Private higher education group Stadio’s share jumped by almost a third on Wednesday, after it reported that student enrolments so far in 2020 had outperformed expectations.

While  51 students had dropped out because of Covid-19, the group gave an upbeat assessment of the performance of its accounting educator CA Connect, which it acquired in 2018 for R32.3m.

The group, whose brands include Milpark Education, the Southern Business School and Afda, said by May 1 2020 it had enrolled 31,047 students, reflecting a 10% increase over first-semester enrolments in the same month in 2019.

Collection of student fees over this period increased by 6% compared to May 2019, the group said.

Stadio was unbundled from Curro and listed separately in October 2017, but has not been immune to Covid-19, saying on Wednesday it had resolved to delay the construction of its new multi-faculty Stadio Centurion campus. This was intended to open in 2021, but is now expected to open in 2022.

Unlike Curro, which recently announced a R1.5bn capital raise, Stadio said on Wednesday it did not foresee a need to raise capital.

“Furthermore, the Covid -19 pandemic has created a shift in the perception and attractiveness of distance/remote learning and, coupled with the attractive price point of the distance learning offerings, has provided an opportunity for Stadio, which currently has approximately 25,000 distance learning students, to actively pursue further growth opportunities,” the group said.

The group also expects a more than 100% fall in headline earnings per share (heps) in its six months to end-June, partially due to writedowns of existing brands as it shifts to a single brand under the name of Stadio. This will result in writedowns of R60m.

The group is also facing additional acquisition costs related to its purchase of CA Connect. The acquisition had conditions related to profit targets, though the group did not go into detail and enrolments have been better than expected.

Core heps, which adjusts for items management feels distort underlying performance, is expected to rise by between 4% and 24%, the group said.

The update was very upbeat and signs were very encouraging for the group’s second half as well, said Small Talk Daily’s Anthony Clark. The group could also benefit somewhat from the effects of Covid-19, he said.

“With many of Stadio’s courses actually tailored to the world of work and offering credentials to allow participants to be better prepared to start or enhance a career, Stadio is better placed  in the education sector, as learners will happily pay to enhance career opportunities,”  said Clark.

Meanwhile, Curro said on Wednesday that from January to March, school fees collections were 23% higher when compared to the same period in 2019.

However, between March and April 2020, collections declined by 20%. It saw a slight improvement in May and June.

“Taking all this into account, bad debt provisioning and financial assistance will increase, but the extent thereof is still uncertain,” it said.

The company said it expects to conclude its rights offer aimed at raising R1.5bn  by the end of August.

Curro and Stadio are part of investment group PSG’s stable.

Curro’s primary and high schools have experienced a benign decline of 468 learners or 0.1% since March 2020. New enrolments for June alone amounted to 513 learners for all grades. Curro expects growth in new enrolments, as “other industry players are subject to greater operational and funding challenges”.

Stadio’s share price jumped 11.7% to close at R1.43, giving it a market capitalisation of R1.17bn.

Curro’s share price closed unchanged at R9, with market capitalisation of R3.7bn.