Rob Facer has left his positions as chief executive and director of Intueri Education Group effective immediately as the private education provider forecast a 36 per cent drop in 2016 earnings.
The company named chief financial officer Rod Marvin as acting CEO while it seeks a permanent replacement for Facer, who will be retained as an adviser "for a period of time to assist Intueri in respect of regulatory reviews," it said.
The board had formed a committee to support the execution of the company's strategy "to deliver improved business performance and position Intueri for future growth."
Intueri's shares last traded at 34 cents, having slumped 86 per cent from their May 2014 listing price of $2.35. They peaked at $3.35 in September 2014.
Since then the company has missed prospectus forecasts and has been investigated by the Serious Fraud Office and its Quantum Education Group and Dive School units have been reviewed by the Tertiary Education Commission funding agency.
It suspended dividends in February pending the TEC review. It has shed 70 staff and in May directors agreed to cut their fees as the company sought to slash costs.
In March this year it was ordered to pay about $150,000 in reparations to the family of a foreign diving student who died during training after pleading guilty to one charge under the Health and Safety in Employment Act in addition to a $54,000 fine.
In June the TEC said Intueri must refund $1.47 million plus tax after an investigation into its dive school showed some student enrolments between 2009-2014 could not be validated and some courses under-delivered against their funding agreement.
Last year it wrote down the value of Quantum, the dive school and its Design & Arts College by a total of about $60 million, resulting in a $48.5 million net loss and flagged a further net loss in the current year. Underlying earnings before interest, tax, depreciation and amortisation was $21.5 million in 2015 and the company told shareholders at its annual meeting that the 2016 ebitda would be "slightly less". Today the company said 2016 ebitda was expected to be about $15 million.
Intueri and its bank are currently working together to ensure future covenants accommodate the latest outlook.
Intueri said first-half ebitda fell to about $10 million from $10.5 million, excluding a $400,000 refund to the TEC related to the dive school review. It flagged a "softer" second half, "primarily due to lower domestic enrolments as the rationalisation of courses at Quantum and the Design & Arts College takes effect; a slowdown in international student enrolments; and lower online enrolments in line with the VFH funding cap".
The company said it expects to reduce debt by $10 million by year end and has a supportive relationship with its banking partner.
"Intueri and its bank are currently working together to ensure future covenants accommodate the latest outlook," it said today.
Chairman Chris Kelly said the company "continues to trade profitably and we believe the initiatives we are undertaking this year will strengthen our organisation and create a solid platform for future growth."
"FY16 is a reset year as we adapt to meet the changing regulatory and operating environment and transition into a more focused and efficient organisation," he said.