Curro (COH) is a private education group focused on building and operating schools for children up to matriculation. The company's tertiary division was unbundled and separately listed on the JSE as Stadio (SDO) on 3rd October 2017. Curro has capitalized on the decline in government education since 1994, and it is a spin-off from PSG, which still holds a 17.2% stake.
On 30th December 2015, Curro reached an exceptionally high price-to-earnings (P:E) ratio of 245 on the JSE, driven largely by its perceived growth potential. The company's business model seemed limitless as it continued to acquire or build more schools. Currently, Curro operates 178 schools across 76 campuses, with an average of just over 72,000 students.
However, Curro has faced challenges, including falling pupil numbers and parents struggling to pay school fees. The company has also impaired the value of its schools by R202 million and increased its bad debts provision. On 1st March 2022, PSG announced that it would unbundle its 63.6% holding in Curro into the hands of PSG shareholders, aiming to release value for those shareholders.
Curro has been involved in legal actions with the City of Johannesburg to prevent schools from being classified as businesses for rates purposes. The company won this case on 2nd March 2023.
In its results for the year ended 31st December 2023, Curro reported a 32% increase in recurring headline earnings per share (HEPS) and a 15% increase in revenue. The company noted that Curro’s weighted average number of learners for 2023 increased by 2% to 72,031, and revenue grew by 15% to R4,764 million. Tuition fees increased by 12%, supported by growth in learner numbers, price-mix across grades, and annual fee increases. Additionally, ancillary revenue rose by 33%, contributing R120 million more than the previous year.
In a trading statement for the six months ending 30th June 2024, Curro estimated that HEPS would increase by between 10.9% and 21.3%.
Technically, Curro’s share price has been moving sideways since the COVID-19 impact in March 2020, but there may be signs of a new upward trend emerging. Education is generally considered a good investment because parents tend to prioritize paying for their children's education, which means education companies have lower working capital requirements. While these companies do not typically face union problems, they are capital-intensive, as each school requires significant infrastructure to operate, adding an element of risk.
On 30th December 2015, Curro reached an exceptionally high price-to-earnings (P:E) ratio of 245 on the JSE, driven largely by its perceived growth potential. The company's business model seemed limitless as it continued to acquire or build more schools. Currently, Curro operates 178 schools across 76 campuses, with an average of just over 72,000 students.
However, Curro has faced challenges, including falling pupil numbers and parents struggling to pay school fees. The company has also impaired the value of its schools by R202 million and increased its bad debts provision. On 1st March 2022, PSG announced that it would unbundle its 63.6% holding in Curro into the hands of PSG shareholders, aiming to release value for those shareholders.
Curro has been involved in legal actions with the City of Johannesburg to prevent schools from being classified as businesses for rates purposes. The company won this case on 2nd March 2023.
In its results for the year ended 31st December 2023, Curro reported a 32% increase in recurring headline earnings per share (HEPS) and a 15% increase in revenue. The company noted that Curro’s weighted average number of learners for 2023 increased by 2% to 72,031, and revenue grew by 15% to R4,764 million. Tuition fees increased by 12%, supported by growth in learner numbers, price-mix across grades, and annual fee increases. Additionally, ancillary revenue rose by 33%, contributing R120 million more than the previous year.
In a trading statement for the six months ending 30th June 2024, Curro estimated that HEPS would increase by between 10.9% and 21.3%.
Technically, Curro’s share price has been moving sideways since the COVID-19 impact in March 2020, but there may be signs of a new upward trend emerging. Education is generally considered a good investment because parents tend to prioritize paying for their children's education, which means education companies have lower working capital requirements. While these companies do not typically face union problems, they are capital-intensive, as each school requires significant infrastructure to operate, adding an element of risk.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.