IDP Education share price leaps 11% as revenue surges in FY22

IDP Education recognised double-digit gains in FY22.

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Key points

  • IDP Education reported FY22 earnings today
  • Investors have responded well, rallying the share back above previous highs
  • In the past 12 months, the IDP Education share price has climbed 5% into the green

The IDP Education Ltd (ASX: IEL) share price is surging more than 11% into the green during early trade on Thursday.

The move comes after the company posted its FY22 annual results. At the time of writing, the IDP share price is resting at $29.81.

IDP share price surges on robust FY22 earnings

Key takeouts from the period include:

  • Revenue of $793 million, up 50% year over year (yoy)
  • Adjusted earnings before interest and tax (EBIT) of $163 million, up 127% from the previous year
  • A record number of students placed into a total of 55,400 courses
  • IELTS testing volumes also grew 67% yoy to a record 1.92 million tests approximately
  • Reported net profit after tax (NPAT) of $106 million
  • More than 101 new computer-delivered IELTS centres opened in FY22 along with 29 student placement offices
  • Dividend of 13.5 cents per share (cps) declared for H2 FY22, bringing total FY22 dividend to 27 cps.

What else happened last period for IDP Education?

Notably, IELTS testing volumes were a standout, exhibiting a 67% gain over the previous year. The company conducted about 1.9 million tests, over a total of 55,400 courses.

This delivered a substantial jump in revenue to more than $790 million, which the company brought down to a record adjusted EBIT of $163 million.

Part of the upside was driven by IDP's launch of IELTS Online. The platform gives test-takers greater choice and flexibility and opens the door for more tests to be conducted at one time.

Given the strength of its operations, the IDP Board declared a 13.5 cps dividend that brought the total FY22 dividend to 27 cps.

Analysts at UBS were quickly on to the result, noting the company beat consensus estimates of earnings per share (EPS) by 8%.

The broker values IDP at $26.80 per share with a buy rating following the company's FY22 results.

Management commentary

Speaking on the results, IDP chief executive officer, Andrew Barkla said:

This year, as global mobility resumed, IDP customers reignited their international dreams. When they did, our teams were by their side with new innovations that helped them fast track their goals.

Importantly, we strengthened our relationships with our customers, evidenced by a fourpoint increase in our global Net Promoter Score across the year.

In addition to expanding our IELTS and student placement office network in key growth markets, we also delivered new data-driven study application services that will move our industry forward.

IDP Education share price snapshot

In the past 12 months, the IDP Education share price has climbed 5% into the green, after rallying off a 52-week low on 17 June. However, it is down 15% this year to date.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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