Education provider Navitas Ltd has increased its full year profit by more than 20 per cent despite a steep fall in student enrolments in Australia and the UK.
Navitas revealed it has experienced a 14 per cent downturn in student enrolment numbers in Australia and a 16 per cent fall in UK enrolments.
The company reported that net profit rose to $77.39 million for the 12 months to June 30, from $64.3 million a year earlier.
Revenue increased 15.6 per cent to $643.8 million.
Shares in the company fell 10 cents, or 2.6 per cent, to close at $3.75 on Tuesday.
Chief executive Rod Jones said Navitas’ English division had operated in a challenging environment while the company as a whole would continue to expand in new and existing markets.
The English division experienced a 48 per cent fall in earnings before interest tax, depreciation, and amortisation.
“Although facing headwinds in several markets, the inherent opportunity for Navitas remains robust, with demand for quality education continuing to grow as more students seek education and training overseas and at home,” Mr Jones said.
He said all divisions performed well except the English division.
He said instability from factors such as last year’s federal election, changes in government policy towards student visas and the strong Australian dollar adversely affected English division.
The Core university programs division underpinned the company’s growth, with six new colleges opening in 2010/11.
Navitas’ main challenge in Australia and the UK was the uncertainty caused by changing government policies in relation to the issuing of visas to international students.
The company said weakness in UK and Australian enrolments had been partially mitigated by strong enrolment growth in Singapore, up 44 per cent, and Canada, up 36 per cent.
The English division anticipated growth in full year 2012.
The student recruitment division would continue to be affected by government policy changes in 2012 resulting in a breakeven result.
“The company remains confident in the long-term drivers of its growth, including continued growth of the international education sector, with steady long-term increases in enrolments,” Navitas said.
Navitas said it had moved from a net cash position to a net debt position of $102.8 million after the acquisition of audio engineering educator SAE Group for $294.3 million.
The acquisition resulted in a 131 per cent increase in equity to $239.2 million, from $103.4 million previously.
The company declared a final dividend of 12 cents per share fully franked, compared with 10.7 cents a year earlier.
