From the top – Navitas

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Company: Navitas (NVT)

GICS Sector: Consumer discretionary

Industry Group: Consumer services

Industry: Education and training

Broker consensus:

Name: Rod Jones

Years at company Navitas: 20

Curriculum Vitae: Rod has 30 years’ experience in educational administration and has held a number of senior administrative positions within the Government and the private education sectors. His background covers both secondary and university education, including being Deputy Director of the Tertiary Institutions Service Centre and the Secondary Education Authority in Western Australia.

Rod has been involved in international education since 1987 and is one of the co-founders of Navitas. In 2007, he was awarded an honorary doctorate from Edith Cowan University for his contribution to international education in Australia. Rod was the 2008 Australian Ernst & Young Entrepreneur of the Year.

Navitas Limited (NVT)

Source: Yahoo

 1.    Why did you want to become CEO?

I was a co-founder of Navitas and had been instrumental in establishing our college network. I have taken the key leadership role in the company since it was established.

2.    What is your managerial style?

I have always been a ‘hands on’ leader and liked to be across all aspects of the business and know what is going on. More recently, due to the significant growth in the company, it has been necessary to delegate more and empower the senior managers to take more responsibility for their part of the Navitas operations. I try and encourage the right balance between innovation and entrepreneurism without compromising on quality. I am also a strong advocate for taking a team approach to management.

3.    What is your percentage ownership of company and is remuneration linked to ownership?

As one of the founders of the company I currently own about 12%. My remuneration isn’t linked to my ownership in any way.

4.    Describe your business plan and strategy for the company.

Navitas is comprised of three divisions. Our core business provides courses for international students to pathway into university. We have 32 pathway colleges around the world, mostly in English speaking countries such as Australia, UK, US, Canada and New Zealand. SAE is our second division and that is the world’s largest creative media education chain with 58 colleges around the world. The third division provides a broad mix of English language training, as well as vocational and higher education courses in areas of key demand across Australia.

Our future growth strategy is to continue the rollout of our college network around the world, with a key part of our focus being on the US.

5.    What is the company’s competitive advantage?

Navitas focuses on achieving results for our students and partners and has built a strong reputation for achieving quality academic outcomes over our 20-year history. This can’t easily be replicated and now acts as a major competitive advantage. Also, we are very good at what we do.

6.    Who are your main competitors?  How do you rate them?

There are only three main competitors in our sector globally. We treat them with a healthy respect.

7.    What is your priority for the next six months, 12 months and two years?

My priority is implementing our growth strategy, which aims to double the company in the next five years.

8.    What is the company’s growth strategy?

We aim to increase earnings by expanding Navitas operations in key offshore markets, primarily the US, and by improving returns from existing businesses.

9.    Do you have global growth plans?

We already have extensive overseas operations with colleges in 27 countries, however much of our planned expansion will occur overseas.

10. What are your company’s main challenges? Are they specific to your company or your industry?

Our challenges aren’t necessarily that different to any business. We need to maintain a focus on quality outcomes, maintaining strong business relationships with our partners, managing costs and employing and developing the best people.

11. Were your company’s most recent financial results better, or worse, than the market expected?

We had provided some guidance to the market on earnings so expectations were pretty much in line with reality.

12. Can you provide guidance for the current financial year?

In October 2013, we stated that we expect FY14 earnings before interest, tax, depreciation and amortisation (EBITDA) of $138m to $148m. This still stands.

13. What are the main risks to this guidance, or if no guidance is provided, what are the main risks to the company meeting its goals this year?

Our key risks tend to be longer-term factors, such as changing regulation or government policy, so we are confident of achieving our target this financial year. But that said, there is always the unforeseen issue that can impact either positively or negatively on the result, although at this stage of the financial year it is unlikely.

14. What is your dividend strategy (payout ratio/franking etc), and how much will you be returning to shareholders this year?

Since listing, we have paid a dividend equating to 100% of distributable income in fully franked dividends. However, with more of our earnings being generated overseas, we are now holding our full year dividend at current absolute levels until we reach an 80% dividend payout ratio.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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