ADvTECH’s share price rose more than 5percent on the JSE yesterday morning after the provider of private education reported a 6 percent increase in earnings for the year to end December and increased its full-year dividend by 33 percent.
Its headline earnings per share rose to 91.2 cents per share, but earnings per share declined by 2 percent to 85.1c, while normalised headline earnings per share were up 5 percent to 89.8c.
The group increased its final dividend to 20c, up from 15c a year earlier. Chief executive Roy Douglas said the group delivered a solid performance for the year, driven by an improvement in the operational performance at the schools division, continued profit growth in tertiary, and a robust result from the rest of Africa resourcing business.
“The good performance in the education division was despite an increase in loss allowance as a consequence of the Covid-19 pandemic and subsequent weak economy,” Douglas said.
Group revenue increased 8 percent to R5.50 billion and operating profit before interest and non-trading items increased 5 percent to R910 million.
In the schools division, student enrolment increased 5 percent, benefiting from restructuring, rationalisation and cost saving initiatives. The division’s revenue was up 4 percent, while operating profit increased 7 percent. The group elected not to increase school fees for the 2021 calendar year.
The schools division consists of 11 brands, with 109 schools across South Africa, Gaborone International School, Makini Schools in Kenya and Crawford International in Nairobi, Kenya.
In the tertiary division, the group reported a 9 percent increase in both revenue and operating profit.
The group owns nine tertiary brands that operate 33 campuses across South Africa.
Its resourcing division reported a good performance in the rest of Africa, with revenue surging 39 percent and operating profit increasing 42 percent.
Douglas said ADvTECH’s strategic resolve, committed employees, robust technology processes and infrastructure combined to deliver high-quality education and a resilient financial performance during the period.
Looking ahead, he said ADvTECH was satisfied that the group had sufficient resilience to navigate through the subdued economic environment.
“ADvTECH will remain bold and ambitious in the face of these challenging conditions, as we believe our performance in 2020 has put us firmly on the front foot. Our strong cash generation and sound balance sheet, together with sustainable cost and capital expenditure containment measures, affords the group significant capacity to navigate any future uncertainty,” Douglas said.
The share closed 1.60 percent lower at R12.31 on the JSE yesterday.
BUSINESS REPORT ONLINE