(Australian Associated Press)
Global education provider Navitas expects Australia and Canada to benefit from US President Donald Trump’s temporary suspension of the US refugee program and ban on immigration from seven majority-Muslim countries.
Navitas chief executive Rod Jones says some students seeking entry into the US are now looking to go elsewhere, as demand for education is continuing to grow.
“There’s a whole lot of uncertainty in the US at the moment. What that means is probably anybody’s guess, other than students starting to back away from the US because of their concerns about potential issues they may face,” Mr Jones said on Tuesday.
“But saying that, they still want to go somewhere, and I think particularly Canada and Australia are going to be key markets moving forward.”
Mr Jones also said European migration issues were affecting the student market in the UK but Navitas was “holding its own” despite tough conditions.
Navitas on Tuesday booked a net profit of $53.3 million in the first half of the financial year, up 18 per cent from a year earlier, propped up by a a $14 million gain on its disposal of the Perth Institute of Business and Technology into a joint venture with Edith Cowan University (ECU).
The company’s revenue and earnings each dropped by eight per cent in the six months to December 31, due to the closure of two Australian colleges with which it had partnerships – Macquarie and Curtin – plus regulatory changes and foreign exchange impacts.
Navitas expects its earnings will remain steady over the financial year but warned of uncertainty in several of its markets.
Navitas re-affirmed its guidance of earnings before interest, tax, depreciation and amortisation (EBITDA) broadly in line with the $164.6 million made in 2015/16 financial year, on a constant currency basis.
Navitas also said on Tuesday that federal government changes to funding for vocational education and training (VET) were smashing the VET sector, but Navitas’s s exposure to the VET sector was very small.
The government was forced to overhaul the VET sector in 2016 following revelations of widespread rorting of student loans by unscrupulous education providers who signed up students to courses that would never be completed.
Most of Navitas’s revenue and earnings is derived from its partnerships with universities to provide student support and pathway programs.
Navitas shares were down 29 cents, or 6.1 per cent, at $4.43 at 1515 AEDT.
DIVESTMENT OFFSETS REVENUE FALL FOR NAVITAS
* Half year net profit up 18.3pct to $53.3m
* Revenue down 7.7pct to $479m
* Interim dividend down 0.2 cents to 9.4 cents, fully franked