Shares of embattled education provider Vocation Ltd (ASX: VET) took a turn for the better today, surging almost 38% to 13.5 cents.
The strong rise came after the company said it had completed a settlement with the Victorian education department, which has plagued the company for the better part of the year and caused its shares to fall more than 94% in that time.
In an announcement to the market this morning, Vocation said it would repay almost $7.3 million to the Department over the next 18 months, which compares to the $8 million that was flagged by Vocation in May this year. The amount was also fully provided for in the accounts for the 2015 financial year.
At the same time, Vocation's registered business Learning Verve was found to be compliant in an audit by the Australian Skills Quality Authority – the latest sign that improvements are being made by the company's new management team.
Although this will certainly come as good news for investors, Vocation has a long way to go to get back to where it was. Indeed, it was forced to close two of its training businesses which were found to have substandard practices, while it also offloaded a number of others it considered to be 'non-core' to raise cash and appease its banking syndicate.
Meanwhile, it has been forced to withdraw more than 1,000 student qualifications with its reputation severely damaged by the scandal.
Although some investors could well see this as a turnaround opportunity, 'Foolish' investors may want to remain on the sidelines until it is clear that the company is indeed on the road to greener pastures.