Curro (COH) H1 2024 earnings summary

Executive summary

• Revenue increased 8% to R2,588 million for the six months ended 30 June 2024, with EBITDA up 10% to R625 million and recurring headline earnings per share rising 16% to 40.2 cents.

• Operating margin improved to 18%, and EBITDA margin recovered to 24.2%, reflecting strong cost management and profitability.

• Weighted average learner numbers increased by 1% to 72,758, with high school enrolment showing strong momentum.

• Cash generated from operations rose 3% to R624 million, exceeding capex requirements and supporting share buybacks and dividends.

• Strategic focus remains on optimizing existing capacity, enhancing service offerings, and prudent capital allocation, including share buybacks.

Financial highlights

• Fee revenue, the main driver, increased by 7%, with average fees per learner up 6%.

• Ancillary revenue grew 17% year-over-year and is now 75% higher than in the first half of 2019.

• Operating expenses rose 8%, with staff costs up 7.4% and facility costs up 9.4%.

• Net finance costs increased to R157 million due to higher interest rates and average net debt.

• Net debt reduced to R3.199 billion; cash generated from operations exceeded capex.

Outlook and guidance

• School fees for 2025 will increase by an inflationary 5.5% on average.

• Capex guidance remains at R700 million per year through 2026, focused on expanding and optimizing existing facilities.

• Management expects to reach 80% of capacity (about 80,000 learners) over the next four to five years, with 7,000–8,000 learner growth anticipated.

• No major expansion outside South Africa planned in the near term, with focus on core operations.

• Ongoing share repurchase program to deliver long-term value to shareholders.