Curro explains profit loss and its strength in a slack economy
Private schooling has always been seen as very resilient in the face of economic downturns.
But now even the private school business model is showing cracks.
Some groups are charging above inflation increases, to the extent that waiting lists are disappearing and some are mothballing classrooms.
Emigration of wealthy families is also a big problem, leading to a big drop in profits.
Andries Greyling, Chief Executive Officer of Curro, is on the line to The Money Show's Bruce Whitfield.
If you analyse Curro over the years, we've split and diversified our brand for not only the higher fee market - the Curro academies in 2014 and later the Curro DigiEd model. Out of 76 campuses, 175 schools - only nine of our campuses were really affected by emigration and higher fees, predominantly most of them in Gauteng. So in 2019 we put in an effort to restructure our fees. And we've been able to stabilise the numbers in 2020 at those nine campuses.Andries Greyling, Chief Executive Officer - Curro Holdings
For Curro luckily we've be been able in 2020 to still grow organically - eight per cent in our learner numbers. It shows that parents, if you're priced correctly, will support you. And that's why we position ourselves for all South Africans.Andries Greyling, Chief Executive Officer - Curro Holdings
The groups's profits are down 23 per cent.
In 2017 to 2019 we invested in 22 new campuses. We spent two billion rand. Obviously this is costing in the short-term - it'll take anything from five to eight years to start paying back.Andries Greyling, Chief Executive Officer - Curro Holdings
Listen to the interview below.
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This article first appeared on 702 : Curro explains profit loss and its strength in a slack economy
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