EDITOR’S NOTE: Expansionist Curro comes down to earth
Curro, which once traded at over a 100 times earnings, has retreated to a much more pedestrian multiple of 17 times
There is always much to debate when two companies in the same business are accorded very different market ratings.I have always been fascinated by the discrepancy between the more established (and conservative, if you will) private education counter, AdvTech, and its PSG-aligned upstart, Curro (which my colleague Anthony Clark has tackled in detail in this issue).At the time of writing this note, the respective market capitalisations of AdvTech and Curro had intersected, the former holding at R5.5bn and the latter at R5.4bn. Four years ago Curro held a market value of more than R23bn and AdvTech was the minnow at about R8bn. This value measure is probably a little unfair since Curro has unbundled its tertiary operations under Stadio, which would add back — at current prices — another R1.2bn.But what is significant is the change in market ratings. I have persistently asked in the FM and IM whether the historically large discrepancy between the respective earnings multiples meant that...
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