Yesterday, IDP Education released its financial report for FY2024.
Regarding the IELTS test, a few things are worth mentioning here. They are:
- IELTS test volumes are down 18% worldwide.
- IELTS test volumes are down 42% in India.
- Outside of India, things are rosier: IELTS test volumes are up 12%.
- IDP says they “expect to record a decline in volumes in [their] key business lines in FY25.”
IDP Education seems pretty determined to convey that IELTS declines are due to regulatory changes in Canada, Australia and the UK. And that competition from other tests is not a major factor. I don’t know if I buy that. I think competition from Pearson and Duolingo is having a serious impact. But I’m just a guy on the Internet. What do I know?
I listened to the shareholder’s call and about 30 seconds of it really captured my attention. CEO Tennealle O’Shannessy said:
“We completed a strategic review of the mainland China market. Off the back of that, we are exploring a direct testing model in China. We’re at the early stages of this process, but we believe that over time this will open up additional growth for us as we connect directly with a greater number of test takers and students in China.”
Currently in China, the British Council alone administers the IELTS test (in conjunction with the NEEA, which is part of the Ministry of Education). Based on an agreement between IDP and the British Council, the British Council pays IDP a fee for each IELTS test that is taken in the country. This arrangement dates back to 2001.
What O’Shannessy seems to be suggesting is the sunsetting of this arrangement in favor of IDP Education directly administering IELTS tests themselves in China.
This could be advantageous for both IDP and test takers. But, as is well known, China can be a tricky place to do business.