Stadio aims for rapid growth
• Curro’s tertiary arm says in prelisting statement that profit will replace headline loss in 2018 financial year
Stadio Holdings, the soonto-be-listed tertiary arm of private education group Curro, is pencilling in profit after tax of R500m from a student body of 56,000 by 2026.
Stadio Holdings, the soon-to-belisted tertiary arm of private education group Curro, is pencilling in profit after tax of R500m from a student body of 56,000 by 2026.
According to a prelisting statement released after market close on Friday, Stadio reckons it can increase its student enrolments (in contact and distancelearning modes) to an initial 35,000 students in the medium term after raising fresh capital of R840m ahead of a JSE listing on October 3.
The steep growth trajectory suggested by Stadio recalls Curro’s listing in 2011, when similar growth ambitions were articulated. Stadio said its longer-term vision was to grow student numbers to over 100,000.
Stadio, which at this early stage of its development is still making losses, comprises Embury colleges, as well as specialist tertiary brands AFDA (South African Motion Picture Medium and Live Performance) and the Southern Business School (SBS). Total student numbers are about 13,000.
Rival private education group Advtech has a more established tertiary education hub, which generated revenues of R789m and operating profit before interest of R157m.
Stadio wants to grow its footprint by acquiring other higher education institutions to create what the company has termed a “multiversity strategy and ethos” that is aimed at accumulating a wide spread of programmes and qualifications in various fields of higher education.
The company intends expanding its newly developed Embury facilities — the Musgrave campus in KwaZulu-Natal (2,700 students), Montana in Pretoria (1,700) and Waterfall in Midrand (1,700).
Stadio will look to geographic expansion of existing brands (including Africa), accrediting further undergraduate and postgraduate qualifications and will invest in focused marketing.
Distance-learning offerings would be expanded, it said, with greenfield opportunities being explored in new engineering, health and sciences faculties.
The prelisting statement forecasts revenue of R142m and a bottom line loss of R11m for the year to end-December. But major growth is anticipated in the next two financial years, with Stadio predicting revenue of R417m and R536m and earnings of R41m and R70m for the 2018 and 2019 financial years, respectively. It stressed these forecasts did not take into consideration potential acquisitions.
The R840m raised in the prelisting share placement will include R200m set aside for broad-based black empowerment investors, an exercise underwritten by empowerment investment company Brimstone. The fresh capital raised will be deployed to settle the recent acquisitions of AFDA and SBS, with about R430m left for further acquisitions “that are in various stages of negotiations”.