Back To School
Finweek English|14 May 2021
South Africa’s listed education companies are riding out the pandemic. Are they worth investing in?
Marcia Klein

While the pandemic severely disrupted the delivery of education across the world, listed education companies showed some resilience and their enrolments remained robust. However, their ability to increase fees and earn revenue from adjunct services were severely curtailed.

The ongoing need for private education in the face of public sector failure, limited places at public institutions, and the growth in online learning resulting from the pandemic continue to be the drivers of growth in this sector. In the year to end-December, which included nine months of lockdown, listed education companies ADvTECH, Curro and Stadio performed relatively well, but investors remain somewhat reticent due to continued uncertainty about further Covid waves and escalating affordability issues due to the economic slump.

Results

ADvTECH, which owns schools including Crawford, Pinnacle, and Trinity House and tertiary institutions such as Varsity College, Vega, and Rosebank College, reported an 8% increase in revenue to R5.5bn in the year to December 2020, despite the withdrawal of some students (mainly pre-primary), inability to provide boarding, aftercare, and extramural activities, and its business in Kenya where the 2020 school year was abandoned. There were some student withdrawals mainly for financial reasons, but also an increase in enrolments at some of its institutions. School enrolments increased by 5% to 33 903 in February 2021, but tertiary enrolments are not available due to the late start to the academic year. Due to the pandemic, the group offered R47m of financial support to over 5 000 families and it did not increase fees at schools. ADvTECH CEO Roy Douglas told finweek that the group doubled enrolment volumes in the last five years and it continues to see positive enrolment growth as demand for private education continues to be underpinned by difficulties in the public sector and people wanting the best for their children.

At Curro, which includes schools such as Curro, Meridian, Select, and DigiEd, average learner numbers increased by 6% to 60 777 in 2020 and further to 66 153 in February 2021. In the year to December, revenue increased by 5% to R3.1bn. Tuition fees increased by 12% due to the growth in learners and fee increases, but revenue growth was weighed down by lower ancillary school income and higher discounts granted, from 7.2% of revenue to 10.9%. Curro terminated 3 200 learners’ places in January due to outstanding accounts and reported record enrolments in February and March 2021.

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