R700 million to meet demand for private schools in South Africa

Curro has posted strong results, with the group actively looking to expand.

In the group’s financial results for the six months ending 30 June 2024, Curro said that its recurring headline earnings increased by 12.3% to R228 million, while its operating margin also expanded by 1.0% to 18.0%.

The group’s headline and recurring headline earnings per share also increased by 16.2% to 40.2 cents per share.

“Curro’s mission is to create more opportunities for more learners. Our robust financial performance in the first half of 2024 underscores the effectiveness of our strategic initiatives and our commitment to providing quality education,” said CEO Cobus Loubser.

“These results reflect our ability to manage costs efficiently while continuing to expand our offerings.”

On a time-weighted basis, Curro’s average number of learners for the first half of 2024 increased by 0.5% to 72,758 learners (2023 H1: 72 385), while revenue jumped by 8.3% to R2,588 million (2023 H1: R2,389 million) from the prior comparable period.

Total school fee revenue jumped by 6.8% due to the growth in learners and the annual increase in school fees, which averaged roughly 6.0% per learner over the year.

The total discounts granted were similar to those in the comparable period but decreased to 6.1% of gross school fees, compared to 6.7% in the previous period.

The group added that it expects credit losses of R77 million in H1 2024 – R1 million less than in H1 2023.

“The remaining debtor’s book, net of the expected credit loss provision, consists of R240 million (2023 H1: R194 million) of actively enrolled accounts and R121 million (2023 H1: R90 million) of inactive accounts. EBITDA increased by 10.4% to R625 million (2023 H1: R566 million),” said the group.

Despite the jump in headline earnings, Curro did not declare an interim dividend.

Outlook

The group said it is actively seeking opportunities to “offer quality education to more learners in Southern Africa.”

In H1 2024, the group opened three new campuses in Walvis Bay and Oshana in Namibia (part of a joint venture) and at Barlow Park in Sandton, Johannesburg.

However, the group said that in the short to medium term, it will focus on supporting and increasing the capacity utilisation of its existing facilities.

Curro invested R306 million in its business during H1 2024 (2023 H1: R312 million). During the full 2024 year, it plans to invest up to R700 million in capital projects to maintain, replace, and expand its facilities to accommodate the strong demand for high school tuition.

During the first half of 2024, Curro invested R306 million in maintaining, replacing, and expanding its facilities. Curro plans to invest up to R700 million for the full year to meet the growing demand, particularly for high school education.

“The group increased its operating margin during this period, and we expect that Curro will sustainably generate more cash from its operations than is required for capital expenditure in the future,” said Curro.

“Despite a strained economic environment, our customers trust Curro to provide high-quality education and we are deeply committed to excellence.”

Read: The two provinces in South Africa where unemployment has quadrupled since 1994