Curro to reach target five years early

Johannesburg - South African private schools firm Curro Holdings Ltd will meet its target of running 40 academies by year end, five years ahead of time, it said on Tuesday, as parental frustration with often overcrowded state-run schools boosts demand.

Shares in Curro, which also reported a 76 percent rise in first-half profit on Tuesday, jumped more than 5 percent to 26.25 rand by 13:04 SA time, extending a rebound from a seven-month low of 23.01 rand seen at the end of last week.

The company, along with rival ADvTECH Ltd, is betting on growing demand from parents unhappy with the public education system in Africa's second-largest economy.

Its stock has rocketed nearly eight-fold since its listing on the Johannesburg bourse in 2011.

“I don't think consumer wealth has grown all that much but I think parents know that it is important to put their children in affordable and decent schools and Curro gives them all that,” said Rigardt Maartens, a portfolio manager at PSG Securities.

South African spends more per capita on education than any other African country, but its public schools are frequently criticized for poor standards of teaching and infrastructure, leading to low exam pass rates.

A poll released this week by ONE, the anti-poverty campaign co-founded by rockers Bono and Bob Geldof, found education and jobs were key areas of concern to respondents in South Africa.

Founded four years after the end of apartheid, Curro has grown from 12 schools in 2011 to 32 this year, serving nearly 30,000 learners - a more than four-fold increase over the last three years.

Curro said it should meet a target of running 40 schools by the end of this fiscal year, five years ahead of schedule, despite slack consumer demand and a lack of confidence in the economy which has been hit by strikes and high unemployment.

The company, whose school fees range from 1,000 rand per month to 6,200 rand, aims to run 80 schools by 2020, double what it promised three years ago.

Curro said headline earnings per share - the main profit measure in South Africa that strips out certain one-off items - reached 9 cents in the six months through June compared with 5.1 cents a year earlier.

ADvTECH, a much pricer private education alternative that also runs tertiary institutions, is yet to report is annual results.

It posted a 12 percent rise in full-year headline EPS in March. - Reuters