Curro invested a further R549 million in the expansion of the business in the six months to June 30.
Curro Holdings, the independent school provider, grew its average learner numbers by 7 percent to 70 519 learners in the six months to June 30, while revenue increased by 15 percent to R2.06 billion.
Earnings before interest, taxation, depreciation and amortisation (Ebitda) increased by 20 percent to R467 million.
“The group recorded pleasing increases in learners, revenue, profitability and cash generated during the first half,” chief executive Andries Greyling said. The growth in learner numbers also continued, and by August 1 Curro had enrolled 71 011 learners, he said.
Recurring headline earnings increased by 31 percent to R152m. Recurring headline earnings per share increased by 31 percent to 25.5 cents per share, from 19.4c per share in the prior corresponding period.
Headline earnings per share increased by 42 percent to 27.5c per share, from 19.4c per share in the prior corresponding period.
The board decided not to declare an interim dividend in line with its policy to pay 20 percent of recurring headline earnings as an annual dividend, on the premise that growth in cash generation would continue in future.
Curro’s Meridian subsidiary received long overdue once-off subsidy income from the provincial government of R25m. Curro also recognised a gain on bargain purchase of R14m in the previous comparable period.
Several factors contributed to the increase in revenue.
It was helped by a 13.3 percent increase in tuition fees due to the growth in learners, coupled with the annual inflationary fee increase. Revenue growth was also supported by an increase in ancillary revenue, which was R30m and 21.4 percent higher in the first half of 2021.
Schools’ Ebitda (earnings before interest, taxation, depreciation and amortisation and head office expenditure) increased by 17.7 percent to R599m for the period, while Ebitda (after head office expenditure) increased by 19.7 percent to R467m.
Curro was focused on increasing its operating margin and managing costs stringently and discounts granted were reduced to 7.8 percent of tuition fees from 9.1 percent in the previous comparable period.
Credit losses are being managed. Expected credit losses of R76m were provided for during this period (2021: R61m).
Curro invested a further R549m in the expansion of the business. “Curro’s primary objective was to increase capacity utilisation of its existing facilities. We are on track with our overall capex programme to invest up to R1.1 billion in the business this year,” said Greyling.
HeronBridge College was acquired in April this year as well as a building in Cape Town to accommodate learners of the thriving DigiEd Foreshore school.
The group’s expansion strategy was to fill capacity at existing schools as grades phase in, which increased to 64 percent from 60 percent of eventual capacity in 2022, invest in digital offerings to reduce fixed cost base at schools, and allocate capital to growing and performing schools, in particular high schools.
edward.west@inl.co.za
BUSINESS REPORT