05/02/2013 - 09:26

Winds are changing: Navitas

05/02/2013 - 09:26

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Navitas chief executive Rod Jones is confident the company can lift its earnings.

Perth-based global education services provider Navitas is confident of lifting its earnings following a pick up in student enrolments, despite posting softer first-half results. 

Navitas reported a first half net profit of $35.1 million for the half year to December 31, compared to $35.4 million from the same period last year.

Revenue rose four per cent to $355.4 million.

Navitas attributed the flat profit result to tax reasons and depreciation charges in the previous corresponding period, and said benefits were beginning to flow from its recent restructure, while its university programs and English businesses were recovering.

"In terms of the key part of our business, which is our university programs, I think we're tracking as per our expectations," Mr Jones told reporters this morning.

"We're certainly not disappointed with where it's heading.

"The light at the end of the tunnel is becoming brighter and brighter."

Navitas is forecasting improved results in 2013-14, with "more significant growth" from 2014-15.

The company's Professional division, formerly known as Navitas Workforce, recorded disappointing results, with revenue down 10 per cent in the division.

Navitas said this was largely due to a drop in demand for corporate training following a change in government funding requirements.

Despite the poor results, Navitas chief executive Rod Jones said a potential sale of the division was "not on the table".

"What happened in the Workforce area came a little bit out of left field," he said.

"But we've dealt with that...(and) moving forward we see recovery in that division for the second half."

Navitas offers pre-university and pathway programs from 30 colleges in Australia, Britain, the United States, Canada, Singapore, Sri Lanka, and Africa. 

Mr Jones said Navitas' results had continued to be affected by the long-term effects of regulatory and policy changes in Australia.

However, enrolments and earnings had improved in Britain following similar policy changes.

"Student enrolments continue to improve in our core University Programs Division as planned, but the benefits are yet to materially show in our financial results due to the lag associated with the effect of lower enrolments in previous periods," he said.

Earnings at its University Programs division increased by eight per cent to $53.1 million, which Navitas attributed to a strong performance in Canada, a return to growth in the UK and a reduction in investment costs as the US college network nears the breakeven point.

Navitas shares were 11 cents, or 2.2 per cent, higher at $5.06 at 10:20am WST.

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