Private education seen as the future in South Africa

You want to mark these words from JSE listed investment specialist PSG Group. “Ample opportunities exist for Curro (an affordable private school business), to continue with its growth path. PSG remains fully supportive of the company’s vision to achieve 80 schools by 2020”.

It is not only that the statement reveals an invaluable investment opportunity but you have to mark it because it speaks to a fundamental social matter, the future of education in South Africa. Are you ready for it?

Currently, Curro operates 26 private schools across South Africa which accommodates about 21000 learners. Curro was launched with a single school accommodating 145 students in 1999. The number of schools rose to 2 in 2007, to 5 in 2010, 12 in 2011and 26 in 2013 (See graph). This makes Curro the largest private school formation in the country.curro graph

Curro generated R309m in revenue during the six months ended June which showed 91% growth when compared to the 2012 figure.

The 2020 vision sets Curro to multiply by 3.07 times over the next six years. A tardy calculation pushes Curro’s learner numbers to over 60000 by 2020.

Curro is not alone in this space. Another JSE listed entity ADvTech spotted the opportunity some time ago. With brands like Junior Colleges, Abbotts College, Crawford Schools, Trinityhouse, the company has grown in leap and bound over the past few years. These companies are flourishing on the back perceptions that South Africa’s public education standards are on the decline. Moneyed households are fleeing the public sectors in large numbers into private education.

If the trend continues it will become a huge social movement. A significantmajority of South African learners remain within the public schooling system. According to the latest numbers of the department of education, South Africa has about 14 million pupils and I million students. These are spread across 35000 educational institutions manned by about 453000 teachers and lecturers. The country has about 1800 private schools.

Obviously Curro thinks the migration will continue. The backing from PSG Group which owns 57.1% of Curro is worth noting. The PSG crowed has proved to be capable of following the money. This is the crowed which backed Capitec Bank way back when it impossible for a ground up operation to challenge South Africa’s Big Four Bank. Look where Capitec is now?

Curro has other big plans. The company raised R605m in May this year to be deployed on growth projects. This money is going into the expansion of existing campuses, as well as in the addition of five new schools for the 2014 year. In the six months to June Curro completed two acquisitions, namely a teachers training college and the 4 300-learner Northern Academy.

News@ujuh.co.za

 

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