ADvTECH reports another year of growth and higher dividends
The ADvTECH Group grew the operations of all its private education brands in the year to December 31, and raised normalised earnings per share by 18% to R6.96 billion.
Operating profit for the private education provider that has grown steadily over more than five years increased by 20% to R1.33bn.
A full-year dividend of 60 cents per share was declared compared to 50 cents previously.
A sound balance sheet and reduced borrowings meant the dividend was at the same cover ratio as the previous year.
CEO Roy Douglas said in a telephone interview the performance had come from continued enrolment growth and operating profit enhancements, particularly in their other African markets.
The rest of Africa tertiary division, in particular, continued to increase its presence and number of placements in 19 countries, and its revenue increased by 38% to R1.41bn and operating profit by 129% to R89 million.
The decision to invest in selected African markets was now contributing significantly to operating profit, due in part to faster growing economies in these countries and less consolidated education sectors, said Douglas.
Schools in the rest of Africa increased revenue by 25% to R334m and operating profit by 69% to R80m, with the operating margin improving from 17.7% to 23.9%.
In South Africa, the operating profit margin improved due to an ongoing drive for efficiencies and better systems, and eliminating wastage and duplication. The improved operating margin at the schools’ division had been an area of focus, he said.
With good enrolment growth in both the schools and tertiary divisions complemented with increased business activity in the resourcing division, group revenue grew by 18% to R7bn.
Cash generated increased by 11% to R1.8bn.
“The expectations are that our growth trend and continuing strong cash generation will continue,” Douglas said, adding that they would also continue to seek measured expansion opportunities.
ADvTECH’s learners achieved a 99.5% pass rate with 90.8% obtaining a bachelor degree pass.
Pinnacle Raslouw in Centurion opened in January, 2023. Enrolments exceeded expectations and phase two of the project was brought forward.
The Gaborone International School performed well, with strong enrolment growth and market-leading academic results.
Capacity was increased at Crawford International in Kenya due to the strong demand.
The school’s final year learners completing their A-level qualification achieved 95% acceptance into international universities in the US, UK, Europe, Canada, Hong Kong, Asia, and Australia.
The introduction of the Cambridge International Curriculum at Makini Schools in 2020 had proved successful, with enrolments approaching 1 000 learners.
The tertiary division continued to grow off its well-established brand portfolio of programmes and qualifications. Its operating profit increased by 12% to R680m, with the operating margin remaining flat at 25%.
Capacity was increased at the Varsity College campuses in Pretoria and Midrand due to growing demand. Similarly, buildings adjacent to Rosebank College’s Braamfontein and Pretoria mega campuses were acquired to allow for further growth.
Douglas said: “ADvTECH remains uniquely positioned to benefit from the continued growth in demand for education in both South Africa and particularly in the rest of Africa. This, together with the good enrolment growth achieved at the start of 2023 in both our schools and tertiary divisions, gives us confidence and an expectation that we will continue on our growth trajectory.”
The schools’ division comprises nine brands with 110 schools across South Africa and the rest of Africa. It owns eight tertiary brands across 32 campuses in South Africa. ADvTECH’s eight resourcing brands places thousands of candidates annually.
BUSINESS REPORT