Faced with Covid-19 challenges for much of the year, early childhood education company MindChamps PreSchool Limited posted 5% lower earnings of $0.7 million for the 1H2020 ended June.

MindChamps’ revenue decreased by 4% y-o-y, to $21.6 million in 1H2020. The company attributed the decrease to the 50% mandated school fee reductions during 2Q2020 as part of Covid-19 countermeasures in Singapore and Australia. This reduction was offset by the increased number of enrolled students following the acquisitions of preschool centres in 2019.

No dividend has been declared as the company intends to retain the profits generated in the current financial period for operational needs.

Cost of sales increased by some 31% y-o-y to $14.1 million in 1H2020. The increase was mainly attributable to higher academic staff costs incurred, which resulted from the increased number of academic staff following the acquisitions of preschool centres in 2019. 

Gross profit came in at $7.5 million, a 36% decrease y-o-y, owing to a mandatory reduction in fees. 

Other income increased by approximately $6.8 million to S$8.3 million in 1H2020, due to the local government Covid-19 relief measures extended to the Group’s operations in Singapore and Australia. 

Administrative expenses increased by approximately $2.3 million or 21% y-o-y to $13.0 million in 1H2020. The increase was mainly attributable to an increase in administrative costs of approximately $1.9 million incurred in relation to the preschool centres acquired in 2019, and support staff costs of preschool centres of approximately $0.4 million, which resulted from the increased number of support staff following the acquisitions.

The group’s cash and cash equivalents maintained at a relatively stable $5.8 million as at June 30 from December 2019

According to its press release, MindChamps holds a 38.5% market share in “premium range preschools” in Singapore. The company has expanded into Australia, the Philippines, Vietnam, Myanmar and Malaysia, where it runs premium preschools and enrichment centres. 

On April 6, the Company entered into a joint venture agreement with Foundation Corporation Holdings to establish a new private fund with a target of approximately US$50 million to US$100 million for its initial fund size.

“The investment objective will be to establish and acquire preschools in the Gulf Cooperation Council countries and operate them under the MindChamps brand,” says MindChamps.

“2020 has been a year of challenges and opportunities,” says Founder, CEO and Executive Chairman David Chiem. The company is on track with its growth plans for the opening of two new centres in Singapore by the end of 2020, adds the company in a press release. 

“With the recent announcement of the partnership with Malek Family Pty Ltd, MindChamps continues to expand its footprint in Australia. Under this partnership, Malek Family Pty Ltd has purchased the rights to develop 10 new purpose-built MindChamps childcare centres in New South Wales and Victoria.”

Shares in MindChamps closed flat at 31 cents on August 13.