NextEd achieves record $111.4m revenue in FY24 despite challenging market conditions
Investments in new courses and campus expansions during the 2024 financial year enabled private education company NextEd Group (ASX: NXD) to achieve record revenues of $111.4 million for the period.
The figure represents growth of 8.9% on the previous year’s revenue of $102.2m and was achieved despite difficult market conditions.
Increased enrolment
NextEd reported growth in its International Vocational segment, where student numbers increased by 3% during the period and six new accredited courses in healthcare and information technology were approved by regulators.
It invested in specialist facilities to support the delivery of the new courses, including an extension to its Melbourne (12 additional classrooms and a commercial teaching kitchen) and Brisbane (13 additional classrooms) campuses.
It also opened a campus on the Gold Coast boasting a commercial teaching kitchen and aged care lab facilities to tap into the region’s strong international and domestic student market.
NextEd generated annualised cost savings during the period from lease exits in Sydney and Brisbane ($1.7m), the discontinued use of short-term licensed classrooms, a reduced non-teaching headcount ($3.3m) and optimised discretionary spend.
Reduced profits
NextEd’s net profit after tax for the year reduced to $200,000 from $6m in the previous period due to the impact of intangible assets including goodwill, brand names and training materials.
The company said these charges were a direct result of future uncertainty created by recent federal government actions to reduce international student numbers.
Gross profit as a percentage of revenue also reduced from 56% to 51% due to a shift away from higher-margin bachelor degree courses in the Technology & Design segment and higher teaching costs.
Operating cash flows for the year fell from $25.2m to $1.7m, improving in the second half of the year due to active debtor management and early benefits from targeted cost reductions.
Policy changes
NextEd said it would work to protect its differentiated and unique market position as government policy changes impact the private education sector.
“Over the longer term, we expect government policy to protect international education export earnings and to support Australia’s future workforce requirements and economy,” the company said.
“NextEd is positioning itself to capitalise on government changes once clarified and to take advantage of the likely tightened competitive landscape.”