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Education and recruitment group AdvTech has kept its half-year dividend unchanged despite a surge in net profit, saying it plans to conserve cash as it invests in the business and battles a tough economy.
AdvTech said on Thursday revenue in the six months to end-June rose 15% to R2.5bn and profit after tax grew 28% to R242.1m, partly thanks to once-off gains including an insurance payout.
But AdvTech said it would keep its interim dividend unchanged at 15c a share.
The group saw “significant investment opportunities”, which meant it wanted to preserve cash, and capital commitments worth R1.4bn would be mainly debt-funded.
“Taking these commitments into account, together with the continuing challenging economic environment, the board has decided it would be prudent and responsible to continue preserving cash and have therefore maintained the dividend payout during this high capital-investment period.”
AdvTech, led by CEO Roy Douglas, will fork out R82m for dividend payments.
The group said revenue from its schools division increased 9% to R1.1bn in the first half, with strong growth in the rest of Africa.
But the division’s performance in SA was “muted”, partly because of “high levels of withdrawals owing to emigration and financial pressures, particularly in the premium schools”.
The group said its “strategic rationalisation” and organisational restructure in the schools division would yield positive results.
AdvTech said it was sharpening its market focus while increasing its presence in the mid-fee education sector. The tertiary division “remains well-positioned and continues to increase its presence in the higher education sector”.
“In the current challenging socioeconomic environment in SA, AdvTech is exercising prudence in continuing to advance its strategic objectives of improving academic quality and access to our offerings.”
Private education group Curro said earlier in August its recurring headline earnings increased 7% to R153m in the six months to end-June. Revenue increased 19% to R1.5bn.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
AdvTech keeps dividend unchanged despite profit jump
Education and recruitment group AdvTech has kept its half-year dividend unchanged despite a surge in net profit, saying it plans to conserve cash as it invests in the business and battles a tough economy.
AdvTech said on Thursday revenue in the six months to end-June rose 15% to R2.5bn and profit after tax grew 28% to R242.1m, partly thanks to once-off gains including an insurance payout.
But AdvTech said it would keep its interim dividend unchanged at 15c a share.
The group saw “significant investment opportunities”, which meant it wanted to preserve cash, and capital commitments worth R1.4bn would be mainly debt-funded.
“Taking these commitments into account, together with the continuing challenging economic environment, the board has decided it would be prudent and responsible to continue preserving cash and have therefore maintained the dividend payout during this high capital-investment period.”
AdvTech, led by CEO Roy Douglas, will fork out R82m for dividend payments.
The group said revenue from its schools division increased 9% to R1.1bn in the first half, with strong growth in the rest of Africa.
But the division’s performance in SA was “muted”, partly because of “high levels of withdrawals owing to emigration and financial pressures, particularly in the premium schools”.
The group said its “strategic rationalisation” and organisational restructure in the schools division would yield positive results.
AdvTech said it was sharpening its market focus while increasing its presence in the mid-fee education sector. The tertiary division “remains well-positioned and continues to increase its presence in the higher education sector”.
“In the current challenging socioeconomic environment in SA, AdvTech is exercising prudence in continuing to advance its strategic objectives of improving academic quality and access to our offerings.”
Private education group Curro said earlier in August its recurring headline earnings increased 7% to R153m in the six months to end-June. Revenue increased 19% to R1.5bn.
hedleyn@businesslive.co.za
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