Education provider Navitas has reaffirmed its full year earnings guidance and announced a share buyback after lifting first half profit by 44 per cent.
Navitas, which runs education programs in Australia, the US and Britain, said net profit for the six months to December 31 rose to $45.5 million, from $31.5 million a year earlier.
Underlying earnings rose at a better-than-expected 16 per cent to $82.8 million.
Navitas chief executive Rod Jones said the second half result would be affected by the loss of its contract with Macquarie University in February, but still maintained full year earnings before interest, tax, depreciation and amortisation in line with FY15's $163.1 million.
Relieved investors pushed up the company's shares nearly 17 per cent early on Tuesday. At the close, Navitas shares were still up 18 cents, or 3.9 per cent at $4.78.
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The company also announced it will buy back up to 7.5 per cent of shares on issue, with the buyback scheduled to begin on February 16.
"Its a capital management strategy. We don't have a lot of debt, and we don't have any other opportunities at the moment. Why have money sitting around?" Mr Jones told AAP.
Navitas shareholders have endured a difficult 18 months as challenging market conditions and tighter visa regulations in its key markets have affected enrolments.
The company has also been hit hard after it lost a major contract from Sydney's Macquarie University, with the partnership to wind down in February 2016.
That contract is estimated to cost Navitas between $25 to $30 million in annual earnings.
Some of the hit had been covered in the first half numbers, but the major impact would be felt in the second half of this fiscal year, as well as in the first half next year, Mr Jones said.
Navitas is looking to boost earnings growth from other university programs contracts, and is focusing on its SAE creative media eduction business as a key earnings driver, to mitigate the impact of the Macquarie contract, he said.
Navitas said in December it had renewed an agreement with the University of South Australia for 10 years, at materially similar terms.
COST CUTS DELIVER STRONG H1 RESULTS:
*Profit $45.5m, up 44pct, from $31.5 million a year ago
*Revenue $517.5 million, up 8 pct, from $479.4 million
*Fully franked interim dividend of 9.6 cents, up from 9.4 cents.
