South African private school network feeling the pain

Curro’s earnings are expected to improve significantly in its 2024 financial year results, but the private education provider has identified 10 campuses in total where more impairments are expected.

In a trading statement released on Tuesday, 25 February 2025, Curro updated shareholders on its earnings expectations for the year through December 2024.

Curro is the leading independent school network in South Africa, offering private preschool, primary, and high school education options. 

In March 2024, the company revealed that it took a significant impairment hit of R378 million in its 2023 financial year. This impairment was related to poor-performing schools in its network.

This severely impacted the company’s earnings, with earnings per share falling by over 80% compared to the previous year.

By the end of June 2024, midway through Curro’s 2024 financial year, the company announced a much stronger performance and revealed that its earnings had grown by around 20%.

Now, the company said its 2024 full-year results will show an even bigger improvement from the previous year.

Curro expects its earnings per share to increase by between 117.1% and 217.1%. Headline earnings per share are expected to grow by between 9.3% and 17.5%.

This is a significant improvement from 2023, but the company explained that this was largely due to its impairments being significantly lower in 2024.

Curro reported an impairment charge of R378 million in 2023 and expects to report an impairment charge between R340 million and R380 million in 2024.

The company explained these impairments are still subject to final audit reviews but include the following ten campuses:

• Curro identified eight previously impaired campuses and expects to further reduce their book values due to slower-than-expected learner growth. These campuses contribute about two-thirds of the total expected impairment charges for 2024.
• Curro expects two campuses to be impacted by the closure of steel manufacturing operations in their respective catchment areas. The company expects that this could restrict their value in use in the future.

The company further revealed in its latest trading statement that it repurchased and cancelled 10.7 million Curro shares for a consideration of R120 million during its 2024 financial year.

Curro’s weighted average number of shares in issue for the year ended 31 December 2024 was 565,254,498 shares.

In addition, the company revealed it had 72,109 registered learners as of 10 February 2025, slightly below the 72,553 registered learners recorded on 29 November 2024.

“Consumer spend remains constrained, and the group’s enrolment has not benefited from moderating inflation and the gradual easing of interest rates over the last few months,” the company said.

Curro is expected to release its full-year results on Wednesday, 5 March 2025.