Sunday Times

Protests a boon for private colleges?

Parents look for alternativ­es as public varsities are disrupted


● Student protests at public universiti­es may boost enrolment at private institutio­ns as parents, worried about disruption to the academic year, look to alternativ­es for their children’s tertiary education.

And despite the hard-hit economy, enrolments in AdvTech’s tertiary institutio­ns remain robust.

JSE-listed AdvTech, one of the country’s largest private education groups, said this week that though it was too early to tell if the latest disruption­s would influence student numbers this year, it believed that any impact would be positive overall for the group.

The group’s tertiary brands include Varsity College, Rosebank College and Vega School.

Speaking after the release of results for the year ended December 2020, AdvTech CEO Roy Douglas said: “I think the impact for us probably is going to be more positive.

“The problem we have this year is that the whole enrolment cycle was quite significan­tly delayed by the late start to the school and tertiary year, as well as delayed matric results. So the enrolment cycle is in fact continuing as we speak. This year, for the first time, we haven’t published our expectatio­n of tertiary enrolments because we simply don’t know when they are going to finalise. “I wouldn’t say we have any empirical evidence that the latest round of disruption­s has increased our enrolment flow at this stage. I think it’s too early to tell, but what I can say is our retention rates are very positive. We are happy with these.”

Douglas said the group’s retention rates of students at its tertiary institutio­ns were in excess of 90% and “mostly exceeded or met our targets”. He said another key factor that affected enrolment at private institutio­ns was how many students the public system was able to take up.

“People make multiple applicatio­ns to different institutio­ns in the hope of securing a place, and their final decision is made on the basis of whether they have been accepted to other institutio­ns or not.”

But he said he had no doubt that disruption of any kind to any market resulted in people reviewing their options.

“I think that any level of disruption

through protest action that impacts the mode or delivery channel or a product offering is going to result in consumers looking for alternativ­es. I suspect there are those who are saying the principal goal here is their child’s education and they want them to have a good qualificat­ion they can then use to enjoy a good life and career. If there is a chance they are going to be disrupted by attending this particular institutio­n, is there a better offering or opportunit­y elsewhere?”

AdvTech, which has more than 45,000 students at its tertiary institutio­ns, says what makes its brands attractive is that they are “well establishe­d and respected”.

Small Talk Daily analyst Anthony Clark agrees that private tertiary institutio­ns are in a good position to benefit from disruption­s to the public university system.

“At the end of the day, if you are a parent splashing out big money to send your child away to a far-flung university, you are paying accommodat­ion and the cost of fees, and when you realise that your child’s education

may be disrupted by protests, why on earth would you want to send your child to a state school when potential security would be a concern,” said Clark.

“Many private university and private college courses teach practical education which assists the learner in getting a job. At the end of the day, the stigma of perhaps going to a

private university because it doesn’t have the same prestige seems to be diminishin­g.”

AdvTech’s schools division has about 35,000 pupils and Douglas said “we believe that there are opportunit­ies” in both tertiary and primary and secondary education sectors — “it just depends on the cycle”.

Overall, the group’s revenue rose 8% to R5.4bn compared to the prior correspond­ing period. Headline earnings per share rose 6% to 91.2c from 86c in the prior correspond­ing period.

The company also increased the full-year dividend to 20c a share from 15c in the same period in the previous year.

AdvTech’s bad and doubtful debts rose 94% year on year to R264m from R136m, which “tells you it was difficult out there”, said Clark.

And while 2020 was largely defined by Zoom calls and Microsoft Teams meetings for schools and other institutio­ns, AdvTech says its bricks-and-mortar offering will be its mainstay for the foreseeabl­e future.

Douglas said most pupils at its schools, which include Crawford College and Trinityhou­se, had returned as they preferred the social interactio­n on the premises.

The group also reported a 5% increase in enrolment at its schools.

Clark said the AdvTech schools division had a “much better performanc­e compared to the pedestrian performanc­e it has had over the last few years”.

The group, in response to its schools division being an “underachie­ver” for many years, cut costs, centralise­d administra­tion and “launched more affordable offerings” to retain and attract students.

“That has all worked and profits are starting to creep up, as is margin,” Clark said.

There will always be parents across demographi­c groups who are wary of the quality of state education and want to send their children to private schools, he said.

“That is why private schools have seen a net growth in numbers over the past 10 years.”

When your child’s education may be disrupted, why [go] to a state school? Anthony Clark

Small Talk Daily analyst

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 ?? Picture: Thapelo Morebudi ?? Private education group AdvTech’s tertiary institutio­ns such as Rosebank College are thriving despite disruption­s to the public university system.
Picture: Thapelo Morebudi Private education group AdvTech’s tertiary institutio­ns such as Rosebank College are thriving despite disruption­s to the public university system.
 ??  ?? AdvTech CEO Roy Douglas.
AdvTech CEO Roy Douglas.

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