Curro takes R378 million impairment hit

Private education provider Curro recognised impairments of R378 million related to poor-performing school assets, significantly impacting their earnings per share. 

This was revealed in the company’s results for the 2023 financial year, where it declared a dividend of 14.64 cents per share from its cash reserves despite the impairments. 

Curro’s revenue grew by 14.6% to R4.8 billion in 2023, supported by growth in learners and increased school fees. 

The company’s weighted average number of learners for 2023 increased by 2% to 72,031 learners, while tuition fees rose 12%. 

Curro’s registered learners have continued to grow, reaching 73,159 as of 5 February 2024, marking a 1.6% increase on the average for the previous year.

As a result, headline earnings rose by 29% to R426 million, and headline earnings per share rose by 19.2% to 73.2 cents. 

However, earnings per share decreased by a massive 82.5% to 7 cents per share – down from 40 cents per share in the prior year. 

Curro explained that this is due to the company recognising impairments of R378 million due to lower-yielding school assets following annual reviews of each school. 

These impairment charges are included in the calculation of earnings per share but are added back into the equation for headline earnings per share. 

Curro is in a healthy financial position after another credible operating performance and strong cash flows during the 2023 financial year.

On a brighter note, the company crossed a significant milestone in 2023, with it being the first year that Curro generated more cash from its operations than was invested in capital expenditure. 

CEO Cobus Loubser said this highlights the group’s maturing financial strength and operational efficiency.

Curro generated R875 million in cash from its schools and reinvested R715 million back into the business in 2023. 

The company will invest around R700 million in the business in 2024 to enhance its facilities and expand its reach.

Curro said there continues to be a strong demand for private education in South Africa, and it will continue to try to meet that demand by spending heavily on the business.