Intueri dismisses gloomy reaction to Australian audit

Intueri Education Group chairman Chris Kelly says the market had “a bit of an overreaction” to yesterday’s news that an Australian government audit of its subsidiaries across the Tasman could threaten the firm’s viability. And he is confident about the company’s future.

Audits by the Australian Skills Quality Authority (ASQA) found that Online Courses Australia (OCA) and Conwal & Associates were not compliant with its standards.

Intueri has until October 21 to respond before the ASQA makes a decision, with possible outcomes ranging from a directive to correct areas of non-compliance through to the full cancellation of OCA and Conwal's registrations as registered training organisations (RTOs).

Cancellation of the registration for Conwal, which generates some 95 per cent of OCA's revenue, “would place serious doubt on OCA Group’s ability to continue to operate, and also significantly impact Intueri’s ability to remain a going concern as it would be unlikely to meet its future banking covenants”, Intueri said.

OCA accounted for 35 per cent of Intueri's $50.1 million of revenue in the six months ended June 30.

“We're quite confident we can rebuff many aspects of it, but until that due process has happened we have to warn the market accordingly, and they've taken rather a pessimistic view of the situation, in my view,” Kelly said. “I think there's been a bit of an overreaction, but investors don't like uncertainty, and right now the environment is uncertain.”

The shares had been halted for the announcement at 30c, having fallen 58 per cent in the year to date, and tumbled by as much as 87 per cent to just 4c when they resumed trading yesterday, valuing Intueri at $4m.

The stock closed down 80 per cent at 6c last night.

Intueri's shares listed at $2.35 in May 2014 and peaked at $3.35 in September 2014. Since then the company has missed prospectus forecasts and has been investigated by the Serious Fraud Office.