I'm Samantha Deutscher for InvestmentPitch.com
Cormark Securities has updated coverage on
Loyalist Group, symbol LOY on the TSX Venture
Exchange.
Following the announcement that the company
has commenced a pilot program to offer housing
to its students, analyst David McFadgen reiterated
his buy recommendation, and $1.30 target price,
a premium of 103% to the $0.64 price the day
the report was issued.
Loyalist Group is an educational organization
that is in the business of providing in-class
private education services, with an emphasis
on teaching:
• English as a second language
• Professional development courses, and
• College transfer preparation programs
The company has commenced a strategic initiative
to become the premiere consolidator of independent,
privately owned and operated schools, in what
is considered to be a large and extremely
fragmented market.
The company has made a number of acquisitions,
and operates under a number of names such
as PGIC in Vancouver, Victoria and Toronto,
Cornerstone Academic College in Vancouver
and Toronto, VIA Training Centre in Victoria,
Pan Pacific College in Vancouver and Toronto,
Urban International School in Toronto, and
MTI Community College in a number of cities.
The King George International College and
Business College acquisition in September
was by far the company's largest to date.
The company has leased properties in Toronto,
Vancouver, Victoria and Halifax, capable of
housing 104 students, and plans to add approximately
100 beds per quarter.
The initial properties are 100% presold for
the first 6 months of 2014, with an average
term of one year.
Loyalist will be charging its students a monthly
rent of $480, with the gross margin estimated
at approximately 50%.
The company has approximately 4,500 students
and believes that approximately 75% of its
students are candidates for housing.
Loyalist CEO, Andrew Ryu, commented "We are
listening to our students, many of whom worry
about accommodation prior to arrival in Canada.
We would rather our students concentrate on
their studies so we are offering safe and
secure housing that meets Loyalist's best-in-class.
If the pilot project is successful, which
we fully expect, Loyalist will continue adding
properties to ensure the needs of its students
are met."
The company announced record financial results
for the nine months ending September 30, 2013,
with revenue at $19.9 million and income from
operations at $4.15 million.
Analyst David McFadgen stated, "We recommend
Loyalist given we believe it is well positioned
to continue to acquire ESL schools and colleges
at attractive multiples."
The company currently trades at $0.63, well
below the $1.30 target price, and with 131.1
million shares outstanding, the company is
capitalized at $82.6 million.
For more information, please visit the company's
website www.loyalistgroup.com, or contact
David McAdam, VP Corporate Development at
604-961-3513 or email dmcadam@loyalistgroup.com.
For more information about Cormark Securities
or to obtain a copy of their research report,
please visit their website at www.cormark.com.
I'm Samantha Deutscher for InvestmentPitch.com
For more video news, and to view our disclaimer,
be sure to visit our website www.investmentpitch.com.
This video is for information purposes only
and it is not a recommendation to buy or sell
any securities.
