Shares of 3P Learning Ltd (ASX: 3PL) soared as much as 17.4% this morning after the cloud-based education company reported its full-year earnings results. The shares hit a high of $2.23, but have since retreated to $2.02, up 6.3% around lunchtime.
A name unfamiliar to many investors, 3P Learning is a $256 million company that offers a range of eLearning programs designed to make learning fun for school students from kindergarten to Year 12. Many of these students have likely been acquainted to some of the company's products including Matheletics, Reading Eggs, Spellodrome and IntoScience at some point during their schooling years.
For the year ended 30 June 2015, 3P Learning reported a 23% lift in revenue to $44.8 million, which was above the prospectus forecast of $43.8 million. The group's earnings before interest, tax, depreciation and amortisation (EBITDA) and net profit after tax (NPAT) also beat prospectus forecasts, rising 30% and 28% compared to the prior year, respectively.
The company's CEO, Tim Power, said: "With strong cash billings and substantial deferred revenue balances of $27 million, we are well positioned to execute on our growth plans for FY16. North America has shown excellent growth with a 41% increase in licence numbers to 931,000."
3P Learning ended the year with $30.9 million in cash, up from $24.4 million in June 2014, while its licence numbers also grew 13% to 5.3 million. Pleasingly, management also said that retention rates haven't been significantly impacted as a result of changes to pricing which should bode well for the company, and its shareholders, in the long run.
Despite today's lift in share price, 3P Learning could still be a great investment idea for long-term investors. Of course, it's by no means a risk-free company but the long-term growth prospects certainly appear favourable.
