Just a bit too small
This recent, and very small, listing is hopping on the education bandwagon hoping to be the next Curro. But this company is much smaller, doesn’t have a large shareholder as Curro does with PSG, and will struggle to raise the cash needed to expand.
The recent announcement that it is potentially buying the six Pembury retirement lodges and villages is interesting and frankly I prefer this part of the business. This move may also help with cash flow as potentially these are mature, profitable businesses.
But while the company is in the hot education space, the problem remains size. Not only the size of its current education offering, but also the small nature of the stock. With a market cap of only some R300m, no large institutional investors are looking to invest, leaving it up to small private investors to push the stock higher and we’re not seeing that.
If Pembury had listed a few years back in better economic and political times, it may have done better and in time it may start to see investor demand. But for now, price weakness is the more likely outcome.