分析与评价纳维教育投资Analysis and Evaluation on Investment in Nativas Limited

Introduction介绍
 

作为世界上三大公众教育集团之一，纳维教育有限公司是一家全球领先的教育机构,提供的教育服务的广泛。纳维教育集团是澳大利亚教育国际开发署的成员。它通过三个主要部门为全球学生和专业人士提供服务和帮助。由于大学课程的途径，无论从稳健的金融，事，国际上产生深远的影响，或灿烂的发展趋势的最大供应商，纳维公司无疑来自世界各地的投资者提请注意。为了做出明智的投资，避免潜在风险，投资者可能需要深入调查，以找出是否是投资一个值得的项目。我们将在细节上以下几个方面，公司简介，年度报告，相关行业统计数据，媒体信息，发展前景，相关企业的比较等，以分析其老有所为投资指定。As one of the world’s three largest public education group, Navitas Ltd is a leading global education provider to deliver an extensive rage of educational service. Navitas education group is a member of Australian education international development agency. It provides services and help through three major Divisions to students and professionals worldwide. As the largest provider of university pathway curriculum, no matter from sound finance, profound influence internationally or the splendid development tendency, Navitas Ltd undoubtedly draws attention from investors around world. In order to make a wise investment and avoid potential risk, investors may need a in-depth investigation to find out if it is a worthy project for investment. We will specify in detail from following aspects, corporation profile, annual report, relevant industry statistics, media information, development prospect, comparison with relevant corporations, etc to analysis its worthiness for investment.

 

Business analysis商业分析
 

Navitas教育集团有限公司拥有三家分支机构：大学计划部; SAE司和专业英语课程司。在大学计划司，Navitas教育集团是在诸如大学预科和大学衔接课程方面，在教育行业的领导者，它提供了32所大学在澳大利亚，英国，美国，加拿大，新西兰，新加坡和斯里兰卡的方案。 SAE，其前身为音频工程学院和SAE技术学院，它被卖给Navitas教育集团在2010年，在未来的几年中，SAE和Qantm现在提供高等教育和职业教育的机会在世界各地的54所学校音频制作，电影制作和创意媒体的主要领域在许多地方，甚至一些新的罗马尼亚，雅加达和Moskhato。Navitas Ltd consists of three divisions: University program Division; SAE Division and Professional and English Program Division. In University program Division, Navitas is the leader in education industry in aspects such as pre-university and university pathway programs, it offers 32 university programs in Australia, UK, USA, Canada, New Zealand, Singapore and Sri Lanka. SAE, which was formerly known as the School of Audio Engineering and the SAE Technology College, it was sold to Navitas in 2010, over the next few years, SAE and Qantm now offer high education and vocational education opportunities in 54 schools around the world in the major fields of audio production, film production and creative media in many locations, even some new in Romania, Jakarta and Moskhato. For PEP, it provides qualified vocational training and higher education, courses are diverse, except normal curriculum, it also covers health, criminology, counselling, psychology and social work. PEP also includes a corporate business agency consisting of the Navitas Resources Institute which provides students and clients with the design and development of programs to build labor force capability, and Cader which develops online learning test and knowledge sharing solutions. Navitas has signed agreements to establish two new on-site colleges at the University of Northampton in the UK and Australia’s University of Western Sydney. [1] Seeing from its education scale, location coverage and diversification, it certainly ranks first in the world. We can make a comparison of another world famous public traded company: Kaplan education group. Kaplan is the leader of global lifelong education, seventy colleges are spread in nine nations and regions, providing high education, special training and pre-university courses for students.#p#分页标题#e#

 

Financial Analysis财务分析
 

We would like to show some data of annual report of Navita, Ltd for the past three years to make a further explanation. For the revenue and Earnings Before Interest, Taxes, Depreciation and Amortization of three divisions respectively, please refer to the chart below: 

FY12 ($m) FY13 ($m) FY14 ($m)

University Program Division revenue 382.5 415.7 499.2

University Program Division EBITDA 102.9 106.1 121.8

FY12 ($m) FY13 ($m) FY14 ($m)

SAE Division revenue 113.9 114.9 150.3

SAE Division Earnings 26.4 25.1 24.5

FY12 ($m) FY13 ($m) FY14 ($m)

Professional and English Program Division revenue 188.3 196.4 224.2

Professional and English Program Division EBITDA 13.9 19.3 25.2

Seeing from the tablet, we can see increase degree of University Program Division has was 20% and 14% respectively. Revenue of SAE Division was 30% increase, but earnings declined 2%. In Professional and English Program Division, the increase percentage was 14% and 30%. In general, income continues to increase step by step.

Navitas is profitable, as early as 2008, its net after tax profit had reached $37m till June 2008, market capitalization was over $800m, which expressed a solid financial foundation. [2] Then let’s see some data of recent years, we can start with the data from FY2012 first, According to Appendix 4D half Yearly report Half Year Ended 31 December 2012, Chief Exective Officer Mr. R Jones gave us the detailed data as below: Under the unit of $000s, Revenues from ordinary activities has 4.0% increase and has reach 355,404; Profit form ordinary activities after tax attributable to Member is down 0.8% to 35,070, also Net profit for the period attributable to members decreased 0.8% to 35,070. With regard to Dividends (distributions), Amount per security of Interim dividend was 9.3 cents, Franked amount per security of Interim dividend was 9.3 cents; Amount per security of Previous corresponding period (31 December 2011) was 9.4 cents, Franked amount per security of Previous correspond period (31 December 2011) was 9.4 cents, this was the record date for determining entitlements to the dividend till 1 March 2013. About other Ratios and other measures, net tangible asset backing per ordinary security for FY2012 was (56) cents, previous corresponding period was (57) cents. Amount per Security of Interim dividend for FY2012 was 9.3 cents, Franked amount per Security was 9.3 cents; Amount er Security of Interim dividend for Previous period was 9.4 cents; while Franked amount per security for Previous period is same 9.4 cents. Based on unit $000s, FY2012 on Interim dividend on all securities was 34,909; Interim dividend on all securities of the Previous correspond Period was 35,280. [3]

In Annual report to shareholders, we can see a chart like below:

Financial Summary

2014 2013 2012 2011 2010 2009 2008 %Change

$000s $000s $000s $000s $000s $000s $000s 14/13

Revenues 878,219 #p#分页标题#e# 731,734 688,530 643,812 556,743 470,696 345,438 20%

EBITDA* 144,929 130,002 126,817 121,144 96,700 77,059 63,443 11%

Profit attributable to members of Navitas* 82,032 74,575 73,149 77,392 64,251 49,191 37,430 10%

Basic earnings per share(cents)* 21.8 19.9 19.5 21.7 18.8 14.3 10.8 10%

Interim dividend per Share(cents)(fully franked) 9.4 9.3 9.4 8.7 8.1 5.5 4.7 1%

Final dividend per share(cents) 10.1 10.2 10.1 12.0 10.7 8.8 6.2 -1%

EVA  created 51,779 46,602 38,524 58,630 54,573 40,551 27,288 11%

Operating cashflows 140,939 126,819 73,859 69,458 86,504 104,344 78,609 11%

Total equity 211,709 235,747 233,560 239,213 130,446 98,576 93,980 -10%

Return on capital employed 19.9% 19.0% 19.4% 50.0% 60.0% 47.3% 33.6% #p#分页标题#e#5%

In this tablet, revenue increased as higher as 20%, it can reflect the movement of income of its main business, it is an important index to analyze growth status and development capability of an enterprise. EBITDA is a profit measure index, it means under the circumstance that operation capital net demand stays unchanged, the operating cash net flow is equivalent to EBITDA. 11% increase explains Navitas will make more use of this amount to pay for interest. Maybe 10% increase in Profit attributable to members can reflect the worthiness of investment at least from view of benefit. From earnings per share, we can regard it as an indicator of a corporation’s profitability. Its calculation is like this: =(Net Income-Dividends on Preferred Stock)/Average Outstanding Shares. It is a profit made by a corporation after dividing its shares outstanding. Made such good achievement, no wonder temporarily stock interest can be reduced by 1%. Final dividend per share is the sum of dividend announced for every ordinary share issued. It is the total dividends paid through a whole year after dividing by the number of outstanding ordinary shares. Before an investment, we should pay great attention to the enterprise evaluation, at the same time, final aim of ore and more enterprises is to maximize the holders value, on this occasion, EVA occured, it stands for Economic value Added), 11% increase can help us have a further understanding about the financial status. Next is operating cash flow，as everyone knows, operating cash flow is of great importance, it can reflect a corporation’s ability if it can generate sufficient enough cash flow to develop, maintain, improve or perfect its operations and projects, or whether it may require additional financing support. Data shows Navitas has enough ability to run business. Return on capital employed is a term, account ratio in finance, valuation and accounting. After considering the amount en enterprise used, it is an effective measure to compare the relevant profitability. Formula of ROCE is Earning before interest and Tax/ capital employed. From whole statistics, though total equity decreases, the overall development trend is rather satisfactory.

Based on Navitas Limited Financial Report, 30 June 2014, the company recorded 20% revenue growth to C$878.2m (FY13: $731.7m)and, in line with prior market guidance, underlying EBITDA growth (excluding goodwill impairment) of 11% to $144.9m (FY13: $130.0m). Among which the revenue distribution of FY13 is Australia accounted for 71%; UK 7%; Europe 6%; Canada 6%; US 4%; ROW 6%. While in FY14, revenue distribution is Australia accounted for 67%; UK 9%; Europe 7%; Canada 6%; US 5%; ROW 6%. In interest: net interest expense of $6.2m was 18% lower than the FY13 charge of $7.6. [4]This was primarily the result of lower debt volumes although this was weighted towards the second half. In Reported NPAT, the University Programs Division incurred a $23.3m goodwill impairment in relation to SIBT. The Division also had a $7.2 goodwill impairment for EduGlobal and AUSI has been reduced to nil. In Balance Sheet, Net debt at 30 June 2014 is $54.5m (30 June 2013: $94.9m). The $40.4m decrease is primarily attributable to record operating cash flows arising from growth in University Programs student recruitment. Net debt is now just 0.38x underlying EBITDA which is considered very conservative. Shareholders’ funds at 30 June 2014 were $211.7m (30 June 2013: $222.7m) an increase of 16% during the year. In Cash Flows, operating cash flows increased by 11% to $140.9m for the year ended 30 June 2014(FY13: $126.8m). This reflects strong growth receiving from customers as a result of emerging new student growth and the Group’s negative working capital model Capex for the year was $25.7m (FY13:$20.3m) reflecting SAE’s relocated sydney, Milan and New York campuses and investment in new systems. In Shareholder Value, Navitas utilizes the economic value added (EVA) framework to assess Shareholder value with EVA being a measure of returns relative to the Group’s weighted average cost of capital for funds employed by the business. EVA for FY14 was $51.8m which represents $5.2m growth in EVA. In addition Navitas was ranked 23rd in the ASX 100 Total Shareholder Return list for FY14 with a Total Shareholder Return of 30.6%. In Dividend, The Directors have declared a fully franked final dividend of 10.1 cents per share (FY13:10.2 cents).This takes the full year dividend to 19.5 cents (FY13: 19.5cents) which is in line with the Groups commitment to hold dividends steady while transitioning to an 80% payout ratio. [5]#p#分页标题#e#

In the light of the University Programs enrollment growth moderates released on April 1st, 2015, we can see Navitas Limited announced a 3% increase in student enrollments for the first semester of 2015(201501) for its University Programs colleges. [6] This cohort, compared to the prior corresponding period (pcp), represents 19,740 equivalent full time student units (EFTSU). Mr. Jones pointed EFTSU growth in Australian University Programs colleges has continued to moderate with a flat result compared to pcp. Enrollments have been impacted by two key factors: a reduction in enrollments form Nepal and India compared to pcp; and a significant decline in SIBT’s Australian domestic student enrollments. Despite slowing growth rates in Australia and the UK due to self-imposed stricter student assessment criteria, demand for tertiary education remains strong across all key source countries and globally enrollments continue to grow solidly. The number of students choosing to study overseas continues to increase and with colleges in the top education destinations the University Programs Division remains well positioned for future long term sustainable growth. By geographical region, EFTSUs are distributed in 201401 was Australia accounts for 58%; UK 14%; Canada 13%; US 4%; Rest of World 11%. EFTSUs are distributed in  201501 was Australia accounts for 57%; UK 14%; Canada 14%; US 5%; Rest of World 10%. EFCTSU for 201401 variance against the pcp was : Canada up 16%; US up 15%; Australia and New Zealand up 1%; UK up 1% and Asia/Africa down 2%.

 

Business Comparison业务比较
 

Above are the financial data and report of Navitas Limited from FY2012 to the beginning of FY2015. If the data still can not persuade you to invest to this corporation with good development potential, we would like to show you some comparison information between Navitas and another corporation which is similarly engaged in education platform development. This is Capital Mining (ASX: CMY), in October 10th, 2014, Capital Mining invested AUD 20 million to acquire 35% stock shares of Beijing Xingang Zhiyuan Co.,Ltd, at the same time, the property of operation has changed from Mining exploration to the education platform development with the basis of “cloud calculation” technology. Beijing Xingang Zhiyuan Co.,Ltd was established in 2012, the headquarter is in Beijing Tsinghua University, management team is consisted of experts in technology, education and publish. It has deep understanding of Chinese education market and gain certain influence. Now let’s take a look at the financial summary of CMY from FY2012 to FY2014. According to Half-Year Financial Report 31 December 2013, Till 31 December 2012, Issued Capital was $7,246,468, in which balance forward before 1 July 2012 was $6,025,706; Issue of share capital was $1,226,400, but Share issue costs was $(5,638). Accumulated Losses was $(3,689,447), in which balance forward before 1 July 2012 was (2,180,731), Loss for the period was $(1,508,716). Reserves was $240,938, in which balance forward before 1 July 2012 was $229,346, Issue of option entitlement was $11,592. Total Equity was $3,797,959, in which balance forward before 1 July 2012 was $4,074,321, Loss for the period was $(1,508,716), Issue of share capital was $1,226,400, Issue of option entitlement was $11,592, Share issue costs was $(5,638). Till the end of 31 December 2013, Issued Capital was $10,790,794, in which balance forward before 1 July 2013 was $7,805,617, Issue of share capital, net of transaction costs was $3,058,399, Share issue costs was $(73,222). Accumulated Losses was $(7,542,755), in which balance forward before 1 July 2013 was $(4,724,686), Loss for the period was $(2,818,069). Reserves was $286,826, in which balance forward before 1 July 2013 was $286,826. Total Equity was $3,534,865, in which balance forward before 1 July 2013 was $3,367,757, Loss for the period was $(2,818,069), Issue of share capital, net of transaction costs was $3,058,399. Then how is it going on after CMY bought stocks of Beijing Xingang Zhiyuan Co.,Ltd after 2014? A recent report on March 13th, 2015 showed that Revenue from ordinary activities till 31 Dec 2014 and compared it with the data till 31 Dec 2013.#p#分页标题#e#

REVENUE FROM ORDINARY ACTIVITIES收入在日常活动

                                 
31 Dec 2013 $            31 Dec2014 $

Administration expenses              (1,932,441),              (436,080); 

Audit services                        (23,000),                (20,650);

Consultant expenses                  (667,957);               (185,895); Depreciation expense                   (105),                   (92); 

Employee benefits expense             (108,530),                (105,067); Exploration expenditure written-off        (84),                    none; 

Travel and accommodation expenses      (43,445),                 (17,655); Provision for diminution in value of investments (12,793),              (1,066); Loss on sale of exploration asset           none,                  (639,900); Other expenses                        (29,753),                (313,897). Basic loss per share and Diluted loss per share (cents per share) at the end of 2013 was the same   $(0.60), Basic loss per share and Diluted loss per share (cents per share) at the end of 2013 was the same $(0.23). [7]

    Besides financially advantage, internationally Navitas also gains high reputation, it has keen understanding to the world education need, and devotes to satisfy the continuously-changing international environment. Its education operation mode was first set up in 1990’s. So what are the advantages of Navitas? First, the new comers, even for the students who comes to university on the first day, they will acquire the student card and can use all the equipment and facility in university. Secondly, SAT/ACT test result is not a need and recommendation letter is not required in application. Thirdly, offer letters can be issued within 24 hours, I-20 can be issued within 10 days. Fourthly, I-20 will be issued by university.

Since February 20th, 2015 when the UK government made a statement that IELTS began to start a new reform, many students worried a lot, for those who have had IELTS certificate, they do not know if their result will be valid or not; for whose who have not taken exam yet, they have no idea which kind of exam they should participate. As the new policy of IELTS for UKVI, pre-university of Navitas Limited has the unique and natural advantage in uniting CAS, pathway, degree visa. The pathway provider is the only one which is least influenced by the new policy.#p#分页标题#e#

 

Conclusion and Recommendation结论与建议
 

Based on the above information, it is not difficult to find out that no matter from finance foundation, internationally influence, reasonable management, continuous perfection or development prospect, Navitas Limited is worthy of investors’ concern, focus and investment. However, we can not deny that there are still some limitations and we still need to make more comparison and judgment. In order to make an effective , long-term investment, there are also several other factors need to be considered. Such as the corporation culture, management concept of enterprise and leading team, environment assessment, national policy, etc., A positive, active attitude and concept of management layer will directly decide how far the corporation will go. Environmental assessment will create additional and far-reaching influence and attract evaluation internationally. Nation supported industry will achieve more guarantee for its stable and long-term development. 

Generally speaking, Navitas is a corporation worthy of investment, along with the global education, distance education, migration and prosperous education market, it will gain much more opportunities for development, receive more students and clients, and draw attention from more and more people from all over the world.

 

Reference:文献
 

[1] Beckie, Smith (April 28th, 2015). Navitas signs UK, Aus pathway partnerships. The Pie News.

[2] Colleges Management, U. A. (2009). Navitas - the big business of education. Advocate Newsletter of the National Tertiary Education Union,16. 

[3] R Johns. (2012). Appendix 4D half Yearly report Half Year

[4] Rod Johns. (2014).Navitas Limited financial Report.

[5] AT Richards. (2014) Navitas Limited Half Year Financial Report

[6] James Fuller. (2015). University Programs enrollment growth moderates

[7] Robert McCauley. (2014) Half Yearly Reports and Accounts