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Navitas announces dip in revenue for FY2017

Global education provider Navitas has announced a five per cent drop in company revenue in its financial year (FY) 2017 results, which also outlined five per cent growth in enrolments at its pathway colleges, excluding two colleges that closed during the year. 

In the FY2017 full-year report released yesterday, Navitas announced group revenue of AUS$955.2 million, compared with revenue of more than AUS$1 billion in the previous financial year. Pro-forma EBITDA (earnings before interest, taxation, depreciation and amortisation) declined by one per cent to AUS$161 million.

 

Navitas commented that the decrease was "mainly due to the final wind-down and closure of the Macquarie and Curtin Sydney colleges", both in Australia.

 

In the University Pathways division, EBITDA decreased by 11 per cent, but excluding the two closed colleges underlying enrolments increased by five per cent, the company said. This was mainly driven by 16 per cent growth in Australia and New Zealand; the North America section was flat with Canadian increases offset by US declines; and UK enrolments decreased by three per cent.

 

Rod Jones, Chief Executive Officer of Navitas, said, "Our underlying student enrolments have grown by five per cent across the year despite tighter market conditions in the US and UK."

 

At the beginning of this year, the Navitas Careers and Industry division was formed through the merger of the former SAE Institute and Professional and English Programs (PEP) divisions.

 

Growth was more prominent in the PEP segment, with a 22 per cent increase in EBITDA to AUS$31.1 million. SAE, a chain of media design schools, also achieved a five per cent growth in EBITDA, and Navitas underlined the opening a new campus in Hannover, Germany, and entry into the Canadian market via an acquisition in Vancouver as landmark events of the last 12 months.

 

SAE profits were impacted by AUS$3 million by the dismissal of an appeal regarding VAT exemption by the UK Court of Appeals, Navitas said.

 

Reflecting on group highlights for the year, Rod commented, "We signed two new and renewed a number of key University Partnerships contracts and established our new Careers and Industry division to simplify and focus on the opportunities to grow our vocational teaching businesses. With the launch of Navitas Ventures, we now have a small team focused on innovation for education, targeted at building new growth opportunities for Navitas."

 

The results showed that 63 per cent of company revenue was accounted for by Australia, followed by the USA (10), Canada (9) and the UK (8).

 

In the review of operations section of the financial report, Navitas referred to the use of agents to ensure student diversity and guard against overreliance on markets.

 

"If a major political or natural event occurred, it may limit or restrict for a short to medium period the freedom of movement for students from source countries or into destination countries. One or more of these events could have a negative effect on our ability to source students into our educational programmes, as well as the company's overall student enrolments and financial results. Navitas utilises a broad network of source country offices and agents to ensure a reliable flow of students across a wide geography is maintained," Navitas said.

 

At the time of writing, AUS$ = US$0.80

 

 

By Matthew Knott

News Editor