Thank you for standing by and welcome to the IDP Education H1 FY24 financial results. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Tennealle O'Shannessy, Chief Executive Officer. Please go ahead.
Thanks, Operator. Good morning. As mentioned, my name is Tennealle O'Shannessy. I'm the CEO and Managing Director of IDP. It's a pleasure to be with you today to present the results the team has delivered for the first half of financial year 2024. Joining me are Murray Walton, our Chief Financial Officer, and Craig Mackey, our Director of Corporate Development. This morning we lodged with the ASX our financial statements and investor presentation, which we'd like to take you through now. In doing so, we'll review the highlights of our financial performance for the first half. We will provide an update on the current market conditions. We'll summarise our key strategic areas of focus and the key developments in those during the period. At the end of the call, we will be very happy to take questions. Okay. Moving to results.
I'll start on slide 5 with a summary of the key operational and financial metrics. I'm especially pleased to be presenting today as we've delivered such strong financial performance for the first half. We delivered record revenue of AUD 579 million, up 15% on the prior period, with a 44% increase in overall student placement revenue, the highlight. Underpinning the strong revenue results for the half, the benefits of our diversified business model are evident in our key operational metrics. We saw exceptional performance from our student placement business, where volumes grew 33%, offsetting lower IELTS testing volumes, which were down 12%. And within this result, we observed weaker IELTS volumes in India, partially offset by strong growth in the rest of the world. English language teaching courses were up 15%, continuing the long track record of solid growth.
The continued expansion of our portfolio of related services drove a 20% growth in other student placement services, including peer-to-peer marketing services via the TAP acquisition. Adjusted EBIT came in at AUD 159 million, up 25%. Margin expansion, which has been a theme of our recent results, continued with the scaling of the student placement business line driving operating leverage. Adjusted NPAT came in at AUD 107 million, up 23%. We also announced a 19% increase in dividends for the period, with the AUD 0.25 per share payment a reflection of the unique characteristics of IDP, a growth company with a strong balance sheet that generates strong free cash flow. The key messages from today's results are: we've delivered another record financial performance for the period, highlighting the quality of IDP's diversified business model.
Our global scale and increasingly unique offering means we are the leading player in large and structurally growing markets. We see strong macro drivers continuing to underpin long-term growth, with ongoing demand for international study and migration, albeit with some cyclical uncertainty emerging linked to policy settings in key destination markets. Our focus on quality and our differentiated business model ensures we're well placed to navigate these changing market conditions. We have a clear strategy and a disciplined approach to investment to drive long-term value for shareholders. I'll now hand over to Murray to take you through the details of our financial results.
Thanks, Tennealle. So turning to the financial results for the period, we have delivered another record half-year performance. Revenue was AUD 579 million, up 15% versus the first half last year, driven by strong growth in student placement. Student placement revenue, including all student placement revenue-related services, was up 44%, with revenue from placements up 48%. Placement revenue for Australia was up 43%. The UK was up 40%. Canada was up 66%, and the USA up 63%, all growing strongly to record levels for the half. Our services and student other services in student placement was up 20% versus the first half last year and includes the new peer-to-peer revenue from the Ambassador platform we acquired in May 2023, along with digital marketing and student placement events, all of which directly support the placement of students.
IELTS revenue was down 5% versus the first half last year, with lower Indian volumes partially offset by the growth in the rest of the world and a 7% increase in average price. English language teaching revenue was up 25% versus the first half last year, driven by both volume and an increase in average price in Cambodia. Adjusted EBIT is at AUD 159 million and is up 25% versus the first half last year. Adjusted net profit after tax is at AUD 107 million and up 23% versus the first half last year. Moving on to slide 8, our key operating metrics. The key operating metrics highlight the strong growth in student placement volumes and average price over the period. Student placement volumes were strong at 57,300, 33% above the first half last year, with placements to Australia at 20,300 and all other destinations at 37,100.
For Australia, we saw a strong growth from China, Vietnam, Bangladesh, and India, with the majority of our source countries delivering double-digit growth. Canadian volumes were up 56%, with India, Vietnam, the UAE, and Bangladesh the major contributors, and replaced students from 24 source countries in the first half as we expand our capability to provide more diversity to our Canadian clients. UK volumes were up 19%, with Nigeria, Thailand, Pakistan, and Taiwan key contributors to the growth. Our USA volumes were up 30%, with India the key source market. IELTS volumes were 902,000, a decline of 12% versus the first half last year, with a decline in India of 31%, partially offset by 17% growth outside of India. Moving on to the average fee performance.
The average student placement application processing fee increased to AUD 4,459, which was an 11% increase versus the first half last year, the majority of that increase coming from the higher commission rates and higher tuition fees. The average test fee for IELTS was AUD 300, a 7% increase, with price increases taken across a majority of our countries. Back to you, Tennealle.
Thanks, Murray. Look, a strong set of results in particular with student placement. I think it's important here to pause and just provide a little more color on the relative performance of IDP's student placement business, and to demonstrate how our differentiated business model, our unwavering focus on quality, means we are consistently outperforming the market and do so in all market conditions. If we have a look now on slide nine, in these two graphs, we are showing the growth in IDP's student placement volumes relative to the growth in overall industry volumes as measured by the total student entry visas in each country. The chart on the left shows the relative performance over a longer period, full calendar year 2023. In this period, you can see that the industry grew at 15%, with IDP volumes growing at almost three times the industry at 41%.
The chart on the right shows a similar data set, but for the more recent time period, in this case, the first half of FY2024. We share a deep-dive view of this period because of the changing market conditions we've observed in our key destination markets over the last six to nine months as a number of governments look to tighten visa policies. Now, we'll talk a little bit more about the changes in government policies in these destination markets later in the presentation. However, the callout here is that during this period of tightening policy, the industry has observed a reduction in volumes of 3%. During the same period, IDP grew its student placement volumes 33%. This relative performance differential is even more evident when you look at Canada in this period. In this case, the industry grew 2%, whereas IDP grew an impressive 56%.
The message here is that IDP has maintained a relentless focus on quality, trust, and reputation and has invested to build an increasingly unique portfolio of products and services delivered at a global scale. This differentiated model has enabled IDP to outperform the market over many years. As market conditions shift towards an increased focus on quality and conversion, IDP's differentiated and highly trusted business model performs even more strongly, creating unique opportunities for market share gain. Moving now to slide 10. So what do we mean when we say IDP is focused on quality, and how does this translate to business outcomes? As we've said, over many years, we've maintained a focus on quality. This is reflected in our operations, underpinned by our direct-to-student business model and our highly trained counselor base. Our scale enables global consistency in our processes and our procedures.
We've built a trusted reputation focused on service and experience. We're extremely proud of our higher and growing student Net Promoter Score, which increased 5 points over the period. This quality focus is also reflected in our strategy, where we're focused on building trusted human connection enhanced by technology. Examples of this include our FastLane and peer community offerings, both of which are scaling well. A key proof point of our quality is our visa approval rates relative to the market. As you can observe in the chart on the right, during the first half of FY2024, we saw industry visa acceptance rates for Australia from all countries sat at 76%, with IDP achieving 91% acceptance rates. This was even more marked in India, where industry visa acceptance rates were 56%, whereas IDP achieved 88% in the same period.
You can see a similar trend on the chart for Canada. IDP's director-student business model and reputation as the leading quality provider is underpinning our superior relative performance and rising market share. Turning now to English language testing volumes in the period on slide 11. The broader Indian market for study abroad and migration has experienced a material cyclical slowdown in the last 6-9 months. Indian IELTS performance primarily reflects weaker-than-expected market conditions. We have observed that a confluence of factors across multiple destination markets has impacted testing volumes across the industry. We also saw lower repeat test taker rates due to changes in the IELTS score requirements for the Canadian Student Direct Stream visa. Increased competition has also clearly been a factor due to the opening up of the Canadian market to a limited number of additional tests.
It is important to note here that competition has been predictable and rational in relation to pricing and has evolved broadly as we have modelled. While data on total testing volumes and therefore market size and share is not available, the chart on the right looks at a directional proxy being international student visa application volumes from India to Australia, U.K., and Canada, which essentially are IELTS key markets. What the chart shows is that during half one, the decline in IELTS volumes was broadly in line with the study abroad demand as measured by visa application volumes. As we outlined in the full-year FY23 results, competition has been a feature of the English language testing landscape for an extended period, and we are experiencing operating effectively in competitive conditions.
Our focus has been to land market share at a level that ensures IELTS maintains its leadership position in line with other markets where we have been competitive for many years. We're doing this by focusing on three levers. Firstly, leveraging our brand and marketing leadership. In the half, our strategic brand and tactical marketing campaigns generated more than 35 million views globally. And locally, we conducted community-building activities such as preparation webinars, which attracted over 17,000 participants. We're focused on growing our established referral ecosystem. In the period, our team conducted over 600 seminars, teacher training programs, and master classes for our referral partner network. And lastly, we're focused on driving differentiated, customer-centric product innovation. Our focus here remains on scaling the rollout of One Skill Retake, which is now live across 60 countries, and securing government recognition for this product.
Importantly, government recognition has been achieved in Australia, UK, and New Zealand. Institutional recognition is progressing strongly. We're now approaching critical mass with the majority of priority institutions recognizing OSR in Australia, Canada, and the UK. As an example for what this means, in the period, we commenced marketing One Skill Retake for onshore Australia. It now represents 8%-10% of bookings and is cited as a key reason for taking IELTS over other tests in our customer surveys. The management team are highly experienced in leveraging the considerable strategic moats that have been built to enhance our leading position, as well as continued disciplined investment to build new moats around product innovation, including a roadmap for product improvements for the IELTS test expected in half two. Back to the point around the importance of diversification in our business model.
Outside of India, IELTS performed very well, reflecting its position as the leading global test and reflecting IDP's ability to target key growth markets and exploit opportunities through network expansion. As an example, in the period, we leveraged our footprint and the expertise acquired through the Intake Education acquisition to expand with 7 new computer labs in the African region. And we're only getting started here. We've identified 12 additional priority countries in the region where we're either not present today or have a minimal share. And this will be our target expansion focus area. I'll now hand back to you, Murray.
Thanks, Tennealle. So moving on to slide 12, which provides a summary of our costs. The key point here is that total costs in the business grew by 13% versus the first half last year. With revenue grown at 15%, this outcome allowed us to expand EBIT margins for the period. In relation to the various cost categories, total direct costs were up 8%, with the stronger growth in the higher-margin student placement business the primary driver. Overhead costs were up 20% on a headline basis. But this includes items such as the M&A-related costs, unrealized EPICS losses, and some provisions for credit losses. These totaled AUD 11.4 million and are set out in detail on page 24 on the presentation. The growth in occupancy and staff costs are primarily related to student placement as we continue to expand our network to underwrite growth in future periods.
In this regard, we added 11 new placement offices during the period and expanded the footprint of several others to facilitate future growth. We also added to the size of our client teams in the USA and UK. The increase in marketing, in part, reflects our investment in strategic and tactical brand campaigns for IELTS, which is supporting our market share objectives, particularly for Canada. Moving on to slide 13, margins. In terms of gross profit margins, student placement was largely unchanged during the period. IELTS GP margins were down a little, which was largely attributable to the increase in fee paid to Cambridge. As you know, this is paid in pounds. So the weaker Australian GBP cross-rate during the period, along with an increase in the underlying per-test fee, took the GP margin down a couple of % versus the first half last year.
While we continue to invest in the student placement-related overheads, the natural operating leverage in that business was the main driver of EBIT margin expansion at the group level. Our first-half adjusted EBIT margin of 27% was a record for the company. Clearly, there's some seasonality here, with the first half always recording a higher margin than the second half, primarily due to the weighting of the northern hemisphere student placement volumes to the first half. These charts evidence how we have managed the business for many years to drive long-term margin expansion for shareholders. We've done this while balancing the need to invest ahead of the curve and also drive innovation so as to create increasingly unique offerings that will pay off in future years. This disciplined approach will continue as we enter a period of greater uncertainty regarding market conditions.
In anticipation of this, we have begun a program of work to identify opportunities for greater efficiencies in our existing cost base. Our objective in this program is to free up capital that can be invested in those parts of the business with very clear near-term growth opportunities while ensuring that we can continue to deliver margin expansion in the long term. Moving on to slide 14. The balance sheet remains strong with cash of AUD 142 million at the 31st of December, with borrowings at AUD 285 million, with a new debt facility in place and an expanded banking panel. Our net debt is at AUD 143 million. Contract assets have increased by AUD 85 million, reflecting the strong growth in student placement revenue during the period.
We will invoice the large majority of these Contract Assets in the second half and complete the collection process from our clients in our key destination markets in Australia, UK, Canada, and the USA. I'm going to hand back to Tennealle now.
Thanks, Murray. Moving on from the financials, we now want to take some time to highlight the significant addressable market opportunities. From a macro perspective, IDP is operating in an industry that has strong structural tail ends. Demand for international education and migration continues to benefit from long-dated global supply and demand drivers. On the demand side, our source markets have large and growing youth populations and underdeveloped higher education systems. On the supply side, we see aging populations in destination markets forcing governments to focus on attracting international students to support education ecosystems and to grow skilled workforce pools. These growth drivers have underpinned a market growth of 7% CAGR for over 20 years. Here, we can clearly observe the strong through-the-cycle structural growth that IDP is aligned to with our global network.
Around this long-term trend, there are, however, shorter-term cycles by destination, driven predominantly by the political dynamics in destination markets. We are observing some shifting market conditions that I will talk about in the next slide. Moving to slide 17. We've observed a change in market conditions over the past nine months. There are a range of changes to policy settings. These are processing arrangements that have either just been or are currently being implemented. Fundamentally, these changes are all designed to lift the quality of the industry, to remove unscrupulous players, and to create a sustainable growth dynamic that delivers the long-term macro needs of the country. What I'd like to do is I'd like to step through the changes at each of the markets in turn.
Starting with Australia, the Australian government is working across multiple departments to improve the integrity of the visa system and to raise the quality of international student and migration flows. The changes that have been announced are nuanced and targeted and should result in Australia continuing to be a relatively attractive destination for prospective students and migrants. In addition to the announced policies, the government is also using its discretion to increase visa rejection rates using relatively subjective tests. The aim here is to assist the natural reduction in net migration from its peak levels post-COVID. While it's challenging to quantify the likely impact of these various regulatory changes, the uncertainty around the visa approval process may impact aggregate student demand in the short term. We are confident that IDP will increase market share during this time where the sector's focus increasingly turns to quality, conversion, and compliance.
Moving to the UK. The UK government is entering an election period. Immigration levels are a key component of the policy debate. From the 1st of January this year, most international students were no longer able to bring dependents with them to the UK. The government also announced that they're reviewing post-study work-right policies to ensure that they're not being misused and that they align with immigration and skills requirements. The combination of the changes that have already been announced, the negative political rhetoric, and the uncertainty around the graduate route review has had a material impact on student sentiment towards the UK. IDP is very well connected to the leaders of the education sector in the UK. With our unique data and insights, we are supporting their efforts to achieve the right outcomes in the post-study work-right review. Moving now to Canada.
The strong growth experienced in the Canadian market in the past five years has attracted some unscrupulous players, which has impacted the quality of student flows and led to a poor experience for some students. The recent announcement of a temporary cap on the number of new international students reflects the government's desire to improve the integrity of the system, to stabilize growth, and to create a sustainable industry. The implementation of the changes announced by the federal government in Canada is still being worked through at a provincial and institutional level. As an example, how the provinces will manage their allocations among institutions during the course of the year and how the new visa application process and system will be implemented is still unknown. However, if the policies achieve their desired outcome, we would expect to see a disproportionate impact on the lower-quality providers.
This should ensure that the market size from a supply perspective for the quality colleges and universities that IDP works with is not significantly impacted. While the policy will result in a near-term reduction in the aggregate size of the market, the opportunity for IDP remains significant given the total new study permits, including those that aren't subject to a cap, could be up to 500,000 this calendar year. The key challenge for the industry to work through is the administrative processes required to navigate the cap. Our clients in Canada are currently working through how student placements will be offered and how visa processing will be undertaken. This creates uncertainty for prospective students. We would expect to see near-term demand implications until the new processes are successfully implemented.
So as an example by what I mean here, visa application processing is effectively paused while provinces create and implement new processes and systems. This is all expected to be resolved by the end of March. But there is uncertainty. For the U.S., there have been no formal policy changes. But positive coordination at a federal level is increasing. In July 2023, the U.S. Department of Commerce released its National Export Strateg y for the first time. So how do we bring this all together? In summary, there are a range of changes to policy settings and visa processing arrangements that have either just been or are currently being implemented. The impact of these changes will take a while to quantify given a number of the key elements are as yet unknown.
It is clear, however, that there will be a reduction in the aggregate market size in the short term. Importantly, there is likely to be less visibility in the pipeline and on conversion rates. Looking through all of this, what is important to note, however, is that the market will remain large and that the powerful long-term macro drivers remain in place. These changes are all designed to lift the quality in the industry, to remove unscrupulous players, and to create a sustainable growth dynamic. As the leading quality player in the market, IDP is extremely well placed to help students and institutions navigate these changing market conditions. Fundamentally, we believe that the sector's increased focus on quality will improve the industry structure for IDP and provide the environment in which we can accelerate our market share gains. Moving now to slide 18.
The student placement market remains large. We have a long runway of growth ahead of us. IDP has a relatively small market share even as the leading player given the fragmented nature of competition. We have an increasingly unique portfolio of services for students and institutions that will enable us to continue to drive both market share gains and commercial terms. As a trusted strategic partner for clients, we bring a portfolio of services that support their recruitment goals and are even more important as they navigate these changing conditions. We're increasingly looking to bundle our offering to lock in better commercial terms for student placement. New clients and improving commission rates are being achieved as we leverage our data insights, our digital marketing, and our other services into strategic bundles.
Just as an example to provide some color here, we are securing deals that are increasing our average commission rates from 15%-20% in exchange for digital marketing and event attendance, which is driving an attractive increase in net revenue. Shifting gears now on slide 19. We've highlighted the market opportunity. I'll now spend some time outlining our strategic areas of focus and the key developments during the period. Starting with student placement, our student placement strategy is focused on delivering differentiated customer experiences on an unmatched scale. We're doing this by leveraging our unique customer insights and our digital capabilities to create products and services that allow us to both delight customers and to increase productivity. Our student placement strategy is focused on four pillars. Firstly, building an unmatched physical and digital scale.
We continue to innovate and invest to enhance our global footprint, as Murray touched on. This half, we built out our physical network through adding 11 new student placement offices. We also successfully integrated Intake Education to accelerate our growth in the strategically important African region. We continue to build our scale in terms of client expansion in key markets also. As an example, in the U.S., we signed 11 new priority universities and colleges in the half, including NYU, who are the largest recruiter of international students in the U.S. Just to talk a little bit about our U.S. expansion, we are approaching our client expansion very strategically, targeting the most popular states and institutions that we see strong current demand for.
Across these states, we have a target list of around 100 potential clients that we'll focus on through FY24 and FY25 that will provide meaningful volume and revenue increases over time. The next focus area for us is building unique data assets. We continue to build out the most comprehensive dataset relating to international education globally. As we grow our new products, we're also increasing the unique data assets associated with them. The scaling of FastLane is a great example here. We now have 75,000 admission rules established and over 32,000 new student academic profiles created. Today, we also leverage data to power proprietary algorithms to drive real-time lead scoring and prioritization to improve conversion. We continue to see strong improvements here, as well as next-best action recommendations to enhance productivity for our counselors. We also provide sophisticated course and content recommendations to enhance the experience for our students.
Thirdly, we continue to focus on driving productivity and efficiency to ensure our counselors can spend as much time as possible speaking with our students. With ongoing investment in our centralized application processing hubs and lead prioritization driving conversion, in the half, we were pleased to see almost 70% of applications processed via these hubs. We successfully completed piloting a new pipeline management solution for our counselors. Lastly, we are relentlessly focused on transforming the customer experience, anchored in trusted human connection amplified by digital innovation. Even with our growing scale and volume, our customers are increasingly pleased with our service. This is reflected through an increase in our student Net Promoter Score of five points over FY23.
Here, a major focus has been the scaling of Fastlane, a digital platform which harnesses IDP's global dataset and client relationships to enable students to receive real-time, in-principle offers from leading institutions. We feel this one's a game changer. We've been very pleased with the adoption by our customers, with 13,400 offers completed via Fastlane in half one. Just to call out, this is up 164% on the prior period and on track for our goal of 25-30 thousand for the full year. We've also made 5,200 courses from over 100 institutions available on the platform. And students absolutely love it, with a student NPS 13 points above our core experience. And we're just getting started here, with a future pipeline of functionality planned as we build out the student placement ecosystem.
An example of this is our acquisition of the Ambassador Platform, a technology platform that aligns with our strategic vision to build digital peer communities. Another highlight from the period has been the increasing uptake of IDP's Student Essentials portfolio of value-added services, which grew revenues by 160%. Student Essentials includes services like accommodation, health insurance, banking, and money transfer provided by third parties on a preferred provider basis. The focus here is on both building out our global deals as well as strategic market-specific partnerships. An example of the type of deal we're talking about here is in the period we signed with the State Bank of India, who is the largest bank in India. IDP continues to focus on disciplined investment and new technologies and digital innovation to deliver beyond expectations for our student customers and institutional clients. Moving to slide 20.
As a reminder, IELTS is the world's most recognized, reliable, and secure English language test for study and migration, using both expert human examiners and digital technology for the best customer experience. Our strategy is focused on leveraging our leading brand, our extensive physical and digital distribution, and our customer-led product innovation to enhance our leading position in a large and growing market. We're focused on four elements. Firstly, focused on building an unmatched physical and digital footprint and providing the widest choice of flexible test delivery options. In the half, we continued our expansion into key growth markets with a focus on African expansion, leveraging the footprint and expertise acquired through our Intake Education acquisition to launch seven new computer labs. We also continue to scale our IELTS by IDP app, which grew 18%, delivering 520,000 downloads in the period.
We continue to build and leverage the most trusted and recognized brands. IELTS is recognized by more than 12,000 organizations. In the period, the U.K. and New Zealand governments recognized One Skill Retake. We continue to expand our brand reach with our strategic brand marketing campaigns achieving over 35 million views globally. We're focused on building scalable and flexible technology platforms. Together with our partners, British Council and Cambridge University, we have finalized the complete modernization of the underlying technology infrastructure that supports test creation and delivery. The new platform will enable us to drive product innovation and deliver significant enhancements to our customer experience and has already allowed us to launch new innovation, including IELTS Online and One Skill Retake. Supported by this flexible platform, we continue to focus on customer-centric product innovation. Our aim is for IELTS to be at the forefront in English language testing.
We've got a strong track record of delivering this, including computer-based testing and, more recently, online testing. A proof point of this product innovation roadmap is IELTS One Skill Retake. This is a new product that allows a candidate to retake one of the four skills where improvement is needed in just one area. One Skill Retake is now live in 60 countries. And in the period, we also saw our app provide improved booking experience and access to prep materials. To finish up, I'll move on to the summary slide, slide 22. The business has delivered strong financial performance, with revenue up 15% and Adjusted EBIT up 25%. We achieved another record financial performance for the period, highlighting the quality of IDP's diversified business model. This diversified model across both business line and geography supports robust, sustainable performance through the cycle.
The business has a financial profile that features strong cash flow generation and a balance sheet with significant flexibility. Our global scale and unique offering means we're the leading player in large and structurally growing markets. We see strong macro drivers continuing to underpin long-term growth with ongoing demand for international study and migration, albeit with some cyclical uncertainty emerging linked to policy settings in key destination markets. IDP's focus on quality and our differentiated business model ensures we are well placed to navigate these changing market conditions. We remain focused on executing a compelling strategy that is creating a unique combination of digital and physical services for our customers through ongoing innovation and disciplined investment to drive long-term value creation for our shareholders.
Finally, I'd like to acknowledge and thank our Chief Financial Officer, Murray Walton, who will step down as CFO on March 31 after 14 years of dedicated service. Thank you, Murray. I'd also like to thank IDP's global leadership team and its broader global staff. Thank you all very much for your time today. Murray, Craig, and I will now take questions, and I'll hand you back to the operator.
Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up your handset to ask your question. The first question is from Chris Hollis with Goldman Sachs. Please go ahead.
Yeah. Good morning, Tennealle, Murray, and Craig. Can you hear me okay?
We can, Chris. Thanks.
Great. Just a few questions for me. Firstly, just in terms of the SP outlook, you mentioned this is an environment of heightened uncertainty. I was interested in how you're seeing your pipeline now versus, say, three or six months ago across the main markets? And just wanted to get a gauge on your confidence that you can continue to grow SP volumes this year, given the regulatory environment at the moment.
Yeah. Sure. So look, looking at the pipeline, we see a solid first-half pipeline despite some softer market conditions that we have referred to. Important to call out there too, we're still seeing strong conversion improvements from leads to applicants to enrollment. Now, within that pipeline, the strongest growth across both leads and applicants sits with Australia, showing strong growth in the period. What we would say, however, is the pipeline data for half one, while it's solid, the various regulatory changes that we've just talked through that have been announced are still washing through the market. And so this does impact near-term visibility. And also, as we've highlighted for a number of periods, the dynamics within the pipeline are changing with increased conversion. So what we want to do is we want to see how the market settles to see the net outcome for IDP's pipeline.
Having said that, IDP, with our focus on quality and our strong track record of growing market share, we believe we continue to be very well placed to navigate the market conditions that we're looking into.
Yep. That makes sense. Then moving across to IELTS, wanted to get any initial thoughts that you have on the implication on that business of the Canada cap and any potential offsets we could see in terms of price or One Skill Retake or students shifting their preference to study elsewhere. Thanks.
Yeah. Yeah. Certainly. So I mean, look, when we look at it more broadly, as we have spoken about, the changes to the policy settings, in particular for Canada, will take a while to quantify because there are a number of key elements that are yet unknown. What is clear, however, is there will be a reduction in the aggregate of the total market size in the short term. So it's difficult to publicly quantify the potential size of the market loss at this point in time. But what we can say is, looking through that, the overall market will be large. The powerful long-term macro drivers remain in place. I think the focus of all the changes, very clearly, are designed to lift the quality of the industry, to remove unscrupulous players, and to create a sustainable growth dynamic.
What we would say for IELTS, in particular, as the leading global test and a dominant market share, IELTS will more clearly be pegged to system growth and what happens at the market level.
Yep. And then last one for me, maybe one for you, Murray, just in terms of the cost outlook. Given the more uncertain revenue outlook at the moment, just curious in how you're thinking about costs into the second half and potentially any initial views into FY 2025 as well, given typically you have a fair bit of flex or discretion in your cost base.
Yeah, Chris. I'll hand over to Murray on that one. But just before I do, just to kind of provide a little bit of color on the approach to costs and some of the principles that we're taking into the period. And it's very consistent with how we have managed our costs over the long term. So we've always been disciplined on costs, and we've managed the business to drive long-term margin expansion for our shareholders. That continues to very much be our focus. We've done this while balancing the need to invest ahead of the curve. So in a long-dated pipeline business, we do need to invest ahead of the curve and also to drive innovation. So we're creating these increasingly unique offerings that are paying off today and will continue to pay off in future years.
Now, in terms of current conditions, clearly, we're entering a period of greater uncertainty regarding the market and the conditions in the market. And so the way we look at cost, we've begun a program of work to identify opportunities for greater efficiencies in our existing cost base. The purpose of doing this will allow us to free up capital that we can then invest in those parts of the business with those very clear near-term growth opportunities. So that is the principle that we take into this period. It is consistent with our long-term approach to cost. But I think it's important to provide that color before we go into detail. So Murray, I'll just hand over to you now.
Sure. Thanks, Tennealle. So as Tennealle says, we've always been very disciplined in our costs. Our approach to costs in the second half is that our costs will be and I mentioned in the presentation that we've started a program of work to identify areas that we want to focus on in terms of cost reduction in that second half. We do expect that we'll see lower overheads in the second half compared to the first half. So that's the focus for FY24. Coming to FY24, we'll be looking to size the cost base for FY25, ensuring that we're running as efficiently as possible while ensuring that we can accelerate quickly when market conditions inevitably improve. Yep. I might just sneak one more, actually, quickly. Just in terms of the SP average fee increase, that was quite strong in the half.
Is that sort of an increase that we can expect to potentially continue over the next couple of periods? Just interested in the outlook for price and student placement.
So to give you an understanding of the, I think we're talking about 11.5%. Underlying price is 8%. So there's some effects in there. But the biggest proportion of that is average commission rates and the increase in tuition fees. That was more than 7% of it. So that's where the key drivers are. Student Essentials, though, had an uplift of almost 1.5% on its own to add to that average price.
Just lifting up from that, and we tried to bring that to life a little bit with one of the slides in the presentation, I think what it does call out is the value that comes from the portfolio of products and the strategic offering that we can bring to our student placement clients and the increasing opportunities around bundling those to help support all of their student recruitment needs. So that is a continued focus for us as we look into the next period.
Great. Thanks, Tennealle. That's all from me.
The next question is from Darren Leung with Macquarie. Please go ahead.
Good morning, guys. Thanks for the opportunity here. I just had one or sorry, two questions, please. One was just in relation to India market share losses in ELT. And obviously, this has been an issue for sort of the last 12-18 months now. What do you think has changed in consumer perceptions that have sort of accelerated these market share losses? And then just while I'm here, I might ask the second one as well. So in relation to all the initiatives that you're putting through, and it's good that you're sort of taking action in relation to that, can you still confirm your FY 2024 cost guidance and any thoughts we should be thinking about into 2025, please?
Sure. Thanks for that, Darren. There's a couple of questions in there. One, just to make sure I got all of them, was some comments around the view of competition in India and market share and then another discussion on cost. So I'll start with a discussion on IELTS in India, and then I'll hand over to Murray for the second part. Now, just to be very clear, in terms of what we have seen in India for IELTS, the broader Indian market for study abroad and migration has experienced a material cyclical slowdown in the last 6-9 months. The Indian IELTS performance primarily reflects weaker-than-expected market conditions. Now, we spoke about the confluence of factors that we've seen across multiple destination markets that have impacted testing volumes across the entire industry.
So in the period, what we have seen is we've seen a decline in student sentiment towards Canada. We've seen the impact flow-through of the dependent visa changes for the UK. And we've seen an increase in visa rejection rates for Australia. So those factors there and the weaker-than-expected market conditions have been the primary driver of the performance that we saw in the period. Now, increased competition has also clearly been a factor due to the opening up of Canada to a limited number of tests. But I think what we would say there is that the dynamics of the competitive environment and what we have observed in India have been predictable and rational and in line with our expectations. So we've seen the new competitors for Canada focusing primarily on network expansion and marketing. And the really important call-out here is that pricing has remained rational.
I think that's evident with Murray's discussion on what happened in price during the period. Our focus, which is the same focus that we have in all competitive markets, will be to ensure that we land market share at a level that ensures IELTS maintains its leadership position in line with other markets where we've been competitive for a number of years. Then your second question, which related to, I think, it was.
Costs.
Costs in the second half, Murray. I'll hand over to you for that one.
Thanks, Tennealle. So the program of work we were talking about earlier is to identify opportunities to drive greater efficiencies in our cost base. It'll allow us to free up funds to invest in those parts of the business that we can see near-term growth opportunities. The areas of focus will be our central overheads and our fixed costs relating to IELTS. We also have levers that will be pulling on more discretionary items such as travel and consultancy.
That's good context. Thank you, guys.
The next question is from Tim Plumbe with UBS. Please go ahead.
Hi, guys. How are you going? I'll just leave it at two questions because I know there's probably a lot of people in the line. Just with the first one around Fastlane, if possible, Tennealle, can you just give us an update in terms of how many universities are either on the platform or work in progress now and how we should be thinking around the timing for really ramping this up and pushing the network effect across the potential student base, please?
Yeah. Absolutely. Thanks for the question, Tim. I mean, we're incredibly excited by the progress that we're seeing in terms of Fastlane. So currently, we've got 105 clients on platform and 5,200 courses live as of 31st of December. Now, this represents a 24% increase in the number of courses on platform since the 30th of June. And the retention of the courses on platform is also incredibly high. So continue to scale and grow really well. The focus for us will be in the period continuing to build out inventory but then also focusing on backend integration, SLA compliance, ensuring that the product is continuing to optimize and drive performance on the student side so that we can really ramp up usage.
I think that the things that excite us a lot as we look at the performance for Fastlane and what gives us really strong confidence on the fact that this will be a game-changer is some of the performance that we've seen in the period. So I think what we've spoken about is we're both focused on the scaling of both sides of the marketplace but then ensuring that the product is delivering the performance uplift that we expect at scale. And so really pleased to see the strong uplift that we continue to see in performance. So a couple of comments on that. Conversion. We are seeing Fastlane students convert 8% higher than our core traditional offering. And then in terms of satisfaction, our Fastlane students, as we mentioned, have an NPS level that is 13 points higher than our core experience.
So this is what excites us so much. Not only is it scaling strongly, not only are we scaling the underlying data asset strongly, but it's delivering a superior experience and outcome for both our students and our university clients.
Great. And the second question just around the U.S., 11 universities signed and, well, universities and colleges signed. And I think you mentioned 100 potential universities identified. Can you talk a little bit about the strategy within this market? How many people have you got on the ground? Can you accelerate that strategy into the second half of 2024 and FY25, please?
Absolutely. And so if we lift up a little bit, the U.S. as a market is exposed to the same strong structural drivers of growth. So the U.S. increasingly is looking for international students to support their domestic education ecosystems because they're seeing some demographic changes in their domestic student profiles reducing growth. So a great opportunity in the U.S. We're really focused on building our share in that market. In the period, as Murray touched on, we grew our team. I think we've currently got around 15, 16 client team on the ground working through those opportunities. In the period, we touched on that we signed 11 new clients in the half, including NYU, their School of Professional Studies, which was incredibly exciting for us. So just as a call-out, NYU is the largest international student recruiter in the U.S. and clearly a premium brand.
In the period, we also signed California State University and Long Island University just to show another couple of examples. Now, as I touched on briefly in the call, our approach to the U.S. is very targeted and very strategic. So what we're doing is we're looking at the most popular states and the most popular institutions where we see current demand from our student base. And so within those target states, the team have identified 100 potential clients to focus on throughout FY24 and FY25. And this will provide a meaningful volume and revenue increase over time. We've also got a forward-looking view of a larger list of additional clients that we're focusing on and starting to work around the longer-term marketing and conversion that will be the focus moving into FY26. So I think the answer here is it's a very large market. It is an exciting opportunity.
Our approach is targeted and strategic. It won't be something that is solved in one year, but we've got strong plans and resourcing in place to continue to grow it over a number of years.
Understood. Thank you.
The next question is from John Marron with CLSA. Please go ahead.
Hi, Tim. Congrats on navigating a tough market. Congrats to Murray on your great run at IDP. I didn't get to spend much time with you, but certainly appreciate what you've accomplished here and really wishing you the best. I guess the guys took most of my questions. I'm going to start scraping the bottom of the barrel here. Can you just maybe elaborate a little more on the tools and materials you're investing in that help support counselors and maybe just touch on counselor productivity metrics if you could? That'd be great.
Yeah. Absolutely. So I think what we've spoken about over a number of years is the work that we are doing to both improve productivity in counselors but to create the systems and tools that free them up to spend more time speaking to students. So clearly, that is the highest-value work, and that is the unique part of what they do. So the types of things we have been focused on include creating our centralized application processing hubs. And so we continue to roll these out. What we saw was that for half one, 69% of all our applications were done via these centralized application processing hubs, and we're well on track for the target of 75% for full year. What we'll see this quarter looking ahead is that Africa will be the next one to move onto these application processing hubs.
So in addition to that, which essentially is taking more of the back-office admin-type work away from the counselors and having that done in a centralized way on a regional basis, we're also focused on tools and processes that improve how our counselors are able to do their work. And so the types of things that we're focused on in that space is we have looked at ways that we can improve how a counselor can manage their pipeline. So looking at tools to improve managing pipeline. And what that does is it essentially brings efficiency and visibility and transparency to how they manage their workflows. The other thing that we've been focused on is the use of AI to really support both how we manage the leads coming to our counselors. So we currently use proprietary algorithms that are built based off three years of internal data.
What those algorithms do is they identify those leads that are most likely to convert, and those leads are prioritized into flows with counselors so that they can be given the very best experience. We also use algorithms to drive next-best action recommendations to help our counselors navigate their workflow. And so I think what we would say here is there remains considerable opportunity both for us to roll out the more parts of the work that drive productivity through centralizing and more back-office work but also thinking about the role of AI to transform and improve the tools and processes to really support our counselors and free them up to be spending time speaking with students.
Okay. Thank you.
That concludes all the time we have for question-and-answer session today. I'd like to hand the call back over to Ms. O'Shannessy for closing remarks.
Thanks again, everyone, for joining us today. We look forward to connecting with many of you today and over the next few days. Thank you for your ongoing support, and we'll now close the call.
That does conclude our conference for today. Thank you for participating. You may now disconnect.