The IDP Education Ltd (ASX: IEL) share price is rocketing significantly higher this morning after the release of its FY 2020 results.
In early trade the student placement and language testing company's shares were up a massive 45% to $21.60.
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How did IDP Education perform in FY 2020?
IDP Education had a tough 12 months in FY 2020 because of the impact of the pandemic on the international education market.
Nevertheless, the company still managed to deliver a solid full year result this morning.
In FY 2020, IDP Education reported a 2% decline in revenue to $587.1 million and a 29% increase in EBITDA to $148.6 million. The latter was driven by a sizeable reduction in both direct and overhead costs. Direct costs fell 8% to $241.9 million and overhead costs were reduced by 10% to $196.2 million.
However, due to a significant jump in depreciation, its net profit after tax and amortisation was up just 3% to $70.4 million
While no final dividend was declared, the company will now pay its deferred interim dividend on 24 September.
Andrew Barkla, IDP's Chief Executive Officer and Managing Director, commented: "Our results reflect strong momentum in the first of the half year, followed by a pivot towards disciplined capital management and product innovation in the second half."
How did its segments perform?
The company's Student Placement business was on form in FY 2020 and recorded a 12% increase in revenue to $190.6 million. While the Australian side of this business posted a 13% decline in revenue to $90.4 million, the Multi-destination side of the business made up for this with a 52% increase in revenue to $100.2 million.
Also delivering growth were its English Language Teaching and Digital Marketing and Events businesses. They both grew revenue by 4% year on year.
However, the company's English Language Testing business offset this positive growth. Its largest segment reported a 9% decline in revenue to $325.5 million in FY 2020.
Outlook.
No guidance was given for FY 2021 given the uncertain operating environment. However, management advised that IELTS volumes are at the early stages of recovery as testing centres reopen.
It also notes that student intentions are strong, with research showing that only 7% of students no longer intend to commence study as planned.
