IDP Education Skyrocketed On ASX After Reporting 26% Revenue Growth For H1 FY19

Provider of international student placement services, IDP Education Limited (ASX: IEL) has released its first-half results of FY 2019 (H1 FY2019) today. In the half-year results, the company has reported 26% growth in its revenue which has reached A$304.3 million as compared to the corresponding period of FY 2017. Following the release of the results, the company’s share price has been uplifted by 20.159 Percent on 7 February 2019.

The company’s Board has declared an interim dividend of 12.00 cents per ordinary share of which 6 cents are franked. The record date for the dividend is 8 March 2019, and the Dividend Payment date is 29 March 2019.

The Earnings before interest, tax, depreciation and amortization (EBITDA) of the company increased by 33% to A$66.8 million as compared to the previous corresponding period (PCP). The company has recorded a strong increase in earnings for H1 FY19 with net profit after tax increasing by around 34% to $40.7 million as compared to PCP. The increase in the earning was mainly due to the 26% increase in revenue with each of the Group’s product lines delivering strong volume growth. 

As per the company’s announcement, the English Language Testing revenue increased by 20% with IELTS testing volumes increasing by 18% in the half year. Further, the company also witnessed strong growth in Student Placement revenue which increased by 40%.

According to the IDP Chief Executive Officer and Managing Director Mr Andrew Barkla, the results of H1 FY 2019 are reflecting “the strength of IDP’s global network and its clear growth strategy”. He also added that the results have demonstrated the company’s robust business model and its diverse network of products and services.

According to the company’s announcement, the results were supported by the ongoing growth in Asia segment (67% of the revenue). In Asia, the Indian operations posted strong growth across both English Language Testing and Student Placement. According to the company, the Demand from Indian consumers for overseas education and migration opportunities remains strong, and the company has benefitted from this dynamic during the half year period.

The revenue of the Australasian region declined by 11% due to the declines recorded in English Language Testing volumes in Australia and New Zealand due to the competition in the onshore market. However, this was partially offset by an increase in student placement revenue in Australasia which benefited from increased volumes and average prices versus the prior comparable period. As per the company’s announcement, the positive result in the Rest of the World segment reflects good growth in IELTS volumes in Canada, Nigeria, Uzbekistan and the Middle East.

At the end of December 2018, the company had total assets of $361.6 million of which 39% is related to intangible assets and the remaining being comprised primarily of cash, trade receivables and property, plant and equipment.

Meanwhile, in the last six months, the share price of the company has increased by 17.91%. IEL’s shares last traded at A$13.800 (7 February 2019) with a market capitalization of circa A$2.9 billion.


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