Intueri says it's 'in a sound financial position' after shares plunge
Company blames fall on loss of investor confidence after Australian rival placed in administration.
Intueri Education Group [NZX: IQE], New Zealand's largest private training institution, says it's in a sound financial position after its shares plunged to a record low on Friday amid concerns about the sector.
The company's stock plummeted last week from $1.30 to 35 cents, hitting a record low of 33 cents on Friday. On Monday last week, Intueri disclosed that the Tertiary Education Commission was reviewing funding at two of its schools, which could reduce 2015 earnings by between $4 million and $5 million. Confidence in the sector was dented on Thursday when Australian education provider Vocation was placed into voluntary administration after the Victorian government withdrew $A20 million ($22m) in funding amid criticism of the company's courses, and investors declined to provide extra funds.
"The tightening regulatory environment in Australia has resulted in a number of sanctions against vocational education providers in recent weeks, culminating in a high-profile listed Australian vocational education provider announcing it had been placed into voluntary administration on Thursday 26 November 2015," Auckland-based Intueri said in a statement today. "The Intueri board believes these events have impacted on overall investor confidence in the wider sector, however it is important to note that Intueri's business model is significantly different from those under review in Australia.
"Intueri remains in a sound financial position, with strong margins and cash flows, appropriate funding and the full support of its bankers."
It said its profit margin on earnings before interest, tax and amortisation is expected to remain comfortably above 20%, generating a solid and stable cash flow.
The company reiterated that the Tertiary Education Commission reviews of two its New Zealand schools are primarily focused on legacy issues and none of its other schools are under review.
The stock has shed 87% so far this year, making it the worst performer on the S&P/NZX All Index.
(BusinessDesk)
Tina Morrison
Mon, 30 Nov 2015
Mon, 30 Nov 2015
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Intueri says it's 'in a sound financial position' after shares plunge
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