Intueri halves full-year loss as smaller impairments offset drop in revenue

Thursday 23rd February 2017

Intueri Education Group halved its full-year loss after taking a smaller charge on impairments, offsetting a 14 percent decline in revenue.

The Auckland-based private education provider reported a net loss of $23.3 million in calendar 2016, down from a loss of $48.5 million a year earlier, it said in a statement. Impairments were $15 million, down from $59.8 million in the previous year. Revenue fell to $78.9 million from $91.6 million.

Intueri is to quit the Australian market by the end of this year after losing federal government subsidies and is considering bids for some of its assets to raise capital, saying this month that it probably breached banking covenants in 2016. Revenue from Australia was $20 million, or 25 percent of total sales, in 2016, down from $27.7 million a year earlier.

Its shares last traded at 1.6 cents, having slumped 94 percent in the past 12 months, and the company said given the uncertain outlook it recommends people seek professional advice before trading in the stock.

Non-cash impairments included $7.5 million in its Australian business, along with its Quantum unit, which is being wound down, its Dive School, which it has conditional agreement to sell, and its Intueri Education New Zealand. Underlying earnings before interest, tax, depreciation and amortisation was $2.4 million in the latest year, missing guidance of $3.2 million after it halted new enrolments in Australia in the fourth quarter, and because of higher marketing and administration costs, it said.

Intueri breached its banking covenants in the first half but said it retains the support of its lender, ANZ Bank New Zealand.

"Intueri is currently working with the bank to agree terms for a standstill agreement for the duration of the strategic review that was announced on Feb. 3," it said.

"A number of capital restructuring and strategic options are being assessed and the review is expected to be completed by the middle of the year. There is no certainty that a bid will materialise or an acquisition be completed as a result of the review, and Intueri recommends that persons considering trading in Intueri shares seek professional advice prior to doing so."

The education provider raised about $60 million in an initial public offering in 2014 to fund the acquisition of the Quantum group and become the country's biggest private training organisation, selling shares at $2.35 apiece and valuing the company at $252.5 million, but has slumped in value to just $1.6 million.

Intueri was stitched together by ASX-listed Arowana International, which kept a 24.9 percent stake in the New Zealand company. The offer, which came in a year when the IPO pipeline was running hot, was managed by UBS New Zealand and Macquarie Securities (NZ).

However, the company's bid to go public was beset with troubles from the get-go. It had to amend its prospectus after a student died at its diving school, and needed a waiver to let it list with just 330 retail shareholders rather than the minimum 500 normally required.

BusinessDesk.co.nz

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