Curro (COH) H2 2024 earnings summary

Executive summary

• Revenue increased by 8% to ZAR 5.1 billion for the year ended 31 December 2024, with EBITDA up 9% to ZAR 1.258 billion and operating margin rising to over 18% from 17.8% year-over-year.

• Recurring headline earnings grew by 13%, and average learner numbers increased by 1% to 72,758, despite economic headwinds impacting enrollment growth.

• Cash generated from operations exceeded CapEx by ZAR 200 million, continuing a positive free cash flow trend.

• Operational excellence, innovation, and financial discipline enabled resilience in a constrained consumer environment.

• Achieved record academic and extracurricular results, including the largest matric class and best results to date, with notable sporting and cultural achievements gaining global recognition.

Financial highlights

• Total revenue rose 8% year-over-year to ZAR 5.144 billion, driven by learner growth, annual fee increases, and higher ancillary revenue.

• EBITDA rose by 9% to ZAR 1.258 billion, and recurring headline earnings per share grew by 13% to 83.0 cents.

• Ancillary revenue grew 12% year-over-year, and operating expenses increased by 8%, mainly due to new schools and higher staff costs.

• Net debt decreased to ZAR 3.155 billion, and net finance costs rose to ZAR 314 million due to higher interest rates.

• Dividend increased by 13% to 16.60 cents per share, with cash generated from operating activities at ZAR 866 million.

Outlook and guidance

• Expectation of a slightly lower operating margin in 2025 due to slowing fee revenue growth and continued consumer constraints.

• CapEx for 2025 projected at ZAR 660 million, with about ZAR 400 million allocated to maintenance and replacement, and the remainder to facility expansion and risk mitigation.

• Tuition fees for 2025 increased by 5.5% per learner.

• Focus on increasing operating margin, reducing discounts and bad debt costs, and maintaining tight cost discipline.

• Consideration of acquisitions with growth and cost-saving potential, funded by debt.