Profit warning for Intueri

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Tertiary education group Intueri has downgraded its profit expectations for the half year to June, saying its push for higher quality has led to increased costs.

In a statement to the NZX this morning the company said its underlying earnings before interest, tax and amortisation would be $27-29 million , down from previous guidance of $30m to $33m.

The financial performance of its Quantum Education Group, Intueri’s main business offering a range of professional training, was affected by its “determination to deliver quality outcomes for students, including more robust enrolment prerequisites and additional measures to ensure successful course completion,” it said.

Combined with softer domestic revenues for Quantum and higher costs from its quality drive, earnings were lower than expected.

Chief executive Rob Facer said although online and international businesses were going well, some initiatives were under way to improve the performance of Quantum.

“Ensuring quality outcomes for students, including improved student achievement and enhanced relevance of programmes, is at the heart of the company’s strategy. This has resulted in a number of reforms at Quantum, which are impacting on recruitment and completions but will provide long term, sustainable benefits to our company, and more importantly, result in better outcomes for a greater number of students.

“We expect to start seeing the benefits of these initiatives flowing from the second half.”

In July Intueri acquired the NZ Institute of Sport and its subsidiary the College of Massage for $17.6m, funded by debt, with potential further earn outs in March 2016 and 2017. Settlement is due in October.

Intueri said the acquisitions would increase its expected annualised revenue to more than $100m and annualised earnings above $30m.

Intueri shares were down 5c in early trading to $1.72.

The company listed on the NZX last May after an initial public offer priced at $2.35 a share.

Its results for the half year to June are due to be announced on August 20.