Azzet reports on three ASX with notable trading updates today.
IDP Education plummets on downgrade
Shares in IDP Education (ASX: IEL) were smashed at the open, down a whopping 37%, following news that the education services provider had taken a scalpel to previous guidance.
Management told the market to expect a 30% drop in student placements and up to a 20% fall in language testing volumes this financial year with key destination markets damaged by global policy uncertainty.
While lost revenue will be partially offset by continued strong average fee growth, adjusted earnings are expected to fall materially year-on-year.
Earnings for FY 2025 are now expected to be between $115 million and $125 million, down around 50% from $239 million in the previous period.
While student demand is affected by US-fuelled economic uncertainty surrounding trade tariffs, upcoming intakes in the UK, Canada, the US - plus second semester in Australia - are also subject to changing immigration rules and negative rhetoric around international students.
Visa data reveals that for the first three quarters of FY25 aggregate international student volumes to the key four IDP destinations are down 28% versus the same period last year, with full year volumes expected to continue to deteriorate.
In response to current challenges, management told the market today that:
“With policy uncertainty expected to continue into FY26 as well as the anticipated impact of FY25 enrolment pipeline on FY26 volumes, the business is completing a detailed review of longer-term cost, productivity, investment and commercial levers.”
“An update on this work will be provided at the FY25 results announcement in August 2025.”
In response to this more challenging operating environment IDP is focused on:
- Market share: IDP expects to continue to gain market share in key markets in Student Placement as the sector increases its focus on quality.
- Cost reduction: IDP has strengthened its cost reduction actions to adapt expenses to the near-term revenue outlook.
- Prioritised investment: IDP has a focused roadmap for digital and AI-enabled product development.
IDP Education's market cap is $1.3 billion; shares are down 70% in one year and down 49% in the last month.
The current share price ($4.71) represents a market cap wipeout of around $832 million.
The stock’s shares appear to be in a long-term bearish trend confirmed by multiple indicators.
Consensus is Moderate Buy.
Treasury Wine Estates seesaws as market digests US earnings downgrade
With shares in Treasury Wine Estates (ASX: TWE) showing some black ink mid-morning, after opening 4% lower, the market appears to be finding some blue sky within the Penfolds, Pepperjack and Lindeman owners' U.S. update today.
What the market reacted negatively to at the open was the news that one of its U.S. distributors, Republic National Distributing Company (RNDC), will cease operating in California from 2 September 2025.
To put the significance of this announcement into context, in the first half of FY 2025, RNDC California accounted for approximately 25% of Treasury Americas' net sales revenue (NSR) and approximately 10% of group NSR.
However, the closure of its California operations is not expected to impact the additional 24 states with which RNDC operates in the U.S.
Management took pains to reassure the market that RNDC's September closure of its California operations was not expected to impact its results in FY25.
However the company expects FY25 earnings to be around $770 million, down from its previous guidance of approximately $780 million.
Much of this lower guidance is being attributed to lower than expected premium portfolio shipments in the U.S. where weaker consumer demand impacts wine category performance at price points below US$15.
Meanwhile, management told the market that it was evaluating alternative distribution arrangements for its portfolio in California.
“TWE is confident that its history working with an extensive network of US distributors, combined with its proven experience in effectively managing distributor changes, which it has done a number of times in the ordinary course of recent years, positions the Company strongly to transition to a new route to market in California in the near-term,” the group said.
With California representing one of the biggest wine drinking states in the U.S. outgoing CEO Tim Ford agreed to spend $1.6 billion in 2023 buying Californian luxury wine group Daou Vineyards.
Another U.S. winemaker, Frank Family Vineyards, was acquired for $434 million in 2021.
Treasury Wine Estates' market cap is $6.5 billion; the share price is down 28% in one year and down 28% year to date.
The stock is currently trading at a 44% discount to its five-year high of $14.63 in February 2023.
The stock’s shares appear to be in a long-term bearish trend confirmed by multiple indicators.
Consensus is Moderate Buy.
Tasmea rises on back of special dividend
Shares in Tasmea (ASX: TEA) were up around 8% at noon after the engineering stock declared a special dividend of 12¢ a share.
The ASX mid-cap stock told the market that the decision to issue a special dividend was based on several consecutive years of sustained earnings growth, in the order of 50%.
While FY26 guidance will be released by the end of June 2025, Tasmea expects continued profitable growth driven by sustained customer demand, margin resilience, and execution of strategic initiatives.
“FY26 guidance is expected to remain ahead of its LTI plans," the company said.
Today’s announcement follows the recently completed $9 million acquisition of Vertex Group, an electrical services company specialising in high voltage solutions.
The acquisition is expected to be accretive to earnings per share by approximately 3%.
Tasmea owns and operates 22 inter-dependent Australian diversified trade skills services businesses focused on Essential Shutdown, Programmed Maintenance, Emergency Breakdown, and Brownfield Upgrade Services of fixed plant for a blue-chip asset owner customer base.
Tasmea has a market cap of $733 million; the share price is up 111% in one year, up 1% year-to-date and up 17% in the last month.
The stock is in a strong bullish trend confirmed by multiple indicators.
Consensus does not cover this stock.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
