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.
