South African private school network under pressure

Independent school network Curro reported a significant jump in earnings, but its learner enrolments and impairments from underperforming schools weighed on the company’s operations. 

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

The company released its results for its 2024 financial year, which represents the year ended 31 December 2024, on Wednesday, 5 March.

It reported 8% revenue growth to R5.14 billion and EBITDA growth of 9% to R1.26 billion.

The company’s operating margin expanded to 18.2% from 17.8% the previous year.

Curro’s profit for the period grew by 203% to R97 million, while earnings per share increased by 166% to 18.6 cents per share. These significant increases were largely due to impairment charges. 

While Curro recognised impairments of R365 million related to lower-yielding school assets in 2024, this is far lower than the R378 million impairment it recognised in 2023.

Curro reported learner enrollment growth of a modest 1% to 72,638 learners and opened three new campuses in the period.

These three new campuses are in Walvis Bay and Oshana in Namibia and at Barlow Park in Sandton, Johannesburg. The two new campuses in Namibia are part of a joint venture through a R37 million equity-accounted investment.

The company invested R669 million in new projects and expansions over the year, with plans to invest another R660 million in 2025 to maintain and expand its facilities further.

Concerningly, the company’s expected credit losses increased to R228 million compared to R139 million the year prior – a 64% increase – reflecting Curro’s higher outstanding debts.

Regardless, the company said it is in a strong financial position, having generated R866 million in cash from operating activities in 2024.

The company attributed its lacklustre learner growth to a weak consumer environment that depressed demand.

“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,” it said.

However, Curro’s outlook for 2025 is positive, with the company saying it remains optimistic that learner growth will improve.

“The business is resilient, and the group is committed to providing high-quality learning and teaching for all its learners,” it said. 

“Based on the learner achievements in 2024, Curro expects another exceptional school year in 2025.”

Curro’s board declared a dividend of 16.6 cents per share, a 13.39% increase from 2023, reflecting the company’s improved cash flow.