KUALA LUMPUR: Having been in the red since the fourth quarter of 2011, Masterskill Education Group Bhd is determined to take the bull by the horns as it strives to return to profit.
While there remain persistent challenges in the home market, the health science education provider is now eyeing opportunities overseas, with a possibility of working with several foreign partners via a franchise model.
The group has widened its education offerings ranging from medical and allied health programmes to include business, hospitality and tourism courses.
To reflect its wider offerings and the new business model, Masterskill’s main education arm, Masterskill University College of Health, was rebranded as Asia Metropolitan University last June.
The rebranding came with an upgrading of the education institution to a full-fledged university from a university college.
In an interview with The Edge Financial Daily, Masterskill deputy CEO Dr Jayles Yeoh said the group is currently working with the authorities to obtain the necessary approvals to provide educational offerings overseas.
“We have been granted a franchising licence by KPDNKK [Domestic Trade, Cooperatives and Consumerism Ministry],” he said.
With the franchising licence, Yeoh said the group is scouting for suitable business partners in China, Myanmar and Bangladesh, where there is demand for higher education.
He expects the franchising business to contribute at least 60% to group revenue in five years.
“We have been losing [money], but we are trying to reverse the losses,” Yeoh said, noting that management is making an effort to turn around by introducing new programmes and new strategies.
“I think by the first quarter of 2015, we should be out of the red.”
Masterskill’s revenue for the financial year ended Dec 31, 2012 (FY12) dipped to RM148.8 million compared with RM250.2 million for FY11. It registered a loss of RM28.3 million or 6.88 sen per share for FY12 compared to a net profit of RM45.3 million for FY11.
On the local front, Yeoh said Masterskill will continue to focus on widening its offerings, especially in degree programmes, where there is a higher demand and revenue compared with diploma programmes.
He said Masterskill will roll out a new flagship campus in Section 19 in Petaling Jaya by year-end for foreign students.
Apart from the hospitality management and travel tourism courses, the PJ campus will offer new business courses that will enable students to obtain their diplomas and Master of Business Administration (MBA).
According to Yeoh, the signing of a MoU with the Association of Business Executives (ABE) UK, last December, will enable students to pursue their studies in the UK. The ABE qualification is recognised by more than 80 universities worldwide.
Yeoh said the decline in revenue, which led to the losses, was mainly caused by a shortfall in the enrolment of students, especially in Masterskill’s nursing programmes.
The enrolment numbers dropped as the government reduced the National Higher Education Fund Corp (PTPTN) loans and the Malaysian Nursing Board raised the minimum entry requirements for its nursing courses.
According to a news report, the PTPTN loan scheme was reduced to RM45,000 from RM60,000 for each diploma student.
The decision by the Malaysian Nursing Board to increase the entry requirement for the diploma in nursing to five credits from three credits in the Sijil Pelajaran Malaysia also affected the enrolment of students.
Masterskill has so far churned out 18,815 graduates and certificate holders from its five institutions in Kuala Lumpur, Johor Baru, Ipoh, Perak, Kota Baru, Kelantan, and Kota Kinabalu, Sabah, from 2007 to 2012.
Amid the challenges faced by the group, former Masterskill CEO and major shareholder Datuk Seri Santhara Kumar resigned from all executive positions in April this year.
Santhara sold down the bulk of his shareholdings in Masterskill, reducing his stake to 6.25% as at May 3 this year from 22.1%.
He sold most of the shares to executive director Siva Kumar Jeyapalan, who now holds a 29.76% stake in Masterskill.
Masterskill closed at 52 sen last Friday, with a market capitalisation of RM211 million.
This article first appeared in The Edge Financial Daily, on August 05, 2013.