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Curro's model is solid and resilient

Curro Holdings recently released its results for the six months ending 30 June 2021. Despite ongoing disruptions caused by South Africa’s third wave of the Covid-19 pandemic, the JSE-listed independent education provider has proven that its business model - underpinned by its strong financial position following the rights offer in 2020 - is resilient to tumultuous change.  

For the six months under review, revenue increased by 12.2% from R1.590 million to R1.784 million. Average learner numbers also increased by 7.2%, from 61 746 to 66 167 in the first half.  

“The strong learner growth recorded this year endorses the credibility of our robust offering, including an increased focus on digital education solutions,” said Andries Greyling, Chief Executive Officer of Curro Holdings. 

“The Covid-19 pandemic continues to disrupt the lives of South Africans and our economy with the education sector being one of the most affected industries. We are exceptionally proud of how our staff, learners and the communities we serve maintained their tenacious focus on education. It is with this powerful spirit that we courageously face the future, even though it remains unpredictable and volatile,” says Greyling.

Curro had 66 366 learners enrolled on 30 June 2021, representing a 9.2% increase on the 60 777 average number of learners enrolled for the 2020 year.

The group’s EBITDA declined by 16.3% from R466 million to R390 million.  

Headline earnings and headline earnings per share decreased by 27.5% from R160 million to R116 million and by 48.8% from 37.9 cents to 19.4 cents, respectively. 

“Earnings of the previous year were predominantly recorded during the first half of the 2020 financial year, and we expect a more balanced distribution of earnings for the 2021 financial year,” says Greyling.

The levels of bad debt and fee discounts granted were also higher during the first half of 2020 than the company had experienced prior to the pandemic. 

“Curro granted non-recurring discount relief of R60 million to its customers in the corresponding period due to the COVID-19 pandemic. If the COVID-19 discount granted in the previous year is excluded, discounts increased marginally to 9.1% of tuition fees from 8.8% in the comparable period,” says Greyling

The nonperforming portion of the debtors book mainly relates to learners who have left Curro and concerted efforts are being made to recover these.  “The quality and ageing of outstanding accounts for enrolled learners improved during the first half of this year,” says Greyling.


Reinvesting into the business  

Curro invested a further R374 million into the business during the year under review, mainly to complete projects which were already scheduled in 2020 to help expand capacity.  

“The primary objective for Curro remains to increase capacity utilisation of its existing facilities. We are on track with our overall capex programme to invest up to R1.1 billion in the business this year,” says Greyling.