RE said that while it is not the company’s policy to comment on speculative reports, management have decided to advise its shareholders and the investing public that the media report contains a number of inaccuracies and misleading facts and figures. Their 2 colleges at OUC are bona fide schools with all the requisite approvals and permits in place.
Management also cautioned against the wilful circulation of the media report and reproduction of the untruths and misleading facts and figures. And that it would not hesitate to seek legal redress against anyone found doing this.
The date of the negative media report was coincidentally released on the same day that RE released its full year ended June’09 resultswhere its performance came in below market expectations due to higher than expected costs, slower than expected student growth rate and start up costs of new colleges. This had resulted in a few downgrades and target price reductions by analysts.
At the same time, technically the stock breached its short term uptrend in place since Mar’09.
Since 3Q ended Mar’09, the company had stopped its usual quarterly dividend payment. At 50.5 cents this morning, market cap is S$1.324bln, trailing PE is 26x, price to sales is 6.5x and price to book is 2.5x.
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