Why EDU Holdings Is Doubling Down on Growth Despite Visa Caps

A Landmark Year for EDU Holdings

EDU Holdings Limited has delivered a standout financial performance for the year ended 31 December 2024, nearly doubling its revenue to $42.3 million and returning to profitability with a net profit after tax of $2.6 million. This marks a significant turnaround from a $3 million loss in the prior corresponding period and surpasses pre-pandemic revenue peaks. The company’s growth was driven by strong enrolment gains in both its tertiary education arm, Ikon, and vocational training division, ALG.

Student Growth Amid Regulatory Challenges

Ikon’s student numbers surged to a record 2,492 enrolments in Trimester 3, 2024, reflecting a compound annual growth rate of 38% over five years. The business also secured accreditation for four new courses, including three postgraduate programs, aiming to diversify offerings and attract both domestic and international students. Meanwhile, ALG’s vocational education enrolments rebounded with a 40% increase on the prior year, signaling recovery in a traditionally volatile sector.

However, EDU’s reliance on international students, accounting for 84% of FY24 revenue, places it squarely in the path of tightening government visa policies. The anticipated ESOS Amendment Bill was delayed, but Ministerial Direction 111 introduced enrolment caps and prioritised visa processing, significantly reducing offshore visa grants, especially in the vocational sector. These regulatory shifts cast uncertainty over future international enrolments and have prompted EDU to intensify its focus on the domestic market.

Strong Start to FY25 and Emerging Competitive Pressures

The new financial year has begun positively, with first-quarter revenue up 129% year-on-year and EBITDA rising from $0.8 million to $5.4 million. Student numbers continue to climb, supported by new course launches targeting domestic students, including online postgraduate degrees. Yet, EDU acknowledges that profit growth will be moderated by increased costs to manage the influx of students and expanding operations. Additionally, heightened competition, particularly in Ikon’s Early Childhood Education courses, signals a more challenging market environment ahead.

Delisting Proposal Reflects Strategic Reassessment

In a significant strategic move, EDU’s Board has proposed voluntarily delisting from the ASX, citing sustained low trading liquidity, increased share price volatility, and the regulatory uncertainty dampening investor interest. The Board believes that operating as an unlisted public company will better align management focus with shareholder value creation and enable more agile execution of growth initiatives. To facilitate shareholder choice, an equal access buy-back at a 23.6% premium to the 20-day volume-weighted average price has been offered, funded through a combination of debt and cash reserves.

Shareholders will vote on the delisting proposal at a general meeting scheduled for 23 June 2025, with on-market trading continuing for at least one month post-meeting. The Board and related parties intend to retain a significant portion of shares, signaling confidence in the company’s future prospects.

Looking Ahead: Growth, Acquisitions, and Market Adaptation

Post-delisting, EDU plans to pursue organic growth by expanding course offerings and geographic reach, with a renewed emphasis on the domestic student market to mitigate international regulatory risks. The company is also exploring earnings-accretive mergers and acquisitions to complement its portfolio and enhance scale. While regulatory headwinds and competitive pressures remain, EDU’s strong cash position and operational momentum provide a solid foundation for navigating the evolving education landscape.