Navitas lifts profit, announces buy-back

Navitas Ltd has posted a 10 per cent increase in its net profit to $16.5 million for the six months to December 2007, compared to the previous corresponding half year, although the result is almost 4 per cent down on the six months to June 2007.

The Churchlands-based education services provider said higher costs associated with its Wynyard Green Education precinct in Sydney ($0.7 million), rebranding costs ($0.4 million), and six months of costs from its Study Overseas acquisition in October, had contributed to the result.

Consolidated operating revenue for the period was $162.2 million, up 18 per cent on the previous half year, due to stronger sales to external customers of the University Programs and Student Recruitment divisions.

The result is 10 per cent up on the $145.5 million company operating revenue for the previous six months.

EBITDA rose 14 per cent to $28.5 million in the six months to December 31, reflecting strong EBITDA growth in the group University Programs ($5.4 million) and a net improvement for the four main divisions of $3.6 million, compared to the corresponding period in 2006.

Of the divisions, University Programs' operating revenue rose 25 per cent to $97.3 million over the period, Workforce Training increased 7 per cent to $7.6 million, Student Recruitment was up 54 per cent to $7.7 million, while the English Language division slipped 7 per cent to $7.7 million.

Adjusted earnings per share rose 8 per cent to 5.4 cents per share, compared to 5.0 cents per share in the first half of 2007, while management remained focused on controlling costs in the existing business.

Operating cash flows increased significantly to $21.1 million, compared to $5.5 million in the first half of FY2007.

Navitas chief executive Rod Jones said the strategy of diversifying the business without sacrificing the core focus on education had provided the right framework for creating long term economic value for shareholders.

Mr Jones said the University Programs continued to be a major contributor to the group going forward, while the English Language division maintained a positive margin and completed the Hawthorn English Language Centre acquisition to help drive future earnings.

He also revealed there existed further acquisition opportunities for the Workforce and Training division.

"Overall trends in the higher education sector remain favourable for Navitas," Mr Jones said.

"Asia is Australia's principal source of international students and continues to be a strong and positive influence on our business...The number of Chinese students going abroad to study this year is expected to increase 30 per cent."

In other news, Navitas has announced an on-market buy back of up to 5 per cent of the issued capital of the company.