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JOHANNESBURG - Private education operator, Advtech Group, pointed to its tertiary division as it reported a 28% increase in trading operating profit to R344 million for the six months ended 30 June 2017 despite muted growth in its schools division due to the tough economic environment.
Advtech's revenue grew by 22% to R2bn, with the tertiary division showing excellent growth with revenue up 33 percent to R789 million, and contributing 39% to group revenue. Headline earnings per share were up six percent to 38.6 cents.
Advtech chief executive, Roy Douglas, said the strength and resilience of the group, through its diversified portfolio, had been well demonstrated with revenue increasing and trading operating profit, indicating continued operating margin improvement.
"The business continued its trend of strong performance in line with its growth strategy. Both the tertiary and resourcing divisions performed exceptionally well, as evidenced by significant increases in revenue and operating profit whilst the schools division results were somewhat muted," Douglas said.
"The difficult economic climate and unsettled socio-political environment had a more significant effect on school enrolment numbers than had been anticipated. We have seen a consistent rise in the number of families emigrating and this trend had a particularly negative effect on enrolled numbers as we lose students in grades where it is difficult to replace."
Advtech owns schools such as Abbotts College, Crawford Schools, Vega, Rosebank College, Varsity College, and most recently the University of Africa (UoA), a private distance-learning university in Zambia.
Douglas said they continued to see numerous opportunities for growth, both in South Africa and on the rest of the continent.
Advtech is pursuing opportunities available in new market segments and regions, which it believes will enhance its business performance and diversify its portfolio.
"The group’s results reflect management delivering to strategy. Our continued investment in the rest of the continent diversifies the business away from the slow South African economy supporting our objective of generating 30 percent of revenue from the rest of Africa by 2020," Douglas said.
"We continue to leverage technology to enhance the delivery of education across the continent."
An interim dividend of 15 cents per share was declared.