The management of Australian Careers Network, the embattled private education provider facing action by three state and federal regulators, have struck a defiant tone at the company’s first annual general meeting, telling investors they were confident of a positive outcome.
ACN shares were suspended from the Australian Securities Exchange two weeks ago, and not expected to resume trading until next month, at the conclusion of regulatory probes by the Australian Skills Quality Authority and Victorian and federal education departments.
Stephen Williams, ACN’s chairman, yesterday told shareholders that the company was addressing the outstanding matters, had suspended all broker engagements and was initiating an independent review watched on by the Australian Council for Private Education and Training, an industry body.
“While non-complying students cannot be enrolled on our system due to vigorous screening processes, it has not prevented continuing bad practices from rogue brokers,” Mr Williams said.
“In February this year, all brokers on ACN contracts were advised that if they breached our strict requirements and standards, their contracts would be terminated.
“Since that date a significant number of brokers have had contracts terminated.”
Mr Williams said there had been “minimal consumer complaints” about the quality of courses run by ACN and its subsidiaries, and said media coverage had “exacerbated” the issues afflicting the company.
The private vocational education industry has grown significantly as state governments open the training sector to competition. But companies including ACN and former market darling Vocation remain reliant on government funding contracts and the federal government’s VET Fee-Help loan scheme to fuel enrolments and revenue.
ACN has grown far more rapidly than expected at the time of its float in 2014, with some 25,000 enrolments compared to forecasts of 14,000. Revenue, largely through government funding, is 78 per cent ahead of prospectus forecasts at more than $85 million.
But ACN’s Phoenix Institute business, a training college that enrols students through the loan scheme, has faced several audits following allegations that free laptops were being offered to lure students to enrol.
Despite the trouble, ACN chief executive Ivan Brown said management’s view was that a “satisfactory outcome is achievable”, but shares would remain suspended until it received responses from the regulators.
“Given the current status of these matters, we are unable to provide profit guidance at this stage,” he said.
ASQA had written to ACN, giving it a “notice of an intention to cancel its registration as a provider of vocational education and training and educational services”, The Australian reported in October.
The federal action came as the Victorian government moved to terminate the funding contract for the Australian Management Academy, an ACN subsidiary.
ACO Price at posting:
$3.43 Sentiment: Hold Disclosure: Held
