ADvTECH defers dividend as pandemic spreads


ADvTECH defers dividend as pandemic spreads

Published Date: 2020-03-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

ADvTECH defers dividend as pandemic spreads

The private education and staffing group says it will revisit the situation at its May board meeting and may resort to share buybacks.

ADvTECH has deferred its decision on a final dividend despite reporting a rise in full-year earnings due to the heightened uncertainty caused by the Covid-19 pandemic. The private education and staff resourcing group says it will revisit the situation at its next board meeting in May, when the impact of the pandemic on the group may have become clearer.

Releasing its annual results yesterday, ADvTECH said due to its low share price, it would also consider the option of a share buyback in lieu of a dividend at that meeting. It paid an interim dividend of 15c per share after paying out a total dividend of 30c in 2018.

The group added 8% more students over the year to 94,286. Most of the additions were at its universities and colleges.

Revenue from its SA schools increased by 8% to R2.02 billion in the year to end-December, while revenue from schools in its Rest of Africa division jumped 55% to R204 million. Its tertiary education division grew revenue by 25% to R2.15 billion and resourcing improved by 11% to R741 million. While tertiary education also reported a strong rise in operating profit, the contribution from schools declined slightly due to its investment in its Rest of Africa business. Resourcing recorded a 29% decline in operating profit.

Group revenue rose 16% to R5.11 billion and operating profit before interest and non-trading items increased by 8% to R869 million. Finance costs grew by 23% to R167 million due to increased debt. Earnings per share (EPS) came in 21% higher at 87.1c per share, while headline EPS jumped 20% to 86c. On a normalised basis, EPS were 8% higher at 85.2c.

ADvTECH said it had closed its schools and tertiary institutions until after the Easter holidays in line with guidance from the government. However, it said it was making full use of online learnings tools and systems.

Its shares fell 5.9% to R6.40 yesterday.

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