Education provider Vocation is targeting a return to profitability within three years despite full year losses ballooning to more than $300 million in the wake of the scandal surrounding its Victorian operations.
Vocation’s net loss grew to $300.3 million in the year to June 30 from $3.5 million after the company lodged a $240.7 million impairment in goodwill and intangible assets.
The writedowns relate to the withdrawal in 2014 of $20 million in Victorian government funding due to substandard practices. The company has since recalled the qualifications of 1,100 students, agreed to pay back $8 million to the government and sold off four businesses.
But managing director Stewart Cummins, who took over in May, said a five-point plan adopted by Vocation could make the company profitable in the next two to three years.
“We have moved quickly to remediate the company’s issues … to build a profitable business that is recognised by our stakeholders as providing quality vocational education and training,” Mr Cummins said.
“There are still hurdles to overcome, but the fundamentals of the business are sound.”
Vocation’s share price collapsed in October when it admitted it had lost the government funding. It has lost more than 97 per cent of its value in less than a year.
At Monday’s close, it was down 0.4 cents to 9.3 cents.
Revenue from ordinary activities for 2014/15 fell 13.8 per cent to $95.2 million, while there was a $15 million hit from corporate and restructuring costs.
Excluding the sell offs, impairment charges and one-off costs, the underlying net loss was $24 million.
Mr Cummins said the projected turnaround involved appointing a strong management team, cutting the number of qualifications it offers by almost half, upgrading systems and processes, establishing new governance to maintain standards for students, and rebranding.
Vocation has appointed former Transpacific corporate development group manager Frank Lintvelt as chief financial officer to replace Brent Cubis, who had been doing the job on an interim basis.
“We are seeing active re-engagement with our customers and third parties who have recognised that the company is under new management and is focused on quality training for students,” Vocation said.
VOCATION LOSSES BLOW OUT
* Net loss $300.3m v $3.5m
* Revenue down 13.8pct to $95.2m
* No final dividend