AdvTech, a JSE-listed private education provider, achieved impressive financial results for the period ending June 2023. The company experienced higher revenues, profits, and dividends, leading to a surge in its share price, reaching an all-time high and closing at R20.70 per share. This marks a significant increase of more than 25% in the past year and over 200% in the last decade.
Key points:
- Revenue growth: AdvTech reported a 16% increase in revenue, amounting to R3.9 billion, fueled by steady student enrolments and moderate fee increases across its education divisions.
- Improved operating margin: The company’s operating profit rose by 23% to R754 million, resulting in an improved operating margin of 22.8%, up from 21.3%, attributed to increased efficiencies and technological improvements.
- Headline earnings: Basic headline earnings per share (Heps) surged by 24% to 84.3 cents, reflecting the company’s strong financial performance.
- Cash generation: AdvTech generated R1.7 billion in cash from operating activities, representing a 13% increase compared to the previous year.
- Strong dividend: Shareholders can expect a 30% stronger interim dividend of 30 cents per share, demonstrating AdvTech’s commitment to delivering value to its investors.
- Performance across divisions: The South African operations recorded a 13% revenue growth, while the “rest of Africa” portfolio experienced a 26% increase in revenues and significant improvements in operating profits.
- Future outlook: Despite potential challenges in the trading environment, AdvTech remains confident in its ability to cultivate further growth, particularly in the local and rest of Africa markets. The company aims to optimize performance, focus on productivity and efficiency, and leverage its scale to deliver quality education and drive continued growth.
CEO Roy Douglas expressed optimism about AdvTech’s position to benefit from the growing demand for education, both in South Africa and the rest of Africa, and emphasized the company’s commitment to enhancing its resourcing footprint in the region.