Curro’s lower-fee schools put pressure on earnings growth

Listed private education group Curro Holdings on Tuesday reported that revenue topped R1 billion for the six months ended June 2017, up 24% from R872 million before, and in line with growth in learner numbers and fee increases.

Curro provides education to more than 47,000 learners across 127 schools (54 campuses) throughout southern Africa. The company reported profit for the period of R105 million, up 31%, while diluted headline earnings per share (HEPS) climbed 24% to 26.8 cents per share.

Consolidated headline earnings increased by 36% from R81 million to R110 million, with HEPS increasing by 22% to 26.9 cents.

Operational EBITDA increased by 24% to R322 million, while no dividend was declared for the period.

“Curro performed well overall, despite the seven Meridian campuses – operating in the rural lower-fee market – experiencing pressure as a result of lower learner numbers compared to the previous year,” the company said in a statement.

“The tertiary business experienced growth with the acquisition of two businesses, and good progress has been made with respect to the unbundling and separate listing of Stadio Holdings (Stadio) on the JSE,” it said.

Curro said it is investing R600 million in construction for the following new schools:

  • Curro Academy Mamelodi in Pretoria East, Gauteng
  • Curro Academy Riverside near Diepsloot, Gauteng
  • Curro Academy Sandown in Sunningdale, Cape Town
  • Curro Castle Oakdene in Turffontein, Gauteng
  • Curro Castle Uitzicht in Durbanville, Cape Town
  • Curro Roodeplaat High School, Pretoria, Gauteng
  • Curro Sitari High School, Somerset West, Cape Town

The company has allocated an additional R900 million in expansion and capital investment at its existing schools.

Curro said it grew its number of campuses to 54, from 49 since the end of December 2016. School numbers have increased by 12 to 127.

The number of learners has increased to 47,002 from 43,183 six months ago, while the number of educators is up from 2,595, to 2,844.

Stadio, the company’s tertiary arm, will list on the JSE at the end of September 2017.

Curro noted that former COO Andries Greyling replaced Chris van der Merwe as CEO of Curro in July, when van der Merwe became CEO of Stadio.

Read: Curro expects improved interim results


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Curro’s lower-fee schools put pressure on earnings growth