Vocation hunkers down

Fairfax Media     |  1 June 2015

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 Embattled education group Vocation will slash the number of courses it offers by almost half and rebadge most of its remaining businesses in a two-year turnaround plan.

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Vocation snipNew chief executive Stewart Cummins says will have the company making a profit again in 2015-16.

But it still faces further uncertainty over a number of regulatory audits in progress as authorities scrutinise the quality of courses and possible class actions.

Cummins said Vocation has already been through its lowest point and now faces a long and painstaking phase of rebuilding credibility among investors.

He said Vocation is still large enough to be a credible ASX-listed company even though it has slimmed down substantially through asset sales and closures of the BAWM and Aspin businesses in Victoria, which originally incurred the wrath of education regulators.

It will struggle to break even in 2014-15 on an underlying earnings before interest, tax, depreciation and amortisation basis. The company has forecast its underlying EBITDA result would be between a $3 million loss or a $3 million profit depending on trading for the final few weeks.

Vocation will slash the number of qualifications it offers from 106 to fewer than 60, and will relaunch its core businesses under a new brand.

It will concentrate on offering courses in sales, customer service, hospitality, leadership and management, logistics, and disability services and employment retraining.

It will retain the Customer Service Institute of Australia brand, the business that was built up by Vocation’s major shareholder Brett Whitford and sold into the Vocation public float in December 2013, but will relaunch the other main businesses, AVANA and Real Institute, under a new brand as it attempts to break with its controversial past.

Vocation’s total workforce has shrunk to 160 staff, from 580 in July 2014. About 150 people have been made redundant, with the rest exiting because of the sale of businesses as the parent company scrambled for survival as a nervous banking syndicate of Westpac, National Australia Bank and Commonwealth Bank of Australia insisted on major asset sales.

The largest asset sold was the Endeavour College of Natural Health, which runs courses in acupuncture, remedial massage, homeopathy and Chinese massage. It was sold to British-based global company Study Group for $75 million earlier this year.

Vocation’s share price hit a high of $3.40 in early September 2014 before its brush with education authorities became public. It has recently been trading at around 12¢, a massive loss in value.

The company said its vocation education and training division would generate revenue of around $15 million in the six months ended June 30, and that trading had softened because of the distraction of asset sales and management changes.

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