JSE-listed private education group AdvTech on Monday reported an 11% rise in revenue for the year ended December 2018, lifted by its tertiary and resourcing divisions.
The schools division increased its scale significantly, mainly through acquisitions, despite external pressures, it said.
Operating profit grew by 14% to R763 million (2017: R668 million), while profit for the year increased by 8% with normalised earnings per share also increasing by 8% to 81.1 cents (2017: 75.3 cents).
Diluted headline earnings per share climbed 7% to 73.5 cents, while a dividend of 30.0 cents per share was declared.
AdvTech pointed to a decrease in fees received in advance because a greater proportion of parents selected monthly payment terms as opposed to the upfront payment option as well as parents who delayed payment until after year-end.
“Receipts after year-end have been significantly higher than in the previous year as would be expected with the change in the payment options chosen and payment patterns, it said.
AdvTech operates 132 education sites comprising 103 schools and 29 tertiary campuses.
The group saw an 11% increase in enrolments, for both tertiary (39,629) and school learners (30,827), to 70,456
The schools divisional revenue increased by 15% to R2 009 million (2017: R1 742 million), representing 46% of group revenue. Operating profit for South African schools increased by 5% to R330 million (2017: R315 million) while the operating profit from schools in the rest of Africa declined due to the costs incurred ahead of the opening of Crawford International School in Nairobi, Kenya, and as it moves through the j-curve.
The strong growth in revenue was achieved mainly as a result of acquisitions and good growth in the mid-fee sector, AdvTech said.
“The challenging South African economic climate and unsettled socio-political environment continue to impact organic growth with increased levels of withdrawals owing to emigration and financial pressures, a trend that has continued into 2019. The growth in student enrolments for 2019 is largely off the back of our expansion strategy to enter faster growing economies outside of South Africa.”
Seven new schools were opened in 2018; Crawford International School, (pre-primary, primary and college); The Bridge Assisted Learning School (pre-primary and primary); and in the mid-fee sector, Maragon Mooikloof High School and Pinnacle College Copperleaf.
AdvTech’s university and tertiary division, Independent Institute of Education (The IIE), saw operating profit climb by 23% to R395 million, while revenue increased by 10% to R1 719 million (2017: R1 556 million), contributing 39% of group revenue.
It said that the tertiary division now offers 201 accredited courses, with a diverse range of offerings including vocational skills training, national certificates and diplomas (N1-N6), higher certificates, diplomas, advanced diplomas, degrees, honours degrees and masters degrees.
Three new campuses opened during 2018, including two digitally enabled, Rosebank College Connected sites in Pietermaritzburg and Bloemfontein. A new combined campus in Johannesburg for Capsicum Culinary Studio and The Private Hotel School includes state-of-the-art facilities such as conference facilities and a restaurant serviced by our students.
The Rosebank College portfolio now consists of mega campuses in Johannesburg, Pretoria and Durban with a mega campus in the pipeline for Cape Town (2020). In provincial nodes, the successful blended learning digitally enabled Rosebank College Connected campuses, which are producing outstanding academic results, are being rolled out.
“They now boast three successful campuses and additional campuses are planned in the near future,” AdvTech said.
Subject to the completion of the necessary regulatory approvals, the acquisition of Monash South Africa (MSA) is expected to be effective from April 2019.
“This will bring the tertiary qualification suite to 233 accredited courses and the higher education student complement to more than 40 000 students, cementing AdvTech’s leadership position as SA’s largest “private university”/private higher education provider,” it said.