The IDP Education Ltd (ASX: IEL) share price has opened weaker following its AGM today. At the time of writing, the IDP share price has dropped 3.85% to $19.23.
FY20 performance recap
FY20 started strong for the international student placement and language testing services provider before COVID-19 headwinds hit the business in Q4. It finished FY20 with a 2% decrease in revenue to $587 million, while EBIT increased 11% to $107.8 million and NPATA increased 3% to $70.4 million. The company maintains a solid $307 million cash balance as at 30 June following a $175 million capital raising in April.
Trading update
The AGM includes an operational and destination update. The company highlights that 70% of its International English Language Testing System (IELTS) network capacity has been reinstated and that all student placement offices (excluding Melbourne) have been reopened. This is an improvement from approximately 55% capacity in late August. Social distancing measures are still limiting its ability to deliver the test in large-scale group environments in several countries, however a shift to smaller and more frequent test sessions, enabled by computer delivered IELTS is helping meet demand.
In terms of student mobility and placements, volumes are down 22% for Q1 compared with last year. It expects the fall intakes in the Northern Hemisphere to be smaller than FY20 as students are increasingly being presented with opportunities to commence studies at later intake dates. IDP pointed to Canada and the United Kingdom that have already started to welcome back international students. In particular, the recent announcement of relaxed travel restrictions for international students headed to Canada was well received by IDP's global customer base. The business was unable to access the size of 2021 semester one intakes for Australia.
The education provider seized the COVID-19 situation to fast-track its digital transformation program. This included the rollout of various new products and innovations including:
- Roll-out of IELTS Indicator, its temporary online IELTS test which was accepted by more than 900 organisations and available in 70 countries;
- The launch of AskIDP, an app that helps students have their difficult questions answered by people they trust;
- Roll-out of its virtual event and counselling solutions
