Top schools bleed pupils as economy contracts
SA’s leading private school chains lose 3 881 students in year
The recent state of the economy has certainly impacted some of our families Selwyn Marx Principal of Pridwin Preparatory School
I can’t sleep . . . if my son finds out that he could be removed . . . he will be so devastated Soweto parent Saying she struggles to pay private school fees
● Nico Roos* had to pull his two children out of a private school because he was battling to pay the hefty fees.
“We couldn’t afford it anymore. It was a difficult decision. You always fear for your children’s welfare,” said Roos, who is one of a growing number of parents resorting to state schools due to the economic crunch.
The school charges about R100 000 for a matric pupil.
Roos’s eldest daughter is now being home-schooled while his other daughter attends an Afrikaans school in Randburg.
The pinch is being felt at two of South Africa’s biggest private school chains, Curro and AdvTech, which between them lost 3 881 pupils last year, mainly because their parents could not afford to pay fees.
Curro Holdings, which owns 148 schools, and the AdvTech Group, which owns 94 schools including the Crawford schools, catered for more than 72 600 pupils in 2017.
Some 683 of the 1 588 pupils who left AdvTech schools last year left because their parents were battling to pay fees. It said private schools across the country where “fees are a significant component” were also experiencing difficulties.
The Sunday Times has established that St John’s College handed out notices for payment of outstanding debt to about 15 parents recently. They collectively owe about R700 000 in fees for the last school term.
“If they fail to honour the arrangement, there’s a possibility that their children could be removed in the third term,” a parent said.
The parent said besides the 15 parents who had received notices, a further 300 were more than 60 days in arrears with last term’s fees.
Jon Patricios, chairman of the St John’s College council, said they could not comment as contractual issues were confidential.
"However, we can confirm that within the current economic climate, while the vast majority of parents pay their fees on time, a few families do find themselves under pressure to meet their school fee commitments,” he said.
Pridwin Preparatory principal Selwyn Marx said the school had not filled its Grade 1 classes this year. The “preferred enrolment” in Grade 1 is 60, but it has 53 pupils. “The recent state of the economy has certainly impacted some of our families,” he said.
Tim Nuttall, rector of St Stithians College, which has 2 595 pupils, confirmed that 7% of its pupils left last year but said “less than 1% were for explicit financial reasons”.
Curro Holdings chief financial officer Bernardt van der Linde said outstanding fees had stood at R56.1-million but had been reduced to R25.2-million in January after most of the parents paid last year’s outstanding fees.
“Of the R25.2-million, R7.5-million are in arrears by more than 60 days. Most of these parents have made payment arrangements.”
He said the main reason pupils were leaving private schools was affordability.
Asked whether pupils leaving Curro were going to state schools, he said: “We are collecting that data, but we assume a large portion will leave to the state schools.”
AdvTech CEO Roy Douglas said: “Parents will cut back on a variety of disposable income items before they cut back on their children’s education.
“The fact that we are seeing a spike in people withdrawing or being excluded because of financial hardship is the cumulative effect of the number of years of poor economic performance that is biting into the consumer.”
Lebogang Montjane, executive director of the Independent Schools Association of Southern Africa, said: “There’s no question that last year our schools mentioned the serious economic pressures that many families were feeling. Families and schools were feeling that there is a financial contraction so some parents may have had to take their children out of independent schools.”
Pupil enrolment at the 769 Isasa member schools in South Africa increased by 2.7% this year compared to 4.9% last year.
A total of 173 269 pupils were enrolled at Isasa member schools. A parent from Soweto said she had lost weight and was going for counselling following fears that a prestigious private school in Johannesburg might remove her child because of non-payment of fees.
“I can’t sleep at night because if my son finds out that he could be removed from the school he will be so devastated,” she said. * Not his real name
● As parents look for more affordable alternatives when it comes to their children’s education, private-school companies such as Curro Holdings are feeling the pinch, with Curro shares falling more than 28% this year.
The PSG Group-controlled company and AdvTech, owner of Crawford Schools and Trinityhouse, have highlighted the issue of pupils leaving, despite an increase in enrolments overall in their most recent financial presentations.
At the close on Friday, Curro’s shares were trading at R31.02. AdvTech, which once rebuffed a takeover bid from Curro, has seen its shares weaken 4.03% this year. In comparison, the JSE All Share fell 3.6%.
Casparus Treurnicht of Gryphon Asset Management said the companies were being affected by the slowdown in the economy, which had eaten into the disposable income of the average citizen. During recent tougher economic conditions, he said, parents also considered government schools which offered the same standard of schooling or even better than some private schools.
“People had this idea that [they] need to send [their] kid [to a private school]. Education is not a negotiable thing, so people were willing to pay upwards, but now they have come to the realisation that’s actually not necessary,” said Treurnicht.
In AdvTech’s annual results to endDecember, it said 43% of the parents of the 2 860 pupils who had left its schools blamed financial pressure. Some 29% left due to emigration or relocation to other parts of South Africa.
Overall, AdvTech schools saw a 3% increase in enrolment in 2018, adding up to the 26 751 pupils they have now.
Anthony Clark, an analyst at Vunani Securities, said the departure of pupils was affecting AdvTech, whose schools cater for high-income individuals.
Some parents had chosen to keep their children in private schools but had moved them to more affordable institutions.
In its annual results released in February, Curro said it had 14% growth in pupil numbers but 5% of its 2017 pupils had not enrolled this year due to affordability.
The group declined to say at which point in their schooling these pupils were leaving, or what financial impact this was having.
What had really affected Curro’s share price, Clark said, was its Meridian schools brand. The market saw losses at Meridian again, which brought into question the “infallibility” of Curro management, despite the core business being profitable.
Clark said that once the losses at Meridian turned the corner and problems were resolved — involving the limit on fee increases as a result of the way Meridian was set up in partnership with Old Mutual, which owns 35% — and the core Curro business was back on a growth path, the stock would pick up.
This week, Curro announced it had acquired Cooper College and Magic Beings Crèche for an undisclosed sum.
Treurnicht said the purchasing of schools was an indication that the group was now growing by acquisition.
Patrice Rassou, the head of equities at Sanlam Investment Management, said that despite the pressure and concerns over the organic rate of growth in these companies, the sector was still an essential service in the long term.
Despite pressure, long-term demand expected to stay strong