{"id":103907,"date":"2015-11-16T19:15:28","date_gmt":"2015-11-16T17:15:28","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=103907"},"modified":"2015-11-16T17:56:08","modified_gmt":"2015-11-16T15:56:08","slug":"private-companies-cashing-in-on-government-failure-in-sa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/103907\/private-companies-cashing-in-on-government-failure-in-sa\/","title":{"rendered":"Private companies cashing in on government failure in SA"},"content":{"rendered":"

South African’s economy has stagnated, hampered by sluggish growth and a worrying trade deficit.<\/p>\n

And while the overall snapshot of government’s performance in stimulating growth and providing decent public services has come under question again in 2015, the upshot is that it leaves a gap for private business to prosper in a number of sectors.<\/p>\n

Communication<\/h3>\n

The communications sector is a\u00a0market that’s dominated by the private sector. State-owned companies in the sector perform poorly across the board – with the main government-affiliated player, Telkom, historically mired with monopolistic behaviour.<\/p>\n

While Telkom has managed to stage a successful turnaround in recent times, the company has been dogged by a tough financial performance over the past five years.<\/p>\n

And while Telkom is only part-state-owned, driven to perform well for shareholders – other state owned tech and telco companies including Broadband Infraco and the South African Post Office shows the real problem.<\/p>\n

Broadband Infraco has never turned a profit, while the Post Office has a well-documented history of recurring losses.<\/p>\n

Vodacom and MTN have delivered real value and growth for investors over the past five years, with the latter only recently running into regulatory woes in Nigeria.<\/p>\n

However, with operations in 22 countries, including an uptick in performance in SA, the company is expected to continue along a solid path over the medium term at least.<\/p>\n

Communication company revenues 2010 – 2015 (ZAR millions)<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n
Company<\/th>\n2010<\/th>\n2011<\/th>\n2012<\/th>\n2013<\/th>\n2014<\/th>\n<\/tr>\n
MTN<\/td>\n114 684<\/td>\n121 884<\/td>\n135 112<\/td>\n136 495<\/td>\n146 930<\/td>\n<\/tr>\n
Vodacom<\/td>\n58 353<\/td>\n61 197<\/td>\n66 929<\/td>\n69 917<\/td>\n75 700<\/td>\n<\/tr>\n
Telkom<\/td>\n33 911<\/td>\n31 712<\/td>\n33 079<\/td>\n32 501<\/td>\n32 483<\/td>\n<\/tr>\n
Broadband Infraco<\/td>\n318<\/td>\n297<\/td>\n393<\/td>\n237<\/td>\n302<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Vodacom<\/strong><\/p>\n

\"Vodacom<\/a>

Vodacom 5 year share performance<\/p><\/div>\n

MTN<\/strong><\/p>\n

\"MTN<\/a>

MTN 5 year share performance<\/p><\/div>\n

Healthcare<\/h3>\n

The South African healthcare sector offers both public and private healthcare options for citizens. The public sector still covers the greater part of the population (about 80%, according to StatsSA), as private healthcare remains inaccessible \u2013 and unaffordable \u2013 to poor people.<\/p>\n

The use of private healthcare is tied directly to medical aid schemes, where most medical aid members make use of private hospitals, and non-members use public facilities.<\/p>\n

There are three big listed players in private healthcare: Mediclinic, Netcare and Discovery – and all three companies have shown strong growth over the past five years.<\/p>\n

Healthcare\u00a0company revenues 2010 – 2015 (ZAR millions)<\/strong><\/p>\n

\n
\n\n\n\n\n\n
Company<\/th>\n2010<\/th>\n2011<\/th>\n2012<\/th>\n2013<\/th>\n2014<\/th>\n<\/tr>\n
Discovery<\/td>\n22 558<\/td>\n26 890<\/td>\n30 246<\/td>\n35 721<\/td>\n43 050<\/td>\n<\/tr>\n
Netcare<\/td>\n22 474<\/td>\n22 584<\/td>\n25 174<\/td>\n27 382<\/td>\n31 783<\/td>\n<\/tr>\n
Mediclinic<\/td>\n17 141<\/td>\n18 625<\/td>\n21 986<\/td>\n24 436<\/td>\n30 495<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Mediclinic<\/strong><\/p>\n

\"Mediclinic<\/a>

Mediclinic 5 year share performance<\/p><\/div>\n

Netcare<\/strong><\/p>\n

\"Netcare<\/a>

Netcare 5 year share performance<\/p><\/div>\n

Discovery<\/strong><\/p>\n

\"Discovery<\/a>

Discovery 5 year share performance<\/p><\/div>\n

Education<\/h3>\n

South Africa’s education has a history of failure – particularly in mathematics and science.<\/p>\n

Census data indicates that only an estimated 48% of students who begin Grade 1 actually complete Grade 12, with most learners dropping out of school in Grade 10 and 11 \u2013 while teachers and university professors claim that pass rates of 30% to 40% are just too low to be of any value, globally.<\/p>\n

Private schools still make up less than 5% of all schools in South Africa, with just over 500,000 students enrolled in private schools out of a total learner population of 12.4 million.<\/p>\n

Two listed players in private education in South Africa are Curro and AdvTech, which build and operate educational campuses across the country.<\/p>\n

Education\u00a0company revenues 2010 – 2015 (ZAR millions)<\/strong><\/p>\n

\n
\n\n\n\n\n
Company<\/th>\n2010<\/th>\n2011<\/th>\n2012<\/th>\n2013<\/th>\n2014<\/th>\n<\/tr>\n
AdvTech<\/td>\n1 470<\/td>\n1 605<\/td>\n1 687<\/td>\n1 766<\/td>\n1 931<\/td>\n<\/tr>\n
Curro<\/td>\n76<\/td>\n170<\/td>\n366<\/td>\n659<\/td>\n1 001<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

AdvTech<\/strong><\/p>\n

\"AdvTech<\/a>

AdvTech 5 year share performance<\/p><\/div>\n

Curro<\/strong><\/p>\n

\"Curro<\/a>

Curro 5 year share performance<\/p><\/div>\n

Security<\/h3>\n

Private security is big business in South Africa, which has one of the highest crime rates in the world. The industry employs close to half a million officers, which far outnumbers the number of police on the ground.<\/p>\n

In 2014, the SAPS reported that there were 153,116 sworn police officials, but the number of registered security officers had jumped to 487,058 in the same year.<\/p>\n

It’s difficult to gauge the financial success of these security firms as many are international companies with no local listing. But their success is evident in their growth.<\/p>\n

ADT claims to have over 420,000 clients in South Africa – internationally the group has over 6 million, with over 250,000 gross additions every quarter.<\/p>\n

Major local players in security are Bidvest Protea Coin and Fidelity Security group – the latter of which acquired the former’s cash-in-transit business this year.<\/p>\n

Fidelity reportedly rakes in R5.5 billion in revenue annually, while Bidvest reported that its security division was a strong performer in its 2014 report.<\/p>\n

Bidvest<\/strong><\/p>\n

\"Bidvest<\/a>

Bidvest 5 year share performance<\/p><\/div>\n

Another way in which private groups are moving ahead of public policing is the increase in private security estates in the country.<\/p>\n

According to Estate Living<\/a>, there are 250,000 residential properties in private estates in South Africa, of which 85% are considered security estates.<\/p>\n

Before the economic crisis of 2008, estate development was recorded at 30% per year – but has since settled at levels of 7.5%, showing strong demand.<\/p>\n

More on business in SA<\/h3>\n

High number of SA businesses struggling to grow turnover<\/a><\/strong><\/p>\n

9 things holding business back in South Africa<\/a><\/strong><\/p>\n

Hard statistics show how government is failing at employment<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

While the overall snapshot of government’s performance in stimulating growth and providing decent public services leaves much to be desired – there is an upside of sorts.<\/p>\n","protected":false},"author":10,"featured_media":25338,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872,23],"tags":[26,6469,10771],"class_list":["post-103907","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-government","tag-headline","tag-private","tag-public"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/103907","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=103907"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/103907\/revisions"}],"predecessor-version":[{"id":113760,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/103907\/revisions\/113760"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/25338"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=103907"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=103907"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=103907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}