IDP record FY19 results underpinned by engine of Asia
Published 14/10/2019
Global agency and data insights giant, IDP Education, has continued its period of strong financial growth, recording its fourth consecutive year of gains to hit a new record revenue of AUD$598m (US$404m) in FY19.
Asia as a student source region remains of paramount importance: 73% of the group’s earnings before interest and taxes came from this region. And within Asia, IDP had a great year: in China, 20% growth in student placement revenue and a notable 68% increase in volume into the UK.
And in India, revenue growth of 38%, with IELTS tests seeing “volume growth” of 18%.
The latest figures see the company increase profits by almost a third off the back of a 25% increase in student placements and 12% growth overall in the volume of IELTS tests – which the company owns a stake in – to improve by AUD$15m before interest, tax, depreciation and amortisation.
“FY19 saw us progress to the next phase”
“IDP’s solid growth continued this year as we delivered quality services for students, education institutions and English language test takers around the world,” IDP chief executive Andrew Barkla said.
“FY19 saw us progress to the next phase in realising our vision to build a global platform and connected community to guide customers along their journey to achieve their lifelong goals.”
Unpicking further company-wide trends, the financial report indicates that Australia, the largest student destination by volume, saw increased growth from India and other south Asian countries while China-to-Australia flows saw a small decline.
The UK “despite subdued conditions” and Canada saw strong performances, and enrolments to the US grew overall, despite some challenging factors, especially for postgraduate study.
IDP also nods to Australia as being its third largest student placement market – counselling international students already on-shore and transferring or continuing their studies.
This business saw volumes of international students placed in Australia 11% above the levels recorded in FY18. Earnings before interest and taxes declined in the Australasia segment “primarily as a result of the decline in IELTS volumes” but also reflecting an investment made in “student placement digital marketing resources and in a contact centre to qualify, nurture and convert leads across the digital platform”, the report details.
In terms of other student source markets, the UAE saw a 24% rise in student placement volumes. IDP’s entry into Nigeria two years ago has seemingly gone well, with “strong growth” recorded especially for “UK digital marketing revenue”.
The 2018/19 financial year also saw the creation of IDP Connect, an amalgamation of IDP Education and insights and marketing specialist Hotcourses Group, after the latter was acquired in 2017 for £30m.
A higher proportion of UG and PG courses placed compared with English language and pathway programs
IDP, which has not recorded a loss since being listed on the Australian Stock Exchange in 2015, also announced last year that it would be undertaking a “digital transformation” of their services through a deal with Cognizant.
Barkla attributed the company’s focus on boosting digital capabilities for both student placement and English testing as one of the main drivers for its FY19 results and ability to deliver further double-digit percentage growth.
He continued that the coming financial year would see IDP focus on providing opportunities for growth for its people and customers.
“After significant technology infrastructure investment, we are now focused on building the skills, processes and capabilities in our global teams,” Barkla said.
English language testing topped IDP’s revenue sources in terms of both volume and growth, generating AUD$359.6m and improving by AUD$52.8m from FY18. With an average fee paid of AUS$280 to sit an IELTS test, the company helped deliver 1, 283, 200 tests.
Recruitment, meanwhile, contributed AUD$170.3 million, an increase of 36%. Student recruitment performed well with the average student placement fee up by 11.2%, the report details.
This has been achieved by negotiated fee increases with Australian clients, a higher proportion of UG and PG courses placed compared with English language and pathway programs, higher underlying fees and upselling wider services to student clients.
IDP also has an English language teaching business with nine schools across Cambodia and Vietnam. Its school in Thailand was closed in December 2018 and converted to an IELTS computer-delivered testing centre. The overall division saw course volumes up 13.1% with most of the growth attributed to Cambodia’s “strong performance” while Vietnam “returned to growth”.
2019 has proven to be a monumental year for IDP as celebrates its 50th anniversary and the company won Education Agency of the Year at the recent PIEoneer Awards in London.
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