Comment on tax changes announced in UK budget

Fairview International PLC

("Fairview" or the "Company")

Comment on tax changes announced in UK budget

Fairview, the operator of international schools following the International Baccalaureate curriculum, notes the changes to the tax treatment of private schools that were announced by the UK government in its autumn budget on 30 October 2024.  The imposition of VAT at 20% from January 2025, coupled with the removal of business rates relief and increased employer's national insurance contributions in April 2026, was widely expected.  Fairview does not own any UK private schools so these changes will not adversely impact its trading.

Daniel Chian, Chairman of Fairview, said: "Like many in the independent schools sector, I am naturally disappointed that the UK government has chosen to apply a tax on education and I sympathise with families and schools who will suffer hardship as a result of these measures.  However, we are  reassured by the government's commitment to ensure that local authorities and devolved governments will be compensated for the VAT charged on fees for pupils with special educational needs. Fairview has a longstanding focus on supporting students with diverse needs, and we will always work closely with parents, local authorities, and communities to ensure that every child receives the support they need.

"Fairview International plc at present only owns independent schools in Malaysia and, whilst these changes will have no negative affect on our trading or financial position, I do have two observations on factors that may be relevant to us.

"Firstly, we have made no secret of our plans to grow our network of schools and have identified the UK as one of our target countries for expansion.  As much as I regret being the beneficiary of another person's misfortune, it is surely very probable that a number of UK independent schools will struggle under the higher costs imposed by the new tax regime - as well as sadly face the possibility that some students will leave due to the imposition of VAT on fees.  Fairview, through our network, prides itself on providing high quality and premium education with affordable school fees.  This model enables us to operate competitively even in challenging markets and our team will examine suitable acquisition opportunities in the UK, many of which could now be available on more attractive terms.

"Within our home market of Malaysia, we may see some marginal benefit as families will be deterred from sending their children to school in the UK, given the pending higher cost regime.  As one of the leading school groups in Malaysia - our Kuala Lumpur school for example has been ranked as having the best IB Diploma Programme in Malaysia for four consecutive years - we may attract more students whose families choose to educate them locally whilst nevertheless desiring the breadth of the International Baccalaureate curriculum."

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About Fairview International PLC

Fairview owns and operates two private independent schools in Malaysia that offer the International Baccalaureate programme. One of these schools is located in Kuala Lumpur, the capital of Malaysia, and the other is located in the southern state of Johor close to the border with Singapore.  These schools trade under the Fairview brand which was founded in 1978, and were subsequently acquired by Agodeus Sdn Bhd, a company owned by the Chian family, in 2012. 

There are three other schools in Malaysia and one in the United Kingdom that also trade under the Fairview brand, which are outside of the Company's group.  All schools in the Fairview network are individually recognised by the International Baccalaureate Organisation as fully accredited to offer the IB programme across the primary and middle years; ages 5 to 16, with Fairview Kuala Lumpur also offering the diploma programme for 16 to 19 year olds.  Each of the schools not owned by the Company use the Fairview brand under licence from the Company accessing the resources of the Fairview Network. 

The school in Kuala Lumpur is the largest and flagship school that uses the Fairview brand, whilst the school in Johor focuses on the expatriate market in Singapore and so is internationally focused.

The Company plans to acquire more schools which can offer international education including the International Baccalaureate programmes both in Asia and the UK.  The Company in particular believes there is an opportunity to acquire underperforming private independent schools in the UK and adapt its product offering to be authorised to offer the International Baccalaureate programme.  With a rise in popularity of the International Baccalaureate programme in both the independent and state sector in the UK, with a growing acceptance of International Baccalaureate graduates by UK universities, the Directors believe that the Company's schools will appeal particularly to the ASEAN, China and Hong Kong market; particularly families looking for an educational foundation in the UK prior to studying at a UK University.

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