Problems with a new student visa enrolment system have forced education provider Navitas to update the Australian Stock Exchange on a revised forecast for new student enrolments.
The “softening” of enrolments is a concern for Navitas owner and chief executive Rod Jones, with Navitas shares slumping almost 10% by the close of trade yesterday.
Navitas, which has a market capitalisation of $1.2 billion, had in June forecast a 5% to 15% growth in new student enrolments for the second semester, compared to first semester enrolments. But yesterday the company revised that down to 2%, because it said there was a smaller pool of international students applying domestically.
It also attributed the drop to overseas students experiencing enrolment delays under a visa processing system introduced in March.
Navitas spokesman James Fuller told SmartCompany the problems involved a small component of total student numbers and the announcement was more about keeping the market informed of conditions than a material change.
“It’s unfortunate as things had been tracking very well and the last two weeks they took a dive, and so we thought we should inform the market,” he says.
“One of the main things we are seeing is that student numbers have dropped this semester, but they have deferred to next semester. It’s not that they are not coming, they are just coming until later.”
Fuller says the problems are because it is a new system and “there will always be teething problems”.
He says Navitas is working with the government on that and is “fairly confident” the problems will be sorted out.
However despite the update to the ASX, Jones is unlikely to have any concerns that his vast fortune is dissipating.
“The most important thing is that we don’t think it is going to impact the earnings forecast because we are talking about new enrolments not total student numbers,” says Fuller.
Jones, who trained as an accountant, is estimated to be worth more than $275 million and has previously featured on the BRW Rich List.
Jones’ idea, and the core of the Navitas business, is “bridging colleges”.
The company partners with universities and runs diploma courses that prepare students for bachelor-level university courses.
Navitas also has government contracts to provide English language courses for migrants and refugees, offers workplace training and recruitment services and also runs a student recruitment division.