Shares in listed education group Navitas (NVT) fell 2% yesterday after jumping 11% to an 11-month high on Tuesday after it revealed a solid rise in earnings for the half year to December, and reaffirmed its full-year earnings guidance.
As well, interim dividend was nudged up a fraction, but what really supported the shares was news of a share buyback starting later this month.
Navitas said profit jumped 44% to $45.1 million for the December half year, from $31.5 million in the December 2014 half year.
The company said in a statement to the ASX the higher profit was struck on an 8% rise in revenues to nearly $519 million, while a $9 million goodwill impairment was taken in the December 2014 half year, making the comparison look a bit better than it was.
Excluding the impact of that $9 million write-down, profit for the latest six months to December 31 was up a more sedate 12% at $45.1 million.
Navitas shares climbed to an 11-month high, up 11% to $5.12 before they fell to $4.78 at the close on Tuesday, then dipped again yesterday to $4.68.
NVT 1Y – Navitas lifts profit, launches buyback
Including the $9 million write-down, EBITDA from the core university division was up 1% at $69.2 million, while the professional and English programs division was 29 per cent better at $16.8 million. The media training business, SAE, nearly doubled earnings to $14.5 million.
Navitas, which runs education programs in Australia, the US and Britain, said it would buy back up to 7.5% of its issued shares, using funds from undrawn debt facilities.
The buyback is scheduled to begin on February 16.
Chief executive Rod Jones said the second-half result would be affected by the completion of contracts with Macquarie University in February, putting full year earnings before interest, tax, depreciation and amortisation in line with FY15’s $163.1 million.
Navitas said it was paying a 9.6 cents a share fully franked interim dividend, up fractionally from 9.4 cents in the year-earlier period.
