curro jse showcase september 2011
TRANSCRIPT
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CURRO HOLDINGS LTD
JSE SHOWCASE
SEPT 2011
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Users are advised that to the extent that any statement in this presentation constitutes a
profit forecast, same has not been reviewed nor reported on by the company’s auditors.
DISCLAIMER
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CURRO IS THE MARKET LEADER IN THE PROVISION OF AFFORDABLE,
QUALITY PRIVATE SCHOOL EDUCATION IN SOUTH AFRICA
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4WHY DID WE LIST?
• Scalable business model
• Preparing for growth - Expansion and re-
gearing of balance sheet
• Credibility/sustainability
• Debt financiers
• Clients
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5CURRO’S PROFILE
• 13 year operating history
• 12 Campuses across SA• Durbanville, Langebaan, Pta (x3), Jhb (3), Witbank, Polokwane,
Hermanus, Mossel Bay.
• Growing company in a growing sector
• Non-cyclical business
• Shareholder of reference in PSG (63%)
• Operationally profitable
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6SCHOOL EDUCATION IN SOUTH AFRICA
• Government schools are overcrowded
• Ex-model C schools are good, but increasingly
under pressure
• No new schools built in affluent areas
• Elite and expensive private schools
• Smaller Private schools with limited facilities and
expansion potential
• Curro
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7SCHOOL MARKET SIZE AND POTENTIAL
2.7
3.2
15.0
SA: Population of Age 0-19 (m)
LSM 9-10 LSM 7-8 Other
Predominant private school market
Other potential private school market
NetherlandsAustralia
IndiaGlobal average
USAUnited Kingdom
South Africa
0% 10% 20% 30% 40% 50% 60% 70% 80%
72%30%
17%13%
11%5%
4% Private school learners(% Private school)
South Africa Learners
Public Schools: 11 900 000
Private Schools:
455 000
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8THE CURRO MODEL
• English or Parallel medium/Dual medium
• Small Classes (<20 per class, max 25)
• Disciplined environment, Christian Ethos
• Balance between academic, sport & cultural activities
• Curro Centre for Educational Excellence (“CCEE”):
External benchmarking and quality assurance
• Emphasis on Computer Technology
• Personal developmental plan
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9CURRO LEARNER NUMBERS
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 -
2,000
4,000
6,000
8,000
10,000
12,000
28 145 310 400 450 575 751 775 910
1,107
1,642 2,059
3,088
5,410
7,457
9,594
Number of schools and learners
12
7
43
21
14
17Estimate
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CURRO CAMPUSES
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14CURRENT PROJECTS / FUTURE VENTURESMajor developments at existing campusesNew campus at Nelspruit 2011New building projects 2012
• Port Elizabeth• Krugersdorp• Heidelberg
Beyond 2012• Cape Town (2 sites)• KZN (2 Sites)• Johannesburg (3 sites)• Centurion• Lepalale/Ellisras (Limpopo)
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FINANCIALS
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INCOME STATEMENT
1H10 1H11 FY2010R'000 R'000 R'000
Revenue 36 527 79 271 74 028EBITDA 6 347 5 659 12 800Depreciation and amortisation (1 177) (3 407) (3 014)Earnings before interest and tax 5 170 2 252 9 786Net interest expense (2 424) (13 226) (5 106)Profit before taxation 2 746 (10 974) 4 680Taxation (391) 3 278 553Total comprehensive (loss) / profit for the period 2 355 (7 696) 5 233
Earnings per share (basic and diluted) (cents) 2.9 (9.6) 6.5
• Rights issue - Interest will not repeat in 2nd half.
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EBITDA PERSPECTIVE
1H10 1H11 YOY Change
2yr CAGR
R'000 R'000 EBITDA 6 347 5 659 (11%) 17%
Schools > 2years 8 125 9 575 18% 25%
Schools <2 years 907 (522)
Aurora - 4 237
Head office (2 684) (7 632) 184% 100%
• Fixed costs component of new schools has negatively affected EBITDA
• Margins are proven for schools >2 years
EBITDA Margin 17.4% 7.1%
Schools > 2years 28.4% 28.7%
Schools <2 years 11.0% (2.3%)
Aurora 18.4%
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BALANCE SHEETAudited
31 December 2010
Unaudited30 June 2011
Unaudited30 June 2011
Pro forma
ASSETS
Non-current assets 236 889 410 291 410 291
Current assets 6 422 12 304 104 055
Trade and other receivables 2 285 6 772 6 772
Cash and cash equivalents 4 137 5 532 97 283
Total assets 243 311 422 595 514 346
EQUITY AND LIABILITIES
Equity 57 686 49 842 372 242
Non-current liabilities 99 787 109 001 109 001
Current liabilities 85 838 263 752 37 103
Intercompany loan 54 440 226 649
Other financial liabilities 10 861 10 197 10 197
Trade and other payables 17 251 27 103 27 103
Bank overdrafts 3 223 - -
Total equity and liabilities 243 311 422 595 518 346
Net asset value per share (cents) 71.7 61.8 230.9
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19SUMMARY – PRE LISTING STATEMENT
31 DECEMBER 2009 2010 2011 2012 2013All amounts Rm Actual Actual Forecast Forecast Forecast
Audited Audited Unaudited Unaudited Unaudited
Number of schools 3 5 12 14 17
Number of learners 2 000 3 000 5 500 7 500 9 500
INCOME STATEMENT
Gross Income 49 76 162 222 300
EBITDA 9 13 16 37 59
PAT 2 5 1 14 16
Weighted average shares in issue 80 80 114 161 161.2
Headline Earnings Per Share 2.3 6.5 0.7 8.7 10.0
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SUMMARY
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21PROSPECTS
• On track in terms of organic growth
• 2 to 4 schools per year
• Enrolment numbers are looking
promising for 2012
• Acquisitive growth – a number of targets
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22BUSINESS OBJECTIVE
2020
40 SCHOOLS
45 000 LEARNERS
R450m PAT