Any company posting an 80% increase in earnings is a buy, in my opinion. And Curro did it by increasing student count from 22k to 27k. So a 22% increase in students resulted in an 80% increase in earnings - that spells efficiency gains in my book. Who knows what sort of cash can be generated if they hit their 80k learner target.
On a PE of 192x? If you want to invest in the private education space, ADH is a much more attractive option with significantly better valuation metrics. A more energetic CEO and the decision to invest another R3bn into the business will furthermore spur future growth rates. Omo
Skaap - I quite like this company, or at least the idea. I have been adding for a while. I like it for a few reasons: my wife teaches at a "high price" private school - not a Curro school have you - and I see the value in what people are prepared to pay for a decent education for their kids. I see how passionate the teachers, at this school, are about teaching and people who are passionate about their jobs tend to get things done right, and while this might not apply to all, or any, Curro schools for that matter, and might not be a solid accounting basis for a valuation, it does give me a warm feeling, since surely it will apply to some. Curro has recently bought some high price private schools in KZN recently, however whether they can turn what might be a decent idea or model, into a profitable business is up to Curro management. And for that I like Oom Jannie. Obviously I would like to see the PE drop, but I understand that this sort of business might take a few years to show real returns. Anyway, if it drops, I might buy some more.
I have a number of friends who currently or who previously have taught at Curro schools. All of them are desperate to get out and teach at the old government model C schools. The teaching conditions at the Curro schools are awful and the pay is terrible. They take the jobs there straight out of teaching college and then when they get the experience they move. It does make me worry about the supposed superior quality education you get from them. I think long term the sustainability of paying poorly will come back to haunt them
First of all the stripey horse and the Topgun are right. Second of all PSG is the owner - a mixed blessing at best at worst...Third of all fee paying schools ratio of current expenditure to income is always too high. They are therefore by definition capital hungry and lastly I am not sure where you get 80 000 learners from the last target on the info page was 40 000 by 2020 which seems possible. That would be another 9 -10 schools.
I am actually surprised about the quality of teachers -but anyone who knows anything about managing educators will know that profits are about a million miles away from their thinking. Just out of collegers will not hack it.