Navitas Limited

NVT Details
·         Reduction in AMEP delivery centers to impact EBITDA: Navitas Limited’s (ASX: NVT) stock fell over 14.92% on March 06, 2017 after the group provided an update on the Adult Migrant English Program (AMEP) tender process. The Commonwealth Department of Education and Training has recommended NVT as a preferred tenderer for a reduced number of contract regions from July 1 2017 onwards under the recent tender process. Based on the assumption that the Department of Education and Training successfully concludes formal contracts with all of its preferred tenderers, NVT estimates that the reduction in AMEP delivery centers would hurt their Professional and English Programs segment’s EBITDA by between $12 million and $14 million from FY 2018 onwards.

·         Recommendation: We give a “Hold” recommendation at the current price of – $ 4.22

Fairfax Media Limited

FXJ Details
·         Growing digital advertising business: Fairfax Media Limited (ASX: FXJ) fell over 3.64% on March 06, 2017 as the group traded ex-dividend. The group also announced that Director, Gregory Colin Hywood has recently acquired about 30,742 ordinary shares. On the other hand, FXJ in the 1H 2017 has reported 6% growth in the net profit to $84.7m. However, the group revenue for continuing businesses fall 5.8% to $902.9m. The Domain Group posted for strong digital advertising growth of 15%, notwithstanding a challenging listings environment. Moreover, the cost reduction programs underpinned a 5% decline in operating expenses, notwithstanding continued investment in the growth businesses. But, the trading in the first two weeks of February saw revenues around 6% below last year. The trading performance in January has led to revenues around 10% below last year in a slower than usual start across the media industry. However, the new real estate listings have seen some early signs of improvement in February following the weak FY17 H1 performance.

·         Recommendation: We believe investors could leverage the subdued levels of the stock as we give a “Buy” recommendation on the stock at the current price of – $ 0.92
 

1H 17 Financial Performance (Source: Company Reports)

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