As Aussie parents scramble to find good quality education centres for their kids, health and community education provider EDU Holdings (ASX: EDU) might have good news for them as it witnesses an increase in enrolments following the recent introduction of childhood education into its Ikon business.
The Company reported that in trimester 3, 2022, enrolments in its private institute for higher education and early childhood education Ikon increased by 30.3% on T3 2021. Overall, the subsidiary’s enrollment numbers have grown by 35.9% in the span of a year. Ikon’s consistent growth sends out positive signals to the market.
Chief Executive Officer, Adam Davis said, “Trimester 3 is another record for Ikon and its sixth consecutive trimester of student growth. Ikon’s Early Childhood Education offering, launched at the beginning of 2021, is enjoying strong support from the international student market, including students articulating from ALG.”
Speaking of which, ALG, i.e. the Australian Learning Group, which specialises in providing accredited study programs in areas of health and community services, has not had such a great year. Compared to 2021, the subsidiary saw a 38.3% decline in enrollments this year. Its trimester 4 enrolments for the year are down 34.4% compared to the trimester 4 enrolments of 2021.
Davis mentioned, “Term 4 New Student Enrolments were 207, up 111% on the PCP, largely arresting the decline in total enrolments. ALG is benefitting from faster offshore visa processing and rebuilding of the onshore market. Current Letters of Offer for Term 1, 2023 point to a strong start to the year.”
The disparity between the two subsidiaries might have to do with their prominent student market. While ALG is driven fully by international students (who couldn’t come to Australia due to border closures and other economic challenges), most of Ikon’s students—over 70%—are domestic. ALG’s decline resulted in the whole Company suffering in 2022 as EDU reported losses of over $2 million, up from $400k in 1H21, with its revenue falling from $11.6 million to $9.2 million.
The Australian education market has been battered and bruised in the past two years. Employees have quit owing to poor wages, people have dropped out of courses and kids have had to settle for less than satisfactory education and care. Though this paints a grim picture of the current state of affairs, seeing the Bachelor of Early Childhood Education at Ikon gain traction—representing nearly 22% of all enrolments—in the past year gives hope.
Moreover, as borders reopen, EDU expects ALG to recover quickly, especially given that it has more student enrolments in total than Ikon. The Company is also seeing a 35% growth in interest from Melbourne students as the same has been declining in Sydney.
To reach more students and countries, EDU is focusing on growing its digital capabilities and prioritising mergers and acquisitions. This way, it aims to set itself on the path to profitability while also filling the dire skill gaps in Australia, hopefully creating a better educational environment for kids in the coming years.
Alinda is a Business Reporter for The Sentiment
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