Private school parents in South Africa are taking pain
Curro has stressed the financial challenges that South African parents are facing, with the private school giant losing students over the last year.
Speaking with BusinessTech following the release of Curro’s interim results, CEO Cobus Loubser said that parents across South Africa are under severe financial strain.
In recent years, South Africans have dealt with weak economic growth, elevated interest rates and sky-high inflation.
The indebtedness seriously limited the ability of parents to pay their school fees.
Loubser said that parents struggling to pay their school fees were most notable in the lower schooling grades, but still affected those with children in High School, with no one immune to a poor-performing economy.
Amidst this struggle, the group saw its total number of students decline by 1.4% to 71,749 learners (2024 H1: 72,758).
The challenge in paying fees is also reflected in the group’s expected loss ratio, which increased from 30.8% to 42.2% over the space a year, with group’s loss provision increasing to R236 million.
Although this increase was partly due to the group changing its risk provisions, it still highlights the economic challenges parents face.
Loubser said that the expected loss ratio will remain at a similar level over the rest of the year.
Curro plans to increase fees by around 4.5% in 2026, but is optimistic that improved economic growth will help increase the number of students at its campuses.
The group’s schools are currently at 70% capacity, and Loubser said that increasing student numbers will help bring fees down, as revenue and costs are shared across a larger number of parents.
When it comes to expanding its school network, the CEO noted that the group opened two new schools in Namibia and still has the option to open or buy new locations.
However, he said that generating cash is essential. The group saw heavy capex in the first 20 years of operation, but this cannot continue into perpetuity, with the group needing to bring cash in.
New era for Curro
The release of Curro’s results came amidst the news that billionaire Jannie Mouton’s foundation want to acquire Curro for roughly R7.2 billion.
Mouton’s fortune is linked to large shareholdings in the PSG Group, Capitec, PSG Financial Services and more. The foundation already owns around 3% of Curro.
Mouton plans to delist Curro from the JSE and turn it into a public benefit organisation (PBO).
The trust said Curro will continue operating efficiently and expand, and its growth will be accelerated via reinvestment of its potential returns/surplus.
The offer will see Curro shareholders receive Capitec and PSG Financial Services shares, with a small cash portion for each share.
The equivalent R13 per Scheme share includes a:
- Cash Consideration of R0.85837 per Scheme Share (which will comprise approximately 6.6% of the Scheme Consideration)
- Capitec Shares in the ratio of 0.00284 Capitec Shares per Scheme Share (which will comprise approximately 79.7% of the Scheme Consideration);
- PSG Financial Services Shares in the ratio of 0.07617 PSG Financial Services Shares per Scheme Share (which will comprise approximately 13.7% of the Scheme Consideration).
Although Loubser stressed that the offer still requires regulatory, board and shareholder approval, he believes it offers an attractive premium to shareholders.
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