Curro marked 25 years of commitment towards its independent schools with a strong financial performance in the first half of its 2023 year – recurring headline earnings surged 34% to R203 million.
CEO Cobus Loubser said: “Reaching a quarter-century is a significant achievement. These positive numbers are a testament to Curro’s dedication to imparting quality education over the years.”
The average number of learners increased 3% in the period, bringing the count to 72 385. This contributed to a 16% revenue increase to R2.4 billion, up from R2.1bn in the first half of last year.
Operational expenses were up about 15%, of which just over 1.5% comprised expenses for alternative energy generation such as diesel generators and maintenance, Loubser said in a telephone interview.
Employee costs rose 11% and other expenses 24%. On a like-for-like basis, if the acquisitions of HeronBridge College in the prior period and Courtney House International School in the current period were excluded, employee costs increased 8% and other costs by 21%.
The ratio of other expenses to revenue was higher than the previous period, driven by additional extramural activity and increased costs associated with the growth in ancillary services.
Expected credit losses of R78m provided for during the first half were similar to the R76m provided in the first half of last year. The remaining debtors book, net of the credit loss provision, consisted of R194m (R175m) of actively enrolled accounts and R90m (R74m) of inactive accounts. The company was benefiting from disciplined collection strategies, its directors said.
Headline earnings per share increased by 26% to 34.6 cents. Recurring headline earnings per share increased by 36% to 34.6c.
Revenue growth was driven by a rise in tuition fees of 14%, due in turn to growing learner numbers and periodic fee increases. “We are pleased with the 31% surge in our ancillary revenue to R223m,” he said. This revenue comprises alternative income streams such as boarding schools and aftercare.
“Our primary aim in the foreseeable future is to bolster and enhance the utilisation of our current facilities,” said Loubser.
Investment of R312m included the acquisition of Courtney House International School. Curro plans to invest up to R800m for the full year on capital projects.
“The company is resilient and in a strong financial position,” said Loubser. It had reached a stage where it was generating more cash than its capital expenditure requirements, which was why it started doing share buy-backs in June 2023.
Curro acquired 2.4 million shares amounting to R19.3m by the end of June 2023. “Up to today, we've secured a total of 10.3 million shares for R88.3m,” he said.
He said the share buy-backs were a way to distribute permanent value to shareholders and capital allocations for further buy-backs would be evaluated.
The strategy remained to augment shareholder returns and grow the portfolio of schools.
“Curro is optimistic about the path ahead,” he said. Earnings were more or less evenly distributed through the two halves of the financial year, he said.
“Our vision has always been to extend quality education to as many learners as possible in southern Africa and I’m confident in Curro’s trajectory. We’re not just celebrating our past 25 years, but looking ahead with the same fervour and commitment,” he said.
The board usually pays 20% of recurring headline earnings as an annual dividend on the premise of continued growth in cash generation in the future.
The results of the previous comparable period included R25m long overdue and received by Curro Meridian education subsidy income, which was treated as non-recurring.
BUSINESS REPORT