Navitas Ltd
Growth in University Partnerships total FY18 enrolments: Navitas Ltd.’s (ASX: NVT) stock fell 3.9% on April 05, 2018 despite the company announcing for 3% growth in student enrolments for the first semester of 2018 in its University Partnerships Division. This brings total enrolment growth across the University Partnerships division for the FY18 to 6%.
In the first semester, the equivalent full-time student units (EFTSU) were 19,615 across the University Partnerships Division compared to EFTSU of 19,047 in the prior corresponding period (pcp). This included enrolments of approximately 1,450 EFTSU from NVT’s four joint venture colleges. The joint venture colleges are equity accounted and the contribution is not recognised in EBITDA in the profit and loss statement. Further, the enrolments at Australian and New Zealand colleges have risen by 4% compared to the pcp after a sustained period of solid enrolment growth in Australia. The growth rate had slowed in the last semester as the Simplified Student Visa Framework (SSVF) contributed to a bias by international students towards the highest ranked SSVF universities and post graduate studies.
Meanwhile, the enrolments in North America have increased by 2% compared to pcp, due to the strong enrolments in Navitas’ Canadian colleges, which were otherwise offset by the continued fall in enrolments in the US. Higher visa rejection rates and ongoing uncertainty caused by the current US administration’s approach to immigration continue to reduce international student volumes into many US universities. The enrolments in UK, on the other hand, have increased by 6% against pcp on the back of the continued higher number of European Union students seeking to study in the UK. Given the mixed scenario, we put a “Hold” recommendation on the stock at the current price of $4.740.
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