On 29 October 2018, Navitas Ltd (ASX: NVT) provided an update on its review of the unsolicited, indicative, non-binding and conditional proposal received from the BGH Consortium. Following this news, the share price of the company increased by 1.406 percent as on 29 October 2018.
In early October 2018, BGH, AustralianSuper and the former Navitas chief executive, Mr. Jones has made an offer for the company at about $2 billion which was a 25 percent premium to the market. The Directors of Navitas have carefully reviewed the Indicative Proposal and they have concluded that the Indicative Proposal does not reflect the value implied by management’s strategy and plan.
The Board has also informed Mr. Jones that the simplest and best solution to manage the inherent conflicts between Mr. Jones’ role as a director of Navitas and his interests and involvement in the BGH Consortium is for him to step aside as a director of Navitas and the board is expecting that Mr. Jones will comply with the insider protocols.
In FY 2018, the revenue of the company declined by 3 percent to $931 million in FY 2018. The EBITDA of the company decreased by 47 percent to $82 million in FY 2018 due to Careers and Industry rationalization cost and $10.1 million contribution from closed University Partnerships colleges in FY17. The reported net loss after tax of the company was $55.3 million in FY 2018, which was mainly impacted by the $123.8 million charge for rationalized colleges announced on 18 July 2018. As per the CEO of the company, the overall financial outcomes for the FY 2018 were disappointing, with the financial statements showing an after-tax loss of $55.8 million after taking account of a range of one-off charges associated with a major rationalization of Careers and Industry Division. Despite the disappointing result for FY 2018, the University Partnerships and the remaining Careers and Industry businesses remain strong and are positioned well for the future.
The University Partnerships Division of the company grew enrolments by 6 percent during FY 2018 ahead of Navitas’ 2020 target of 5 percent. New partnership contracts were signed with Virginia Commonwealth University and Murdoch University and five existing partner contracts were successfully renewed with no change in key commercial terms. In addition, the college operated with Swansea University was converted to a joint venture on 1 March 2018 to implement a broader strategic opportunity for growth. The Company declared a final dividend of 8.0 cents per share, partially franked at 70% which has taken the full year dividend to 17.4 cents per share. At the end of FY18, Mr. Rod Jones, co-founder and inaugural CEO and Managing Director of Navitas retired from his executive roles.
In the last six months, the shares of the company increased by 16.36 percent as on 26 October 2018. NVT’s shares traded at $5.050 with a market capitalization of circa $1.78 billion as on 29 October 2018 (AEST 2:58 PM).
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