AdvTech FY numbers - Buying New Assets

Vestact recommended stock AdvTech had results out a few days ago, for the full year ended 31 December 2018. The group is a leading private education provider with schools, colleges and universities and a smaller recruitment division. The results were satisfactory in a tough environment. Revenue was up 11% and operating profits grew by 14%.

The best performing unit was the university and tertiary division which grew operating profits by 23%. Rosebank College opened new campuses in Johannesburg, Bloemfontein and Pietermaritzburg. The group acquired Monash South Africa, and when that deal closes it will have 40,000 students.

The schools division had a tough year, but continues to expand, including in Nairobi, Kenya. In the last four years its network has doubled, to over 100 schools. A lot of work is going into improving the shared services base. In 2019 they will serve over 30,000 scholars. Its Crawford Schools metrics had excellent results.



We like this company because state-provided education in South Africa is creaking, and more parents want to go the private route. The group has impressive operating margins of over 17%. Although building schools is rather capital intensive, the shift to digital learning promises to be more cost-effective.

The share price performance of AdvTech has not been great, in a generally weak market in recent years. Don't worry about that, this is a good one. Hold!