After reporting a drop in profits last June, Australia’s largest listed education services provider, Navitas, is optimistic about 2015 on the back of strong interim results from the last half of 2014.
Continued university programmes enrolment growth, a strong performance from the creative media school SAE and similar growth in the Professional and English programmes has bolstered the FY15 guidance, with 14% growth in group revenue to AUS$480.5m.
End of year results in June 2014 had showed a 31% drop in profits, with the loss of a longstanding partnership at Macquarie University considered one key factor (resulting in AUS$30.5m in goodwill write-downs).
However Navitas’ university programmes helped drive underlying EBITDA growth across the group of 13% to AUS$71.1m during the second half of the year.
Growth for the university division alone saw its EBITDA increasing by 17% to AUS$68.6m.
The company reported that each of the key regions of Australia, the UK, Canada and the US contributed to the 70 basis point improvement in this EBITDA margin. An increase in divisional management and sales costs partially offset these regional margin gains.
The company’s creative media subsidiary, SAE Institute Group, saw enrolments increase but EBITDA fell to AUS$7.4m from AUS$9m mostly due to transaction costs from its Ex’pression College acquisition and non-recurring costs of restructuring in the US region.
Year on year revenues for its professional and English programmes division continued to grow increasing 5% to AUS$114m and earnings growing 19% to AUS$13m.
“This has been a period of solid revenue growth across all divisions and margin improvement for University Programmes and Professional and English Programmes,” said Rod Jones, Group Chief Executive Officer of Navitas.
“Navitas also continued to invest in growth opportunities and productivity improvements including an increase in sales staff in source countries, US expansion of University Programmes and SAE, enhanced staff capability and improved systems and processes such as shared services,” he added.
“While we face headwinds, and a tightening global economy, all three divisions are expecting growth in FY15”
Last month the company opened its first significant university partnership in four years, and sixth in the US overall, with Florida Atlantic University in Boca Raton, which was announced in 2014.
In 2014, the company also celebrated its 20th anniversary with a Partners Conference in Dubai for many key education agent and university partners.
“The results released today are consistent with guidance provided in July regarding an expected full year FY15 underlying EBITDA result of AUS$162m to AUS$172m,” said Jones.
“While we face headwinds, and a tightening global economy, all three divisions are expecting growth in FY15 and will continue to progress strategic opportunities for the longer term as we strive to meet education and training needs in a global knowledge economy.”
