Johannesburg - ADvTech says it should be able to deliver on its target of boosting earnings per share - on a normalised basis - to 100c a share.
This, it says, is assuming no deterioration in the current climate and the opportunities it has identified and further investment into its offerings.
The company, which has 54 000 students at 101 institutions, says revenue for the first half to June gained 28 percent to R1.6 billion, while its trading operating profit grew 33 percent to R270 million. Its profit came in at PR161.2 million, a 54 percent gain year-on-year. About a year ago it was the subject of a subsequently aborted R6 billion hostile bid from Curro that would have created an education giant.
Normalised earnings per share gained 24 percent to 31.9, while headline earnings per share - a key indicator of performance - grew 48 percent to 36.5c.
The company explains that earnings per share, headline earnings per share and normalised earnings per share have been adjusted downwards by 0.7 cents. This is due to the retrospective adjustment of the 2015 rights offer.
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CEO Roy Douglas says “the schools division performed well, achieving a slight improvement in margins, thanks to continued underlying demand while also benefiting from recent acquisitions”. He adds tertiary’s performance gives it “a great platform from which to further entrench our leadership position in the private tertiary sector”.
In a statement to shareholders on Monday, the group said both its schools and tertiary divisions performed well with revenue growth of 20 percent and improved operating profit up. However, the resourcing division’s profits declined due to the uncertain economy, though revenue increased as a result of the recent acquisitions.
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Enrollments at schools gained 6 percent to 25 062, while students in its tertiary entities grew 20 percent to 29 138.
ADvTech has 81 schools - up from 76 a year ago - across 43 campuses through brands such as Abbotts College, ADvTECH Academies, Centurus Colleges, CrawfordSchools, Junior Colleges, Maravest Group and Trinityhouse. Its existing capacity at schools is 84 percent used.
It also recently purchased Summit College, which is yet to be consolidated in the group's results, and opened Founders Hill College in January 2016, while Copperleaf College will open under the ADvTECH Academies umbrella in January 2017.
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“The overall growth for the division including the new schools and acquisitions is expected to continue at a steady pace in line with our growth strategy.”
Its tertiary division includes the Independent Institute of Education (IIE) which operates Rosebank College, Vega, The Design School Southern Africa, Varsity College (including The Business School at Varsity College) and Forbes Lever Baker (FLB). The division has a national urban footprint of 20 Department of Higher Education and Training registered campuses.
The tertiary division acquired Capsicum Culinary School and a stake in Oxbridge Academy with effect from July, strengthening its position in the tertiary sector.
The listed company says the next phase of growth will be for it to to introduce new niche qualifications that provide career opportunities and growth into the distance education sector.
Its resourcing unit - which provides permanent and temporary staffing solutions - saw operating profit decline 30 percent to R9 million due to the tough environment.
Douglas adds the group remains focused on increasing its presence in mid-fee schools, identifying acquisition and partnership opportunities in both South Africa and the rest of the continent, and the expansion of its delivery model through technology-enabled education including blended and distance learning.
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