Curro plans further expansion as numbers grow


Curro plans further expansion as numbers grow

Published Date: 2019-08-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Curro plans further expansion as numbers grow

The private schools group says its focus will be on increasing its existing capacity rather than greenfield campuses.

Curro has reported a big increase in first-half revenue as it continues to attract more learners to its schools and as they progress to grade 12. It has also continued to spend on new campuses, with planned investment of R223 million as it establishes sites in Pretoria, Midrand, Delft outside Cape Town and Mbombela.

Releasing interim results, the private schools group said expansion and replacement projects would require R1 billion of investment this year. However, it said its focus would be on increasing its existing capacity and reducing its investment in new greenfield campuses.

The group grew learner numbers by 13% to 57,173 in the six months to end-June as a 16% increase in enrolments at its Curro schools more than made up for a 2% decline at the Meridian campuses. It grew the number of campuses it operates to 68, from 57, with schools increasing to 164 from 139.

However, a near doubling in trade receivables to R164 million suggests that more families are late in their school-fee payments.

Revenue rose 19% to R1.48 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 21% to R415 million. Headline earnings per share (HEPS) were up 44% to 50c, boosted by a non-recurring deferred tax liability adjustment of R53 million which reduced the effective tax rate for the period to 2%. Excluding the adjustment, recurring HEPS rose by a more muted 7% to 37.1c. It hasn't declared an interim dividend.

While the Curro schools reported a decline in recurring HEPS, Meridian returned to profitability following last year's recapitalisation which was aimed at reducing debt.

Its shares rose 6.8% to R17.80 yesterday. They fell 13% on 6 August when it released a trading statement alerting shareholders to the expected earnings increase.

Similar Stories