Education biz to drive Scicom's FY15 growth

PETALING JAYA: Scicom (MSC) Bhd, one of two companies appointed to re-skill Malaysian Airline System Bhd (MAS) staff, expects its education business to be one of the main drivers of growth in the current financial year ending June 30, 2015 (FY15) based on its capability to provide large scale training programmes, said its group CEO Leo Ariyanayakam.
"For FY14, the outsourcing business would be the main driver. But next year would be the education business, we would think…our education business is very services focused. It's all vocational, very services focused. We look at anything that is within the services business for example retail, hospitality and tourism," he told reporters after its AGM and EGM yesterday.
Currently the education business makes up just a fraction of the group's revenue. In its quarterly results announcement yesterday, Scicom announced that revenue from training and consultancy stood at RM270,000, while the outsourcing business brought in RM43.1 million.
Leo said the group has been focusing on providing vocational education to governments and corporates. In emerging markets, governments are now looking to Scicom to provide large scale vocational training to their people.
"They come to us because we can deliver large scale projects. The difference between smaller companies that have five or six trainers, they can only do about 100 people at a time. We can do thousands because we have that capability in-house to scale. That's the difference. When you have to train a few thousand people, they will come to us because we understand how to scale," he added.
The group's Q1 FY15 net profit rose 38.68% to RM7.25 million from RM5.23 million a year ago while revenue for the quarter rose 17.43% to RM43.48 million from RM37.03 million a year ago.
It declared a first interim dividend of 1.5 sen, tax exempt, per ordinary share which is to be paid on Dec 15, 2014.
In September 2014, MAS and its major shareholder Khazanah Nasional Bhd announced its partnership with Sutherland Global Services and Scicom to re-skill MAS staff who will be affected by the 6,000 job cuts expected at the ailing carrier.
"We have a memorandum of understanding (MOU) with them. We have not started training," said Leo. He declined to elaborate on the MOU.
In a filing with Bursa Malaysia yesterday, it said that the management is in the midst of finalising new training programmes that will be reflected in the second half of FY15. Training and consultancy includes educational and industrial training services primarily focused on customer care in the service industry.
"The group's education division is currently involved in tendering process of a few major training projects and associated revenue is expected to materialise in the second half of FY15," it said.