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Curro to cash in on tertiary fees crisis

Mar 12 2017 06:16
Lesetja Malope

The recent announcement by Curro Holdings that it would be listing a yet-to-be-named higher education-focused business later in the year has redirected focus to the ailing state of public tertiary education.

Curro Holdings is set to join a growing number of businesses taking advantage of the quagmire of problems facing public higher education institutions by increasing its investment in the tertiary sector.

The entity, according to Curro CEO Chris van der Merwe, will be listed later this year and will house already-acquired assets such as the Durban-based Embury Institute of Higher Education, and its Waterfall Estate and Montana “niche university” campuses. Embury is already fully accredited.

Van der Merwe said Curro would continue its focus on basic and primary education, while the new business would focus on tertiary education, referred to as the “big Curro school”, thus duplicating some tried-and-tested aspects of Curro schools.

The tertiary campuses will offer accredited degree programmes such as bachelor degrees in the arts (BA), sciences (BSc) and commerce (BCom).

At a later stage, schools of engineering and medicine could be added.

The accreditation process, Van der Merwe said, was kick-started almost three years ago.

Curro already has a controlling stake in Botswana’s BA Isago University, which boasts a student population of more than 4 000.

The intensified investment in tertiary education coincides with the funding dilemma faced by public higher education institutions, which sparked the #FeesMustFall protests in the past three years.

The group invests a percentage of its turnover on teacher training, but poaching teachers from the public sector is not a priority.

“Poaching is a last resort for us,” he said.

Van der Merwe, who is already involved in both businesses, said he would be nonexecutive chairperson of the tertiary business when it lists, while remaining a director and strategic adviser of Curro Holdings, which listed in 2011.

Curro has managed to grow at an impressive rate, having started with just 28 learners in 1998. Eleven years later, in 2009, it sold a 50% stake to PSG, when it had 2 059 learners. Last year, it had 41 589 learners across its 110 schools.

The group is also targeting a 15% enrolment growth.

“This does not mean we do not panic because of the current market conditions, we also panic,” Van der Merwe said of the ambitious goals.

With revenue margins growth on the up, Curro Holdings’ registered bad debt remains a red flag, with over 1 000 learners who were not able to return to their schools in January.

“We work with parents who can no longer afford [Curro] to find another school with more or less the same ethos as us.”

The company has earmarked Gauteng, Cape Town and Durban for its future expansion, while also eyeing partnerships and acquisitions on the rest of the continent.

Van der Merwe also said balancing Curro Holdings’ earnings before interest, taxation, depreciation and amortisation – which he hopes to double in four years’ time – with bad debts has proven to be tricky, but should be easier with the 41 new schools planned from this year until 2020.

According to the department of higher education and training, there are currently 128 accredited private higher education institutions at 280 sites across eight of the country’s provinces, with none registered in the Northern Cape.

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