Lumi Gruppen H2-23: Strong growth for ONH, transition for Sonans o Total income ofNOK 210.4 million (247.6) o EBIT ofNOK 12.8 million (32.6) oNOK 30.9 million in cash flow from operations (30.8) aided by strong credit control measures o Improved profitability for ONH due to strong student intake and stable cost development o Sonans' cost base rationalised to align with private candidate demand "The second half of 2023 was very different for our two operating segments. ONH continued its uninterrupted growth over the last four years, while Sonans is still struggling in a weak market. However, the steps we have taken on cost cuts and credit control have yielded results and contributed to an operational cash flow that is in line with last year," says CEOErik Brandt . ONH ONH's revenues grew by 19 per cent from the corresponding period last year. ONH continued its positive development in the second half, achieving robust profitability through a combination of top-line growth and strategic cost initiatives. ONH has now become our most significant operating segment. Sales growth was driven by new online programmes in combination with a higher share of recurring revenues from student volume growth over the last years. The vocational initiative ofLumi Gruppen is now fully integrated with ONH, and the first single subjects are planned to be launched in 2024, capitalising on synergies in brand, academic resources, and administration. ONH will relocate to new, larger facilities during the latter half of 2024. This decision aligns with the university college's growth plans and underscores its commitment to strengthening the educational offering. The move is expected to incur an additionalNOK 8-10 million per year of premises costs starting in 2025. ONH has submitted an application to NOKUT for institutional accreditation, aiming to attain self-accreditation rights. This will enable the university college to independently develop, approve, and launch programmes up to the Bachelor's level, bypassing the conventional NOKUT process that presently causes delays in the introduction of new programmes. Sonans Revenues for Sonans decreased by 38 per cent from the corresponding period last year, as expected. The decline in revenue is largely explained by lower student volumes and the prior period benefitting from a change in revenue recognition delivering a one-off revenue boost of approximatelyNOK 20 million . Sonans has strengthened its order-to-cash process by implementing credit checks and tighter follow-up of students who are late with payments. This has resulted in a stronger credit quality and hence a stronger cash flow, only 17 per cent below the prior year period. The announced cost programme is progressing on track, with an expected further effect in the range ofNOK 8-12 million for Sonans with impact from the next school year 2024/2025. Group financials Total income in the second half wereNOK 210 million , compared toNOK 246 million in the same period of 2022. The decline is primarily attributed to challenges in the private candidate market. EBIT wasNOK 12.8 million , compared toNOK 32.6 million in the same period the year before. The lower EBIT is a result of the decline in revenue not being fully offset by the cost programmes implemented. Net loss for the half year wasNOK 10.0 million , compared to a profit ofNOK 11.5 million in the same period in 2022. Earnings per share were negativeNOK 0.19 , compared to positiveNOK 0.32 the year before.Lumi Gruppen has strengthened its order-to-cash process by implementing credit checks and tighter follow-up of students who are late with payments. Cash flow from operations wasNOK 30.9 million in the second half, compared toNOK 30.8 million last year. Outlook Lumi's business model continues to transform to a more flexible and scalable business model with a lower share of fixed costs. Oslo Nye Høyskole 2023/2024 Based on the autumn intake and the spring intake completed inJanuary 2024 , revenue is expected to end atNOK 235-236 million for ONH in the school year 2023/2024. The estimate presented in the third quarter 2023 report wasNOK 227-232 million . Revenue in the last school year wasNOK 203 million . Sonans 2023/2024 Based on the autumn intake and the spring intake completed inJanuary 2024 , revenue is expected to end in the range ofNOK 174-176 million for Sonans for the school year 2023/2024. The estimate presented in the third quarter 2023 report wasNOK 170-175 million . Revenue in the last school year wasNOK 255 million . Profitability for Sonans is expected to be around breakeven in the school year 2023/2024.Lumi Gruppen will continue to adapt the cost structure to the current market situation. Please see the attached second-half report for further information. A webcast and formal presentation of the H2 2023 report are not planned at this time. To schedule a meeting and Q&A session with management, please send an email to ir@lumigruppen.no. For further information please contact:Martin Prytz , CFO and Head of Investor Relations E-mail: IR@lumigruppen.no Mobile: +47 480 14 078 About Lumi:Lumi Gruppen is a leading Norwegian education provider founded in 1989. Today,Lumi Gruppen consists of two main divisions: Sonans and Oslo Nye Høyskole. Sonans is the market leader inNorway within private candidate exam preparation courses, and Oslo Nye Høyskole offers high quality bachelor's degrees within health, social sciences, psychology and business and administration, both on campus and online.
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