Intueri Education Group is in a trading halt on the NZX and ASX pending an announcement from the company over "possible sanctions" across the Tasman.
The upcoming announcement concerns "notification received from the Australian Skills Quality Authority (ASQA) relating to possible sanctions," Intueri said in a statement. The shares will stay halted until either the company makes an announcement, or September 27, whichever is earlier, unless ASX decides otherwise.
ASQA is Australia's national regulator for that country's vocational education and training sector, and regulates courses and training providers to ensure nationally approved quality standards are met.
Intueri operates across the Tasman through its Online Courses Australia subsidiary, which accounted for 35 per cent of its $50.1 million of revenue in the six months to June 30 this year.
A large percentage of students in Intueri's Australian online courses are funded through VET Fee-Help. The Australian government has imposed a cap on the scheme this year, holding all providers to their 2015 revenue levels. The Australian Federal Department of Education and Training is conducting a review of the scheme after a Senate inquiry found rampant abuse of the system and soaring costs, and legislation is expected to be introduced early next year.
When it reported its first-half earnings, Intueri said there had been high enrolments in the second half of 2015 leading to an uplift in revenue, but impacts of the funding cap would become obvious in the second half so it was pursuing "a number of other opportunities" for growth in online learning with other organisations which were forecast to boost revenues.
The possibility of an Australian sanction adds to the list of setbacks Intueri has faced since listing in 2014, including New Zealand probes into student enrolments, a student death at its dive school, the sudden exit of its chief executive, and more recently amending its lending covenants that were at risk of being breached.
The shares last traded at 30 cents on the NZX and have fallen 58 per cent this year, making them the third-biggest decliner on the S&P/NZX All Index behind Wynyard Group and Bethunes Investments. Intueri listed at $2.35 in May 2014 and peaked at $3.35 in September 2014.
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. It suspended dividends in February pending the TEC review and is focusing on repaying debt as a result of the new lending covenant.
Intueri has shed 70 staff in an effort to stem the red ink and in May directors agreed to cut their fees as the company sought to slash costs. CEO Rob Facer left suddenly last month, with chief financial officer Rod Marvin stepping in as acting chief.
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, 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.