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Listed private learning group AdvTech on Monday reported a 13% increase in revenue for the six months ending June 2020 to R2.829 billion, as it launched its online school, Evolve, in the period under review.
The group estimated that Covid-19 affected income by R88 million, due to student withdrawal, Makini was unable to recognize income for two months as a result of a government directive, was unable to provide accommodation, aftercare, early childhood development and extramural activities and loss of income in South Africa’s resource endowment.
Operating profit, which increased by 4% to R444 million, was also 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.
Higher net financial costs and tax rate in the period resulted in normalized earnings for the period that decreased by 1% to R226 million, while normalized earnings per share decreased by 2% to 41.8 cents per share, AdvTech said.
“The underlying performance of AdvTech during the six months ended June 30, 2020 has been very encouraging with an improvement in the performance of the school division, a sustained level of performance of the tertiary division and an excellent result of the rest of the business resource of Africa, “said CEO, Roy Douglas said.
“The good start to the financial year underscored the strategic management decisions made in previous periods, resulting in the group being well positioned to withstand the impact of Covid-19 on its operations and transitioning more than 75,000 students to the Online enrollment without a single academic day missed. “
South Africa schools
South African schools increased revenue by 9% to R1.072 billion and operating profit increased by 13% to R198 million.
“There were some negligible withdrawals, primarily due to financial reasons, with the largest number of withdrawals and temporary withdrawals at the pre-primary level where more supervision is required for online or hybrid learning,” the group said.
However, it also reported an increase in enrollment at some institutions.
“In keeping with our strategy to defend our revenue and using our students’ preferred mode of delivery, we launched our online school, Evolve, in August 2020.
“This world-class homeschooling offering offers parents an alternative option to access a quality education for their children. The online school will open in January 2021 and registrations from September 2020. “
AdvTech said it will also expand its mid-fee offering by repositioning select schools.
Maragon Ruimsig has been repositioned as Crawford International, while the remaining Maragon schools will be merged with the other brands. Two low-performing schools, Trinityhouse North Riding and Trinityhouse Palm Lakes, will be closed at the end of the year, affecting about 200 students, he 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.
College / Tertiary Division
AdvTech said its tertiary division maintained its performance with strong enrollments in early 2020, achieving student growth of 13%. Revenues increased 14% to R1,187 billion, and operating profit, which was affected by a higher level of provision for doubtful debtors, increased 3% to R252 million.
The group said that its resources division’s revenue fell by 21% to R99 million, as a result of the hiring stoppage in the second quarter.
“To mitigate the impact of lower revenues and minimize operating loss, strategies were implemented to reduce costs, which, sadly, included pay cuts, temporary layoffs and staff reductions.
“The cuts were rolled out across the board gradually to lessen the impact on lower-income employees,” he said.
Read: Crawford Schools Owner AdvTech’s New Online School To Open In 2021 – Here’s What It Costs
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