Despite tough and uncertain times brought about by the coronavirus (Covid-19) pandemic, Curro Holdings operations and results for the interim six months period ending 30 June 2020 is satisfactory under difficult circumstances.
The South African education provider, listed on the JSE, released its results today for the six months ended 30 June 2020.
Growth in revenue, learner numbers, EBITDA and recurring HEPS
During this period, revenue increased by 7% from ZAR1 480 million in June 2019 to ZAR1 590 million in June 2020.
Learner numbers rose by 5% from 57 173 to 59 967. Prior to the Covid-19 pandemic, the first quarter (three months ending March 2020) saw Curro’s learner numbers boosted by 9% (from December 2019 to January 2020) and fee collections increasing by 24% from the same period in the prior year.
For the period under review, schools’ EBITDA (earnings before interest, taxation, depreciation and amortisation) increased by 11% from ZAR491 million to ZAR546 million, with group EBITDA going up 12% from ZAR415 million to ZAR466 million. The EBITDA margin increased to 29%.
Recurring headline earnings and recurring headline earnings per share increased by 9% from ZAR153 million to ZAR167 million and from 37.1 cents to 40.5 cents, respectively.
Headline earnings decreased by 23% from ZAR206 million to ZAR160 million, while headline earnings per share decreased from 50.0 cents to 38.7 cents, which was predominantly due to a once-off deferred tax reversal recognised in the prior year interim period.
No interim dividend was declared for the period under review.
“Despite the impact and uncertainty brought about by Covid-19, Curro remained committed to its value proposition by providing quality education to learners and their parents,” said Andries Greyling, Curro Holdings CEO.
“Teaching and learning have not continued in the traditional sense, but by tapping into our digital strength, we innovated more. We will complete the academic year and cover the curriculum in its entirety; all learners will be assessed by the end of the year. I am proud of the way Curro, its staff, parents and teachers were able to adapt and rise above the challenges of the pandemic. We are particularly proud of our learners who have shown resilience and persistence that will undoubtedly pay off as they progress on their education journeys,” added Greyling.
Curro extended its focus to address the financial impact on its parents. The school fee increases of 15% from 2019 to 2020 were offset by an increase in discounts from 7.5% of revenue to 12.6% of revenue which included the set-up of the R60 million Covid-19 relief fund.
Curro ramps up online learning to cater to ‘new normal’
Curro embraced its vital role during the lockdown period, and committed to continue providing its curriculum via a virtual and remote learning strategy.
“All the years of funding and development of our online offerings paid off during lockdown, as Curro was well-positioned to pivot to an online learning environment. We already had this infrastructure in place that enabled us to prioritise our learners’ education – ensuring that they would not fall behind in their studies,” said Greyling.
During the period under review, Curro forged ahead with its commitment to deliver quality education by launching an online school, at the height of lockdown, which provides remote learning for learners from grade 4 to 9. As of the end of July, over 400 learners had enrolled for Curro Online – Curro’s new digital learning initiative.
Investment and expansion
Curro is poised to take advantage of opportunities to enhance its offering to learners in southern Africa. Curro will be raising ZAR1 500 000 000 from its shareholders in a Rights Offer to invest in potential opportunities and reduce the gearing levels of the company.
In addition, ZAR278 million has been invested for completing projects which were initiated in 2019, and to replace moveable assets. A further ZAR600 million will be invested to create capacity in predominantly greenfield schools that are experiencing growth and to fulfil commitments Curro had made in 2019, ahead of the pandemic. These commitments mainly include acquisitions and land banking.
Outlook for 2020
Curro’s focus remains on increasing its learner numbers at its existing facilities, twinned with its drive to help learners and staff adapt to the ‘new normal’, which has resulted in structural changes and the adoption of digital innovation sooner than expected.
“Due to market conditions, the nursery school market has remained subdued as this is considered a non-compulsory phase of schooling. Curro is addressing this by converting selected nursery schools to primary schools and assisted learning facilities. We continue to recognise the importance of education to children at this age, and will continue with our dedication to them. Numbers however, will be limited,” said Greyling.
“The future is uncertain for everyone. We are positioned well to fulfil all our commitments to our learners, their parents, our staff and shareholders, and will continue to lead and navigate the best we can during these challenging times,” concludes Greyling.