Intueri Education Group has suspended dividend payments to shareholders as it battles a raft of problems including an investigation by the Serious Fraud Office in New Zealand into one of its colleges and a cutback on funding by authorities.
Intueri, which is listed on both the Australia and New Zealand stock exchanges, had previously been able to steer clear of the serious difficulties being experienced by listed rivals such as Vocation and Australian Careers Network, who've run headlong into problems as regulators and authorities questioned the quality and practices of their education operations.
Intueri's share price is now sitting at one tenth of the $2.80 level it was trading at just 12 months ago. The firm generates about 25 per cent of its revenues from Australia, and the bulk from New Zealand.
The company's chief executive Rob Facer told Fairfax Media on Thursday that it was too difficult to say when the investigations by authorities might be finalised.
"It's hard to put a date on it. We'd like to think it might be by the middle of the year," he said.
He said the board was being prudent by freezing dividend payments now, because of the uncertainty. The company has been paying out between 60 to 70 per cent of its net profits in dividends. None of the Australian businesses operated by INtueri are under question.
The company's Quantum Education Group, based in NZ, which teaches courses in business, travel and tourism and information technology, is the subject of an investigation by the Serious Fraud Office in NZ. Intueri has provided information to them.
At the same time, the Tertiary Education Commission in NZ is reviewing the operations of Quantum, and another business operated by Intueri called the NZ School of Outdoor Studies which offers scuba diving courses.
The TEC has restricted the amount it will pay for unfunded students at Quantum, which will reduce revenues at the college by between $8 million and $9 million.
Mr Facer said on Thursday this would mean that student numbers at Quantum would likely be between 700 and 750, less than half that of the previous year. ASX-listed Vocation collapsed late last year in a high-profile fall from grace in the listed education sector.
Intueri said on Thursday it couldn't give specific profit guidance for 2016, but it was expected that underlying earnings would be slightly lower than 2015's $21.5 million for the 12 months ended December 31, 2015.
Intueri is dual listed and had an issue price of $2.18 in May, 2014 when it was spun out of private equity firm Arowana International.