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ACN float flounders in a sea of troubles

The Australian    |   16 December 2014

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Education and training provider Australian Careers Network has seen its shares sink 20% on its Australian Securities Exchange debut, with investors remaining wary of companies exposed to the vocational education sector.

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The shares opened at $1.30 on 15 December, 23% below the listing price of $1.70, and closed the day at $1.36.

The Melbourne-based company was forced to delay and scale back a planned $100 million float, raising $54.4m in a listing handled by Petra Capital, after investor sentiment soured following troubles at fellow education provider Vocation Limited.

Ivan Brown, ACN’s chief executive, said timing is everything.

We picked the worst possible time in human history to try and list an education float. That’s life, what do you about it.

Vocation’s share price has plummeted more than 85% after the Victorian government permanently rescinded $19.6m in funding for its registered training organisation businesses.

Last month Simonds Group, a home builder with a significant training arm, saw its stock sink 13% on debut, with the slide wiping nearly $30m off its forecast market capitalisation of $270m.

Like Vocation, ACN and Simonds Group’s Builders Academy Australia rely on government subsidies for all or part of their revenues.

ACN is thought to recently have acquired the Australian Management Academy and other colleges to a value of about $30m.

It also operates several registered training organisations including Cove Training, which it recently purchased to provide machinery licensing options to existing students.

The company operates in NSW, Queensland and Victoria, with 15 facilities and about 150 staff.

About ACN (from ACN prospectus):

ACN is the holding company of Australian Careers Network Group.

Australian Careers Network Group is a full service VET provider encompassing student
marketing and recruitment, direct and subcontracted education and training delivery (registered and non-registered), the issuing of registered qualifications, tracking, processing and reporting functions under the Australian Skills Quality Authority (ASQA) and the Victorian Registration and Qualifications Authority (VRQA).

Its primary services include workplace training and classroom based accredited certificates and diplomas, heavy equipment licensing, simulative and flexible learning, industry-experienced training and assessment and partnering with job seeking agencies to provide employment pathways to students seeking employment upon completion of a qualification.

Australian Careers Network Group delivers VET qualifications through its 10 registered training organisations (RTOs) with over 40 locations across Victoria, New South Wales and Queensland, as well as through partnerships with key TAFE institutes and corporate clients. The Australian Careers Network Group offers 96 nationally recognised qualifications from Certificate I to Advanced Diploma level, and enrolled over 10,700 students in FY2014 (pro forma).

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