Navitas (ASX: NVT), the domestic and international education service provider, announced increase in total student enrolments for its third semester in 2013. The total, 5% higher than the peak it hit in third semester 2010, was 15,426 equivalent full time student units (EFTSU) for its University Programs division.
This rise in enrolments was 13% greater than the corresponding period in 2012. International student recruitment from countries such as China, Vietnam, India and Nepal led to the majority of the 30% increase in new student growth.
The company said that this level of growth is not expected to continue in excess of 30% in the first semester of 2014 because at the start of the academic year is when domestic student intake is very significant.
The company's largest education segment is in Australia, but its University Programs division's 32 pathway colleges and managed campuses also are in the UK, US, Canada, Singapore, Kenya, Sri Lanka and New Zealand. Divisional revenue was up 9% to $415.7 million, achieving EBITDA of $106.1 million.
Its media education provider, SAE Institute, has 50 locations worldwide with segment revenues of $114.9 million and EBITDA of $25.1 million in 2013. The Professional and English Programs division achieved $196.4 million in revenue, with EBITDA up 39% to $19.3 million from 2012's $13.9 million.
In total, NPAT was $75.5 million, a 1.9% increase for 2013, but over the past five years it had a 14.7% compound annual growth rate. The rate of semester enrolment growth was at its highest in 2008, and trailed downward through the GFC. In 2011 a reversal of that trend occurred, beginning to rise from the -10% growth to the present 5% growth in third semester 2013.
Other such listed companies with educational divisions are Seek (ASX: SEK), which is planning to float its IDP Education in 2014. It intends to sell down some of its stake to help with the liquidity of the IPO offering.
Foolish takeaway
Education is always something people are willing to pay for. Professional and English training is sought after, and for some foreign students who come to Australia for education, it is the beginning of the path for living here and starting careers.
Online education opportunities are also growing, so investors will want to see how the company is taking on the challenge of staying relevant to the changing educational landscape, and how they can grow market share.
