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3P Learning looks to US expansion

3P Learning is looking to make further inroads into the United States, where it is achieving strong revenue growth.

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Source: AAP


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The company behind online education tools Reading Eggs and Mathletics is looking to grab "low-hanging fruit" in the United States to increase its global presence.

3P Learning's American operations achieved revenue growth of 58 per cent in the half year to December 31, though at $3 million it remains its smallest source of income.

Acting chief executive Jonathan Kenny said the company would concentrate on US states where 3P already has a presence.

"While winning new districts in America is important, we do see low hanging fruit in driving higher school and product penetration in the 76 districts where we already have customers and reference sites," Mr Kenny said.

"It's about doubling down in those districts and those states."

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Mr Kenny said 3P holds a 10 per cent market share in New York City, with products in 1,880 schools.

While not growing as rapidly as the American business, 3P's Australian and New Zealand businesses remain its dominant division, with earnings up 16 per cent to $7.4 million.

Mr Kenny said the outlook for Australia and New Zealand was strong, with record forward orders leading into the February to March sales period.

"Licence retention rates are strong notwithstanding price increases which were implemented in February," Mr Kenny said.

Meanwhile, in Europe, the Middle East and Africa, earnings grew 48 per cent to $3.1 million.

On a pro-forma basis, which takes into account the impact of 3P's listing on the share market in 2014, 3P's profit dropped 22 per cent to $3.2 million.

The company's bottom line was impacted by an acquisition during the first half of the 2015/16 year, Mr Kenny said.

Earnings margins are not expected to grow in the second half of the financial year due to 3P's investment in expansion.

3P shares dropped 47 cents, or 25 per cent, to $1.41.

Chairman Sam Weiss said the hunt to replace former chief executive Tim Power, who resigned in January, was advanced, with a number of candidates interviewed.

3P LEARNING

* Pro-forma net profit down 22pct to $3.2m

* Revenue up 24pct to $22.9m

* No interim dividend


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