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Navitas annual profit up 25%

AAP logoAAP 1/08/2016 Trevor Chappell

Global education provider Navitas expects its 2017 earnings will be broadly in line with 2016's as its revenue breaches $1 billion for the first time.

Navitas - which operates more than 120 colleges and campuses across 31 countries, and has more than 80,000 students - says it has achieved a full-year profit of $90.1 million, on $1.01 billion revenue.

That's up 25.4 per cent on the previous year's $71.8 million and comes as the company significantly restructured its operations to better position itself for long-term growth.

The previous year's result was pulled back by a $19.5 million goodwill impairment.

The company's EBITDA (earnings before interest, tax, depreciation and amortisation) was up one per cent to $164.6 million - in line with guidance - despite the closure of the Macquarie City Campus in Sydney and the pending closure of the Curtin University Sydney campus

"Navitas expects FY17 EBITDA will remain broadly in line with the FY16 result," Navitas said.

"This takes into account solid underlying organic revenue growth in core markets and the final financial impact of closing the Macquarie and Curtin Sydney colleges in Australia."

Navitas said global demand for high-quality education and training was expected to continue across the group's operations over the coming year.

In 2016, more than 4.5 million students globally were studying overseas, reflecting rising wealth, improving secondary education systems and a lack of tertiary infrastructure.

International education policy settings in Australia, Canada and the US remained supportive, Navitis said.

On the negative side, the UK student visa regime was restrictive and unlikely to improve in the near future.

Also, the UK's recent decision to leave the European Union had caused some medium-term uncertainty.

Furthermore, changes to vocational education funding in Australia were limiting growth opportunities for providers like Navitas and were unlikely to improve until 2017.

In fiscal 2016, Navitas' biggest division, the University Partnership Division, generated EBITDA of $137.2 million - down two per cent on a year earlier.

The division's earnings were hurt by the closure of Macquarie and Curtin Sydney .

The closures also affected enrolments, which fell 3 per cent in the second semester for the Australia and New Zealand region.

Navitas on Tuesday also announced that chairman Harvey Collins will retire at November's annual general meeting and will be replaced by Tracey Horton.

Shares in Navitas were three cents higher at $5.92 at 1243 AEST.

NAVITAS LIFTS REVENUE, PROFIT

* Annual net profit up 25.4pc to $90.1m

* Revenue up 3.1pc to $1.01bn

*.Final dividend of 9.9 cents per share, fully franked, down from 10.1 cents

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