Revenue, Gross Profit, and Net Profit (AED)
| Sellers | Jacquie & Leila |
| Buyers | Dan & Mike (LTV Holdings) |
| Structure | 70% equity via new share issuance |
| Investment | AED 238,400 over 4 quarters |
| Status | In Discussion |
Reported net profit of AED 116K significantly understates true earnings power. Partner Salary/Wages of AED 362K is owner compensation — removing it reveals AED 478K adjusted EBITDA (34.2% margin). This is the real baseline for investment analysis.
Despite AED 116K in reported profit, year-end cash is only AED 8,508. The Shareholder Current Account shows -AED 152,824 in draws, meaning owners have been extracting cash faster than profit accumulates. AR of AED 67K needs aging analysis.
Revenue grew just 2% in 2025 vs 2024 (AED 1.37M → 1.40M). Discount rate fell from 5.7% to 4.8% — a positive sign. But the business needs active enrollment growth strategy to break out of its stable-but-stagnant plateau.
Total OpEx: AED 1,186,370
| Category | AED | % Rev |
|---|---|---|
| Partner Salary/Wages Owner | 362,000 | 25.9% |
| Rent Expense | 250,000 | 17.9% |
| Salaries & Employee Wages | 267,920 | 19.2% |
| Staff Bonus | 47,000 | 3.4% |
| License Fee | 41,440 | 3.0% |
| Insurance | 33,707 | 2.4% |
| IT & Internet | 24,865 | 1.8% |
| Utilities (DEWA) | 22,851 | 1.6% |
| All Other | 136,537 | 9.8% |
Initial capital injection. New shares issued to LTV. 70% equity transferred. Operational handover begins.
Second installment. Marketing team takes on enrollment growth. Finance/ops integration underway.
Third installment. Technology systems deployment. Curriculum and program investment.
Final installment. Full integration complete. Growth trajectory established heading into Year 2.
| Scenario | Basis AED | 70% Value | Multiple |
|---|---|---|---|
| Reported NP (2024) | 113,524 | 238,400 | 3× |
| Adj. EBITDA (2024) | 474,924 | 332,447 | 0.7× |
| Reported NP (2025) | 116,128 | 244,069 | 2.9× |
| Adj. EBITDA (2025) | 478,128 | 334,690 | 0.7× |
| Resource | Details | Est. Value/yr |
|---|---|---|
| Team Access (10+ FTEs) | Tech, Marketing, Ops, Finance | 250K+ |
| Meta/Google Ad Credit | $5M credit line for enrollment | 50K+ |
| 11,000 sqft Warehouse | Events, training, programs | 100K+ |
| Tech Systems | Custom automation + platforms | 75K+ |
| Dan & Mike Time | ~AED 1M+ combined comp equiv. | 100K+ |
| Total Non-Cash Value Estimate | 500K+ | |
Gross sales → Net revenue → Gross profit → Net profit (AED)
Comparison of 2024 and 2025 profit layers (AED)
| Line Item | FY2024 (AED) | FY2025 (AED) | Change | % Change | Notes |
|---|---|---|---|---|---|
| Operating Income | |||||
| Gross Sales | 1,430,004 | 1,469,120 | +39,116 | +2.7% | |
| Discounts | (81,273) | (71,085) | +10,188 | -12.5% | Discount rate improved |
| Other Income | 21,010 | (667) | (21,677) | — | Other charges turned negative |
| Net Revenue | 1,369,741 | 1,397,369 | +27,628 | +2.0% | |
| Cost of Goods Sold | |||||
| COGS | 56,271 | 84,971 | +28,700 | +51.0% | Significant increase — investigate |
| Outsourced Partners | 335 | 9,900 | +9,565 | +2,853% | New outsourcing in 2025 |
| Total COGS | 56,607 | 94,871 | +38,264 | +67.6% | |
| Gross Profit | 1,313,134 | 1,302,498 | (10,636) | -0.8% | 95.9% → 93.2% |
| Operating Expenses | |||||
| Partner Salary/Wages Owner | 361,400 | 362,000 | +600 | +0.2% | Owner comp — addback on exit |
| Salaries & Wages | 323,105 | 267,920 | (55,185) | -17.1% | Headcount reduced? |
| Staff Bonus | 30,000 | 47,000 | +17,000 | +56.7% | Big bonus increase |
| Rent Expense | 250,000 | 250,000 | — | 0% | Fixed — lease term? |
| Insurance | 18,744 | 33,707 | +14,963 | +79.8% | Nearly doubled |
| IT & Internet | 21,830 | 24,865 | +3,035 | +13.9% | |
| Bank Fees | 14,641 | 18,251 | +3,610 | +24.7% | Payment processing costs up |
| License Fee | 39,975 | 41,440 | +1,465 | +3.7% | Confirm transferability |
| Accounting Services | 3,606 | 11,800 | +8,194 | +227% | Big jump — DD related? |
| All Other OpEx | 119,927 | 129,387 | +9,460 | +7.9% | |
| Total OpEx | 1,186,628 | 1,186,370 | (258) | 0.0% | Essentially flat |
| Bottom Line | |||||
| Net Profit (Reported) | 113,524 | 116,128 | +2,604 | +2.3% | |
| Adj. EBITDA (ex-owner comp) | 474,924 | 478,128 | +3,204 | +0.7% | True earnings power |
Ranked by size (AED)
People vs Fixed vs Facilities vs G&A
| Expense Line | Category | FY2024 (AED) | FY2025 (AED) | % of Rev | Flag |
|---|---|---|---|---|---|
| Partner Salary/Wages | People/Owner | 361,400 | 362,000 | 25.9% | Owner comp |
| Salaries & Employee Wages | People | 323,105 | 267,920 | 19.2% | ↓ Improved |
| Rent Expense | Fixed | 250,000 | 250,000 | 17.9% | Lease term? |
| Staff Bonus | People | 30,000 | 47,000 | 3.4% | ↑ +57% |
| License Fee | Fixed | 39,975 | 41,440 | 3.0% | Transferable? |
| Insurance | Fixed | 18,744 | 33,707 | 2.4% | ↑ +80% |
| IT & Internet | Fixed | 21,830 | 24,865 | 1.8% | |
| Janitorial Expense | Facilities | 19,907 | 22,525 | 1.6% | |
| Utilities DEWA etc | Facilities | 22,697 | 22,851 | 1.6% | |
| Bank Fees & Charges | G&A | 14,641 | 18,251 | 1.3% | ↑ +25% |
| Other Expenses | G&A | 12,708 | 16,651 | 1.2% | Unclassified |
| Accounting Services | G&A | 3,606 | 11,800 | 0.8% | ↑ +227% |
| Telephone Expense | G&A | 8,464 | 15,775 | 1.1% | ↑ +86% |
| Travel Expense | G&A | 7,206 | 7,046 | 0.5% | |
| Educational Resources | Program | 7,916 | 3,901 | 0.3% | ↓ Reduced |
| Repairs & Maintenance | Facilities | 9,142 | 5,522 | 0.4% | |
| Visa Charges | People | — | 6,326 | 0.5% | New in 2025 |
| External Provider | Program | 2,374 | 4,050 | 0.3% | |
| Gardener | Facilities | 4,950 | 3,600 | 0.3% | |
| Advertising & Marketing | G&A | 200 | 2,868 | 0.2% | Very low — upside |
| Consultant Expense | G&A | 7,762 | 3,000 | 0.2% | |
| Bad Debt | G&A | — | 2,646 | 0.2% | New in 2025 |
| Total Operating Expenses | 1,186,628 | 1,186,370 | 84.9% | ||
Total Assets: AED 105,104
Cash is AED 8,508 while Accounts Receivable sits at AED 67,169 — 8× cash. The business is profitable on paper but operationally illiquid. Need AR aging report: how old are these receivables and what's the collection rate?
Shareholder Current Account is -AED 152,824. Owners have drawn out AED 152K more than they've put in. Despite AED 116K net profit in 2025, cash was extracted. This is normal pre-sale behavior but confirms the cash crisis above.
Total liabilities of only AED 6,882 (AP + Output VAT). No loans, no leases on balance sheet. Clean capital structure. Rent is pure opex — no hidden debt obligations.
Net fixed assets of AED 28,242 (furniture/equipment). Asset-light model with no owned property. 37% depreciation on gross F&E (AED 45K → AED 28K net) suggests aging equipment — may need refresh.
| Account | AED |
|---|---|
| Current Assets | |
| Petty Cash | 1,789 |
| Bank (RAK Starter Account) | 6,720 |
| Accounts Receivable | 67,169 |
| Input VAT | 1,185 |
| Total Current Assets | 76,862 |
| Fixed Assets | |
| Furniture & Equipment (gross) | 45,082 |
| Accumulated Depreciation | (16,840) |
| Total Fixed Assets | 28,242 |
| TOTAL ASSETS | 105,104 |
| Account | AED |
|---|---|
| Current Liabilities | |
| Accounts Payable | 2,449 |
| Output VAT | 4,433 |
| Total Liabilities | 6,882 |
| Equity | |
| Retained Earnings | 134,918 |
| Current Year Earnings | 116,128 |
| Shareholder Current Account | (152,824) |
| Total Equity | 98,222 |
| TOTAL LIABILITIES & EQUITY | 105,104 |
AED 8,508 cash on hand as of Dec 31, 2025 — less than a week's operating costs. Despite AED 116K net profit, the business has no cash buffer. Shareholder drawings of AED 152K account for the discrepancy.
The UAE education/nursery license (AED 41,440/yr) is government-issued and may be non-transferable upon change of ownership. KHDA / Dubai Municipality licenses often require re-application, re-inspection, and approval under new ownership.
AED 67,169 in AR (8× cash) with no aging breakdown. In a school context, this is likely unpaid tuition fees. Bad debt of AED 2,646 appeared for the first time in 2025 — suggests collection deterioration.
Revenue grew only 2% in 2025 despite UAE's strong education sector growth (typically 8–15%/yr). Marketing spend was just AED 2,868 (0.2% of revenue). The school is growing slower than inflation.
COGS jumped 68% YoY (AED 57K → 95K). Outsourced Partners exploded from AED 335 to AED 9,900. This compressed gross margin from 95.9% to 93.2%. Without explanation, this is unexplained margin degradation.
Jacquie is the educational leader and community-facing owner. Leila is potentially exiting. Parents enroll based on trust in founders. Post-acquisition, if either founder disengages abruptly, enrollment churn risk is significant.
Insurance jumped from AED 18,744 to AED 33,707 (+80%) with no obvious explanation. Could be new policy, expanded coverage, or premium spike. At 2.4% of revenue, it's now the 5th largest expense.
AED 3,606 in 2024 → AED 11,800 in 2025. Possibly DD-related (seller engaged accountants in prep for sale). Will likely revert post-close as LTV brings in-house finance support.
Rent is AED 250,000/yr (17.9% of revenue) — the single largest non-people cost. No information on lease term, renewal options, or whether the landlord must consent to change of control.
Only AED 6,882 in total liabilities (AP + VAT). No debt, no long-term obligations on balance sheet. Acquiring a clean capital structure with no hidden liabilities.
After removing owner compensation (AED 362K), the business generates AED 478K in adjusted EBITDA — a 34.2% margin. LTV is acquiring 70% for less than 0.7× adjusted EBITDA. Exceptional entry multiple.
Education service businesses with 93%+ gross margins have enormous room to invest in growth. Adding AED 50K+ in digital marketing could 2–3× enrollment with minimal impact on margins.
AED 2,868 total marketing in 2025. This is a school growing entirely on word-of-mouth. LTV's $5M Meta/Google credit line and marketing team represent instant, material upside that no competitor can easily replicate.