IDP Education (ASX:IEL) share price higher despite 36% FY21 profit decline

It has been a volatile start to the day for the IDP Education share price…
The post IDP Education (ASX:IEL) share price higher despite 36% FY21 profit decline appeared first on The Motley Fool Australia. –

The IDP Education Ltd (ASX: IEL) share price is on the move on Wednesday morning following the release of its full year results.

In early trade, the language testing and student placement company’s shares were down as much as 9% to $25.24 before rebounding to be up 1%.

IDP Education share price higher after 36% profit decline

Revenue down 10% (or 5% in constant currency) to $528.7 million
English Language Testing revenue flat at $325.6 million
Student Placement revenue down 25% to $143.3 million
Earnings before interest, tax, depreciation and amortisation (EBITDA) down 330% to $145.2 million
Adjusted net profit after tax dropped 36% to $45 million

What happened in FY 2021 for IDP Education?

For the 12 months ended 30 June, IDP Education reported a 10% reduction in revenue to $528.7 million and a 36% decline in adjusted net profit after tax to $45 million. This reflects ongoing operational disruptions caused by COVID-19 related government restrictions.

Positively, the company’s IELTS volumes still managed to grow 5% year on year despite COVID-19. This led to revenues in the English Language Testing business remaining flat on a reported basis and growing 8% in constant currency. This appears to be supporting the IDP Education share price today.

The main impacts were felt in the Student Placement business. Australian revenues fell 34% and Multi-Destination revenues in the business fell 17% on a reported basis and 11% in constant currency. Management notes that placements to Australia were hardest hit, falling 40% versus last year. International border closures meant student enrolments were largely limited to those willing to commence their studies online.

One positive was the company’s Digital Marketing business, which saw its revenue rise by 8% to $30 million. This was thanks to its institutional clients looking to IDP’s global digital platform for marketing and data insights.

At the end of the period, the company’s cash balance stood at $307 million. This was largely unchanged year on year.

What did management say?

IDP’s Chief Executive Officer and Managing Director, Andrew Barkla, was pleased with the company’s resilient performance.

He said: “Our diverse business model and long-term strategy allowed us to decisively navigate the disruptions of the past sixteen months. Importantly, our business took critical steps during the year to further strengthen our leadership position in preparing the industry for recovery.”

“IELTS demonstrated its through-the-cycle appeal as volumes rebounded despite ongoing restrictions across our global network,” he added.

What’s next for IDP Education?

Unsurprisingly, no guidance has been provided for FY 2022. However, Mr Barkla appears positive that the company is well-placed for the future after five years of transforming the business.

He said: “IDP took another significant step in FY21 to deliver on our vision of building a global platform and connected community. By bringing together human connections and digital innovation, we are guiding people on their journey to achieve lifelong learning and global career aspirations.”

“Over the past five years we have transformed our business and built a digital platform to complement our trusted human connections. With our people, customers and institutions now on one global platform, our stakeholders have begun to benefit from even stronger support at all stages of their journey.”

“Our recent acquisition of the British Council’s IELTS operations in India, along with investments in digital marketing and the IELTS technology platform have strategically positioned us to grow IELTS market share going forward,” the CEO said.

The IDP Education share price is up 35% in 2021.

The post IDP Education (ASX:IEL) share price higher despite 36% FY21 profit decline appeared first on The Motley Fool Australia.

Should you invest $1,000 in IDP right now?

Before you consider IDP, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and IDP wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

3 buy-rated ASX growth shares

3 strong ASX growth shares for investors in August

3 top ASX growth shares rated as buys

Here’s why the IDP Education (ASX:IEL) share price jumped 15% in July
2 buy-rated growth shares for ASX investors in August

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!