MARKET WATCH: A sterling report
Marc Hasenfuss on Curro, Famous Brands and Workforce
I don’t think there is a more anticipated trading update on the JSE than the earnings range pencilled in by fast-growing private education group Curro Holdings. When a share is accorded a trailing earnings multiple of about 140 times it’s not difficult for shareholders to pay special attention to a trading update. Indications are that PSG Group’s star pupil will bring home another pleasing report in the year to end-December.Curro has estimated its earnings range for the financial year to be between 43c/share and 47c/share — which means its bottom line continues to grow by more than 50% a year. If we assume it delivers to the top end of its earnings forecast, then the share is on a forward earnings multiple of 105 times. This is still a heady rating, but not quite as demanding as the +150 times earnings multiples we’ve seen in recent years. If we assume another 50%-60% growth in financial 2017, then Curro could post bottom-line earnings of between 70c/share and 80c/share. By financia...
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