Growing-pain lapses

It’s never a huge indicator of confidence in a company when you sneak a glance at the list of Directors’ Dealings and every one of the last 20 trades is a sell. Yes, the numbers involved are small, but you might think somebody could be coaxed into taking one for the team and buying a share or two, just to stave off any possible commentary about rats and sinking ships. Sadly the trajectory of Pembury’s share price has been downhill since it listed on the Altx in March.

The group has taken a hatch and despatch approach to the market, providing schools and retirement villages to punters at different ends of the age spectrum. These are both interesting market segments, with the likes of Curro showing the way in the forprofit, low-cost educational field, and an increasingly ageing population providing a demographic boost to the “grey rand” market. It’s one thing to be in an interesting sector, however, and quite another to turn it into profits, and this is where Pembury has struggled, due to what it coyly refers to as “growing pains”.

These have consisted of a number of lapses of accounting, controls and compliance, and have required remedial action to be taken, sharpish.

Pupil numbers were lower than projected due to tighter credit procedures and the delay in the rollout of new classrooms, as well as the loss of a number of pupils to larger private school groups. The good news is that four of the seven campuses are contributing positive earnings before interest, tax, depreciation and amortisation and the numbers should continue to improve.