Navitas records slight profit lift

Perth-based education services provider Navitas has recorded a modest rise in net profit for the financial year, amid signs the international student market is returning to positive territory.

Navitas reported a 2 per cent rise in net profit after tax to $74.6 million, with earnings before interest, taxes, depreciation and amortisation up 3 per cent to $130 million.

The figures represent a solid improvement on the company’s previous year, during which net profit fell by 5 per cent.

Navitas chief executive Rod Jones said a combination of factors, including the federal government’s streamlined visa processing reforms and the lower Australian dollar, had sent positive signals to international students.

“The last two years have been some of the most challenging years in our history and we’re pleased to report that the 2013 financial year was a period of recovery and consolidation,” Mr Jones told reporters.

“The recovery can mainly be attributed to the steps we took to mitigate the recent headwinds, such as reducing our costs, and a generally more positive operating environment in the key market of Australia.

“This environment has affected the operational performance in FY13 positively; we expect however the full economic impact will be realised in future years.”

New enrolments for the second semester of 2013 increased by 15 per cent against the prior corresponding period, driving a 5 per cent upturn in total student numbers in Australia.

Within this growth, there was a 33 per cent increase in international students from source countries and a 20 per cent increase in domestic students.

However, there was a 14 per cent decline in enrolments from international students already within Australia.

Mr Jones said the Department of Immigration and Citizenship had struggled to deal with growing demand for medical checks from prospective international students, creating a processing bottleneck which had forced around 200 students to defer their studies.

“I think the demand has probably surprised (DIAC) as well,” he said.

“I think they’re aware of the situation and hopefully they’re going to deal with it.”

While Australia’s reputation as a hub for international students suffered following a series of attacks on international students in 2009, Mr Jones said the damage had been mitigated.

“I think that is, to be blunt, old news and I think it’s very much off the radar now,” he said.

“We’ve seen significant growth out of the areas that were most impacted in that, South Asia and India in particular, and there’s certainly significant demand coming out of those regions again.”

At 11:00AM, WST, Navitas shares were down three cents to $5.97.