Navitas (NVT) - 2017 FY Results

NVT reports a bottom of the class set of full year results

Key Points

The Good

  • Two new colleges signed up in the US
  • 5 University partnerships renewed
  • SAE EBITDA margin up 0.8%
  • FY Dividend flat at 19.5c

The Bad

  • Group EBITDA margin flat at 16.3%
  • Group revenue down 5%
  • Group EBITDA down 6%
  • Reported NPAT down 11%
  • EPS down 8% from 24c to 22.1c
  • University partnerships impacted negatively by the close of Macquarie and Curtin Sydney Colleges
  • Net debt increased from $56.2m to $186m

Source: NVT

Source: NVT

 

In Conclusion

This is the third year in a row of declining operating cashflow for NVT as the loss of the Macquarie and Curtin Sydney Colleges impact the business. In 2018 no revenue will be earned from these operations further constraining earnings in FY2018. These were material contracts the key will be NVT finding new revenues to replace the lost contracts in the coming years. While it is encouraging that 5 university partnerships were renewed in FY17 there are a number that are up for renewal in FY18. NVT however still enjoys a strong macro environment in terms of the global demand for international education.


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Michael Eidne

Director - Research

Michael has over 14 years experience working in financial markets in South Africa, UK and Australia. Prior to joining DJ Carmichael, Michael held research analyst positions at Bell Potter Securities and Blackswan Equities. He also spent several years working as a consultant for various Perth-based resource companies before moving back to the equity markets. Michael is originally from South Africa where he was a portfolio manager at Edge Capital, which is a large South African alternative investment manager. He also worked for a number of years at Investec Asset Management as an investment analyst.

Michael has a MSc in Mineral and Energy Economics from Curtin University and a MBA in Finance from the University of Cape Town.