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Bright Scholar Education Holdings Ltd Earnings: Successful cost control initiatives with 33% reduction in SG&A

By sagebytes —

BEDU Financial Analysis

Analysis Date: 1/27/2025

Business Model

Bright Scholar generates revenue primarily through three segments: Schools, Overseas Study Counselling, and Others

Revenue Sources

  • Schools (57.4% of revenue)
  • Overseas Study Counselling (21.4% of revenue)
  • Others (21.2% of revenue)

Revenue Distribution by Channel

  • Schools: GBP25.7 million (57.4%)
  • Overseas Study Counselling: GBP9.6 million (21.4%)
  • Others: GBP9.4 million (21.2%)

Income Statement Analysis

  • Revenue decreased 16.1% year-over-year to GBP44.7 million
  • Gross margin declined to 29.2% from 33.5% year-over-year
  • SG&A expenses decreased significantly by 33% through operational efficiency improvements

Balance Sheet Analysis

  • Cash position remains healthy at GBP47.5 million despite 12.5% decline from August 2024
  • Total equity improved by 5.1% to GBP68.4 million

Cash Flow Analysis

  • Operating cash flow deteriorated to -GBP5.7 million from -GBP2.3 million year-over-year
  • Positive investing cash flow of GBP3.6 million compared to -GBP2.0 million in prior year

Capital Allocation

Company announced new share repurchase program of up to US$1.2 million over next 12 months, demonstrating commitment to shareholder returns while maintaining operational flexibility

Management Commentary

Successfully executing 'dual-engine' growth strategy

Significant reduction in SG&A expenses through operational efficiency improvements

Growth in Overseas Study Counselling segment despite challenging environment

Revenue decline in core Schools segment

Overall Sentiment: Cautiously optimistic, focused on operational efficiency and strategic growth initiatives

Recommendation

Rating: Hold

Reason for Rating: While operational efficiency improvements are positive, revenue declines and cash flow pressure warrant caution

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/27/2025, 10:57:22 AM