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With a business that revolves around international students, IDP Education (ASX: IDP) could have easily been one of the scores of companies reporting losses due to COVID-19 travel restrictions.
But the Melbourne-based group has done just the opposite, reporting a 29 per cent increase in EBITDA to $148.6 million.
While the company's English language testing and student placement levels in Australia were down, operations were buffered by IDP's digital strategy while declines were offset by a 52 per cent surge in multi-destination student placement revenue.
IDP Education is led by Andrew Barkla, who according to the Australian Council of Superannuation Investors (ACSI) was the highest paid CEO on the ASX in FY19 with earnings of $37.76 million.
Financials revealed in today's FY20 results show fewer available CEO incentive options meant Barkla likely took home an estimated $11 million during the period, which would still place him - the head of a mid cap - amongst the nation's highest executive earners.
In today's announcement, Barkla commended his global team for delivering solid results, which in statutory terms led to a 3 per cent rise in NPATA despite the disruption to travel markets and student movements.
"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," he said.
"Our recent investment in digital talent and our technology platform has enabled us to respond to COVID-19 restrictions with agility and customer centricity."
Adapting to a near-global shutdown of the International English Language Testing System (IELTS), which constitutes the majority of the group's revenue, the company rapidly rolled out an online IELTS test to help students progress applications where in-centre testing was suspended.
As a result, the company's English language testing segment revenues fell by 9 per cent to $325.5 million. There was however a slight increase in sales from its much smaller English language teaching business.
While student placements in Australia were down by 13 per cent, the shift to multi-destination volumes led the segment's revenue to jump by 12 per cent to reach $190 million.
Barkla said although many international students' plans were on hold due to travel restrictions, demand for international education remained strong.
"Gaining an international education is a lifelong aspiration. Our research shows 74 per cent of IDP students with current university offers are holding on to their study goals," he said.
Similarly, IELTS is regaining momentum after social distancing requirements put it in a stranglehold.
"While IELTS volumes were impacted in the second half of FY20, we are encouraged to see our testing centre network has safely reopened in 53 of the 55 countries in which we operate," Barkla said.
The executive said the group's focus remained on accelerating its rebound and capturing market opportunities.
"Throughout this period of disruption, we continued to execute on our vision of building the world's leading platform for international students," he said.
"Our global dataset and insights have been sought-after by policy makers and educators around the world. We will continue to share our insights to help the sector and ensure the interests and behaviours of students remain at the fore of all decision making.
"The world needs educated and globally ambitious people now more than ever. We are proud of our role in helping connect the next generation of business leaders, doctors, nurses, planners, policy makers to their global study goals."
Updated at 1:24pm AEST on 20 August 2020.
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