EDU Holdings Limited reported a striking 114% increase in revenue to $36.1 million for 1H25, driven by strong higher education enrolments, while declaring its first fully-franked interim dividend. Despite regulatory headwinds in vocational training, the company’s robust cash position and strategic growth initiatives position it well for the future.
- Revenue surged 114% to $36.1 million in 1H25
- Net profit after tax rose sharply to $6.3 million from $28k
- Higher education segment (Ikon) led growth with 163% revenue increase
- Vocational education (ALG) revenue up 36% but faces regulatory challenges
- Maiden fully-franked interim dividend of $0.01 per share declared
Strong Financial Performance Amid Sector Dynamics
EDU Holdings Limited delivered a robust first half for 2025, with revenue soaring 114% to $36.1 million and net profit after tax (NPAT) climbing to $6.3 million, a dramatic improvement from a near break-even $28,000 in the prior corresponding period. This performance underscores the company’s successful execution of its growth strategy, particularly in the higher education segment.
The company’s higher education arm, Ikon, was the standout performer, posting a 163% increase in revenue. This surge was fuelled by strong international and domestic enrolments, with a notable shift towards online delivery, which now accounts for 72% of domestic higher education enrolments. Ikon’s expansion into new courses and offshore markets, including active recruitment in countries such as Spain, Colombia, and Nigeria, has broadened its reach and diversified its student base.
Vocational Education Faces Headwinds
Conversely, the vocational education and training segment, ALG, while achieving a 36% revenue increase and a return to profitability with a $0.5 million NPAT, continues to grapple with regulatory pressures and softer market conditions. Challenges such as tighter visa settings, increased application fees, and reduced eligibility criteria have dampened new student enrolments, which declined 28% compared to the prior year. These factors are expected to persist, posing medium-term challenges for ALG’s growth trajectory.
Balance Sheet Strength and Dividend Initiation
EDU Holdings’ balance sheet remains healthy, with net cash increasing by $16.2 million to $21.2 million, supported by strong operating cash flows and modest capital expenditure focused on campus expansion and course development. This financial strength has enabled the company to declare its maiden fully-franked interim dividend of $0.01 per share, signalling confidence in its ongoing cash generation capabilities.
Navigating Regulatory Uncertainty
Looking ahead, EDU Holdings faces a complex regulatory environment. The potential reintroduction of the ESOS Amendment (Quality & Integrity) Bill could impose tighter controls on student mobility and agent commissions, while visa processing remains constrained with higher fees and stricter eligibility. The company’s strategic priorities include strengthening recruitment capabilities, expanding course offerings, and enhancing operational efficiencies to mitigate these risks.
Despite these headwinds, EDU Holdings projects continued revenue growth in the second half of 2025, driven by sustained enrolment momentum in higher education. However, EBITDA and NPAT are expected to soften due to increased costs supporting growth and ongoing market softness in the vocational segment.
Bottom Line?
EDU Holdings’ impressive first-half growth and maiden dividend mark a milestone, but regulatory challenges and vocational sector softness warrant close investor attention.
Questions in the middle?
- How will EDU Holdings adapt if the ESOS Amendment Bill imposes stricter growth controls?
- Can the vocational education segment overcome regulatory headwinds to sustain profitability?
- What impact will continued visa processing constraints have on international enrolments?