Intueri Education Group says the Australian Department of Education and Training has declined its application for an A$6 million uplift in VHF funding for its Conwal unit and it has slashed its 2016 earnings guidance by that amount as a result.
In October the company gave guidance for underlying earnings before interest, tax, depreciation and amortisation of about $9.5m, which included the A$6m uplift in Australian government funding.
"The guidance will need to be reduced by the amount of the requested A$6m uplift to $3.2m unless Intueri's request for reconsideration is successful," interim chief executive Rod Marvin said in a statement today. "Conwal intends to apply for reconsideration of this decision within the 28 days allowed by the DET."
The company last updated the market on December 2, when it said it would receive an A$3.5m payment from the DET for 2015, which it confirmed today it has received. A large percentage of students in Intueri's Australian businesses, Online Courses Australia (OCA) and Conwal & Associates, are funded through a scheme that helps either pay some or all of a student's fees, known as VET Fee-Help. The Australian government imposed a cap on the scheme this year, holding all providers to their 2015 revenue levels, and closed it to new students after the end of 2016.
Intueri shares have tumbled 92 per cent this year and last traded at 4.5 cents. It listed on May 2014 at $2.35 in what was a boom year for initial public offerings. It now has a market capitalisation of $4.5m.
