Navitas shares plunge 32 per cent after Macquarie University contract loss

Shares in education group Navitas have plunged 30 per cent, wiping about $100 million off the fortune of founder Rod Jones, after Macquarie University ended an 18-year agreement with the Perth-based company.
杭州桑拿网

Macquarie will effectively kick Navitas off its campus.

The company’s Sydney Institute of Business and Technology, which had operations on Macquarie’s campus and acted as a bridging school to help prepare students for university, will move to Sydney’s CBD after an 18-year partnership that saw 20,000 students progress to Macquarie.

Navitas told the ASX on Wednesday morning that it will extend its current deal with Macquarie, slated to end early next year, until 2016, but the university will then establish its own in-house pathway college.

The announcement followed a two day trading halt, and shortly after trading commenced on the Australian Securities Exchange on Wednesday, its share price plunged 30 per cent from $7.04 to $4.66.

Navitas’s group chief executive Rod Jones described the development as “disappointing”.

“[It] will likely result in a one-off decline in growth in university programs earnings which will impact the second half of FY16 and the first half of FY17,” he said.

However, Mr Jones reaffirmed Navitas’ 2014 earnings before interest, tax, depreciation and amortisation, but said the company would take a “conservative” approach to the next financial year, and advised of a one-off non-cash goodwill impairment of up to $40 million.

Many of its SIBT’s 3200 students are from overseas and Navitas said SIBT would continue to help students access Macquarie through a streamlined visa processing program.

Macquarie vice-chancellor Bruce Dowton said the time was right for Macquarie to “assume full responsibility for our pathway programs”.

Navitas has recently been performing strongly on the ASX, its share price had gained 43 per cent in the past year, and it had a market value of $2.6 billion.

Comments are closed.

Post Navigation