In a regulatory and market update issued to investors, IDP predicted that the size of the international education market will shrink by 20-25% over the next 12 months.
The company remains bullish, however, that it is well positioned to further increase market share in the same period, as other companies face the same tough conditions.
Short term, financial concerns centre on falling demand for IELTS testing, with the company predicting a 15-20% decline in the volume of IELTS test-takers and solid average fee growth in 2025.
IDP Education manages the IELTS testing franchise in India – one of the biggest international student source markets in the world.
Similarly, visa data shows aggregate volumes of study permits for Australia, the UK and Canada declined by 20-30% in the first quarter of 2024 when compared to the same period last year.
IDP will now begin the implementation of a cost reduction program for 2025, that will “align expenses to the near-term revenue outlook”
IDP Education
The popularity of three of the ‘big four’ English-speaking study destinations has been hampered by policy changes in recent months.
The Australian government introduced a raft of changes with the stated objective of reducing net overseas migration by approximately 50% by 2024/25. Canada introduced a two-year cap on the number of study permits issued, reducing student numbers by a third, while the UK increased the skilled worker salary threshold and banned dependants.
IDP will now begin the implementation of a cost reduction program for 2025, that will “align expenses to the near-term revenue outlook”, the company said in a statement.
However, reassurances were made about retaining experienced global staff, with the cost-reduction program not expected to impact the company’s operating footprint.
Despite the challenging outlook, IDP still forecasts robust growth in student placements in the year ahead.
The company predicts a 15-20% growth in student placements as alternative destination markets such as New Zealand, Germany and Ireland are all growing in popularity. The US is also expected to increase market share as it attempts to address a 15% domestic demographic decline of university-aged students by 2025.
Recent data for US study visas produced by the US Department for State show a seven percent increase in international student flows in the first quarter of this calendar year versus the same period in 2023.
In response to IDP’s statement, the Financial Review in Australia reported that the company’s share price fell by approximately 38% in six months, with shares more than 12% lower on June 6 when the news broke, before recovering to close down 6.5% at $14.68.
IDP has been contacted for comment.