Acquisitive Advtech buys more schools, but payout stays at 2017 levels
Advtech appears set on keeping pace with Curro in expanding its private school network via acquisitions.
Unlike Curro, Advtech shareholders are receiving dividends, albeit at the same level as in 2017.
"The group’s expansion plans to be implemented over the next few years require significant funding and therefore, the board believes it prudent to maintain the dividend," that company said in its results for the six months to end-June, which were released on Monday.
Advtech held its interim dividend at 15c, the same as in the first half of its 2017 financial year.
Echoing past result statements, Advtech’s said organic growth at its upmarket schools was hampered by emigration and financially constrained parents. It has responded by focusing on what it terms the "mid-fee sector" and expansion into the rest of Africa.
Acquisitions during the reporting period included 71% of Kenya’s Makini group of eight schools with 3,200 students for R130.8m.
This helped Advtech grow its interim revenue by 13% to R2.3bn, but its net profit declined by 8% to R196m.
Advtech’s school division increased its revenue by 18% to R1.1bn, contributing 47% of the group’s total for the six months to end-June.
"The acquisition of the Makini Schools group in Kenya, and securing of a management contract in Uganda, added nine schools, five campuses, boarding facilities and approximately 4,100 students to the division’s enrolments," the company said.
"This, together with the imminent opening of the Crawford International School in Nairobi, has resulted in significant progress being made in our strategy of expanding our operations on the rest of the continent."
Advtech’s tertiary education arm grew its interim revenue by 12% to R883m, contributing 39% of the group’s total.
"Three new campuses opened in 2018, including two new digitally enabled, blended learning sites of Rosebank College in Pietermaritzburg and Bloemfontein.
"Facilitating expansion into the fast-growing hospitality sector, a new campus in Johannesburg combines Capsicum Culinary Studio and The Private Hotel School," Advtech said.
Its staffing division grew revenue 4% to R321m, contributing 14% of the group’s total.