Curro is not accustomed to bad news. In fact, one of its challenges since listing in 2011 has been to manage very high expectations. So when a race issue at one of its schools escalated, Curro was thrown into the spotlight – something it did not expect or, as became clear in the aftermath, know how to handle.
Curro was a c c us e d of r a c i a l segregation at its Roodeplaat school in Pretoria, which has three grade R classes. Two classes had only black pupils. The six white pupils in the grade were all placed together in the third class with other black pupils. CEO Chris van der Merwe has explained that this was an isolated incident.
He has explained that two-thirds of Curro’s learners are black, and that the whole purpose of Curro’s existence is to broaden access to independent schools for all children. He has explained that Curro does not practise segregation.
But what is difficult to explain, hence the outcry, is the old mindset expressed by regional manager André Pollard, who was quoted saying: “It is not because we would like to segregate the whites. It is just because of friends. Children are able to make friends with children of their culture.”
Van der Merwe says that Curro has l e a r nt a l e s s on a bout good communication. He says t hat an incorrect message had been sent out that this was a separate white class. “This was a few white children among black children in one grade R class, but they were not distributed evenly to the other classes.
“This was an integration mistake, and we apologise. If you look at broader Curro, we don’t stand for a policy of segregation − we wouldn’t have enrolled 36 000 children, of which 24 000 are black. We learnt a crucial lesson about communication,” he explains.
There has been some progress in the aftermath. Curro has adopted a policy in that school where the parents will help the teachers to declare that all the classes are representative. All the children in the grade R classes were reallocated and are today integrated.
Van der Merwe adds that as Curro grows and there are more learners, incidents are prone to happen. “We have learnt t hat t here is a way to handle them, it is definitely about good communication.
“This incident will make Curro stronger, and if the process and procedure that we immediately put into that school to reassure parents works, we can adopt it as a policy in the group.”
Investors have generally shrugged off the incident and possible reputational repercussions, although they were a bit nervous about Curro’s recent trading update ahead of its results on 17 February. Earnings for the year to December will be 33% to 43% higher than the previous year. This is strong growth, but not as high as what has become expected of Curro, which trades at a price-toearnings (P/E) multiple of almost 200. Its growth has been exceptionally fast.
In August last year, it had close on 30 000 learners at 32 campuses. Less than six months later, it had just over 36 000 across 42.
Van der Merwe says that two years ago the P/E was 1 600, “so we have made some progress”.
“The P/ E concept isn’t necessarily appropriate on a company like ours. You have to understand the model. By 2020 we will be 80 schools, and we will not sit with a whole bunch of empty schools − most will be full capacity or close to Cents 3 500
Mar ’ 14