Grow with the flow: Curro celebrates sharp increase in profits, plans for further growth

Private school group Curro has had a bumper first half of the year, with a 34% surge in recurring headline earnings to R203-million – a sharp increase from R152-million in the first half of 2022.

Pupil numbers increased by 3% to 72,385 (from 70,724 as of December 2022) – an average of 928 on the group’s 78 campuses across the country – and grew revenue by 16% to R2.4-billion, from R2.06-billion in H1 2022.

The R566-million cash generated from operations increased by 1% to R607-million, which funded the first half of 2023’s R312-million capex.

It is planning to invest up to R800-million this financial year in capital projects to maintain, replace and expand facilities.

Earnings before interest, taxation, depreciation and amortisation (a measure of a company’s profitability) increased by 21% to R566-million, from R467-million.

Headline earnings per share increased by 26% to 34.6c per share, from 27.5c.

This year marks the group’s 25th anniversary.

Curro CEO Cobus Loubser told journalists during a call that reaching a quarter-century was a significant achievement. 

“This is a remarkable success story. We have built significant momentum in an ongoing quest to offer more opportunities to more learners across our region.” 

Curro provided for credit losses of R78-million during the first half of this year, which is in line with the R76-million provided in the corresponding period.

The remaining debtor’s book consists of R194-million (R175-million in H1 2022) of actively enrolled accounts and R90-million (H1 2022: R74-million) of inactive accounts. 

“Our rise in tuition fees by 14% was a result of growing learner numbers and our periodic fee increases. We are pleased with the 31% surge in our ancillary revenue to R223-million.”

In June, Curro began a share repurchase programme, during which the company bought back 2.4 million shares at a cost of R19.3-million. To date, it has secured 10.3 million shares for R88.3-million. 

Based on the strong enrollment interest, Curro had seen a sustained flight towards quality education despite prevailing economic conditions, which were causing financial distress and affecting overall learner growth.

This was affecting pupil numbers, Loubser said. 

“In 2023, we now have about 6,900 learners in Grade 8, and just over 4,200 learners in Grade 12. There is some attrition in learner numbers, mainly due to the financial duress families experienced during and after the pandemic, and more recently, the increasing interest rates, inflation and food and energy costs.

“The rollover of learners across grades builds Curro’s academic momentum, particularly in high school.”

The board declared an annual dividend on 2 March 2023 and paid R65-million on 17 April, so will not be declaring a dividend at this time. It is the board’s policy to pay 20% of recurring headline earnings as an annual dividend. DM