Navitas Australia University College Market Report
Shares in Navitas, the only listed education provider and Australia’s biggest private college, have outperformed the market, which began tanking in April.
In theory Navitas, which focuses on getting foreign students to university standards, should be staring into a revenue abyss…
….In March, Navitas’s academic enrolments rose 17 per cent, with flat English-language demand. He was confident of similar double-digit academic growth in June, with English again flat, but not going backwards….
…. Founded from humble roots in 1994 as a 200-student collaboration with Edith Cowan University, Navitas now boasts a $1.5 billion market capitalisation and although the stock isn’t especially liquid its performance has been consistent enough to attract analyst coverage from brokers.
Mr Jones said until recently Navitas suffered from being a stand-alone stock, rather than part of a well-researched sector.
He said it sat in a space no one quite knew how to deal with.
“It took us ages for the market to understand what we were about and while we tried to explain it, to some extent it fell on deaf ears,” he said.
Management’s challenge now is to justify the stock’s steep trading multiple, 25 times current-year earnings, in an industry facing adjustment as the student cash cow runs dry….
Which is being facilitated by strategically placed articles and spruiking in the media…. Curious as to beginnings of Navitas, public universities allow a private company owned by (former) staff members access to university resources without public tender to run preparation courses? Former director includes the infamous Trevor Flugge formerly of AWB?
International students numbers from Assessment Level 3 and 4 markets namely China, India etc. will not be clear till 2nd half of this year as many June commencements, and possibly September, would have applied under less stringent old student visa system up to 31 December 2009 (plus onshore transfers from private colleges).
Of late new SOL has introduced uncertainty, even if many occupations are university study based, no guarantee they will remain on the SOL….. DIAC has shown form in sudden changes which affects how students choose a study destination.
Further, September is the main start point for competitors in northern hemisphere namely UK and US, while bulk of Navitas income is still via Australian university pathways? Navitas US and UK partners are not exactly top of the pops in those markets.