Despite being caught up in the market sell off last month, the IDP Education Ltd (ASX: IEL) share price still managed to record an exceptionally strong gain in February.
The student placement and language testing company's shares carved out a gain of 19.6% over the period.
Why did IDP Education smash the market in February?
Investors were fighting to get hold of the company's shares last month following the release of an impressive half year update.
For the six months ended December 31, IDP Education reported a 20% increase in revenue to $379 million.
They key drivers of this growth were its English Language Testing and Student Placement segments. The English Language Testing segment delivered a 21% increase in revenue to $215.3 million, whereas the Student Placement segment posted a 35% lift in revenue to $122.6 million.
They benefited from a further jump in volume, with particularly strong growth in the India, Canada and United Kingdom markets.
Also contributing was the opening of 37 new computer-delivered IELTS centres. This took the total number of centres across the IDP Education network to 167. Pleasingly, management notes that the roll-out of computer-delivered testing has been well received, with strong adoption rates in key markets.
IDP Education's bottom line grew at an even quicker rate thanks to its expanding margins. It reported a 53% jump in EBITDA to $106.2 million and a 41% lift in adjusted earnings per share to 23.4 cents.
Coronavirus impact.
Another positive from the half year update was management's commentary around the coronavirus.
It advised that the disruptions being caused by the coronavirus to its business are being managed. As a result, it is not currently having a material impact on its financial performance.
And while it acknowledges that the situation is constantly evolving and the true impact remains uncertain, management continues to be very positive on its future. IDP Education's chief executive officer and managing director, Andrew Barkla, added: "The longer-term structural drivers remain, regardless of any timing-related impact from the novel coronavirus."
Should you invest?
When the market volatility eases, I think it would be well worth considering a long term investment in IDP Education.
Like fellow growth shares Jumbo Interactive Ltd (ASX: JIN) and Appen Ltd (ASX: APX), I think IDP Education has the potential to grow its earnings at an explosive rate over the next decade and drive strong returns for investors.
