The group has reported an 11 percent increase in first semester students to for the six months ended 30 June.
The Covid-19 lockdown restrictions meant that students across the world have had to take an online learning approach to their studies. Private higher education investment company Stadio Group notes this uptake in online learning in its results for the six months ended 30 June, reporting a 15 percent increase in distance learning students to 28,573.
The group has also reported an 11 percent increase in its first semester student number to 34,494 as the demand for higher education (particularly professional qualifications) increases.
“Stadio Group’s core purpose is to widen access to higher education in the country as we believe that education forms a fundamental pillar of social and economic empowerment,” says CFO Samara Totaram.
She adds that the South African economy is facing some severe headwinds, and this undoubtedly has an impact on Stadio’s students and their ability to fund their studies. For this reason, cost management, capex management and debtors’ collections all require constant review and monitoring to “ensure that the business stays financially healthy and is able to navigate these uncertain times whilst ensuring that the offering remains affordable for students”.
Notwithstanding the poor economic environment, Samara explains that the group has shown incredible resilience over the last six months. Not only has it seen its student numbers grow, but it has also reported a growth in revenue and core headline earnings for the period. “The most fundamental factor driving our business is the demand for higher education, coupled with our reach in the distance learning space,” she says.
Samara adds: “We believe the demand for higher education will grow and that Stadio will play a meaningful role in servicing the education needs of the country.”
For the six-month period, Stadio reported a profit after tax of R85 million, earnings per share of 9.6 cents per share, headline earnings per share (HEPS) of 9.4 cents per share, as well as a growth in core headline earnings per share (CHEPS) by 41 percent to 9.7 cents per share.
According to the group, the overall growth in CHEPS is due to the underlying organic growth in EBITDA, as well as additional cost savings due to the protracted lockdowns through the six months. However, while it has achieved certain savings in the first semester, Stadio expects an increase in costs in the second semester, assuming campuses return to some level of normality in the latter half of the year. Over and above this, it states that academic costs are generally higher in the second semester for the various programmes that are offered.
“Like many companies, we have had to curtail or defer some of our capex projects,” Samara says. “However, we have still recognised the need to position our offering and pursue core growth strategies.”
As part of this, Stadio successfully completed its first mega-campus in Centurion in June 2021 (at a cost of R223 million). “The campus will open for new students in 2022, will accommodate between 3,000 and 4,000 students and will offer a wide range of programmes spanning multiple faculties,” she concludes.
