ADvTECH benefited from good enrolment growth at its private education facilities, moderate fee increases and operating leverage in the 12 months to December 31, the results showed yesterday.
“In our resourcing division, we continued to benefit from our investment into the rest of Africa. This sustained performance is driven by the group’s established market position in South Africa and its growing presence across the continent,” CEO Roy Douglas said in a statement. He retired and stepped down as CEO on February 29, this year.
A final dividend of 57 cents a share (2022: 37 cents) was declared, bringing the full year dividend well up by 45% to 87 cents (2022: 60 cents) for the 2023 financial year.
This was after group revenue grew 13% to R7.86 billion as a result of good enrolment growth in both the schools and tertiary divisions and from increased business activity in the resourcing division. Operating profit increased by 18% to R1.58bn. Normalised earnings increased by 20% to R950 million.
At the schools division, all brands recorded volume and operating profit growth.
Schools South Africa’s revenue was up 13% and operating profit increased 18%. ADvTECH students recorded exceptional results in the 2023 Independent Examinations Board examinations, with a 99.7% pass rate, while 87.7% obtained a bachelor degree pass.
ADvTECH’s school brands in the rest of Africa recorded strong enrolment growth. Revenue increased by 14% to R381m while operating profit improved by 43% to R114m, despite the impact of the weakening Kenyan Shilling. Capacity was increased at Crawford International School in Kenya due to strong demand. Gaborone International School continued to perform well.
The tertiary division performed well, growing off the back of a well-established portfolio of quality brands and the multi-channel modes of delivery via contact, blended, online, full-time, part-time and distance learning. Revenue increased by 10% to R2.99bn and operating profit grew by 16% to R787m.
The Varsity College campuses in Pretoria and Midrand were expanded. Rosebank College acquired additional capacity at its mega-campuses in Braamfontein and Pretoria and opened a new digitally enabled campus in Mbombela in January this year.
In the Resourcing division, revenue increased 26% in the rest of Africa, while operating profit was 28% higher in the rest of Africa as the strategy to expand in the rest of Africa bore fruit and volumes grew substantially.
The South Africa resourcing business’ revenue contracted 9% to R229m due mainly to the disposal of the group’s 51% share of the Contract Accountants group in the second half of the prior financial year, along with the tough trading environment.
“Furthermore, the significant investments made by the group over a number of years are contributing meaningfully to earnings and cash generation. ADvTECH is now in a position where we are generating cash in excess of our investment funding requirements and, consequently, the board has increased the dividend payout to shareholders by 45%,” the group’s directors said.
Cash generated had increased by 10% to R1.94n in the past year. Capital expenditure was focused on meeting incremental demand via increasing capacity at existing sites as well as on a new school and a new tertiary site. Capital was also allocated to acquire equipment and technology to enhance teaching capability and to improve business systems.
Chairperson Chris Boulle said in a statement: “Roy has successfully led the group in its expansion strategy during his tenure… He leaves ADvTECH in a strong position to continue its growth trajectory.”
Geoff Whyte has been appointed as the new CEO.
BUSINESS REPORT