ADvTECH, the leading private education group, on Monday posted positive financial results despite the prevailing tough global trading and economic conditions caused by the COVID-19 pandemic.
The achievement has taken market experts by surprise given that schooling is one of the sectors that have borne the brunt of the pandemic with most parents not able to keep up with their monthly fee payment.
According to the group’s website, revenue went up 13% to R2.8 billion compared to R2.5 billion in 2019. The operating profit was up 4% to R444 million, in 2019 this stood at R428 million. A normalised earnings per share was down 2% to 41.8 cents while in 2019 it was 42.5 cents per share.
Last week Women in Science Africa reported that several private and independent schools may have to close down due to their perilous financial circumstances caused by the COVID-19 virus.
ADvTECH CEO Roy Douglas attributed their impressive financial showing to their “strategic management decisions” taken to ensure the group is able to weather the COVID-19 storm. He said they were also agile with their operations which saw over 75 000 of its students population being migrated to online tuition without losing a single academic day.
Douglas said the group’s three divisions namely; school, tertiary and resourcing came to the party and delivered solid performances. He said despite the coronavirus disruptions, ADvTECH has remained focused since the lockdown to make sure they can deliver an uninterrupted academic and operational sustainability.
He said ADvTECH responded to the COVID-19 imposed conditions by providing a range of support services to mitigate its impact. These include extra academic and pastoral care, supplemental education, psychological support as well as enhanced professional support by adjusting the service desk to operate 24/7 thus responding to more than 1000 calls per week.
According to Douglas they spent R37 million 5 386 families who were not able to pay full school fees. This was primarily because of the withdrawal of students, inability to provide boarding, aftercare, early childhood development and extra mural activities. Overall, Douglas said, the group suffered an R88 million loss in revenue due to the COVID-19 pandemic.
“Our response was aided by our investment in learning management systems in 2015, the commitment and adaptability of our academic, IT and support staff as well as the remarkable resilience of our students,” said Douglas.
The tertiary division also showed remarkable performance and delivered steady student enrolments at the beginning of 2020 achieving an overall 13% student growth. Revenue in the division increased by 14% to R1 187 million compared to R1, 038 million in 2019 said Douglas.
He was also upbeat that their strategic foray into Africa is paying dividends. Operations in the rest of Africa, he said, delivered growth increasing revenue by 39% to R365 million compared to R262 million in 2019 while the operating profit increased by 45% to R11 million instead of R8 million in 2019.
“The group remains confident in its investments in schools in the rest of Africa and continued to build scale with revenue increasing by 18% to R108million (2019: R92million), notwithstanding the Kenyan government’s directive to defer the school year until 2021, added Douglas.
Ironically, the group has failed to save one of its prestigious schools; Trinityhouse Northriding, which is scheduled to shut down its doors at the end of 2020 academic year. It blames the impending closure, which has left many teachers and parents devastated, on the declining learner enrolment.
Desiree Seaton, ADvTECH’s communications manager, said most of their schools were badly impacted by the coronavirus but this was acutely felt by schools that had small student enrolments. She said Trinityhouse Northriding is one of the schools that were experiencing declining enrolment.
“Northriding by 2020 was originally planned to have around 400 students. It reached a peak of 129 students in 2018. This has diminished to 92 in 2020 and is expected to be between 60 and 70 students for 2021, with only eight new applications being received for grades 000 to four for 2021,” she said.