Fitch rates Oxford College of Business first-time National Long- Term Rating of ‘A(lka) with stable outlook

Fitch Ratings has assigned Sri Lanka-based tertiary education provider Oxford College of Business (Private) Limited a first-time National Long- Term Rating of ‘A(lka)’. The Outlook is Stable.

The rating reflects Oxford College of Business’s tight liquidity, small operating scale in terms of EBITDA and reliance on a single counterparty with a limited record. These risks are mitigated by defensive demand for its academic programmes and neutral-to-positive free cash flow (FCF) generation that support a steady financial profile.

The Stable Outlook is based on our view that the company’s liquidity and credit metrics will remain adequate in the next 12-18 months. Oxford College of Business’s rating is constrained by its small EBITDA size compared with that of higher-rated peers, as it caters to a niche product in a small addressable market. The company generates 80% of revenue from the postgraduate segment, which is price sensitive and competitive. Oxford College of Business estimates its post-graduate market share to be 25%-30% of estimated annual market enrollments of 4,000- 5,000 students.

It also plans to diversify by tying-up with a second foreign university in 2H23 and to expand beyond postgraduate programmes by introducing top-up undergraduate and professional courses that target students who have basic qualifications or requisite work experience.

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