Research archive for COH

We love the education sector here at Vestact and here's why. The South African Private School sector is a very fragmented market with only three prominent companies operating in the sector namely: AdvTech, Curro, and Reddam.

Noteworthy news on SENS yesterday, Curro To Acquire Windhoek Gymnasium. They will spend R180 million for the school with 1,509 learners at the moment. This is the first move outside of RSA for Curro and falls part of their plans to grow their number of learners from the current 36,000 to 90,000 by 2020. There are a number of regulatory hurdles to jump through with the purchase and given that it is an international purchase there will be a couple more. Based on recent purchases in the Education sector it would seem that they paid a fair price for the school.

We had numbers from Curro this morning, interim results for the six months ended 30 June 2015.

It's getting hot in there, so take off all the prose. In this case it was the other way around, the chaps from Curro stuck out a stinging SENS in response to the Advtech board rejecting their offer. This is unusual that any PSG controlled company goes hostile, it seems now that Curro will speak to the shareholders of the company. After all, they are the owners of the company and had expressed a desire for a deal of some sort to happen, bearing in mind that it is at a significant premium. We had seen earlier in the day a letter to parents of a school that is owned by Advtech, suggesting that any bid would be disruptive for the teachers and pupils. Not a single mention of the shareholders, the people that actually parted with their funds in order to build these institutions.

Curro and AdvTech confirmed yesterday that they are in talks. Obviously it was Curro who initiated the talks, they want to buy AdvTech. It makes sense that as the bigger competitor by market cap that they use the momentum and big shareholder to buy another business that the market has not taken so kindly too. As Michael pointed out yesterday however, and lean in a little closer to your screen here, Curro has a market cap of 12.1 billion Rand, turnover of just on one billion Rand for the financial year to end February. AdvTech has a market cap of 5.2 billion Rand, turnover of 1.93 billion Rand. Curro's turnover grew at 51 percent last year, AdvTech at less than ten percent.

Yesterday we received full year results from private school operator Curro. I am intrigued by this business because I love the educational theme so I went along to the presentation. Lets first look at the breakdown of this company.

Curro stands still for nobody. The independently listed schools business have acquired St Dominic's in Newcastle for an undisclosed sum, the school is all of 123 years old. The company is now half way to their 80 school target by 2020, currently they are at 41, so less than 7 schools a year from here. Curro are going to inject some money into the school, raising the pupil numbers by 340 to 900 eventually. They will build a heated pool, have an Astro Turf and other sports facilities. Going like gangbusters. Michael attended a Free Market Foundation speech by Loane Sharpe the other day and Loane had said that the cheaper private school enrolments last year had increased 27 odd percent (somewhere around there) and government enrolment down 6 percent. Parents are voting with their feet. Remembering that in 2013 (from a Curro results presentation) that only 4 percent of overall pupils attend private institutions. And of those folks attending those schools, around 5 percent of them attend private schools owned by Curro, there is certainly HUGE room for growth.

Yesterday we received 6 month results for the period ending 30 June 2014 from Curro, the biggest for profit private school education provider in South Africa. The presentation has lots of very informative tables so bear with all the figures being thrown at you. First lets look at the progress made as far as schools and learners are concerned.

Yesterday Curro had a voluntary announcement that they purchased another school. They purchased, "Waterstone College which has 1 210 learners, situated in Johannesburg South".

I wanted to add something to what Byron wrote yesterday in his piece on Curro - Making a profit, growing like crazy, but it only struck me whilst I was out having a jog/run (slow, sadly) this morning. Firstly, on the priority lists for parents, education of their kids ranks very, very high up the priority lists. If not at the top, very near to the top. Secondly and the main point was, watch the main shareholder of Curro, who is PSG. PSG Financial Services owns 101 729 366 shares, according to the 2012 annual report, but after the rights issues, there are now 294 794 391 shares in issue and the PSG holding is still 63.1 percent.

This morning we received results for the year ending 31 December 2013 from South Africa's biggest private school operator, Curro. Wow this business is flying. Learners increased by 69%, Revenue increased 80% and HEPS increased 87%. Of course there is a reason for this growth. Last year the company spent R1bn on acquisitions, development and expansion. That is big when you consider that the company's market cap sits at around R8bn. But throughout last year that number was closer to R5bn. Yes the share price has done that well.

If you are a Curro shareholder you will know that they have raised some money from you a few times over the last few years. You should also know that if you had followed your rights and given them the money it will have been money well invested (so far). The share price reached R25 today after trading at and around R20 a few months ago. Well you will be happy to know that this money is being well spent with an announcement that they are buying a school in Natal.

On Friday we received results for the year ending 31 December 2012 from Curro holdings as the company for the first time since listing, made a profit. I still wouldn't be worried by profits at this stage, they are in huge expansion mode. See below from the presentation which pretty much sums up what has been a very good year for the company.

Yesterday we had 6 month results from Curro one of my favourite stocks but wow has the ride been wild. How is this for some share price moves? The stock listed at 550c in June 2011 and closed at 799c on the day, it then fell all the way back down to 550c before starting its upward surge. It reached as much as R20 this month before pulling back to R16 a couple of days ago. After these results it is now sitting above R18 and a market cap of R4.2bn.

You know the saying "good things happen to good people". Well sometimes good things happen to good companies. And I don't mean good as in well run. I mean good in the context of performing a good service which helps build our nation. Yesterday Curro, the private schooling company made an announcement headed Curro, PIC and Old Mutual join forces to expand quality low-fee schooling.