Markets

Alef Education profits rise but share price struggles

July 30, 2024, 9:59 AM

Alef secured a long-term contract with the Abu Dhabi Department of Education that helped to increase revenues, as profit hit $68 million — Alef secured a long term contract with the Abu Dhabi Department of Education that helped to increase revenues, as profit hit $68 million

$68m profit in H1
Share price down 12.6% on debut
Long-term contract with Adek

Alef Education has reported pre-tax profits of AED249 million ($68 million) for the first half of 2024. However, the company’s share price continues to struggle.

At noon on Tuesday the share price was AED1.18, down 12.6 percent on its debut IPO price in June.

Alef was the first education technology business to list on a UAE stock exchange and raised nearly AED2 billion when it launched on the Abu Dhabi bourse.

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Revenues in the first six months of 2024 increased by 1 percent to AED354 million year on year, largely because of a long term contract with the Abu Dhabi Department of Education and Knowledge (Adek).

Savings worth 6 percent were made in employee, software, legal and professional spending.

Alef CEO Geoffrey Alphonso said the company would “pursue scale” to improve earnings and “maximise shareholder value”.

The contract with Adek, which provides for a minimum of 80,000 students across the emirate, runs for the next seven years, although discussions have taken place to extend this by a further three years.

Alef Education has also signed a two-year confidential government contract in the UAE worth AED31 million “to build and deliver values-based Islamic content”.

In addition, a deal signed with the government of Kenya is expected to pave the way for commercial agreements.

“The company has a sizeable pipeline of deals for the second half of 2024 and is in ongoing discussions with several governments to expand its offering across its high-growth target markets,” a statement said.

Alef Education has agreed an AED67.5 million payout for the first half of 2024, implying an interim dividend per share of around AED0.05, with its dividend yield exceeding 8 percent at the current share price.

The UAE raised $1.3 billion from three offerings in the six months from January, including Alef Education, which accounted for 37 percent of the total GCC IPO proceeds, but marked a 67 percent decline compared with the previous year.

Earlier this month Amanat Holding, an investment company in Dubai, announced plans to list its education platform.