Embattled education provider Vocation Ltd (ASX: VET) has promoted Stewart Cummins to Chief Executive Officer following the resignation of Mark Hutchinson in January (taking effect from 1 May).
Investors applauded the decision, bidding the stock 15.2% higher to 9.1 cents, making it one of the market's few shining lights for the day in what is otherwise a sea of red with the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) down 1.3%.
Vocation has been the centre of controversy over the last five months after the company lost key funding from the Victorian Government. It was forced to surrender $19.6 million in funding and has since issued numerous profit downgrades, faced pressure from creditors and even a number of legal actions brought against it.
According to the company's statement, Cummins, who has acted as Chief Financial Officer (CFO) in recent months, has played a key role in conducting the company's strategic review in relation to the issues mentioned above.
As a result a number of business lines have been sold by Vocation which has allowed it to reduce bank debt to less than $10 million. An update on the strategic review and its revised financial guidance will be provided in the coming weeks.
Encouragingly for shareholders, the Fairfax press quoted Cummins as saying: "I wouldn't have taken the job if I didn't think we had a strong future." Fairfax also quoted him as saying the company has been through its lowest point and can now focus on rebuilding.
Before you get carried away however, Vocation still presents as a risky investment prospect. Although it appears to be turning the ship around, it is still unclear how the company will perform in its trimmed down state. As such, investors would be unwise to buy the stock just yet.