AdvTech Group reports double-digit profit growth for the year

JSE-listed private education provider AdvTech Group reports a 33% increase in earnings per share (Heps) for the full year ending December 2021, saying performance was driven by good enrollment growth and collections and efficiency improvements.

The group, which owns higher education brands such as Vega School, Varsity College and Rosebank College in South Africa, reported an 8% increase in revenue for the period to R5.9 billion, against 5.5 billion rand reported in the previous comparison. period.

Group operating profit for the period increased by 22% to R1.108 billion from R908 million for the 2020 period, while operating margins strengthened to 18.7% from 16.5 % the previous year.

The group says the strong cash generated during this period has helped to reduce its borrowings and continues to maintain a strong balance sheet.

“AdvTech delivered another set of strong results for the twelve months to December 2021, reinforcing the group’s consistent performance and further underscoring the quality of its assets and robust business model,” said AdvTech CEO Roy. Douglas, in a statement to Sens.

AdvTech reinstated its dividend, declaring a final gross dividend of 31 cents, bringing its dividend for the full year to 50 cents, from 20 cents for the comparable period of 2020.

Schools Division Performance

The group’s schools in South Africa recorded a 4% increase in revenue to R2.2 billion for the period, despite the decision to waive fee increases during the period.

The South Africa division also recorded a 10% improvement in operating profit for the full year to R413 million, compared to R376 million for the full year 2020, while the operating margin slightly increased from 17.8% to 18.9%.

“The group continues to benefit from the implementation of revised structures, improved systems, improved technology capability and strong financial management,” says Douglas.

“These initiatives have contributed to AdvTech’s ability to adapt to the challenges created by the pandemic and, at the same time, maintain a high level of performance,” he adds.

On the other hand, its Rest of Africa Schools division – which owns education brands like Gaborone International School in Botswana, The Makini Group of Schools and Crawford International in Kenya – saw its revenue rise 36% to R268 million. over the period, compared to R197. million in the prior comparable period.

The Rest of Africa division also saw its operating profit increase to R47 million, significantly above the R10 million recorded in 2020.

“Schools in the rest of Africa have seen good enrollment growth, remain operationally healthy and have shown higher profitability and returns on investment,” the group says.

Higher Education Division

According to Africa’s largest private education provider, although the late release of Matric 2020 results severely disrupted the enrollment cycle for higher education students in 2021, its enrollment numbers continued to grow , both in online and in-person delivery channels.

AdvTech’s tertiary division recorded a 4% increase in revenue to R2.4 billion from R2.3 billion in the prior period. The division’s operating profit increased to R609 million while the operating margin improved from 23% to 25% during the period.

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Looking ahead, the group says it hopes to capitalize on the growing demand for education in the regions where it operates.

“AdvTech is uniquely positioned to leverage the advantages of our brands, structures, systems and financial strength to benefit from the growth in education demand that is expected to continue both in South Africa and the rest of the world. ‘Africa.”

“Furthermore, the strong cash generation inherent in our business model continues to strengthen our balance sheet and will allow us to invest with confidence in areas of opportunity,” Douglas said.