JOHANNESBURG - AdvTech gained more than 10 percent on the JSE yesterday after the private education provider reported double-digit growth in revenue for the six months to end June boosted by its investments in schools in the rest of Africa region.
The group said its revenue increased by 13percent to R2.83billion, with Africa operations recording an 18percent increase in revenue to R108million, despite Kenya’s government deciding to defer the school year until 2021.
However, it said it took an estimated R88m hit in revenue as a result of the Covid-19 outbreak due to the withdrawal of students, with Makini in Kenya not able to recognise revenue for two months and the loss of revenue in resourcing South Africa.
The group's operating profit before interest and non-trading items increased by 4percent to R444m and normalised earnings per share decreased by 2percent to 41.8cents a share while headline earnings per share decreased by 8 percent to 40c.
The group did not declare an interim dividend.
Chief executive Roy Douglas said that the underlying performance had been encouraging with an improvement in the school division’s performance, sustained level of performance from the tertiary division and an excellent result from the rest of Africa resourcing business.
“The strong start to the financial year underscored the strategic management decisions taken in previous periods, resulting in the group being well-positioned to withstand the impact of Covid-19 on its operations and transition more than 75000 students to online tuition without a single academic day lost.
"Our response was aided by our investment in learning management systems in 2015, the commitment and adaptability of our academic, IT and support staff as well as the remarkable resilience of our students,” Douglas said.
The group operates three divisions: schools, tertiary and resourcing.
The tertiary division reported a 14 percent growth in revenue to R1.18bn, supported by a 13percent increase in student numbers at the beginning of the year, while operating profit increased by 3percent to R252m.
The group said the schools division benefited from past restructuring and rationalisation and it increased enrolments at some of its schools.
The resourcing division delivered revenue growth of 39percent in the rest of Africa region and a 45percent increase in operating profit.
Douglas said the group was satisfied with its resilience aligned to its strategy to navigate through the current economic crisis caused by the pandemic.
“The group has maintained a strong balance sheet with significant capacity to navigate the uncertainty by maintaining our cash flow and staying within our existing facilities with sustainable cost and capital expenditure containment measures,” Douglas said.
AdvTech shares closed 6.67percent higher at R8.16 on the JSE yesterday.
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