NVT - Navitas Limited

[robusta]

Re: NVT - Navitas

Good growth in the northern hemisphere, it will be interesting to see how the new regulations in the UK will play out long term.
http://www.asx.com.au/asxpdf/20141029/pdf/42t8yrsp3dg9rw.pdf

 

[skc]

Re: NVT - Navitas

Good growth in the northern hemisphere, it will be interesting to see how the new regulations in the UK will play out long term.
http://www.asx.com.au/asxpdf/20141029/pdf/42t8yrsp3dg9rw.pdf

Got sold down on the back of this I think...

This is an overall increase of 12% in EFTSU compared to the prior corresponding period
(pcp) which in turn had grown by 25%.

“We are committed to recruiting genuine students and to complying with Streamlined
Visa Processing requirements. As such, growth rates in Australia may temporarily slow
compared to pcp as these measures aimed at ensuring quality impact.”

 

[Muschu]

Re: NVT - Navitas

The Northern Hemisphere opportunities are, imo, the growth key. My hold is minor but does not trouble me.
NVT and GEM have served us well.

 

[ROE]

Re: NVT - Navitas

Price run way ahead of itself, healthy correction with the current earnings.
EPS probably around 21-23 mark for the year so do look expensive

 

[galumay]

Re: NVT - Navitas

Price run way ahead of itself, healthy correction with the current earnings.
EPS probably around 21-23 mark for the year so do look expensive

Based on the ½ yearly I reckon they will be lucky to make EPS of 20c this year, i think there might be some more 'corrections' to come!

 

[robusta]

Re: NVT - Navitas

Just watched the results presentation.

University programs 14% growth (10% volume, 4% price. Have to love the pricing power.

SAU revenue up 27% but need to control costs. NVT have taken action on this issue.

Debt reduced by 30 mil and new debt facilities in place at very favorable terms.

This is the comment the market must have reacted to; "We are looking at flat growth for University Programs moving forward" So they are saying any growth will come from SAE and be in low single digits at group level.

Should be interesting times ahead for Navitas, I'm holding for sure and thinking about buying more around current prices or cheaper.

 

[galumay]

Re: NVT - Navitas

This is the comment the market must have reacted to; "We are looking at flat growth for University Programs moving forward" So they are saying any growth will come from SAE and be in low single digits at group level.

Who knows what Mr Market reacts to! But surely the reaction is more likely simply to the drop in EPS, its pretty significant and negative growth in earnings is not what the market would have expected.

 

[Muschu]

Re: NVT - Navitas

A while back somebody put up a post showing when all NVT University Partnerships are up for renewal. I can't locate this info but would be grateful if someone can supply this data.

Some company announcements have been about re-structuring and I am now curious as to whether NVT has become somewhat too ambitious. If the USA is not well-managed then who knows what may follow?

My most recent post expressed confidence... Thar is waning and my comment now seems premature. There could be worse to come.

 

[Ves]

Re: NVT - Navitas

Who knows what Mr Market reacts to! But surely the reaction is more likely simply to the drop in EPS, its pretty significant and negative growth in earnings is not what the market would have expected.

Steady state business.... NPAT grew 12%, EBITDA 13%. What negative growth? Yes, there was a goodwill impairment and some acquisition costs, but they are one-off expenses. Cashflow looked very impressive to me: the balance sheet continues to expand.

The reference to "flat growth" in the UP segment is after considering the loss of the Macquarie contract. If they completely replace that profitability by the end of next year I believe that is a very good result IMO.

 

[notting]

Re: NVT - Navitas

The reference to "flat growth" in the UP segment is after considering the loss of the Macquarie contract. If they completely replace that profitability by the end of next year I believe that is a very good result IMO.

Market seems to think they have Buckley's of replacing that big contract loss by the end of next year. Even if they did it will be ensuing weakness till then. Two years is a long time in the market place, to get back to where you were, if you can!

 

[Ves]

Re: NVT - Navitas

A while back somebody put up a post showing when all NVT University Partnerships are up for renewal. I can't locate this info but would be grateful if someone can supply this data.

See post here.

 

[Muschu]

Re: NVT - Navitas

See post here.

Many thanks... I see 3 UMass contracts are not far away...

The West Australian, this morning, states that it was the profit reversal in the SAE arm that sparked the sell-down.

 

[ROE]

Re: NVT - Navitas

NVT is a good business no doubt but everything has a price, buy and sell accordingly

 

[galumay]

Re: NVT - Navitas

What negative growth?

EPS, but now I check I am confused! EPS fell significantly for the half ending 12/14 according to the half year report, down to 8.3c, yet the Investor Presentation for the same period says EPS up 11% to 10.7c.

I was working off the report rather than the Investor Presentation, now I wonder why the discrepency - its a massive difference in terms of impact on the business

EDIT - its the NPAT reporting that is way different, $30m on the report and $40m on the presentation.
I must be having a blonde moment and missing something!

EDIT @ - looks like another case of using unreported NPAT for Investor Presentation as opposed to reported NPAT in Financial Report, its goodwill impairments that have been excluded from presentation.

 

[skc]

Re: NVT - Navitas

EPS, but now I check I am confused! EPS fell significantly for the half ending 12/14 according to the half year report, down to 8.3c, yet the Investor Presentation for the same period says EPS up 11% to 10.7c.

I was working off the report rather than the Investor Presentation, now I wonder why the discrepency - its a massive difference in terms of impact on the business

EDIT - its the NPAT reporting that is way different, $30m on the report and $40m on the presentation.
I must be having a blonde moment and missing something!

EDIT @ - looks like another case of using unreported NPAT for Investor Presentation as opposed to reported NPAT in Financial Report, its goodwill impairments that have been excluded from presentation.

Just a difference between normalised and reported statutory numbers. I think they put $9m one-off goodwill impairment on the Macquarie U withdrawl.

 

[galumay]

Re: NVT - Navitas

Just a difference between normalised and reported statutory numbers. I think they put $9m one-off goodwill impairment on the Macquarie U withdrawl.

Thanks skc, so how should I interpret the results, it seems to me the impairment is real, and has a real impact on NPAT and therefore EPS, should I largely ignore the impact because it is expected to be a one off? That seems to lead down a dangerous path to me! Would be grateful to hear your thoughts.

 

[skc]

Re: NVT - Navitas

Thanks skc, so how should I interpret the results, it seems to me the impairment is real, and has a real impact on NPAT and therefore EPS, should I largely ignore the impact because it is expected to be a one off? That seems to lead down a dangerous path to me! Would be grateful to hear your thoughts.

Well there is no right answer. Many companies make up excuses to put into one-off's when they actually occur semi-regularly. E.g. a construction company calling cost blowout in a project "one-off", but they have a history of blowing out costs every 2-3 years.

In NVT's case, the event that happened had not really happened before.... and it would be wrong (for now) to assume that it will happen at regular intervals in the future. So while it reduces current year NPAT and EPS (although much of that is non-cash), it wouldn't be wrong to consider it as a true one-off (for now).

If, say, you are using a PE multiple valuation method, then you certainly shouldn't take the lower reported EPS (you'd be too conservative). You might choose a lower PE multiple, however, to account for the increased uncertainty.

 

[galumay]

Re: NVT - Navitas

.....

If, say, you are using a PE multiple valuation method, then you certainly shouldn't take the lower reported EPS (you'd be too conservative). You might choose a lower PE multiple, however, to account for the increased uncertainty.

Thanks skc, I dont use a PE valuation, and as I already hold I am not so interested in the impact on price as I am in gauging the real impact on the business. From that perspective I need to consider whether it is a genuine one off, or a new pattern developing in the business. I will assume for now that it was an outlier and keep an eye out for evidence to the contrary!

 

[ROE]

Re: NVT - Navitas

you now got to discount for this probability that more universities will want to go down this path and more hit to earning and impairment.

it may not happen and I don't think many would (due to its network of agents and contacts to bring in students for the uni) but this stock can no longer command the same premium it once has.

I sold out with the price run up before the result and now watch with interest and not cheap enough for me
because now I give it 50% chance that more impairment may happen to be on the safe side

have taken this impairment into my discount model and price has to be under $4 for me to get interested.

 

[galumay]

Re: NVT - Navitas

Thanks ROE, appreciate your thoughtful contribution, as always!