Janison Education Group Ltd (ASX: JAN) shares are having a disappointing day.
In late trade, the education technology company's shares are down 24% to 29.2 cents.
Why are Janison Education shares being sold off?
Investors have been selling the company's shares today in response to a couple of key announcements that were released after the market close yesterday.
The first was the surprise bombshell announcement that Janison's CEO and Chair are stepping down from their roles with immediate effect. Outgoing Chair Michael Hill, who will remain on the board, commented:
Today, as part of our succession process, Janison announces the transition of CEO and Managing Director, David Caspari, and myself (Michael Hill) as the Chair with the appointment of Independent Non-Executive Director, Kathleen Bailey-Lord as Janison's new Chair.
During the transition period, Janison's founder, Wayne Houlden, will step into the business and support the management team.
What else was announced?
Also potentially weighing on Janison Education's shares was an update on the company's performance during the first quarter. Although the company delivered top-line growth, it wasn't the same story for its earnings.
According to the release, Janison reported a 5% lift in first-quarter revenue over the prior corresponding period to $13.5 million. This reflects strong growth in Janison Solutions and acquired businesses in the Janison Assessments segment.
However, a 10% increase in operating expenditures meant that its earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 10% during the quarter to $1.9 million.
At the end of the period, the company had a cash balance of $7.8 million.
Commenting on the quarter, management said:
Management is pleased with the revenue growth across all core lines of the business in 1Q24 with the exception of ICAS. Management remain confident for the medium to long-term prospect of ICAS with initiatives such as the University of Sydney partnership and expanding international interest opening new opportunities.
Looking ahead, management highlights that the global education sector is "finally returning to normal, post the profound impact of COVID – and looking to growth, presenting significant opportunities for Janison."
And while no guidance was provided with this update, the company intends to do so once it has learned the "outcome of a strong pipeline of strategic Solutions deals [that are] expected to be announced Q2/Q3 FY24."
In the meantime, it will continue to implement strategy and operating plans that drive core business performance over the course of FY 2024.