Sign up for our free daily newsletter


Get the latest news and some fun stuff
in your inbox every day

Curro 6 month numbers

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

Here are a quick overview of the numbers. Headline Earnings are up 82% to 51 million but due to the extra shares in issue the HEPS are only up 68% to 14.8c. Revenue is up 45% to R705 million and learners are up 26%. The number of schools has grown from 80 at the end of 2014 to 101 at the end of June. The advantage of a growing school network is that their overhead costs of running the group drop on a per learner basis. So the company gets relatively more profitable as they grow, the wonders of economies of scale. EBITDA margins improved from 20% to 23%.

The stock has been the market's preferred entrant into the private education space in South Africa, where the view is for 'blue sky' growth opportunities. There is a graphic from our post a year and a half ago, Curro full year results 2013, which shows that if the number of learners triples from here they will occupy still less than 1% of the education market in South Africa. So there is definitely scope for huge growth and continued growth at current eye watering levels. With the nice boost in HEPS the P/E ration moves from around 190 to around 120, so not cheap by any means! Looking forward the stock probably wont double in 3 years again with earnings growing into the share price. When at some point in the distant future where there are no longer growth opportunities, the huge amounts of cash generated from the company will then result in a very rosy dividend yield. For those with an already diversified portfolio this is a buy in our books


Other recommended stocks     Other stories about COH