Australian tertiary education provider NextEd Group has recorded revenues of AUS$43.6 million in the first half of the 2023 fiscal year – a 239% increase on the $18.2m revenue the company earned in the first half of 2022.
NextEd, which until December 2022 was known as iCollege after merging with Redhill, has 11 colleges at 10 campuses across seven Australian cities and operates student recruitment under the Go Study brand.
According to the company’s H1 FY23 Interim Financial Report, NextEd’s EBITDA across four segments hit $6.6 million, a 403% increase over the same period in the previous year.
Operating cash flows of $14.4 million represented a 876% increase, while the cash balance of $38.6 million at December 31, 2022, was 28% higher than the previous half-year.
Deferred revenue by December 31, 2022, was $40.3 million, 31% higher than at June 30, 2022, when it was $30.7 million.
The report noted that NextEd “expects revenues and EBITDA to increase in H2 FY23 against the previous half-year as international student numbers continue to grow”.
“We have delivered extraordinary H1 FY23 results and are excited about harnessing future growth opportunities through course range expansion, increasing our campus footprint and extending student lifetime value,” said NextEd CEO Glenn Elith.
“The NextEd team is energised and committed to unleashing the potential of the organisation and its students.”
While revenue in International Vocational (+256%), Technology & Design (+144%) and recruitment agency Go Study (+160%), in the the Domestic Vocational segment it fell by 19% as NextEd discontinued unprofitable courses.
Brands in the NextEd portfolio include: Academy of Information Technology; Capital Training Institute; Celtic Training; Coder Academy; Go Study; Greenwich College; International School of Colour and Design; online provider Work Ready Education; and SERO Institute.
Although NextEd ceased delivering “unprofitable” courses to domestic students in H1 FY23, the company said the domestic vocational will likely show future growth, especially in hospitality and healthcare.
“NextEd is confident student demand for its accredited vocational courses in hospitality and healthcare will remain strong, and there will be future opportunities to grow these revenues due to available government funding and industry demand for quality graduates,” the report noted.
Cut backs on the domestic courses resulted in a 19% decline in domestic vocational revenue in H1 FY23 to fall to $4.7m, but the company still achieved a 28% increase in EBITDA to $1.5m as a result of back-office reorganisations it introduced “to achieve efficiencies and better support future growth”.
It also recruits international students via Go Study to study at more than 350 education providers across Australia, Canada, US, UK and Europe. The agency has offices in Australia –Sydney, Melbourne, Brisbane, Gold Coast, Perth – Europe – Spain, France, Italy – and South America, in Colombia and Chile.
The report noted that the company’s commission revenue in H2 to December 31 2022 reached $1.9m, up from $796,000 before December 31 2021.
In the first half of 2023, NextEd confirmed 8,460 new student enrolments in English language and vocational courses, a 251% increase on the 2,411 enrolments in 1H22.
As of December 31, 2022, the 4,163 students actively studying English language with the provider was 1,296% higher than the same time in 2021, when 299 students were enrolled. By the end of February 2023, the total English language students had reached approximately 5,300.
Strong supply chain relationships, quality learning outcomes, available campus capacity and Australia’s “attractiveness and resilience as a study destination” will all lead to increased English language enrolments.
NextEd also predicts that the English language enrolments will progress into other vocational programs the company offers.
The provider launched English language and vocational courses at its Gold Coast campus in January 2023, and added six vocational hospitality courses in Perth and Brisbane, with plans to launch them in Melbourne, Sydney and Gold Coast later this year.
Sydney and Melbourne also saw four new bachelor degrees launch in February 2023.
Expansion at Sydney, Melbourne, Brisbane and Gold Coast campuses will allow for an expected increase in international student numbers as the company plans for “significant growth” in future international student revenues.
Classrooms at the Melbourne campus will grow from 73 to 89 from May, those at the Brisbane campus from 12 to 24 from April 2023, and a new lease is expected in early March for an additional 18 classrooms at the Sydney campus.
“In addition to the current growth drivers, there are other exciting opportunities for NextEd to invest in growth through further course range development, geographic and addressable market expansion, and though applying our strong cash position and organisational capabilities to considering strategic M&A,” the report noted.
