Navitas down on profit drop

Shares in Navitas were lower this morning after the Perth-based education provider posted a 10.8 per cent slide in net profit for the 2017 financial year.

Navitas delivered a FY17 net profit of $80.3 million, with revenue down 5.5 per cent to $955.2 million primarily on the back of the final closure of two colleges on the east coast – Macquarie and Curtin Sydney.

The company also posted a final dividend of 10.1 cents per share fully franked, for a total payout of 19.5 cents per share.

Pro-forma earnings before interest, tax, depreciation and amortisation was also down 1.3 per cent for the year, to $161 million.

Investors took to the market to respond to the results, with Navitas shares down 10.9 per cent to $4.42 each at 10:45am.

“The market’s going to have do digest the results, but the reality is that when you adjust for these one-offs we are right where we said we were going to be, ” chief executive Rod Jones told Business News.

“It’s going to take some time for people to absorb these results, but we’re comfortable with where we are in terms of moving forward.”

Mr Jones said Navitas had significantly simplified and streamlined its global operating structures to provide the best platform possible to deliver on growth opportunities ahead.

“Our underlying student enrolments have grown by 5 per cent across the year despite tighter market conditions in the US and UK,” he said.

“We signed two new and renewed a number of key university partnerships contracts and established our new careers and industry division, to simplify and focus on the opportunities to grow our vocational teaching businesses.

“With the launch of Navitas Ventures, we now have a small team focused on innovation for education, targeted at building new growth opportunities for Navitas.”

Navitas said in a statement that its near-term outlook would be affected by lower contributions from fewer adult migrant English program contract regions and the final closure of the Macquarie and Curtin Sydney colleges, but it was well positioned to capture growth opportunities and deliver on its 2020 key performance targets.