Curro struggles for pupils as interest rates hit parents

Private education group Curro is writing down the value of 28 of its 182 schools that did not grow pupil numbers as expected over the past two years.

Overall, the company, which has 73,159 pupils, barely grew numbers year on year, gaining only 112 pupils at all its campuses this February compared with a year ago.

Curro said on Thursday its impairments will amount to R340m-R380m. This is an accounting change, showing the 28 schools are not as valuable as previously recorded on the books, and are not likely to generate the income previously predicted.

The impairments also reflect the high cost of capital and debt as interest rates rose, and outweigh Curro’s full-year profit of R235m in 2023.

They will see Curro’s earnings per share (EPS) for the year to end-December drop 66.4%83.1%, and could be as low as 6c.

But headline earnings, which strip out the one-off impairment costs, will rise to 70c-76c from 61.4c in 2022.

Private schools have cashstrapped customers in a stagnant economy, while having to manage the high costs of property ownership, skyrocketing water and power bills and maintenance and staffing costs.

Parents sometimes use government schools for the junior phases and spend more on private high schools, as they become concerned about preparing their child for matric.

This is in line with Curro’s experience, where it is finding younger parents with younger children are less advanced in their careers and cannot afford private schools.

The group’s high schools continue to grow in line with expectations, but the challenging effects of higher interest rates on constrained consumers affected young families particularly. “This resulted in a reduction in enrolments of learners in the youngest grades of primary schools,” said Curro.

Curro offers preschools, primary schools and high schools as well as a variety that caters to different budgets.

While it grew pupil numbers only 0.15% year on year, the 73,159 pupils it recorded on February 5 is more than the 71,809 registered learners it had on November 30.

More than 1,200 learners left during 2023 year. Some pupils are asked to leave due to the nonpayment of fees.

/Supplied Sluggish growth: Private education group Curro hardly grew as it enrolled only 112 more pupils at its 182 schools year on year this February.