One of the most impressive results delivered so far during earnings season came from Perth education provider Navitas and its founder and chief executive, Rod Jones.
Despite operating in Australia’s beleaguered international education sector, the company produced a 24 per cent increase in revenue for the six months to December 31 to $270.2 million, with net profit climbing an impressive 45 per cent to $27.5 million.
The market loved the result and sent the company’s shares up more than 12 per cent to $4.95 in the days after the announcement.
For Jones, that little stock price surge added $30 million to the value of his stake in the company. His shareholding is now worth just over $275 million. In the last 12 months, his fortune has more than doubled.
That puts Jones in prime position to make a triumphant return to the rarefied air of BRW’s Rich 200 list. Jones made a one-time appearance on the list in 2006 with a fortune of $133 million, but a subsequent slump in the Navitas share price has kept him off the list for the past three years.
But based on last year’s cut-off of $150 million (which will surely rise given the performance of the Australian sharemarket) Jones is back with a vengeance.
Jones had something of an unusual path to entrepreneurship. He trained as an accountant and then worked in administration roles in the education sector, including stints as deputy director of the Tertiary Institutions Service Centre and the Secondary Education Authority.
In the mid 1990s, Jones identified a problem in the education space – about 70 per cent of international students were failing subjects, not because they were not smart enough, but because of what Jones calls "transition issues”.
His 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.
The company 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.
The company listed in November 2004 at $1 a share and has risen steadily ever since. The burst over the last 12 months should ensure Jones becomes a regular Rich 200 feature.
He’s not the only entrepreneur who is back in contention for the big league. Here are a few other comeback kids:
As a director of gold, coal and iron ore miner Aquila Resources, Charles Bass rode the resources boom to amass a fortune of $342 million. But with Aquila shares tumbling over 2008 and early 2009, the mining industry veteran departed the Rich 200 in 2009. This year, he should make a triumphant return. In the last 12 months the company’s share price has leapt from $2.28 to $8.90, valuing Bass’ share price at $320 million.
Veteran Sydney car dealer Nick Politis fell off the Rich 200 last year thanks to a big drop in the value of his stake in listed car retail company AP Eagers. But a surge in car sales in the second half of the year – helped in no small part by the government’s special investment allowance – helped the company’s share price more than double in the last 12 months, pushing the value of Politis’ stake back above $150 million. When his other assets are included, he should easily make the grade again.
The founder and chief executive of serviced offices business ServCorp, Alf Moufarrige, is firmly in expansion mode, with plans to triple the size of his business in the next three years. His fortune is also in expansion mode, with his stake in Servcorp jumping from $107 million to $178 million in the last 12 months. That should put his back on the Rich 200, after he fell off the list last year.
Last year was an extremely difficult one for all companies specialising in mining services, such as Kevin Maloney’s The MAC Service Group. The company’s shares plunged from almost $4 at the start of 2008 to less than $1 at the start of 2009, causing founder and executive director Maloney to lose his spot on the Rich 200 just a year after making the grade. But this year has seen a fight back, with the value of Maloney’s stake climbing from $68 million to $190 million – safely back in Rich 200 territory.
Former Flight Centre executive Jim Goldburg has been off and on the Rich 200 in the last few years, but the extraordinary rise in the company’s share price seems likely to put him very close to the big list again. In the last 12 months, the company’s share price has rebounded from $5.90 to around $19.80, giving Goldburg a stake worth around $88 million. When that is combined with his stakes in several property development firms, Goldburg will go close.