Curro forecasts a sharp decline in recurring headline earnings per share
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CURRO Holdings said in a trading statement yesterday that recurring headline earnings per share were expected to decrease by between 54.7 percent and 47.1 percent for the six months to the end of June.
Recurring headline earnings per share were expected to be between 18 cents and 21c, the education company said.
One of the reasons was a R1.5 billion rights offer in September last year, which resulted in 42 percent more shares in issue during the first half of this year compared with the first half of last year, which reduced earnings per share meaningfully.
The average number of learners in the six-month period increased 7 percent, and revenue increased 12 percent from the previous comparable period.
Curro said they were proud of the learner growth and strategic progress over the six months, even though the Covid-19 pandemic continued to disrupt learners and the economy.
Another reason for the earnings decline was that Curro’s earnings for the previous financial year to December 31, 2020 were significantly weighted towards the first half of 2020, because schools were closed for three months due to the lockdown, with concomitant first-half cost savings.
The schools were fully operational in the second half of 2020 and in 2021.
As a result, R167m, or 93.3 percent, of the total recurring headline earnings of R179m for 2020 was recorded in the first half of the 2020 financial year.
“However, we expect a more balanced distribution of earnings across the 2021 financial year,” Curro said.
The company said it used R1.1bn of its R1.5bn rights issue to cut debt, which strengthened the balance sheet.
Curro Holdings closed 4.27 percent lower at R11.20 on the JSE yesterday.
BUSINESS REPORT ONLINE