Taaleem aims to double revenues after 60% profit rise

Taaleem

• $204m IPO money currently untouched
• New school planned every two years
• Looking at early years sector

Taaleem, the UAE schools operator, plans to double its revenues by 2028 by opening “at least one school every two years”, managing more government schools and diversifying into early years, its chief executive told AGBI. 

The company, which has low debt, has yet to deploy the proceeds of its AED750 million ($204 million) initial public offering in 2022.

It does not expect to raise any more cash to fund its expansion in the medium term “unless something incredibly ambitious came across our desk, which would be in relation to a major acquisition of a similar sized group within the UAE or GCC,” CEO Alan Williamson said. 

• Keen students enrol to bring Taaleem ‘record’ revenues

• Saudi private schools’ report card points to untapped potential 

• Dubai kindergarten sector shows strong potential

There are currently no talks taking place, Williamson said, but “our ambitions have transformed at the same rate as our number of schools and students, which have doubled in five years. That’s why our growth story is so exciting.” 

Revenues at the company, which is listed on the Dubai Financial Market, grew 11.5 percent annually to a record AED258.7 million ($70.4 million) in the first quarter of the 2023-2024 academic year ending November 30, Taaleem said last week. 

Net profit grew 60.5 percent year-on-year to AED81.6 million, and student enrolment was up 26.6 percent to 35,715 for the academic year, another record. Net debt stood at AED-493.2 million.  

Taaleem

Taaleem secured contracts to manage five new government schools, bringing the total number of public schools to 21 out of its portfolio of 31 schools in the UAE.

Public sector schools do not perform as well as private UAE schools on global education rankings so Taaleem wants to focus on the private sector, Williamson said. 

“We’d be happy to get four or five new ones a year, that’s enough. We recruit better teachers, change the curriculum from Arabic to American, it’s manageable and a nice revenue stream,” he said.

Taaleem’s last private acquisition, in May 2022, was of Jebel Ali School, and Williamson said Taaleem is eyeing “at least one more”. 

It has committed to four new schools in the Emirates to accommodate 8,000 students. They include the Dubai British School Jumeira and the fifth Dubai British School, in Mira. The company is also expanding Greenfield International School in Dubai Investments Park.

Taaleem

The UAE has “more than enough room for growth”, although Taaleem is also looking at partnership opportunities in Saudi Arabia, Williamson said. He added that it would only enter the kingdom “at a time when regulation was clearer and it was in the best interest of our shareholders”.

Growth may come instead from diversifying Taaleem’s offer, such as tapping the fast-growing early years sector. Some of Taaleem’s schools already offer nursery provision.

“A partnership with, or acquisition of, a successful nursery group is something we are evaluating,” Williamson said. The GCC pre-primary sector is projected to grow at a faster rate than other education segments, the Dubai financial advisory service Alpen Capital.

Research from LEK Consulting predicts that 65,000 young expats will enter the UAE’s education market between 2022 and 2027, driving growth. Around 20 to 25 percent of Taaleem’s annual student intake is new to Dubai, while 40 percent come from competitors, Williamson said. 

“We’re super-confident that even if the economy flattens out a little, we will be very successful.”