IQE
20/08/2015 08:30
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REL: 0830 HRS Intueri Education Group Limited
HALFYR: IQE: IQE - 2015 Interim Results Announcement
NZX Release
20 August 2015
Intueri Education Group releases its interim results for the 6 months ended
30 June 2015
Included in the interim results announcement are the following;
1. Media Announcement in relation to the 1H 2015 interim results
2. Interim results presentation
3. Interim financial statements for the 6 months ended 30 June 2015
4. NZX Appendix 1
5. NZX Appendix 7
6. ASX Appendix 4D
7. ASX Appendix 3A.1
MEDIA RELEASE
INTUERI 2015 INTERIM RESULTS ANNOUNCEMENT
2015 FIRST HALF KEY EVENTS AND HIGHLIGHTS
o Positive rollout of Intueri's growth strategy:
o Revenue $42.7 million, up 75% on prior comparable period (PCP)
o Net Profit After Tax $6.1 million, up 277% on PCP
o EBITA $11.7 million, up 95% on PCP
o Strategic acquisition of outstanding 50% shareholding in Online Courses
Australia Group in January 2015 and 100% acquisition of Information
Technology Training Institute in April 2015
o Outperformance from the Online segment and strong growth from
International, with softer New Zealand Domestic performance, as previously
advised
o Fully imputed interim dividend declared of 6.1 cents per share, in line
with prospectus guidance
o 2015 full year underlying EBITA forecast in the range of $27 million to $29
million
INTUERI REPORTS UPLIFT IN REVENUE AND PROFIT AS GROWTH STRATEGY CONTINUES
Vocational education provider, Intueri Education Group, has delivered a
significant uplift in its first half result as it continues to successfully
implement its growth strategy.
The increase in half year net profit after tax to $6.1 million was primarily
driven by additional earnings from strategic acquisitions, as well as strong
growth in Intueri's Online and International segments, offset by a weaker
than expected performance from the Domestic segment.
*Refer 2015 First Half financial summary table in results announcement
attachment
For the six months to 30 June 2015, Intueri has reported revenue of $42.7
million.
Earnings Before Interest, Tax and Amortisation of Acquired Intangibles (EBITA
) were $11.7 million, with EBITA excluding $0.4 million of acquisition costs
of $12.1 million. EBITA includes $2.1 million of other income associated with
the reversal of a prior year Tertiary Education Commission (TEC) Dive School
provision and an adjustment to deferred consideration on the Academy
acquisition.
Net Profit After Tax was $6.1 million for the period, including a $1.9
million adjustment for the deferred consideration on the 2016 OCA final
acquisition payment.
Operating costs increased in line with management's focus on building a
strong organisational infrastructure to support future growth. Investment
continued into the company's quality and compliance functions to deliver
enhanced outcomes for students.
Cash flow from operations of $4.2 million was impacted by additional working
capital requirements of $1.4 million for Online Courses Australia (OCA),
resulting from the strong growth in student numbers and the associated time
lag in VET Fee-Help payments. Cash flow also reflects the $1.3 million
expansionary capital expenditure in kitchens at NSIA and $2.3 million of 2014
terminal tax payments.
Net Debt increased to $34.9 million from $11.3 million as at 1 January 2015,
largely as a result of acquisition payments. Intueri has a conservative debt
gearing level of 1.4x with access to sufficient funds for planned acquisition
payments and to investigate further growth opportunities.
Directors have declared a fully imputed dividend of 6.1 cents per share. This
equates to 63% of NPATA , which is within Intueri's dividend policy of 60-70%
of NPATA and in line with prospectus guidance. Given the excellent growth of
the Australian business, Intueri will be offering partial franking credits to
its Australian investors, in conjunction with a supplementary dividend.
MANAGEMENT COMMENT: ROB FACER, CHIEF EXECUTIVE OFFICER
Management's focus for the first half year has been to integrate
acquisitions, drive the quality and compliance programme to ensure quality
outcomes for students, develop initiatives to offset the weaker performance
from the Domestic sector and continue to identify potential growth
opportunities.
The $10-billion Australasian vocational education market is highly fragmented
and offers significant opportunities for consolidation. We have continued to
implement our growth strategy with the acquisition of the outstanding 50%
shareholding in Online Courses Australia Group (OCA) in January 2015 and the
100% acquisition of the Information Technology Training Institute (ITTI) on 1
April 2015.
Since period-end, we have also announced the acquisition of the New Zealand
Institute of Sport, along with its subsidiary the New Zealand College of
Massage, which is expected to settle in October 2015 following customary
approvals. This increases the company's expected annualised revenue to more
than $100 million and annualised EBITA above $30 million.
We are pleased with the excellent growth delivered by our Australian Online
segment, which provided $9.5 million in revenue for the six month period,
more than double the previous comparable period. The continuing
outperformance of OCA validates our decision to acquire the outstanding 50%
shareholding of this company in January 2015. We are supportive of the
regulatory reforms underway in the Australian sector and remain largely
unaffected by these. OCA management are continuing to drive student
enrolments by delivering an increasing number of higher value Diploma
qualifications.
Our International segment has also delivered strong growth with revenue of
$10.0 million for the period, up 20% on the prior comparable period. We are
benefitting from the continuing growth in international student numbers with
New Zealand student visa approvals up 10% in 2015 YTD. We have commissioned
two additional kitchens at our NSIA college to accommodate further growth in
this segment.
Revenue for the Domestic segment, which provided 51% of Intueri's group
revenue, was $22.0 million for the period. A number of our New Zealand
colleges are continuing to deliver solid results, such as the Cut Above
Academy and Elite. However, as previously advised, ongoing trends are
affecting the overall performance of our Domestic segment including a strong
local labour market affecting domestic student recruitment in Foundation and
Youth Guarantee courses; a slower rebound in Christchurch which is continuing
to affect enrolments at the Design and Arts College; and the ongoing
consequences around legacy issues at the Dive School.
A number of initiatives are underway to mitigate the soft performance in our
Domestic sector, including the operational integration of our Academy and
Quantum colleges to facilitate the roll-out of Youth Guarantee programmes in
regional centres. A review of sites and premises across the country to ensure
optimum use is also underway.
Ensuring quality outcomes for students, including improved student
achievement and enhanced relevance of programmes, is at the heart of the
company's strategy. This has resulted in a number of changes being
implemented at Quantum including the introduction of more robust enrolment
pre-requisites and additional measures to ensure successful student
completions, as well as aligning reporting metrics with other colleges in the
Intueri group.
We believe these initiatives will provide long term, sustainable benefits to
our company, and more importantly, result in better outcomes for a greater
number of students. While these changes are currently having an impact on
recruitment and completions, and therefore the level of course fees received
from students, the New Zealand Qualifications Authority (NZQA) and TEC are
fully supportive of our quality initiatives and the changes we are making
have no impact on the current TEC course funding.
We expect to start seeing the benefits of these initiatives flowing from the
second half.
SECOND HALF OUTLOOK
Management are focused on continuing to drive the strong growth in our Online
and International segments and are working hard to improve the performance in
our Domestic segment.
We are looking forward to resolving the Dive School Worksafe case by year end
and rebuilding our student numbers at this respected facility with several
new international programmes coming on stream and an increased marketing
focus on domestic enrolments. The court callover date has been deferred one
further month, till 17 September 2015, whilst discussions continue towards
agreeing a resolution.
We are expecting a stronger second half result as we benefit from acquisition
growth and the continuing positive growth trends in our Online and
International segments. We remain on track to achieve our updated guidance of
underlying EBITA between $27 million and $29 million for the 2015 financial
year.
KEY DATES
Record date for interim dividend 11 September 2015
Payment date of interim dividend 25 September 2015
Release of interim report 25 September 2015
ENDS
For more information, please contact:
Rob Facer, Chief Executive Officer, T: +64 27 675 3538 E:
[email protected]
Intueri is a New Zealand headquartered group of private training
establishments delivering vocational education to students in New Zealand,
Australia and from around the world. Intueri is dual listed on the NZ and
Australian stock exchanges under the code IQE. www.intueri.co.nz
Financial results reflect earnings from businesses from the time of
acquisition. 1H 2015 includes a full six months for all colleges except for
ITTI which was acquired on 1 April 2015. 1H 2014 includes five weeks of
Quantum (acquired 23 May 2014) and three months of OCA (acquired 31 March
2014). It does not include ITTI or Academy.
Intueri has previously provided 2014 pro forma information as this was the
prospectus reporting basis for 2014. No phased 2015 or other forward looking
pro forma information was provided in the prospectus, and therefore no 1H
2015 performance comparison vs prospectus is available. The 1H 2014 reported
pro forma is the pro forma basis outlined in the Intueri prospectus which
assumed that Quantum Education Group Limited and Online Courses Australia
Group Limited were acquired on 1 January 2014. It excluded Academy Group NZ
Limited and ITTI, which were acquired after the Intueri prospectus was
issued, and for which pre acquisition pro forma information was not
available.
EBITA is Earnings Before Interest, Tax and Amortisation of Acquired
Intangibles. The Board has used Underlying EBITA, being EBITA excluding
Acquisition Costs, as the basis for its full year forecast guidance as it
believes this provides the most appropriate measure of Intueri's operating
performance. These are non-GAAP measures.
NPATA is Net Profit After Tax Before Amortisation of Acquired Intangibles.
The Board believes NPATA provides a better comparable measure of its
operating performance and cash flow and it is the basis for the Intueri's
dividend policy.
More detail on the financial results and reconciliation of non-GAAP to GAAP
measures are available in the Interim Results Presentation released to the
market on 20 August 2015 and available on the company website
www.intueri.co.nz.
End CA:00268717 For:IQE Type:HALFYR Time:2015-08-20 08:30:25
