Australian tertiary education provider NextEd Group (ASX: NXD) is all set up for the new student intake season. It has secured regulatory accreditation for three new vocational healthcare courses—aged care, individual support, and community services—to cater to international students. With marketing efforts in full swing, targeting English language students and using recruitment agency networks, the Company anticipates the first student intake in March 2024.
Plus, NextEd’s hospitality courses, launched in various Australian cities in FY23, are experiencing strong demand. The Company projects a 20% growth, from 684 actively studying hospitality vocational students in January 2024 to over 820 students by March 2024.
These moves align with the Federal Government’s Migration Strategy, addressing critical workforce needs in the health and hospitality sectors.
To accommodate an anticipated rise in students, NextEd successfully launched its relocated Adelaide campus in December 2023, completing the project on time and nearly $200k under budget. The new campus is double the size of its predecessor and got regulatory approval in January 2024 to deliver courses to international students in Adelaide. International student operations are set to commence in April 2024, starting with English language courses and expanding to include vocational certificate and diploma courses.
In January 2024, NextEd expanded its Brisbane campus from 23 to 35 classrooms, optimising weekday capacity and discontinuing ten lower-yield, short-term licensed classrooms. The expanded campus achieved over 70% weekday use upon opening, with plans for increased use as new vocational healthcare courses for international students are introduced. Additionally, a larger Gold Coast campus, scheduled to open in March 2024, presents significant expansion opportunities for NextEd.
Following these new launches and expansions, geographic expansion investments will pause until FY26.
NextEd’s international student enrollments are rebounding post-pandemic, with December 2023 figures three times higher than pre-COVID in 2019 and a 7% increase from September 2023. The Company attributes this success to diversified course offerings and campus expansions.
English language student numbers, after a surge driven by the pandemic, are stabilising. The Company plans to expand relationships with recruitment agencies, encouraging international students to combine English language with vocational courses in their initial visa applications.
Changes to the English proficiency criteria for international students indicated in the December 11, 2023, Migration Strategy could see an additional ten weeks of study becoming a mandatory requirement. This potential shift is viewed as a positive development for NextEd’s English language business.
January 2024 student commencements for NextEd were comparable to the November 2023 intake, in line with expectations as students opted for holidays during the Australian summer. The actively studying international vocational students at the end of January reached 2,670, surpassing counts from the previous two intake periods.
NextEd anticipates revenue for the half-year period ending December 31, 2023 (H1 FY24), to be about $59.2 million, representing a 36% increase on H1 FY23’s $43.6 million.
Despite regulatory and legislative changes, NextEd is powering through. While it stands to benefit from the Migration Strategy, it is also gearing up for potential drawbacks when it comes to visa restrictions. The Company’s focus is on longstanding source country selection and prioritisation strategies.
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