Today, IDP Education reported upbeat results that markets appear surprised by considering previous suspicions that the spread of the coronavirus might have impacted business…
IDP Education (IEL), a holding within the Value Strategy since September, reported its interim results this morning and the numbers have clearly blown the market away with the stock rallying by roughly 20%. While the underlying numbers do indeed look very impressive – revenue up 25% and earnings before interest and tax (EBIT) up 49% – I think the best part of the market update was the revelation that to date the Coronavirus has had no material impact on the business. IEL dropped roughly 20% from its January highs once the news flow regarding the Coronavirus started to deteriorate so the fact that IEL is managing its exposure so well is very encouraging. This comes on the same day Blackmores Limited (BKL) has fallen roughly 17% on updates about the impact the Coronavirus is having on its own business. So, in the context of some big hits to China-facing companies it is very good news that IEL is an exception.
Given the quality of the new numbers, we anticipate that IEL will remain part of the strategy when we next rebalance and given the momentum behind the company, we expect to see higher levels in time.
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