YUCHENGCO-LED academic institution Malayan Colleges Inc. (MCI) is acquiring an estate worth P425 million, marking its continued commitment to expand in the education sector.
In a regulatory filing, the company, which operates under the name Mapua Institute of Technology, is said to have entered into a “contract to sell” agreement to buy a 2.3-hectare property in Davao City.
The completion of the purchase is subject to various conditions that need to be fulfilled. Further details on the deal and the seller, however, were not disclosed.
As a precedent to various developments now taking place in MCI, the company recently completed a two-stage redevelopment project of its campus in Intramuros, Manila.
As for its first phase, the existing gym was fully renovated and updated in May 2014.
Then, the construction of the new Research and Administration building was completed this year.
Meanwhile, the establishment of the Engineering Building of Malayan Colleges Laguna Inc. (MCLI) was finished in the middle of third quarter of 2015.
The purpose of these is to upgrade the facilities for the benefit of the current and entering students.
Together with MCLI and Malayan High School of Science, MCI is preparing for the implementation of the Department of Education’s (DepEd) K to 12 Program, which adds two more years of secondary education.
When it starts in 2016, there will be two years when there will not be any students moving on to tertiary studies.
Given this, it is seen to severely impact the profit and cashflow of both for-profit and nonprofit tertiary education institutions.
Both MCI and MCLI have already received approval of their respective applications with the DepEd to offer Grades 11 and 12 in 2016 and 2017, respectively, to lessen the projected slowdown in enrollment at the collegiate level.
According to MCI’s owner iPeople Inc., the impact of K to 12 will be felt in the 2016-2017 school year. But it will not have an effect on the enrollment in their network of schools in the near term, the company said.
In response to the prolonged academic years, iPeople is keen on acquisitions that would fit in with its current education portfolio.
These targets can include for-profit secondary schools, for-profit colleges, or for-profit universities.
iPeople is a subsidiary of House of Investments Inc., a member of the Yuchengco’s Group of Companies.
For the quarter ending September 2015, iPeople reported a 7-percent growth in consolidated net income after tax of P581.99 million compared to P541.77 million during the same period last year on the back of steady stream of revenues from Mapua group.
Revenues aggregated to P1.77 billion from P1.68 billion, up 5 percent year-on-year. This was primarily driven by the strong results from school operations.
Top figures from school operations increased from P1.54 billion to P1.66 billion due to continuous hike in the number of enrollees and units taken by the students.