Pem­bury group on the move

BMFI joins board, plans for three new cam­puses

The Star Early Edition - - COMPANIES - Joseph Booy­sen

PEM­BURY Life­style Group (PLG), with the con­clu­sion of a deal with the Black Man­ager’s Fo­rum In­vest­ment Com­pany (BMFI), has po­si­tioned it­self for ag­gres­sive growth in South Africa’s listed ed­u­ca­tion sec­tor.

PLG said on Fri­day that Njab­ulo Mthembu, manag­ing di­rec­tor of BMFI, would join the Pem­bury board af­ter the fo­rum had ac­quired a 15.7 per­cent share­hold­ing of the school­ing group for R55 mil­lion.

PLG, which listed on AltX on March 31 at R1 a share, is now trad­ing at 60 cents to 62c, with a mar­ket cap­i­tal­i­sa­tion of around R200m.

Ri­aan van Jaarsveld, fi­nan­cial di­rec­tor at PLG, said the cur­rent mar­ket for pri­vate school pupils in South Africa was es­ti­mated at roughly R2.5 mil­lion.

“All the cur­rent pri­vate schools to­gether cater for roughly 500 000 to 650 000 pupils, which leaves a big por­tion of the mar­ket that is cur­rently un­touched.”

PLG now has 19 schools in Gaut­eng and North West and this year plans to open three new cam­puses in Cen­tu­rion‚ Rood­e­poort and Springs.

Van Jaarsveld said the group’s broad-based black eco­nomic em­pow­er­ment was strength­ened by BMFI.

“This to­gether with BMFI net­work opens up new win­dows of op­por­tu­nity for the group, bear­ing in mind that roughly 70 per­cent of our learn­ers cur­rently are from pre­vi­ously dis­ad­van­taged ori­gin.

“Cur­rently our schools fol­low the Caps and IEB mod­els to cater for the com­mu­nity around the school.”

Van Jaarsveld said they were in the process of se­cur­ing school prop­er­ties which strengthen the bal­ance sheet and pro­vide se­cu­rity for lend­ing when needed.

“We fol­low a shared ser­vices ap­proach, with cer­tain func­tions be­ing per­formed cen­trally, while the school­ing and ed­u­ca­tion are done on school level with overview from the group com­pa­nies.”

An­nounce­ments of the PLGBMFI deal were pub­lished in June and last month, re­gard­ing the bind­ing share sale and sub­scrip­tion agree­ment.

The BMFI will ac­quire 57 mil­lion shares by the ac­qui­si­tion of 37 mil­lion ex­ist­ing shares from prop­erty ven­dors of PLG at R1 a share, to­talling an ac­qui­si­tion con­sid­er­a­tion of R37m and the sub­scrip­tion for 20 mil­lion new PLG shares at a sub­scrip­tion price of 90c a share, to­talling a pur­chas­ing con­sid­er­a­tion of R18m.

The re­sult­ing in­flow of cash will be used to strengthen the com­pany’s cash flow po­si­tion, pro­vid­ing it with more funds for prop­erty ac­qui­si­tions and planned cap­i­tal ex­pen­di­ture.

‘All the cur­rent pri­vate schools to­gether cater for roughly 500 000 to 650 000 pupils.’

PLG com­petes against JSElisted pri­vate school­ing firms Curro schools and ADvTECH and un-listed Spark, which is also an af­ford­able new en­trant on the scene.

Mthembu said the PLG in­vest­ment was a good fit with the fo­rum’s in­vest­ment fo­cus on ed­u­ca­tion among other sec­tors, as well as their long-term ori­en­ta­tion.

“We are long-term hold­ers with an av­er­age in­vest­ment hold­ing pe­riod of 15 years in our cur­rent port­fo­lio and are pleased to sup­port PLG ful­fil its growth as­pi­ra­tions.”

PLG’s chief ex­ec­u­tive, An­drew McLach­lan, said BMFI shared the vi­sion of pro­vid­ing qual­ity, af­ford­able pri­vate ed­u­ca­tion to the mar­ket, ad­dress­ing a very real need for South Africa.

“The sub­scrip­tion will in­ject fur­ther funds to ex­pand our cam­puses.”

joseph.booy­sen@inl.co.za

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