Shares in tertiary education group Stadio Holdings surged as much as 13.2% to R3.77 on Monday morning — the most in two weeks — after the company said it made a net profit of R77.3m in the year to December, from a loss of R5.1m in 2017.

The group, which Curro Holdings unbundled onto the JSE in October 2017, said revenues increased fivefold in the year to R633m, as student numbers rose from 12,976 to 29,885 thanks to the addition of new brands.

Stadio aims to ultimately have 100,000 students in its institutions.

It recently added Afda, Southern Business School, Lisof, Milpark and Prestige Academy to its portfolio.

“The group experienced good growth in its contact-learning students, driven largely by the expansion of the Embury Musgrave campus as well as the opening of the two new Embury campuses in Montana and Waterfall,” Stadio said.

However, bad debts as a percentage of revenue increased from 1.5% to 3.2%, mainly because of its acquisitions.

“We continue to look at ways of improving collections and facilitating funding mechanisms to assist students with their funding needs where appropriate,” the company said.

Stadio said it would use its cash balance of R260m to fund working capital, expand campuses, and for potential acquisitions.

Since it was also finalising a debt facility, the group said it had no plans to raise capital from shareholders in the short term.

The company is considering building new campuses in the Western Cape, Gauteng and KwaZulu-Natal.

It said it had reached agreements to buy vacant land in Durbanville in the Western Cape, and was considering land deals in Gauteng.

The company planned to complete the first of these “large-scale comprehensive” campuses in Gauteng or the Western Cape by 2021.

Further, Stadio said it would expand the Montana campus in 2019 to increase capacity for both Embury and Afda students.

This would provide Afda with “a geographic expansion opportunity into Pretoria”, Stadio said.

The group was also pursuing acquisitions “that will have a direct impact on the variety of programmes offered by the group and that support the group’s strategy to become a leading multiversity”.

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