THE ANALYSTS: One on One IPO ‘a good look’

The Analysts of Taking Stock with Kalilah Reynolds say they are excited about education technology company, One on One Educational Services’ upcoming initial public offer (IPO).

One on One is an eLearning platform that provides personalised learning solutions to students, Governments and businesses across the Caribbean.

The company is seeking to raise some $358 million by offering 380 million shares through an IPO scheduled to open on August 12.

Research Manager at JN Fund Managers, Dania Palmer said that the company has seen significant growth over the past five years, so he feels positive about the offer.

“When I look at the price that it’s coming out at, it’s right in that sweet spot that the market usually loves. In terms of the valuation, it’s being offered at a fair valuation between 18-20 times PE [price/earning ratio], depending on how you do your calculations,” he noted.

He also noted that the company has seen significant growth in its profitability over the past years. One on One transitioned to a fully digital business model in 2017, which gave the company a leg up when the COVID-19 pandemic hit in 2020 and forced learners online.

The company’s revenues jumped from $36 million in 2019 to $140 million in 2020. That figure almost doubled in 2021 with revenues coming in at $268 million dollars.

“When we look at the net profit, we see a significant improvement, where in 2017 it was in a negative position (-106%) and in the full year 2021 the company’s net profit is at 25%,” Palmer revealed.

He noted the increase in the company’s receivables, which is money owed to the company by its clients. That figured climbed to $114 million in 2021 from just $8 million the year before.

However, Palmer noted that may be a consequence of One on One’s growing partnership with regional governments, who have outstanding balances. He also added that the company has maintained positive cash flows over the past three years, which allays some of the worry.

The Research Manager said that One on One’s forward-thinking strategy will augur well for the company’s future.

“We’re seeing a growing company and a profitable company… I think One on One is seeking to solve a real problem and I think that strategy is very good for the future of the business,” he added.”

Business Writer at the Jamaica Observer, David Rose shared similar sentiments, noting that the company has formed long-term partnerships with regional governments for the digitisation of their education systems.

He also commended the company for creating a separate pool to allow teachers and trainers to especially participate in the offer.

“We’re seeing where they have left it [the IPO] until next week Friday to actually give teachers time to open brokerage accounts, which I commend the One on One team for because I believe that we should encourage our civil servants to build wealth,” Rose said.

“I’m excited for this young company and I’m excited for young entrepreneurs. Over the last 2-3 years we have seen a few untraditional companies seeking to raise capital on the Junior Market, so it augurs well for entrepreneurship in Jamaica,” Palmer added.

Categories: Taking Stock