Navitas chalks up a loss

SHARES in education giant Navitas have fallen heavily after the company announced an 11 per cent drop in full-year profit and said a decline in government-backed language training contracts had hurt the outlook for its English language training division.

The company’s profit fell to $80.3 million in the year to June 30, while revenue dropped more than 5 per cent, largely on the back of the closure of two colleges in Sydney, Navitas said.

Underlying earnings before interest, tax, depreciation and amortisation were down 5.8 per cent at $155 million, in line with the company’s guidance. Chief executive Rod Jones said Navitas had experienced tighter market conditions in the US and the UK and was streamlining the business’s operating structure to deliver future growth.

“Group revenue declined due to a number of factors including the final closures of two University Partnerships colleges,” Mr Jones said.

The two Sydney colleges were ventures with Macquarie and Curtin universities.

Within Australia, Navitas has delivered governmentcontracted settlement services in English, education and employment pathways, focusing on migrants and refugees.

Navitas said its near-term earnings would be hit by a reduction in the size of contracts under the federal government-backed Adult Migrant Education Program (AMEP) and the shutdown of its two university partnership colleges.

In April, Navitas said the latest round of AMEP contracts would result in a twothirds reduction in contracted areas from the beginning of July. Its shares dropped 50¢, or 10 per cent, to $4.47.