Navitas Limited

NVT Details

Subdued outlook: Navitas Limited (ASX: NVT) reported a 5% fall in revenue to $955.2m mainly due to the final wind-down and closure of the Macquarie and Curtin Sydney colleges. The company reported EBITDA of $155.0m with pro-forma EBITDA of $161.0m, while posting 11% fall in NPAT at $80.3m. However, the company witnessed a 170-bps margin improvement across the Careers and Industry division businesses. University Partnership Divisions’ equivalent full time student units (EFTSU) for the second semester of 2017 increased by 8% on the pop. This result includes enrolments from Navitas’ three new joint venture colleges with combined enrolments of ~1,000 EFTSU. Underlying Australian and New Zealand enrolments increased by 16% following ongoing demand and a stable regulatory environment, while North American enrolments were flat with growth in Canada offset by declines in the US following continued uncertainty in response to the new administration. Additionally, UK EFTSU decreased by 3% as the regulatory environment continues to be restrictive.


FY17 Financial summary; (Source: Company reports)
 
On guidance front, the Group’s near-term outlook will be impacted by the decrease in contribution from fewer AMEP contract regions and no contribution in FY18 from the fully closed Macquarie and Curtin Sydney colleges. We give a “Hold” recommendation on the stock at the current price of $4.47


NVT Daily chart; (Source: Thomson Reuters)

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