Navitas is set to lose some government contracts, and its shares are getting hammered

A surfer falling off his board at Bondi Beach in February. Ryan Pierse/Getty Images

Shares in Navitas fell hard after the education provider flagged a decline in revenue from federal government contracts.

A short time ago, the shares were down 15% to $4.21.

Navitas says its been informed by the Department of Education and Training that there will be a smaller number of contracts to deliver its Adult Migrant English Program.

The company says this could mean a fall in earnings of between $12 million and $14 million next financial year.

“The proposed reduction in contract regions is disappointing news as Navitas has been delivering this important program to a high standard since 1998,” says CEO Rod Jones.

“However we will continue to focus on providing high quality outcomes to our clients in our remaining and new contract regions; and ensure any transition for clients is as smooth as possible.”

Navitas posted an 18% rise in net profit after tax to $53.3 million for the half year to December. However, revenue was down 7.7% to $479 million.

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