Headline earnings per share (HEPS) in JSE-listed private education group, ADvTECH, soared 16% in the interim period to June, driven by a 9% surge in revenue to R4.2 billion on account of strong demand and higher enrolments.
Geoff Whyte, CEO of ADvTECH, yesterday said half-year HEPS in the company quickened by 16% to 97.7 cents. This saw the company bump up its interim dividend from 30 cents earlier in the year’s contrasting period to the current 38 cents.
Investors in the company reacted to this positively with the ADvTECH share price trading 2.21% higher at R33.80 in afternoon trade on the JSE yesterday. This extended a positive run in the shares of the company which have appreciated by 8%, 9.83%, and 65.35% in the past seven days, 30 days and one year comparative, respectively.
Revenue for the group’s South African schools was 11% higher for the half year at R1.5bn, driving up the operating profit for this segment by 12% to R316 million.
“To meet the demand for quality private education in the mid-fee sector, we are currently constructing a Pinnacle College campus in Ridgeview, Roodepoort, which will open in January, 2025. The success of Pinnacle College Raslouw in Centurion also continues with good enrolment growth, necessitating the build out of the balance of the school several years ahead of plan,” said Whyte.
Expansion projects at the company’s Rosebank College Cape Town, Pretoria, and Braamfontein mega campuses are already under way. A new campus is also under construction for Vega Pretoria adjacent to Varsity College, in addition to the completion of further expansion projects at the Varsity College Pretoria, and Cape Town.
These expansions of capacity are geared to “increase capacity to meet continued strong demand” for the company’s private education services.
In the rest of Africa schools category, ADvTECH raised operating profits by 29% to R62m. The company’s tertiary category raised overall revenues by 13% to R1.69bn, while the operating profit lifted up to R436m.
“These were achieved through healthy growth in enrolments, moderate fee increases, and continued margin improvement, despite the challenging economic environment. The group continues to build its competitive advantage through investing in the delivery of superior technology-enhanced teaching and learning,” explained Whyte.
However, due to a challenging operating environment in South Africa, worsened by low margin contracts coming to an end in the rest of Africa operations, resourcing revenues for the group declined by 3%. Net finance costs for the half-year period under review increased marginally to R93m due to increased finance costs on lease liabilities that resulted from several new leases being entered into or renewed.
Nonetheless, the strong cash-generating capacity of the group was reflected in its cash generated by operating activities rising 12% to nearly R2bn.
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