Crawford Schools owner AdvTech talks up online school launch
Listed private learning group, AdvTech, on Monday reported a 13% rise in revenue for the six months ended June 2020 to R2.829 billion, while launching its online school, Evolve, in the period under review.
The group estimated that Covid-19 affected revenue by R88 million, owing to the withdrawal of students, Makini being unable to recognise revenue for two months as a result of a government directive, not being able to provide boarding, aftercare, early-childhood development and extramural activities and the loss of revenue in resourcing South Africa.
Operating profit, which increased by 4% to R444 million, was additionally tempered by an increase in provision for doubtful debtors of R91 million and Covid-19 related costs of R15 million, which were partially offset by savings achieved of R53 million.
The higher net financing costs and taxation rate in the period resulted in normalised earnings for the period decreasing by 1% to R226 million, while normalised earnings per share decreased by 2% to 41.8 cents per share, AdvTech said.
“AdvTech’s underlying performance for the six months ended 30 June 2020 has been most encouraging with an improvement in the school division’s performance, sustained level of performance from the tertiary division and an excellent result from the rest of Africa resourcing business,” said chief executive officer, Roy Douglas said.
“The strong start to the financial year underscored the strategic management decisions taken in previous periods, resulting in the group being well-positioned to withstand the impact of Covid-19 on its operations and transition over 75,000 students to online tuition without a single academic day lost.”
Schools South Africa
The schools in South Africa increased revenue by 9% to R1.072 billion, and operating profit increased by 13% to R198 million.
“There were some negligible withdrawals, mainly due to financial reasons, with the greatest number of withdrawals and temporary withdrawals at pre-primary level where more supervision is required for online or hybrid learning,’ the group said.
However, it also reported an increase in enrolments at some institutions.
“In line with our strategy to defend our revenue and using the mode of delivery preferred by our students, we launched our online school, Evolve, in August 2020.
“This world class home-schooling offering gives parents an alternative option for accessing quality education for their children. The online school will open in January 2021 with registrations starting in September 2020.”
AdvTech said it will also expand its mid-fee offering through the repositioning of select schools.
Maragon Ruimsig has been repositioned as a Crawford International, while the remaining Maragon schools will be merged within the other brands. Two underperforming schools, Trinityhouse North Riding and Trinityhouse Palm Lakes, will be closed at the end of the year, affecting approximately 200 students, it said.
The company’s portfolio includes Crawford Schools, Pinnacle College, and Trinity House. Tertiary institutions within its brand include Varsity Collge, Vega, and Oxbridge Academy.
University/tertiary division
AdvTech said its tertiary division sustained its performance with strong enrolments at the beginning of 2020, achieving 13% student growth. Revenue increased by 14% to R1.187 billion, and operating profit, having been impacted by a higher level of provision for doubtful debtors, increased by 3% to R252 million.
The group said that revenue for its resourcing division declined by 21% to R99 million, as a result of the hiring standstill in the second quarter.
“To mitigate the impact of the lower revenue and minimise the operating loss, strategies to reduce costs were implemented that, unfortunately, included salary cuts, temporary layoffs and retrenchments.
“The cuts were implemented across the board on a graduated basis to lessen the impact on the lower earning level employees,” it said.
Read: Crawford Schools owner AdvTech’s new online school will open in 2021- here’s how much it costs