Profits to flow as foreign students return
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SYDNEY, Feb 5 AAP
February 05 2013, 4:44PM
International education services provider Navitas is preparing to reap the benefits as Asian students once again flock to study in Australia.
Despite reporting a flat first half net profit of $35.1 million for the half year to December 31, Navitas says regional student enrolments are climbing and earnings should improve.
"What we've seen over the last three to four months is a very, very significant turnaround in terms of demand out of China," said chief executive Rod Jones, who also cited Vietnam and India as key markets.
"Streamlined visas, the potential to work in Australia once they've finished studying, these things are positives from a student perspective."
The company flagged improved earnings this financial year and next.
Profits were emerging from its recent restructure, while its university programs and English businesses were recovering and would support earnings growth.
More significant growth would be visible from the 2014 financial year, as student volumes continue to grow across core divisions and margins improve, Navitas said.
Mr Jones said full-time student enrolments were up two per cent in the first half due to returning stability in Australia and Britain following regulatory changes.
New student recruitment in Australia also rose seven per cent.
"Until we build up our new student numbers to offset the numbers of students flowing through the system, we're not going to see the uptick, but we're getting very close to that point now," Mr Jones said.
Mr Jones denied the restructure of the professional and student recruitment divisions was a prelude to a sale.
He said Navitas had dealt with issues surrounding the $2.5 million loss in its professional division.
"Certainly there were parts of the business we were disappointed with - what happened in the (professional) area came a bit out of left field," he said.
"Most of the issues there have been dealt with in the first half, and moving forward we see recovery in the second half."
Navitas offers pre-university and pathway programs from 30 colleges in Australia, Britain, the United States, Canada, Singapore, Sri Lanka, and Africa.
Its business in Germany, which accounts for 27 per cent of the company's offshore business, suffered a government funding cut last year.
And a one-off boost to earnings from the sale of a license in Bahrain last financial year had not been repeated.
Navitas declared a fully franked interim dividend of 9.3 cents, down from 9.4 cents previously.
Its shares closed five cents lower at $4.90.
By Neda Vanovac