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4291

Governance: A

NCLE

National Company for Learning and Education

114.30 SAR / Share

As of: Mar 05, 2026

32.0x P/E Ratio Trailing 12 Months

5.5x P/B Ratio Price to Book Value

1.8% Dividend Yield Annual Dividend / Share

4.91B SAR Market Cap Total Valuation

0.82 Beta Systematic Risk Index

22.9% Net Margin Net Profit / Revenue

The Story

NCLE is a high-margin educational operator leveraging a robust ROIC-WACC spread to fund a multi-city infrastructure expansion across the Kingdom.

Source: Q1 2025 (2025-12-11)

Value Creation +5.9% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

1.8%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+5.0%

Payout Ratio Percent of net profits distributed as dividends

58.9%

Net Margin Net profit margin generated from total operational revenue

22.9%

ROIC Return on Invested Capital

13.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

32.0x

P/B Ratio Market capitalization compared to corporate book value

5.5x

EV / EBITDA Operating multiple reflecting core operational leverage

21.4x

EV / SALES Asset pricing multiple relative to total topline revenue

7.8x

Growth Story

NCLE's growth is driven by a systematic expansion of its physical infrastructure. Revenue has climbed from 446.5 million SAR in fiscal 2023 to a TTM figure of 669.9 million SAR, reflecting both organic enrollment growth and the integration of new branches such as those in Al-Narjis and Al-Qairwan. The company maintains a five-year average reinvestment rate of 37.16%, which, coupled with an average ROIC of 13.58%, supports a sustainable growth rate of approximately 5.04%. This capacity for growth is anchored in heavy capital expenditure, with TTM Capex reaching 141.3 million SAR and future capital commitments of 153.9 million SAR dedicated to completing educational complexes in Ishbiliyah, Al-Rabie, and North Obhur.

Profitability Dynamics

The company demonstrates consistent value creation, maintaining a positive spread of 6.06% between its return on invested capital (ROIC) and its weighted average cost of capital (WACC) of 7.51%. Profitability remains robust, with TTM operating margins at 26.86% and net profit margins at 22.89%. A significant accounting shift in fiscal 2025, aligning revenue recognition with the academic year rather than the fiscal year, has refined the timing of these earnings but underscores the inherent seasonality where the first three quarters typically outperform the fourth. Despite heavy infrastructure spending, the business remains a cash generator, recently recommending a 107.5 million SAR dividend for the fiscal year ended July 31, 2025.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.82

Cost of Equity Minimum required rate of return demanded by shareholders

7.8%

WACC Weighted average cost of total debt and equity funding

7.6%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

8.4%

Risk Factors

NCLE’s risk profile is characterized by its reliance on debt-financed infrastructure and a low beta of 0.80, suggesting lower volatility relative to the broader market. The company carries 415.2 million SAR in total debt, primarily composed of Islamic Murabaha facilities and lease liabilities. Specific risks include the mortgaging of land assets, such as the Al-Salam schools in Al-Khobar, to secure these facilities. Furthermore, the business is sensitive to regulatory changes in revenue recognition and the timing of the academic calendar, as evidenced by the recent restatement of prior-period figures to comply with SOCPA interpretations. The heavy capital commitment for ongoing projects also necessitates consistent enrollment levels to service the 4.89% after-tax cost of debt.

Governance Disclosures

Rating: A

We track 4 key governance and oversight matters for this company in our database.

Significance: 2/10 Tunneling

Management and Board Remuneration

The Group paid 1,317,824 Saudi Riyals to key management and 563,625 Saudi Riyals to the Board of Directors in salaries, remunerations, and benefits.

Significance: 5/10 Info Asymmetry

Revision of Revenue Recognition Methodology

The Group changed its tuition fee revenue recognition from a fiscal year basis to an academic year basis, resulting in a restated net profit increase of 4,763,890 Saudi Riyals for the prior year's first quarter.

Mitigating Factors: Conducted in accordance with interpretations issued by the Saudi Organization for Chartered and Professional Accountants (SOCPA).

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In-Depth Analysis