Curro’s tertiary plan just the job
CURRO Holdings, which has abandoned ambitions to buy rival Advtech, has bold plans to tackle the tertiary market by offering qualifications aimed at enabling graduates to find jobs.
Nico de Waal of the PSG Group, which owns a majority stake in Curro, said on Thursday that Curro’s tertiary division would offer courses in education training, commerce and IT. At the same time the tertiary division would focus increasingly on distance learning.
The tertiary division will be separate from the schools divisions, which is known for its prep schools and pupils in posh plaid uniforms, and includes Curro Select, Curro Academies and Meridian Academies.
In January 2018, Curro will open two new tertiary campuses in Pretoria and Johannesburg, which will be able to accommodate 1 700 and 1 800 students respectively.
Curro initially invested in the tertiary sector in 2013 when it acquired Durban-based teacher training college Embury. Curro plans to separately list the tertiary division to ensure dedicated management focus.
The rationale for expanding into the tertiary market beyond educating teachers for Curro’s pipeline of schools was to assist the government in providing quality tertiary education, given
Higher qualifications almost tripled but many are unemployed
the capacity and funding constraints at South Africa’s public universities, De Waal said.
Although the SA Qualifications Authority reported that higher education qualifications almost tripled from 1995 to 2014 from 70 020 to 202 653, many graduates remain unemployed.
This is not Curro’s first attempt at establishing its footprint in the sector. In 2015, it tried to buy a stake in Advtech, which has long been invested in tertiary education. But Curro’s R6-billion offer was snubbed and its interest was now more focused on “expanding independently”, said CEO of PSG Group Piet Mouton.
Nolwandle Mthombeni, equity analyst at Mergence Investment Managers, said there was high demand in the tertiary segment and it could accommodate both Advtech and Curro.
Advtech, with 78 schools and 27 tertiary campuses, still dominates the sector with 4 430 tertiary students graduating in 2016. It owns among others the Design School Southern Africa, The Forbes Lever Baker Educational Institute for Accountancy and Management, Rosebank College, Varsity College and Vega.
In its tertiary division, revenue rose 28% to R1.3-billion and operating profit increased 67%.
Cratos Wealth analyst Ron Klipin said: “This shows a substantial turnaround, from earlier days, when this business was floundering.”
Advtech CEO Roy Douglas said on Friday the company would expand in Africa. Seen before as a defensive stock, Advtech was now an extremely good growth opportunity. “Our growth will come from both our organic and acquisitive means.”