Pinned straw:
I won't spend too much on this one, although i hold it , it is in the bottom half a dozen holdings out of about 50 stocks I own (before today that is). i listened to the call, clearly the analysts were anticipating some stability in Aust/Uk, which has not forthcoming. Both IELTS and SP volumes down, IELTS showing some decrease at a decreasing rate, so slowing, but SP where the $$ are, still falling heavily and the implied 2H volumes are very poor, 2026 does not look like a turnaround, potentially 2026 is the bottom? who knows. the EBIT guidance is again poor due to SP declining and operational leverage and it's a long way back.
the B/s looks ok 5-6X Interest coverage, but we need to see cashflow, which has been an issue with IEL. so something to look at in August
Interestingly, when volumes were around these annualised levels, the share price was around $9, going to $31 so draw your own conclusions on that one. different environment now.
they gave some visa numbers, Canada very poor, US not great (no surprises here) but Aust/Uk both down 9-10% and mgt offered no signs of a bottom, so thats the rub and upset the apple cart.
on a broader investment level, a while ago i wrote a piece the "tail that doesnt wag" about the tail of my portfolio being my worst performers. the common story here is that they are good quality companies that are battling earnings downgrade cycles, clearly the market has low tolerance here, the art of identifying long term intrinsic valuation into a downgrade cycle is clearly a poor bet. I have been careful of this and have long abandoned my old doubling down strategy that made me so much money pre GFC. its a different era. so my lesson from this one and a few others is wait for the pressure on earnings to clear before doubling down or even initiating at all, in most cases. that strategy is proving much superior in the land of massive momentum investing. of course you can buy those stocks that fall without any earnings concerns being a much less stressful existence. imo :)