Waterstone College, a private school managed by Curro Holdings. Photo: Reuters
Curro Holdings successfully focused on growing its independent education business as well as tightly managing costs, and as a result earnings before interest interest, taxation, depreciation and amortisation increased 10.4% to R625 million in the six months to June 30.
CEO Cobus Loubser said the success of these strategies were further indicated by the 16.2% increase in headline earnings per share to 40.2 cents per share, while the operating margin had improved by 1% to reach 18%.
“Curro’s mission is to create more opportunities for more learners. We are pleased with the improvement in key financial metrics… These results reflect our ability to manage costs efficiently while continuing to expand our offerings,” he said.
Curro’s revenue rose by 8.3% to R2.59 billion driven by a 0.5% increase in the average number of learners, which totalled 72 758 for the first half of 2024. The total school fee revenue increased by 6.8%, reflecting learner growth and an average school fee increase of about 6% per learner for the year.
There was a solid 17.2% increase in Curro’s diverse and growing ancillary income streams.
The 8.1% increase in total operating costs was lower than the increase in total revenue over the period, which supported margin expansion.
Employee costs, which constitute about two-thirds of operating expenses, grew 6.7% on a like-for-like basis if you exclude the three new campuses opened. The strong increase in ancillary revenue resulted in increased costs associated with these activities.
Curro generated R624 million cash from its operating activities, 2.8% more than the previous period following higher tax and interest payments. Notably, more cash continued to be generated than required for capex, “which bodes well for future shareholder returns”, Loubser said.
Total debt, net of cash and investments in money market funds, reduced from R3.24bn as of December 31, 2023 to R3.2bn as of June 30, 2024.
During the first half Curro invested R306m in maintaining, replacing, and expanding its facilities, with plans to invest up to R700m for the full year to meet the growing demand, particularly for high school education.
“Our strong cash generation and increased operating margin position us well for sustained future growth, even amid challenging economic conditions. We remain committed to delivering high-quality education and maintaining our status as a trusted leader in the education sector,” said Loubser.
Curro was actively pursuing opportunities to offer quality education to more learners in Southern Africa. The group opened three new campuses in Walvis Bay and Oshana in Namibia, and at Barlow Park in Sandton, Johannesburg, in the six-months period.
The two new campuses in Namibia were part of a joint venture. Much of the focus in the short to medium term was to support and increase the capacity utilisation of its existing facilities.
During June, GCR ratings affirmed the long and short-term national scale issuer ratings assigned to Curro at A(ZA) and A1(ZA) respectively, with a stable outlook. The group continued to buy and cancel its own shares, having purchased a further 10.4 million shares for R116m during the six-months period.
Curro’s share price traded 1.92% to R12.71 on the JSE yesterday afternoon, bringing the gain in the share price over 12 months to a robust 31%.
BUSINESS REPORT