Dear Shareholders,

 

On behalf of the Board of Directors of Raffles Education Limited (the “Company”, and together with its subsidiaries, the “Group”), I would like to provide our shareholders with an update on the Group’s financial performance and key developments for the financial year ended 30 June 2026 (“FY2026”).

 

The Group recorded revenue of S$106.8 million for FY2026, compared with S$111.7 million in the previous financial year. The decrease was mainly attributable to the disposal of Hefei Yuren Education Management Co. Ltd. (“HFYR”) during the year.

 

Despite the lower revenue, the Group recorded profit before income tax of S$6.8 million for FY2026, compared with S$8.7 million in FY2025. The Group’s net loss after tax was S$6.4 million, compared with a net profit after tax of S$4.4 million in FY2025. Amongst other factors, the results for FY2026 were affected by, amongst other factors, the loss arising from the disposal of HFYR and related tax provisions as well as foreign exchange movements.

 

The Group also recorded an adjusted EBITDA of S$29.6 million for FY2026, compared with S$19.4 million in FY2025. The improvement primarily reflects the Group’s operating performance after adjusting for certain significant non-recurring and non-operating items.

 

Strengthened Financial Position

 

During FY2026, the Group continued to focus on strengthening its balance sheet and managing its financial obligations.

 

Total borrowings decreased significantly from S$208.7 million as at 30 June 2025 to S$86.2 million as at 30 June 2026. This was principally due to repayments of borrowings, repayment of non-convertible bonds and conversion of convertible bonds, partly offset by the issuance of S$3.0 million in non-convertible bonds.

 

As a result, the Group’s net gearing ratio decreased from 34% to 7% as at 30 June 2026. The Group also ended FY2026 with cash and cash equivalents of approximately S$39.1 million, compared with S$16.9 million at the end of FY2025.

 

Net cash generated from operating activities increased to S$12.6 million, compared with S$4.3 million in FY2025. During the year, the Group also generated cash proceeds from the disposal of non-current assets held for sale and the disposal of a subsidiary.

 

Streamlining and Restructuring of the Group

 

The Group continues to streamline and restructure its operations with focus on improving cost management and operational efficiency.

 

During FY2026, the Group completed the disposal of HFYR and the disposal of the property at 51 Merchant Road, Singapore. The disposal of 51 Merchant Road contributed to a gain of S$52.8 million, while the disposal of HFYR resulted in a loss of S$29.4 million recognised in the Group’s financial statements.

 

The Group will continue to assess its businesses and assets with a view to optimising its resources, strengthening its financial position and improving the sustainability of its operations.

 

Education Business

 

The Group remains focused on its core education businesses across its key markets.

 

The global education environment remains challenging, with increasing competition, evolving regulatory requirements and restrictive policies in certain countries affecting the recruitment of international students. Currency volatility also continues to affect the Group’s financial performance.

 

Against this backdrop, the Group will continue to focus on operational efficiency, prudent cost management, student recruitment and the development of its education businesses.

 

Langfang Land Reclamation in China

 

Subsequent to the financial year end of 2026, the Group announced that its 70%-owned indirect subsidiary, Langfang Hezhong Education Consulting Co., Ltd., entered into a land reclamation compensation agreement on 18 August 2026 with the Langfang Economic and Technological Development Zone Management Committee in relation to the compulsory government reclamation of the relevant land.

 

The compensation consideration is RMB293.3 million (approximately S$55.7 million) and is expected to be collected in two tranches by the end of 2026.

 

After taking into account related income taxes and expenses, the net cash proceeds are estimated at RMB270.7 million (approximately S$50 million), of which the Group’s 70% share is estimated at RMB174.2 million (approximately S$31 million).

 

The Board believes that the expected proceeds from this transaction, together with the Group’s ongoing efforts to strengthen its balance sheet and manage its operations, will provide additional financial resources to support the Group’s continuing operations and strategic initiatives.

 

Outlook

 

Looking ahead, the Group expects the global education landscape to remain competitive and challenging. Economic and geopolitical uncertainties may continue to affect the recruitment of international students, while currency volatility and regulatory developments in the countries within in which the Group operates may continue to impact its business.

 

The Group will therefore remain focused on disciplined financial management, operational streamlining and restructuring, while continuing to develop its education businesses and optimise its portfolio of assets.

 

The Board remains committed to creating sustainable value for our shareholders and will continue to keep shareholders informed of material developments affecting the Group.

 

On behalf of the Board, I would like to thank our shareholders, students, parents, business partners, employees and other stakeholders for their continued support and confidence in the Group.

 

 

Yours faithfully,

 

 

Mr CHEW Hua Seng

Chairman and Chief Executive Officer

Raffles Education Limited

 

CEO’s Message was extracted from Annual Report 2026 publication. Information is correct at the point of print.