Curro bounces back

Curro’s earnings have recovered in the first half of this year following a major impairment the company took in 2023.

Private education provider Curro released its interim results for the six months through June 2024 today, which revealed a strong performance.

The company’s average number of learners increased by 0.5% to 72,758, which saw revenue increase by 8% to R2.59 billion.

Specifically, total school fee revenue increased by 6.8% due to the growth in learners, coupled with the annual increase in school fees for this year, which averaged about 6.0% per learner for this year. 

However, total operating costs increased by 8.1%, with total employee costs constituting about two-thirds of Curro’s total operating costs. 

It explained that the total increase in employee costs was 7.4%, while other expenses grew by 9.4%. 

Excluding the three new school campuses opened in the current period, employee costs increased by 6.7%, and other expenses rose by 8.7%.

Therefore, Curro explained that the ratio of other expenses to revenue in the current period was higher than the prior corresponding period, driven by additional extramural activities and increased costs associated with the growth in ancillary services. 

In addition, the company’s expected credit losses of R77 million provided for during the first half of this year were similar to the R78 million provided in the first half of last year. 

Its remaining debtor’s book, net of the expected credit loss provision, is R240 million of actively enrolled accounts, up from R194 million the year prior, and R121 million of inactive accounts, up from R90 million.

However, EBITDA increased by an impressive 10.4% to R625 million, and earnings per share grew by 20.4%.

Curro’s earnings per share reached 40.2 cents, up from 33.4 cents in H1 2023.

Curro revealed in its 2023 full-year results that impairments of R378 million related to poor-performing school assets significantly impacted its earnings per share. 

For the full 2023 financial year, Curro’s earnings per share decreased by a massive 82.5% to 7 cents per share – down from 40 cents per share in the prior year. 

However, the company has now recovered, with no major impairments reported in these half-year results.

Curro said is actively pursuing opportunities to offer quality education to more learners in Southern Africa. 

It opened three new campuses in Walvis Bay and Oshana in Namibia and at Barlow Park in Sandton, Johannesburg, in the first half of this year. The two new campuses in Namibia are part of a joint venture. 

Much of the company’s focus in the short to medium term is to support and increase the capacity utilisation of its existing facilities.

Curro invested R306 million in its business during this period, down slightly from R312 million last year. 

It plans to invest up to R700 million in capital projects during the full 2024 year to maintain, replace, and expand its facilities and accommodate the strong demand for high school tuition.

Curro also listed other investing activities of R16 million in its statement of cash flows, which represent the aggregate net decrease in money market investments and other financial assets, down from R41 million in H1 2023.

“The group increased its operating margin during this period and we expect that Curro will sustainably generate more cash from its operations than what is required for capital expenditure in the future,” the company said.