IDP Education Limited (ASX: IEL) today announced its financial results for the 2016 financial year (FY16).
For the twelve months to 30 June 2016, the Company reported total revenue of $361.6 million, an increase of 17% compared to FY15. Net profit after tax (NPAT) was $39.9 million which represents growth of 32% compared to the FY15 pro-forma.
Andrew Barkla, IDP Education Chief Executive Officer and Managing Director, said the results reflected a continuation of the Company’s strong underlying organic growth profile across each of its product categories: Student Placement, English Language Testing and English Language Teaching.
According to Mr Barkla, IDP Education’s operational and financial highlights during FY16 included:
- Record full year revenue and earnings with double-digit revenue growth in each of the Company’s core product categories
- Very strong performance from Student Placement with the highlight being a 100% increase in revenue from the placement of students to UK, USA, Canada and New Zealand (IDP Education’s ‘multi-destination’ countries)
- Revenue from IDP Education’s Australian Student Placement business up 17% driven by solid growth in both volumes and average fees
- English Language Testing performing strongly with revenue from IDP Education’s global IELTS operations up 11% on FY15
- Strong cash generation which resulted in a balance sheet with $35.4m of net cash as at 30 June 2016
Importantly, the results exceeded the forecasts provided in IDP Education’s IPO prospectus dated 12 November 2015, with EBIT 6.0% ahead of forecast and NPAT 12% above.
The strong performance reflected the combined effect of volume and price growth in each of the company’s business lines.
In Student Placement, volume growth of 18% combined with an average realised fee increase of 13% to deliver 33% revenue growth for the year. Within this category, the Company’s ‘multi-destination’ strategy delivered strong results with placement volumes to the UK, USA, Canada and New Zealand up 72% relative to FY15.
Mr Barkla commented that the “growth and diversification benefits of the multi-destination strategy is clearly evident in the result with our China and India businesses in particular delivering strong results”.
In English Language Testing, IDP Education’s IELTS volumes were up 4% for the year which, combined with a 7% increase in average realised fee, drove the 11% revenue growth for the year. The result reflected the benefits of a broadly diversified global portfolio of testing locations and recognising organisations. IDP Education’s IELTS operations in Asia experienced strong growth during the year with India in particular benefiting from surging demand for study and migration in key English speaking countries.
IDP Education’s English Language Teaching business posted revenue growth of 26%. This was again driven by volume and price growth with a 14% increase in student volumes combining with a 10% increase in average course fees. The Company’s Cambodian schools were stand-out performers and continue to be market leaders in that country.
IDP Education’s Board of Directors has declared a final dividend of 5.5 cents per share which is expected to be 35% franked. The franking level reflects the nature of IDP Education’s global business with approximately 80% of revenues generated outside of Australia. The record date for the dividend will be 8 September 2016 with payment to be made on 30 September 2016.
Looking forward, Mr Barkla noted that the company’s focus is now on further improving our customer experience. “We have a strong financial and operational foundation, trusted brand and knowledgeable staff. Each element of our strategy going forward will be designed to enhance the customer experience through both online and offline channels.”
“Our vision is to build a global platform and connected community to guide international students along their journey to achieve their lifelong learning and career aspirations” Mr Barkla said.
“As part of this strategy we will be investing in our digital capability to improve the integration of our face-to-face services with our online channels so that we are even more connected and responsive to the individual needs of our customers.”
* FY15 financials are presented on a pro-forma basis consistent with the prospectus dated 12 November 2015. Adjustments to FY15 statutory results are $1.0m for public company costs (pre-tax) and $0.4 (post-tax) for net interest adjustment.
Note that all financial amounts contained in this announcement are expressed in Australian dollars unless otherwise stated. Any discrepancies between totals and the sum of components are due to rounding.
For more information, please contact:
+61 421 690 204
Investors & Analysts
IDP Education Limited
+61 3 9612 4400
The material in this announcement has been prepared by IDP Education Limited (ASX: IEL) ABN 59 117 676 463 (“IDP Education") and is general background information about IDP Education’s activities current as at the date of this announcement. The information is given in summary form and does not purport to be complete. In particular you are cautioned not to place undue reliance on any forward looking statements regarding our belief, intent or expectations with respect to IDP Education’s businesses, market conditions and/or results of operations, as although due care has been used in the preparation of such statements, actual results may vary in a material manner. Information in this announcement, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice.
Non-IFRS Financial Information
IDP Education uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These measures are collectively referred to as non-IFRS financial measures. Although IDP Education believes that these measures provide useful information about the financial performance of IDP Education, they should be considered as supplemental to the measures calculated in accordance with Australian Accounting Standards and not as a replacement for them. Because these non-IFRS financial measures are not based on Australian Accounting Standards, they do not have standard definitions, and the way IDP Education calculates these measures may differ from similarly titled measures used by other companies. Readers should therefore not place undue reliance on these non-IFRS financial measures.