FAST-growing private education company Curro continued on its path of profitability in the six months to end-June, but no dividend was declared as it retains cash to continue its rapid expansion.
Curro reported diluted headline earnings per share of 5.2c on Tuesday. That compared with a loss of 1.9c in the year-earlier period. In February Curro reported diluted headline earnings per share of 7c for the year to end-December, compared with a loss of 5.4c for full-year 2011.
Earnings before interest, taxation, depreciation and amortisation (ebitda) in the half-year to June 2013 rose by 178% to R51m.
Curro’s growth has far outstripped its projections. First-half revenue increased by 91% to R309m as the number of learners at Curro schools increased by 76% to 21,908. It said 2014 enrolment numbers were looking promising.
The company, which celebrated its 15th birthday in July, opened its first school with 28 learners in July 1998. Upon listing in 2011 Curro had 5,557 pupils in 12 schools. In its prelisting statement, it projected that by the end of 2013 it would have 17 schools with 9,594 pupils.
Curro said a rights issue in February had significantly strengthened its balance sheet. That rights issue followed one in 2012, when Curro, which is majority owned by PSG Group, moved to the JSE’s main board from the AltX exchange.
Over the short term, Curro said on Tuesday, all the legacy funding at different terms and covenants had been repaid, except for R60m in moveable asset finance.
It said it therefore had a base to raise funding at more favourable terms. This would be balanced between a domestic medium-term note programme, and term and facility funding from banks.
It said on Tuesday that the only other outstanding debt as at June 30 2013 was in respect of the Meridian business.
Curro obtained a BBB credit rating from Global Credit Ratings (GCR) in July. GCR’s corporate ratings head for Africa, Eyal Shevel, said at the time that the rating reflected two conflicting features of Curro: its rapid growth PSG’s equity investment and its subsequent listing; and that most of its schools remained in the start-up phase and had therefore been losing money.
He said it would require further dent funding to expand but noted that its existing schools were becoming more profitable.
The company plans to invest more than R500m in the expansion and development of new campuses in the current financial year.
Curro offers education for children from three months to grade 12 in four categories of schools — Curro private schools, Meridian private schools, Curro Castle nursery schools and select private schools — and is moving into teacher training as well.
It is building new campuses in Ballito and Port Elizabeth. For the Meridian business, a new campus is being built in Karino in Nelspruit, as well as an additional campus in Polokwane. The first new Curro Castle is under development in George.
No dividend has been declared for the period under review. Curros soon as cash generated exceeded capital requirements, dividends would be paid.