Thank you operator, good morning, everybody. Welcome to the FY 2019 full-year result presentation for IDP Education. Today, I'm joined in this meeting by Murray Walton, our Chief Financial Officer, and Craig Mackey, Head of Investor Relations and Corporate Development. I plan on moving through the pack, and I'll update you on the page numbers as we go. I think FY 2019 represents another very strong year for IDP. IDP's growth continues to be aligned to strong international education and global migration and work trends. FY 2019 was a successful and transformative year for IDP as we delivered on our digital platform and digital capabilities through our Delight program. We have now laid down the strategic foundation for continuous improvement in service innovation and market leadership into the future. If we move to page three and look at the financial highlights, revenue at AUD 598 million is up 23%.
EBITDA at AUD 115 million, up 29%. NPATA at AUD 68.6 million, up 24%. NPAT, AUD 66.3 million, up 29%. A very strong top level and bottom financial result. In terms of the dividend, the half-year dividend will be AUD 0.075 per share. That makes a full-year dividend of AUD 0.195, and that's a 30% growth over the prior year. Student placement, a particularly strong result in FY 2019, with almost 50,000 students placed by IDP around the world. Our APFs up in the year by 25% over FY 2018. Very strong performance across the board. Australia up 10%, the U.K. up 41%, Canada up 22%. Sorry, 72%. When we look at our major markets, China in total, a 14% increase, and India at 63% in total. As we move to English language testing, again, another record year for IDP and indeed for IELTS globally.
IELTS testing volume up just over 12%. Some very strong performances from our major markets. India up 18%, Canada up 19%, Vietnam up 31%. In our English language teaching business, our course numbers were up 13%. In particular, a strong effort again in Cambodia with a new campus coming online and getting the full year impact from that investment in the FY 2018 period. I'm moving to page four now just to touch briefly on the performance highlights. Student placement, as you'll see as we go through the presentation, the investment that we've made in standing up the platform is clearly beginning to deliver very strong results for us top line, and those equally are now beginning to flow into our placement volume. We expanded our physical office network further in the year.
Opening up in a very strategic market for us as we look into the future, being Pakistan in June with three offices there. Equally, we opened up in Nepal, a number of new offices in Canada, and we opened up an onshore office in Canada to support our students there. Our Student Essentials service line was expanded, we'll talk to the success of that. We've seen market share gains across all destinations relative to competitors in student placement. As we move to English language testing, strong volume performance, as I said, in some of our key offshore markets. A real focus for FY 2019 was accelerating the rollout of our computer-delivered IELTS test. That was a top priority for us.
We opened up 124 computer-delivered test centers in the year in 44 countries, which was well ahead of our beginning of the year target of aiming for 21 countries. We've also seen market share gains in the year against our primary competitor, British Council. In digital marketing events, we fulfilled on the integration of Hotcourses, in particular with our own client teams creating a new B2B division branded IDP Connect. They are really focused on transforming the database and digital services that we'll bring to our university institution partners, delivering on global insights, content services, and data-driven student engagement products. In English language testing, as I said, very strong performance by our operations in Cambodia. Moving to page five.
A key part of our digital transformation strategy has been to put in a sophisticated platform to enable us to connect and to grow at scale around the world. The foundations for that growth have been completed in FY 2019. We now have the world's best course search across 28 IDP new search sites are now integrated in with the 12 Hotcourses international sites. They are now plugged into our marketing automation and our data repositories and CRM, so we can drive engagement and marketing automation and lead nurturing across and from those platforms. As I mentioned, we opened up our new office network. We now have nine new offices, 127 offices for student placement across more than 33 countries. We completed our rollout of our global contact center, with 18 countries now live with our contact center capabilities. We've digitized our student expos with new technology.
We've had over 115,000 students attend our events in FY 2019. In terms of virtual agency, strong performance from our virtual agency in China and in India. We continue to look to the innovation we can drive and the learnings we can obtain from those initiatives to apply more broadly to our strategy. We've rolled out the leading content management and CRM system, so we now have 2,500 of our counselors and their office staff now using that one platform, engaging with our customers consistently around the world. With our new Student Essentials program, we've had more than 20,000 services sold in FY 2019. As we ended the year, we began our first internship pilot program, which of course, for many of you would remember, is a key part of our strategy to remain relevant on our customer journey through study to career.
When we look at under the covers in terms of some of the other things we've done, it's one thing to put the technology in place. I think it's another thing to actually build the capability and the competency to really drive the returns from that investment. Whilst we've been very successful in putting in an integrated platform, we've equally been working on bringing new capabilities and competencies into the business, in particular as they relate to digital technology and digital marketing. From a global perspective, under our Chief Digital Marketing Officer, where we lead a lot of this transformative strategy, we build a global team ensuring that we have the best capability and the best ideas being rolled out on a consistent global basis.
From a regional perspective, we've hired more than 40 new digital marketing and digital technology specialists. We've replicated a consistent structure and operating model and cadence in each one of our regions around the world. Within each region, we've brought 60 new roles into place to ensure, again, we're getting the return and the high levels of engagement we expect from the platform with our students. You'll see some of the benefits of that on a following slide. Our innovation hub in Chennai is quickly coming together. We're bringing the teams, which were the Hotcourses teams we acquired and our own technology teams together in Chennai. We've expanded that team dramatically. This is where we do our product and software design, development, testing, and customer support.
It's now been named our new digital campus, based in Chennai, and we have almost 400 people there now, which will ensure that the innovation that we're bringing on the table is not a one-off. It puts us in a position now to constantly lead the market with innovation in student, and ultimately also IELTS technology innovation. If I move to page seven and have a look at some of the results we're getting from the platform or received from the platform through FY19. As I mentioned, we now have 40 connected international websites. We've had a 30% increase in IDP web traffic. Our hot and warm lead numbers continue to grow, now at 37% growth in that funnel. We've had a 27% increase in event attendance.
Again, much of this comes from using marketing automation and new campaigns and programs to bring people to our physical locations to have an event experience with IDP. 36% increase in contact center leads moving from unqualified to qualified. We are now starting to see the impacts as these leads now move through the funnel into following stages. An 11% decrease in cost per lead and a 30% increase in applied volumes. It's the first time we've shared that data point, but we're now seeing the impact of the platform at the very top of the funnel now moving through into a significant increase into applied. As it relates to IELTS, and moving on to page eight, some highlights for us there. Of course, IELTS continues to hold its position and expand its position as the world's most trusted English language test.
We've had record volumes in FY 2019, and we expanded our network further through the year into Poland, Peru, Chile, and Ireland. With computer-delivered IELTS, 124 new centers, as I mentioned, and 44 countries with computer-delivered IELTS now up and running. On page nine, talking to really where we're going with IELTS from an innovation perspective. We're now in a position to start leveraging the investment we made in our digital platform and digital capabilities. In the coming year, we'll start to focus that resource and capability on really reimagining IELTS, in particular, as it relates to the customer journey and our digital customer engagement. I just wanted to touch on a couple of things that we're doing there. In terms of investment in the customer experience, of course, the rollout of computer-delivered was the primary objective that we wanted to achieve.
Now our aim in the year ahead is to drive adoption. We've seen great adoption in some of the technology-mature markets. Singapore is now at 80% of tests done on computer-delivered, and Australia is now at just over 60% on computer-delivered. We're rapidly innovating the product. The product in the year ahead is being re-platformed. Cambridge, IDP, and British Council have, for the first time, jointly created a new product group to drive innovation, reporting into all three parties that will be properly funded to ensure that that innovation continues to hold IELTS as the leading product in the world. The three partners have embarked on the production of a new AI-based IELTS prep product, which will be launched into the China market in the October timeframe.
From a digital innovation perspective, as I said, leveraging our investment in the digital platform to do simple things like nurturing our leads and connecting the leads and our engagements from IELTS with our student placement business will also be a priority for the year ahead. Let's now jump into some more of the detail on the results for FY 2019. Murray, I'll pass over to you to present the financial results.
Thanks, Andrew. I'm on page 11 of the pack. Revenue was AUD 598 million for the year, with growth of 26% on a constant currency basis. We had good growth across all of our product categories, but the standouts were student placement, both Australian and multi-destination, and English language testing. English language testing revenue was AUD 360 million, and growth was 15% on a constant currency basis, with India making a strong contribution to that growth. Student placement revenue was AUD 170 million, and growth was 36% on a constant currency basis, with very strong growth from India and strong growth from China. Digital marketing events and English language teaching both performed well, with revenue of AUD 37 million and AUD 28 million, respectively, and growth of 12% and 15%, respectively, on a constant currency basis.
Gross profit at AUD 334 million had growth of 21%, with margin improving to 55.9%, a result of operational efficiencies in IELTS and a greater contribution from student placement. Overheads grew 19% on a constant currency basis and include investment in nine new student placement offices. We continue to add digital marketing capability and contact centers moving forward in our digital transformation. Excluding the expansion cost into the new offices, overheads grew at an underlying rate of 17%. EBITDA at AUD 115 million had growth of 26% on a constant currency basis. EBITDA margin was 19.3%, an increase on last year's 18.3%. Depreciation and amortization increased by 81% to AUD 15 million, with growth related to the student placement digital platform and the network office expansion. Net profit after tax, AUD 66 million with growth of 23% on a constant currency basis.
I'm going to move on to page 12, the key operating metrics. The key operating metrics highlight the strong volume growth across all products. IELTS volumes were 1,283,000 and 12% above last year. There were strong performances from India, Canada, Nigeria, and Vietnam. Student placement volumes were 49,600 and 25% above last year, with the Australian destination growing 10% and multi-destination growing 51%. Multi-destination growth of 51% saw strong growth from Canada of 72%, while the U.K. performed strongly for IDP with growth of 41%. Moving on to the average fee performance. The average test fee for IELTS was AUD 280, a 4% increase. On a constant currency basis, the test fee increased 2%, with a strong growth in India at a negative mix impact as the price is lower than our global average.
The average student placement Application Processing Fee has increased to AUD 3,435, a 9% increase on the same period last year on a constant currency basis. The Australian average fee increased 17%, with favorable study sector mix, increase in commissions from clients, client incentives, and Student Essentials all contributing to the strong price increase. The multi-destination average fee decreased 2% on a constant currency basis with a higher mix of Canada-bound students at a lower than average price, lower student pays revenue as the change in revenue recognition deferred this revenue. These offset the favorable study sector mix and increase in client commissions. I'll hand back to Andrew now.
Yeah. Thanks, Murray. If we move to page 13, which provides really a global picture of our network. On the left, reflecting the source countries where we're sourcing international students, on the right, the destination markets where we're placing them. Again, as said, a very strong year for student placement volume growth, up 25%. I think here you can see, of course, the contribution of the two major markets, India and China. I think year-on-year, India has become a larger portion of our international student source country base simply because of the significant growth, with India up 63%, now becoming 37% of the total market as we've sourced our students. China at 25%, grew strongly at 14%. I think when you double-click into China, we've all probably heard that Australia itself has had a few challenges with international students of late.
In terms of our aggregate numbers from China, we were down -6% from a source country. In that 14% growth, it was offset significantly by very strong U.K. growth, with U.K. up 68% from China over the previous year. If we look at India, with its growth of 63%, Australia destination growth from India was at 52%. U.K. destination growth from India was at 54%, and Canada destination growth was 83%. Really, across the board, firing on all cylinders. I think that's reflected again when we have a look at the destination growth rates in themselves from our source markets. Australia up 10%, U.K. up 41%, Canada up 72%, USA up 51%.
We're getting the benefits of our expanded office network, our new operating systems and processes, and the platform starting to come to the fore and have an impact, as I said, taking market share in all markets that we operate in. If I move to page 14, in terms of a global view of IELTS, our English language testing product. This, in aggregate in terms of volumes, reflects IDP and British Council total volumes. Performance this year at just over 12%, again above the last 10-year CAGR of 11%. Still reflecting very strong growth and a record result for IELTS around the world. For us, some small market share gains within the year against British Council with, I guess the volumes as they are so significant, has a real impact on our EBIT for every one market share point we take from British Council.
With that said, Murray, I'm going to hand back to you and take everyone through the segmental earnings.
Thanks, Andrew. On page 15, we had strong revenue growth in Asia and the rest of the world, with Australasia declining. Asia revenue grew 29% to AUD 392 million, with India growth of 39% a major contributor, supported by strong performances from China, Vietnam and Cambodia. The rest of the world grew 26% to AUD 143 million, with Canada, Nigeria and the Middle East making significant contributions to the growth. Australasia revenue at AUD 63 million was 8% lower than last year. Good growth in onshore student placement revenue could not offset the decline in Australian and New Zealand IELTS volumes. EBIT in Asia was AUD 114 million, with very strong growth of 38% that has underpinned the strong FY 2019 group EBIT performance. The rest of the world EBIT was AUD 13 million and had strong growth at 21%.
Australasia EBIT declined 25%, a result of lower IELTS revenues and the onshore student placement business investing in digital marketing and contact center resources in support of the student placement digital platform. Corporate costs increased by 23% due to increases in depreciation, staff and IT costs. Overall, the total EBIT growth of 28% is a result of the strong student placement and IELTS revenue growth and the geographic spread of the business across the world. I'm going to hand back to Andrew now.
Yes. Thanks, Murray. In summary, on page 12, again, a record financial performance, strong financial performance by IDP in FY19. Very strong growth across all product lines continue, and I think certainly as we look ahead, I think the macro trends remain very favorable for IDP into the future. In particular, with also the extent of the network and the strength that that network gives us around the world. We've successfully transitioned the business from primarily an analog products and services company to one very much now integrated into a digital way of working with digital technology and digital skills and capabilities.
This really provides us with a strong foundation for growth and a foundation to more aggressively scale the business as we move forward. Equally, the investment now that we've made, in particular to support the transformation of our student placement business, now gives us the skills and technology to turn to other products and services. As I said, through the year ahead, we'll be taking that investment and those capabilities and applying them to our IELTS customer journey and our IELTS product innovation. With that said, that ends the formal part of this presentation. I'd now like operator to open up the call for Q&A. Thank you.
Ladies and gentlemen, we'll now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Your first question comes from the line of Philip Pepe from Blue Ocean Equities. Please ask your question.
Hi, guys. Thanks for taking the question, and well done on another strong result. Just a question on the cash flow, though. EBITDA was up strongly, operating cash flow was flat. Looks like the main culprit is contract assets. Just wondering, what's the rationale for booking revenue ahead of billing? Is that normal practice?
The new accounting standard, AASB 15, required us to change our revenue recognition policy. There's U.K. student placement revenue, and some Australian student placement revenue that is now required to be recognized effectively when control of that student passes to the institution. There's AUD 24 million of contract assets on our balance sheet.
That increase of AUD 27 million, is that one-off or is that recurring?
That'll be ongoing, but there's a one-off step up.
Yeah
as we obviously have changed the policy. There will always be contract assets as our business grows to the U.K. and Australia.
Got you. Okay. Thank you.
If you take out that contract assets, though, the cash conversion is actually 112%.
Yeah. No, correct. Yeah. Thank you.
Your next question comes from the line of William MacDiarmid from Ord Minnett. Please ask your question.
Hi, everyone. A few questions from me. Just on IELTS volume growth. The growth of 12% implies that you possibly lost market share in the second half. Can you just talk a little bit around that and perhaps potentially also talk a little bit to British Council's activities with respect to their own computer-based testing rollout?
No, thanks, William. I mean, overall, obviously a solid performance. There were a couple of one-off challenges in the second half in India. Whilst India showed significant growth for us at 18%, we did have an impact there with the general election in the second half, which muted IELTS growth, for us and for BC in that context as well. That was very similar to what we saw when we did a little bit of research on the 2014 general election, and it relates specifically to colleges and schools not releasing their marks in a timely manner, which pushes out the IELTS volume. We've seen that IELTS volume that was dampened through that period now come back in later periods, in particular through the last couple of months.
As it relates to market share, we had a small issue in the Punjab, probably middle of the second half, where there was some misinformation going or being spread in the Punjab, in particular, around the acceptance of an IDP IELTS test compared to a BC IELTS test for Canadian college acceptance. The Punjab is a highly emotionally charged area, and it literally took us probably about 2 months to squash that misinformation that was being pushed around. That's behind us now in our volumes in the Punjab, and our market share in the Punjab is back to where it was. By the way, we had a majority market share in the Punjab. That impacted us for a couple of months, we estimate probably about 30,000, 35,000 tests in those couple of months that we had to address.
Okay, thanks very much. Can you also just talk a little bit around potential for deregulation of high-stakes English language testing for immigration in the Canadian and U.K. markets? I think there continues to be speculation that that will be opened up at some point. What your opinion on that is and potentially what your exposure is?
Yeah, thanks, William. I mean, my view, and I've said this before to our investors and to the analysts. I believe ultimately other markets will open up and that's driving our investment in IELTS with the partners and our own innovation agenda. Again, I think it's worth recognizing that the markets are open as it relates to university admissions. Pretty much every university around the world accepts almost every test for admission. It only comes down to where there is migration tests aligned to a visa result. The U.K., my estimates are they'll probably open up sometime through the course of the next six months. I don't think that's a material impact on us based on the assessments that we've done, because it relates specifically to a test designed for the U.K. government called UKVI, which is of limited volumes around the world.
Canada, as far as we understand, and we've been in direct consultation with the Canadian immigration authorities and interests there. There is no timetable to change their positions that we understand. Clearly in Canada, we already compete in that market with another organization called Paragon, with a test called CELPIP, which is a computer-delivered test, owned by the UBC, University of British Columbia, and a very well-regarded and respected test in Canada. It's not necessarily compelling reason for them to add more tests.
Okay, great. Thanks. I'll let someone else ask a question, please.
Thanks, Glenn.
Your next question comes from the line of Aaron Yeoh from Goldman Sachs. Please ask your question.
Morning, guys. Thanks very much for taking my questions this morning. First one, could you just make a broad comment on your expectations for sort of the macro or volume environment in your key sort of destination markets heading into 2020? Seems like overall Canadian volumes potentially might have slowed. Do you think this will be a headwind into next year? Or do you expect volumes from other markets such as the U.K. to sort of pick up some of the slack?
No, thanks, Aaron. We, at this juncture, have pretty good visibility. As you know, our major northern hemisphere intakes are coming up in the fall. I feel quite confident that we'll still see strong growth. Now, as it relates to Canada, you're right. The Canada growth in aggregate looks like it has slowed. However, IDP's penetration of Canada in terms of opening up new clients has met our expansionary objectives. We actually have a team in Canada right now who are confirming additional places. Really, Canada becomes a market share play for us, and we're extremely well-positioned for that relative to other competitors.
I'm confident, even with a slowing top-line market growth for Canada because of our network now and the strength of our sourcing of Canadian students, that we will still take growth as we have been in other markets like the U.K. through market share gains. Again, quite confident with what we can see coming into the fall intakes. The U.K., in itself, is proving at this moment to be very popular with the Chinese students. Part of that has been the Trump effect. Possibly part of it has been, in recent times, a question about employability from Australian universities.
Whilst I think the number to Australia will continue to be significant and there we'll focus on market share gains again, we are getting, and you can see it in certainly the numbers we presented here on FY19, a strong uptick and Chinese students looking now at the U.K. as a priority, in particular over the U.S., which is of net benefit to us, because in China, we don't actually place students to the U.S., but we do have an operation that places into the U.K.
Great. Thanks very much. Just a second question from me. I'm interested in your outlook sort of commentary around your priorities in FY 2020, and particularly the comment around improving the IELTS customer experience. I was just interested in, I guess the last couple of years it's been around the digital platform strategy. What's really been driving, I guess, the decision as a business to sort of refocus on a new sort of priority area?
Yeah
where that ranks?
Yeah. No, very much. On the strategy map that we put together and really is our guide and it's been in place for three years. At the very top, it is building a global platform and connected community, to assist our customers on their journey through study to employment. That actually enables us to encapsulate also the digital transformation of IELTS. Certainly because student placement was within our own realms, and we can get our arms around it, and that investment can be focused specifically on IDP getting a return. The right place to put that effort was in student placement first to bring in the capabilities, skill sets, and the technologies to support that. Of course, we've been working very closely in parallel with an IELTS transformation objective.
In the last 12 months, we've made significant progress with Cambridge and with BC on aligning a vision and a strategy for really the digitization and the further development of additional IELTS products and services. It just makes sense that now that we've got the platform in place to support student placement and the capabilities, in the year ahead, we're going to very much focus on driving the returns from that investment and building that definitive data set through the year, bringing in skills around data analytics and AI to enable us to move from platform to marketplace on student placement. With IELTS, yes, this year is about the transformation of that product from a technology and from a customer experience level. For example, if you are an IELTS test taker today, you would come onto a website.
If you had difficulty booking and you dropped off, we would have no way of retargeting you and then nurturing you or understanding why you were doing IELTS. We're going to take the technology that we've invested in for student placement, which enables those capabilities, and now underpin IELTS with that. Whilst we're transforming the product with BC and Cambridge, we are transforming the experience as it relates to the distribution and the customer journey across our markets, which we believe gives us an advantage, not only against the likes of PTE, who are a competitor in this market, but more importantly, it's a place where we can go and gain market share against BC with our level of investment and sophistication now.
Okay, great. Just with regards to the plans that you have in place for the IELTS business, how much additional investment does that require? I guess given the fact that it's a tripartite agreement with yourselves and BC and CA, I was just wondering, would it be easier, for instance, to potentially take on BC's stake to then roll this across your key geographies?
Yeah. There's two components to the investment as we're looking at it now. One will be the investment we put into leveraging our own technology, to build out things like new online registration systems, marketing automation, lead nurturing, ensuring a unique customer experience for each test taker, depending on their objective. We're probably looking in aggregate, I think, of around AUD 12 million in CapEx spend in the year ahead that'll go into a combination of that, as well as included in that will be a proportion of that CapEx will go into the newly created unified product innovation group that we've set up in the U.K. We have a new leader for that. We have new marketing capability now hired into that. That will be an entity where we jointly put equally in capital to innovate the product and the family of IELTS products together.
Great. Thanks very much.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Again, it is star one to ask for a question.
Okay. Oh, sorry, operator. Go ahead.
There is a follow-up question on the line.
Great. Thank you.
Let me still take this. Okay.
Yes, please.
The follow-up question is from the line of William MacDiarmid from Ord Minnett. Please ask your question. Hello, William. Your line is now open. You can ask your question.
Hi, guys. Sorry, I just thought in the absence of other questions, I might just jump in again. You've spoken a little bit about that innovation around IELTS. Can you talk a little bit around the shared costs, how those costs will be shared amongst each other? You also mentioned that you'd be looking at sort of developing more work around test prep. Would that be launched into China? Will you share in the economic benefit of that, or what's the outlook for that product in particular?
The investment in transforming, in particular, the front end of the customer experience, leveraging our technologies and capabilities that we've built and have been deployed around student placement, those will be our costs because fundamentally there we're aiming to compete against BC. I think everybody understands BC is still by far and away our most significant competitor. Those will be costs borne by us. There'll be a proportion of other CapEx, which will go into the product innovation group based in the U.K., which is a new entity that reports into the three partners. The investment into that will go in equally. That's fundamentally transforming the core IELTS IDP and ultimately IELTS core IP and the family of IELTS products. The example that I gave you re: a product, it's a big step for the partnership.
We engaged a consultancy in China. We had a very deep analysis of the preparation market. We identified a Chinese-based, quite sophisticated AI partner, very well experienced and very well-known. They're working on behalf of all three partners, so Cambridge, IDP, and BC. To create a new product, in particular, aligned at prep, and prep for IELTS success from an early stage, from a junior education stage. That product will be launched most likely in October, and all three parties will equally share the benefits financially from that product in China.
Okay, great. Thanks very much. Just finally, U.S.A. was up reasonably across the full year. Can you talk a little bit around the outlook for that market and if you see that as an opportunity for you guys, I guess across the next quarter?
Yeah, the U.S., for us, it's an important market for India, even for India, it's small volumes. Outside of India, we really don't focus on the U.S., and we don't plan on, or I certainly don't plan on putting a specific focus on expanding our U.S. capability within our network. For the year ahead, we will remain focused on Australia, Canada, the U.K./Ireland, where we're expanding our client footprint. All of those markets represent, I think, the best opportunity for us to continue to grow strongly. We'll leave the U.S. as something that we'll come back to in following years.
Okay, thanks very much.
No problem.
There is another follow-up question from the line of Aaron Yeo from Goldman Sachs. Please ask your question.
Andrew, just a follow-up from me. Just wondering if you could comment on, I guess, your plans to open up new student placement offices next year.
Well, we will continue to open up new student placement offices. In particular, we're looking at, and it's not that it hasn't been finalized yet, but we're assessing a strategy in India to execute what we're calling a micro office model to give us access into potentially another 15 or 20 cities. Not all in the same year, but over the course of the next couple of years. We will open up four new offices in India that are already approved as part of our CapEx investment next year. Outside of the micro offices, four new large offices in India. We are in the process of assessing some other markets, in particular in Africa at the moment. Nigeria is a market that we have a desire to go into, and potentially Kenya. They're great markets for the U.K. in particular.
I think I'd say, as I said before, Aaron, part of my job is just to ensure that we execute well with the opportunity we have at hand. Opening up new offices isn't the top of my list to ensure that we expand on our student placement growth objectives. It's more the expansion we should get through now, the digital implementation of technology and the improved counselor productivity we'll get in the existing office network.
Okay, great. Just, sorry, one last question. Just with regards to the 30% increase in IDP web traffic called out in slide seven of your presentation pack. Did this compare to 40% in the first half?
40% in the first half? Yeah, it does compare. Again, as we've rolled out the new sites, we've probably captured in the first half a fair bit of low-hanging fruit as it relates to just having a much, much further expanded web presence. It's probably normalizing a little bit around 30%. The other thing that's important to note, and I don't think it's actually reflected in the numbers here, the organic traffic is the one that I've really got my eye on because it's very easy to drive web traffic through paid, et cetera. Our organic growth is up 60%, and that's a metric which is much more important. I think equally a more important metric is now how we drive hot and warm leads. One of the things we've learned is it's easy to get web traffic.
I can put out a specific, buy some keywords for things like internships or scholarships, and you can drive a lot of web traffic to that, but it's very low conversion web traffic. I think for us as we go forward, it's hot and warm leads will become more important, and then watching the applied number because that's where we're seeing the hot and warm leads actually turn into applications, which is giving us a first view of how we can drive conversion out of the pipeline.
Great. I guess, sorry, just following from that. Given the positive stats you're seeing around the increase in leads and the sort of cost per lead, why shouldn't we expect, I guess, some sort of margin expansion within this business to start really coming through?
Ultimately, it will. This year, we have in our own objectives and KPIs for the first time, put in a measure around driving counselor productivity, as I'm just giving you an example, because we should now see through the system, the automation enabling us, and the contact centers enabling us to take a large pipeline, distill that down to qualified and relevant leads for specific intakes, and get those leads to counselors in a more efficient way, and therefore drive growth through having greater productivity at the counselor level. Ultimately, yes, we should see some margin expansion coming through.
In terms of that, just to follow on, how should we think about, I guess, the profile around the timing of margin expansion driven by the increased scale? Is this year still a bit of a build on that in terms of building up scale, and then it's more sort of next year or the year after where you really start to see that come through?
Aaron, you saw our EBIT margin improve from 18.3% to 19.3% this year while we were still making investments, and we're still making investments in our network. Yes, we'll see some margin improvement, but I don't expect to see a significant step up in one year. It'll be gradual and over a number of years.
Okay, great. Thanks very much, guys.
Thank you.
There's no more question at this time. I would now like to hand the conference back to today's presenters. Please continue.
Okay. Thank you very much. What I suggest we do now is wrap up the call, and I look forward to, as does Murray and Craig, speaking with many of you over the next coming days. Thank you very much for joining the call.