Commenting on the results ADvTECH CEO, Roy Douglas, said: “ADvTECH has delivered another set of strong results for the twelve months to December 2021 reinforcing the group’s consistent performance and further highlighting the quality of its assets and robust business model.”
“The group continues to benefit from the implementation of revised structures, improved systems, enhanced technological capability and strong financial management. These initiatives contributed to ADvTECH’s ability to adapt to the challenges created by the pandemic and, at the same time, sustain a high level of performance.”
Operational and financial performance
ADvTECH delivered another strong operational performance with good enrolment growth, a significant improvement in collections and a continued focus on efficiency improvements. The strong cash generation allowed the group to reduce borrowings and maintain a sound balance sheet.
Group revenue grew by 8% to R5.9 billion (2020: R5.5 billion) while operating profit increased by 22% to R1108 million (2020: R908 million). Group operating margins strengthened to 18.7% (2020: 16.5%). Normalised earnings for the period increased by 35% to R656 million (2020: R486 million) while normalised earnings per share increased by 35% to 121.5 cents (2020: 90.2 cents) per share.
Expectations are that the growth trend and good cash generation will continue. Together with a sound balance sheet and significantly reduced net borrowings, the Board is confident to re-instate dividend payments at a similar cover ratio as was in place prior to the disruption caused by COVID-19. The Board has therefore announced a final gross dividend declaration of 31.0 cents (2020: 20.0 cents) per ordinary share in respect of the year ended 31 December 2021. This brings the full year dividend to 50.0 cents (2020: 20.0 cents) per share.
Schools South Africa
The schools division in South Africa continued to benefit from the group’s restructuring efforts, brand portfolio alignment and improved customer service. Enrolments continued to climb throughout the year, while extramural and aftercare showed a recovery in the second half of the year.
Despite foregoing a fee increase, schools in South Africa increased revenue by 4% to R2.2 billion (2020: R2.1 billion) underscoring the robustness of the performance. Operating profit improved by 10% to R413 million (2020: R376 million) while the operating margin increased from 17.8% to 18.9%.
Schools Rest of Africa
Schools in rest of Africa recorded good enrolment growth, remain operationally sound and posted higher profitably and returns on investment. Revenue increased by 36% to R268 million (2020: R197 million) and an operating profit of R47 million was achieved (2020: loss of R10 million). The operating margin of 17.7% is on par with schools operated by ADvTECH in South Africa and is expected to improve further.
Tertiary/University division
The 2021 tertiary student enrolment and registration cycle was severely disrupted as a result of the delayed release of the 2020 matric results. Nevertheless, enrolments, both face-to-face and distance online, continued to grow - reaffirming the group’s ability to deliver a quality academic offering irrespective of the mode of delivery.
Revenue increased by 4% to R2.4 billion (2020: R2.3 billion), while operating profit improved by 13% to R609 million (2020: R539 million). The operating margin increased from 23.0% to 25.0%
Resourcing division
Expansion into the rest of Africa continued to pay dividends with the division increasing its presence and number of placements across the reporting period. The division in South Africa increased market share in a tough environment and together with good cost controls allowed the business to return to profitability. Revenue for the overall division increased by 20% to R1018 million (2020: R848 million) and an operating profit of R39 million (2020: R3 million) was achieved.
Prospects
Commenting on the group’s outlook, Douglas said: “ADvTECH is uniquely positioned to leverage the advantages of our brands, structures, systems and financial strength to benefit from the growth in demand for education that is anticipated to continue both in South Africa and the rest of Africa. In addition, the inherent strong cash generation of our business model continues to strengthen our balance sheet and will enable us to invest in areas of opportunity with confidence”.
ABOUT ADvTECH
The ADvTECH Group, a JSE-listed company, is Africa’s largest private education provider and a continental leader in quality education, training, skills development and placement services. The Group reports its performance in a segmental structure reflecting the Schools and Tertiary as two separate education divisions, and Resourcing as the third division. ADvTECH’s Schools division comprises 9 brands with more than 108 schools across South Africa and the rest of Africa, including Gaborone International School in Botswana, and The Makini Group of Schools and Crawford International in Kenya. It owns 9 tertiary brands, across 32 campuses across South Africa and the rest of Africa. ADvTECH’s 8 resourcing brands places thousands of candidates annually, assisting graduates to make the transition from the world of study to the world of work.
For further information on the results go to www.advtech.co.za
Graeme Coetzee 063 685 6053
Sihle Nkatsha 071 492 8868