03/02/2015 - 14:43

Navitas half-year profit drops

03/02/2015 - 14:43

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Shares in Perth-based global education provider Navitas closed almost 10 per cent lower today, following news of a 13.2 per cent fall in half-year profits to $31.3 million, despite a gain in revenue.

Navitas half-year profit drops
Navitas chief executive Rod Jones.

Shares in Perth-based global education provider Navitas closed almost 10 per cent lower today, following news of a 13.2 per cent fall in half-year profits to $31.3 million, despite a gain in revenue.

The half-year results take into account the university program division’s anticipated final $9 million write-down relating to the loss of its 18-year contract with Macquarie University, which was announced last July.

Navitas group chief executive Rod Jones said the goodwill impairment was expected and was taken into account for the profit guidance.

He said he didn’t expect other partnered institutions to follow Macquarie’s lead.

“There is absolutely no evidence of anybody else going in the same direction. To be fair, many of them were quite surprised at the action taken by Macquarie,” Mr Jones said.

The company posted a 14 per cent growth in half-year group revenue to $480.5 million, and a 13 per cent increase in its underlying EBITDA to $71.1 million.

Mr Jones said the company had experienced high growth in the US, with its sixth US agreement signed last August, with Florida Atlantic University.

He said the division was expected to partner with one or two new universities in the region annually.

The university program division’s interim revenue increased by 14 per cent to $277.5 million, following enrolment and fee increases across all key regions.

Navitas’s creative media education arm – SAE – recorded 27 per cent growth in revenue to $86.8 million, while its EBITDA dropped 18 per cent to $7.4 million as part of a restructuring in the US.

The professional and English programs division recorded a 5 per cent increase in revenue to $114 million, and a 19 per cent jump in EBITDA to $13 million.    

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