Shares in vocational training specialist Education Development International have fallen 20 per cent in a month on fears that the government's coming austerity package will harm the company's growth prospects. And even an unexpected bonus of £150m of extra funds for apprenticeships amidst the rubble of the first £6.2bn of planned cuts struggled to shore up investor support.
Chief executive Nigel Snook is wary of sounding too complacent but he feels the extra funding announced "backs up our guidance that vocational education will continue to be a priority". Indeed the resilient first half performance is notable considering it comes against a period when the government was pumping money into training schemes to keep people off the dole queue. According to Mr Snook, in recent months the market had been cooled a little anyway by "unnecessary bureaucracy and administrative uncertainty".
EDI has continued to win business and its international business, which accounts for almost 25 per cent of turnover, continues to perform solidly, growing sales by 16 per cent. The effect of a share buyback has meant analysts have nudged their full year forecasts upwards with Brewin Dolphin forecasting EPS of 12.6p (2009: 11.4p).
| ORD PRICE: | 109p | MARKET VALUE: | £ 61.9m | |
| TOUCH: | 106-112p | 12-MONTH HIGH: | 164.5p | LOW: 92.5p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 28p* | NET CASH: | £7.4m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2009 | 12.8 | 3.6 | 5.34 | 0.40 |
| 2010 | 13.4 | 4.0 | 5.64 | 0.80 |
| % change | +5 | +9 | +6 | +100 |
Ex-div:02 Jun Payment:02 Jul * includes intangible assets of £9.2m, or 16p a share | ||||
