Navitas lifts half-year profit 18pc as enrolments build

Education provider Navitas has overcome the closure of two colleges to increase half-year profit by 18pc.

A Navitas college in Sydney.

Education provider Navitas reported an 18 per cent rise in half-year profit, as the cost of closing two colleges in Australia was more than offset by benefits from higher student enrolments at ongoing operations from Asia to North America and profits gained from a joint venture deal.

Navitas (NVT) said net profit totalled $53.3 million in the six months through December, up on $45.1 million a year ago.

Profits were held back by the closures of the Macquarie City Campus in central Sydney, which was managed on behalf of Macquarie University, and the nearby Curtin University Sydney during 2016. Navitas said group revenue fell 8 per cent on-year to $479 million.

Directors declared an interim dividend of 9.4 cents a share, slightly below a payout of 9.6 cents a year ago.

Navitas CEO Rod Jones

Still, the Perth-based company offered an upbeat outlook as rising incomes and higher teaching standards in many countries prompt millions of students to study overseas each year.

Navitas has sought to overcome the lost revenue from the college closures in Sydney by signing deals for new colleges and extending existing deals. The company said it recorded a net gain of $14.3 million on a deal with Edith Cowan University in Western Australia state that converted its Perth Institute of Business and Technology into a joint venture.

Management has also moved to improve returns for investors by buying back shares. Navitas said it had repurchased 11.6 million ordinary shares during the period at an average price of $5.11.

The company reaffirmed expectations for annual earnings before interest, tax, depreciation and amortisation to be broadly in line with the $164.6 million reported a year ago.

Dow Jones Newswires