Private schooling firms underperforming
Private schooling firms are not shining as before: Curro spent heavily on growth and muted enrolments hurt AdvTech
It seems an obvious equation: bad and rapidly worsening government schooling plus desperate parents equals a boom for private education companies. So why are both Curro and AdvTech, the two pre-eminent education firms listed on the JSE, trading so far off their highs of the past two years? For fast-growing Curro, the problem is that it will probably have to dip into its investors’ pockets again. Consider that net cash generated from operating activities fell 23% to R313m in the year ended December, while cash on hand dwindled to R571m from R706m the year before.This has come as the company ratchets up spending on acquisitions and the building of new schools. In 2017 alone it spent R1.136bn on its schools business, for the construction of five new campuses across the country and the expansion of existing campuses. The amount includes R148m for "land banking". Spending will almost double to R2.3bn this financial year. Sasfin Securities deputy chairman David Shapiro, who says he’s stru...
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