ATAA
Ataa Educational Co.
As of: May 28, 2026
Company Profile
Ataa Educational Company is a Saudi joint stock company, incorporated under the Regulations for Companies in the Kingdom of Saudi Arabia and was registered in Riyadh under Commercial Registration Unified National Number 7012408725 dated 10 Rabi’ I 1424H corresponding to May 11, 2003. The company’s principal activities include the establishment, ownership, management, operation, and incorporation of private and international schools (kindergarten, primary, intermediate, and secondary) for boys and girls (general and Quran memorization), as well as colleges and universities within and outside the Kingdom of Saudi Arabia. The company also engages in establishing, managing, and maintaining training centers; acquiring existing educational and training institutions and developing and managing them; owning, managing, and operating educational and training institutes; owning and managing vocational training centers; and establishing, owning, and managing special education schools.
The Story
Ataa Educational Company operates a highly diversified network of private and international schools across Saudi Arabia, balancing steady operating margins with a capital-intensive expansion strategy funded by substantial leverage.
Source: Q3 2026 (2026-05-20)
Performance & Distributions
Market Pricing Multiples
Growth Story
ATAA's growth story is characterized by a transition from organic expansion to a multi-brand acquisition strategy, akin to sowing seeds in multiple gardens. Revenue has shown some volatility, declining from SAR 666.04 million in FY 2023 to SAR 636.75 million in FY 2024, before recovering slightly to SAR 640.77 million in FY 2025, with TTM revenue standing at SAR 636.74 million. This consolidation phase is supported by a high 5-year average reinvestment rate of 37.95%, as the company continues to invest in new projects, such as the development of educational complexes in Al Sulaymaniyah and Al Mansoura. However, because the company's 5-year average Return on Invested Capital (ROIC) stands at a modest 5.34%, its sustainable growth rate is constrained to 2.03%. This indicates that while ATAA is aggressively reinvesting cash back into its physical footprint—including the recent 80% acquisition of Backswood Riyadh Schools—its long-term growth capacity is heavily dependent on improving the capital efficiency of these newly integrated assets.
Profitability Dynamics
ATAA's profitability profile resembles a heavy ship navigating seasonal tides, where solid operating margins must contend with high capital costs. The company maintains a strong operating margin of 22.22% (TTM EBIT of SAR 141.47 million) and a net profit margin of 14.17% (TTM Net Income of SAR 90.20 million). However, the true measure of value creation reveals a structural challenge: the company's 5-year average ROIC of 5.34% falls short of its estimated Weighted Average Cost of Capital (WACC) of 7.89%, resulting in a negative value creation gap of -2.55%. This spread indicates that historical investments have not yet generated returns sufficient to cover the group's cost of capital, which is driven by a 9.07% cost of equity and a 5.51% after-tax cost of debt. Profitability is also subject to seasonal fluctuations, as tuition revenues are recognized over the academic year rather than the financial year following a recent accounting policy alignment with SOCPA guidelines. This change, while representing a more faithful pattern of performance, highlights the seasonal cash flow pressures inherent in the business model.
Risk & Capital Structure
Risk Factors
The primary risk facing ATAA is its substantial debt load, acting as an anchor forged from heavy debt that limits financial flexibility. As of the latest TTM period, the company carries SAR 1.08 billion in total debt against a cash balance of SAR 59.26 million, resulting in an enterprise value of SAR 3.19 billion. This leverage is primarily composed of Shariah-compliant Islamic Murabaha facilities from local banks (outstanding balance of SAR 649.67 million as of April 30, 2026) and interest-free long-term loans from the Ministry of Finance. These borrowings are heavily secured by mortgages over the company's lands and properties (valued at SAR 92.56 million) and six promissory notes totaling SAR 1.204 billion. This high debt load exposes ATAA to interest rate volatility, as bank facilities are tied to SIBOR, and resulted in SAR 42.56 million in finance costs for the nine months ended April 30, 2026. Additionally, the company faces operational risks from regional geopolitical instability and credit risks, with its allowance for expected credit losses rising to SAR 44.00 million on accounts receivable of SAR 198.41 million.
Governance Disclosures
We track 12 key governance and oversight matters for this company in our database.
Expenses Paid on Behalf of Subsidiary Shareholders
The Group paid expenses on behalf of Fawzia Al Haqbani and Hayat Al Shahrani, who are shareholders at a subsidiary, amounting to SAR 47,582 each during the nine-month period ended 30 April 2026. As of 30 April 2026, there was an outstanding balance due from Hayat Al Shahrani of SAR 37,633 and a balance due to Fawzia Al Haqbani of SAR 9,129.
Rental Transactions with Shareholder and Former Board Member
The Group paid rents of SAR 9,014,000 and made payments of SAR 13,014,000 during the nine-month period ended 30 April 2026 to Dr. Ahmed bin Nasser Al Miteb, a shareholder and former Board of Directors member. As of 30 April 2026, the outstanding balance due to him was fully settled, down from SAR 4,600,000 as of 31 July 2025.
Research Report
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