THREE years ago, many experts believed Navitas head Rod Jones was lazy - but it had nothing to do with his work ethic.
THREE years ago, many experts believed Navitas head Rod Jones was lazy - but it had nothing to do with his work ethic.
Indeed, the work ethic of the managing director of the global education provider was evident this week when he went to work the morning after returning from an overseas trip that included competing in Ernst & Young's World Entrepreneur of the Year event in Monte Carlo.
During the bull market, fund managers and brokers regularly denounced companies like Navitas, formerly IBT Education, for being lazy or having lazy balance sheets, because they weren't using large amount of leverage to expand.
Companies such as ABC Learning were commended for their aggressive strategies. The ABC group went into receivership last November with debts of more than $1.5 billion.
"We were criticised three years ago as a public company because we didn't carry debt, but I think these days we are seen as the sort of company you want to be invested in because we don't have debt," Mr Jones said in a wide-ranging interview with WA Business News.
"I believe in sustainable businesses, and to me not having huge levels of debt is a way to have a sustainable business."
It's not that Navitas has anything against debt, per se, it's just that its cash flow can usually fund the two-year period it takes for a new college to become profitable.
The education provider specialises in pathway programs, whereby international students attend Navitas-owned private colleges offering English language tuition and transition courses on university grounds.
The full-fee paying students, who are known to pay upwards of $20,000 a year in tuition alone, can generate up to 25 per cent of a university's revenue. On rare occasions this figure can surpass 50 per cent.
The Perth business has expanded overseas, including in the UK, and now looks set to tap into the lucrative American market where some universities are desperately seeking income streams after their investment funds were eroded by the sharp economic downturn.
"We're just on the edge of doing something in the US," Mr Jones said.
Broker Bell Potter notes that Navitas doesn't have any significant domestic competitors, but that's not to say the company has had everything its own way.
Critics used the presence of AWB's former chairman, Trevor Flugge - who became the gun-toting, bare chested face of the Iraq kickbacks scandal - on the board to attack the company. Mr Flugge stepped down as a director in 2006.
There is also an anti-Navitas blog run by people concerned that private-public partnerships undermine the quality of education.
Mr Jones said Navitas colleges provided a supportive learning environment for international students, which led to high completion rates.
Navitas has exploited a niche in the education industry and has been rewarded accordingly. It was one of the few listed companies to increase its share price during the past turbulent 12 months, which took the value of Mr Jones' stake in the company to more than $150 million.
On a personal front, Mr Jones was the 2008 Australian Ernst & Young Entrepreneur of the Year (a Chinese businessman running a company specialising in the production of automotive safety and industrial glass won the world competition).
He said he was enjoying himself too much to contemplate retirement, and that he had no plans to cede ground to potential competitors.
"Universities are a bit like a club; if you do it well with one they'll have confidence in dealing with you," he said.
"For others to get into the game, they've got to be able to develop those relationships. That's not simple."
