a recurring income to the group in future. Given the turnover of around RM110m recorded in FY2012, the RM2m contract will marginally increase the group's revenue for this coming 2 years. But, it's always a good start since this is a new segment for the group.
It's believe that the group is going to announce its 3rd quarter result on this coming Thursday (20th Nov). The revenue probably still count on its core business of ICT training and software license distributor. Its new segment of university business probably still incurs some loss after spending around RM2.0m on marketing expanses to promote its newly launched university at H1FY13 and it turned out to have low students intake. Management team still have lots of things to do to improve the situation
Anyway, it's good that the group is diversify its business into university and training platforn for oil & gas industry apart from its core business to further enhance shareholders' value :)
Prestariang, go go go