Accounting and earn-out adjustments help Intueri first-half profit more than triple

Thursday 20th August 2015

Intueri Education Group, the private training college that's twice downgraded its annual earnings outlook, boosted first-half profit 277 percent in a result bolstered by the reversal of charges it thought it would have to pay relating to an accounting error and potential earn-outs on two acquisitions.

Net profit jumped to $6.1 million, or 6.1 cents per share, in the six months ended June 30, from $1.9 million, or 4.2 cents, a year earlier, the Auckland based company said in a statement. That included a $1.1 million reversal on a charge to the Tertiary Education Commission over an accounting error, a $1 million gain after Academy Group NZ missed an earn-out target, and a $1.9 million benefit on a lower than forecast earn-out payment to the former owners of Online Courses Australia Group.

Revenue climbed 75 percent to $42.7 million, and earnings before interest, tax, depreciation and amortisation jumped 95 percent to $11.7 million. Intueri anticipates annual underlying Ebitda of between $27 million to $29 million in calendar 2015, having downgraded the outlook twice this year due to weaker than expected sales in its Quantum Education Group unit, and higher than expected costs.

"Management's focus for the first half has been to integrate acquisitions, drive the quality and compliance programme to ensure quality outcomes for students, develop initiatives to offset the weaker performance from the domestic sector and continue to identify potential growth opportunities," chief executive Rob Facer said. "We are expecting a stronger second-half result as we benefit from acquisition growth and the continuing positive growth trends in our online and international segments."

The board declared an interim dividend of 6.1 cents per share, payable on Sept. 25 with a Sept. 11 record date.

The shares last traded at $1.59 and have slumped 39 percent this year. They were sold in an initial public offering last year at $2.35 apiece.

Intueri has been acquiring businesses in the past 12 months and last month agreed to buy the New Zealand Institute of Sport for $19.3 million, including its subsidiary, New Zealand College of Massage, to give it scale in the sports and complementary health sectors.

The company's in-class vocational segment more than doubled profit to $3.9 million on a 53 percent increase in revenue to $33.2 million, while its online vocational unit boosted earnings to $2.1 million from $552,000 on a 251 percent jump in revenue to $9.5 million.

Intueri said it's working to resolve its case involving The Dive School and Worksafe by the end of the year, with the court callover date deferred until Sept. 17 while it's in negotiations with the regulator. The Dive School faces charges brought by WorkSafe over the death of a foreign student.

BusinessDesk.co.nz

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