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Trading Statement And Publication Date Of The Financial Results For The Year Ended 31 December 2020
CURRO HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1998/025801/06)
JSE Share Code: COH
ISIN: ZAE000156253
Company Code: BICAP
(“Curro” or “the Company”)
TRADING STATEMENT AND PUBLICATION DATE OF THE FINANCIAL RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2020
COVID-19 has had a severe impact on our lives during 2020 and Curro was presented
with various challenges as such. Management has dealt with these challenges, as far as
it was within their control, but it nevertheless affected the results for the year ended 31
December 2020.
Over and above management’s many operational interventions to keep learners, staff and
parent communities safe whilst continuing to provide high-quality education, the Company
bolstered its balance sheet with a successful rights offer in September 2020.
As a result of the rights offer, the Company had 597,961,595 shares in issue at year-end
compared to 412,087,989 shares at the end of the previous financial year. Accordingly,
the weighted average number of shares used to calculate earnings per share for the year
was 470,998,749 (2019: 420,384,587). Further details are included below.
In terms of the JSE Limited Listings Requirements, a listed company is required to publish
a trading statement as soon as it becomes reasonably certain that the financial results for
the next period to be reported on will differ by 20% or more from the financial results for
the previous corresponding period.
Shareholders are advised that as required by International Financial Reporting Standards
(IFRS), the Company’s results for the year ended 31 December 2019 have been adjusted
to account for the rights offer as follows:
Reported results Restated results
for the year ended for the year ended
cents 31 December 2019 31 December 2019
Recurring headline earnings 51.0 50.0
per share (RHEPS)
Headline earnings per share 61.1 60.2
(HEPS)
Earnings per share (EPS) 49.0 48.1
Weighted average number of 412,087,989 420,384,587
shares in issue
The Company hereby advises that it expects the financial results for the year ended
31 December 2020 to fall within the following ranges:
Restated Forecast
for the year ended for the year ended
31 December 2019 31 December 2020
cents cents % change
Recurring headline
earnings per share 50.0 35.0 to 41.0 (30.0%) to (18.0%)
(RHEPS)
Headline earnings per
share (HEPS) 60.2 34.0 to 39.0 (43.5%) to (35.2%)
Earnings per share
(EPS) 48.1 (5.0) to (9.0) (110.4%) to (118.7%)
In evaluating these results, shareholders should take the following into account:
• HEPS for the previous corresponding period included a non-recurring tax reversal (a
profit) of R53m and the current reporting period includes a non-recurring acquisition
cost of R8m (net of tax) which accounts for the key differences between RHEPS and
HEPS.
• Following a detailed and prudent review of the business plans for each of its schools,
the Company recognised impairments of R202m (net of tax) in the 2020 financial year,
relating to lower-yielding school assets. These impairment charges are included in
the calculation of EPS but are added back for purposes of the calculation of HEPS,
and accordingly accounts for the key difference between HEPS and EPS. EPS for the
previous corresponding period included a bargain purchase gain of R27m and an
impairment charge of R86m (net of tax).
• The Company experienced an increase in outstanding school fees and a deterioration
of the debtor aging profile. In response to this, Curro enhanced its debt collection
processes and increased the impairment of its debtors’ book, which resulted in a
R63m (after tax) higher bad debt expense than in the prior year.
• The financial results for the second half of 2020 were lower than that of the first half.
The business achieved savings in staff costs in the first half of the year, whilst schools
were fully operational in the second half. In addition, fee income was negatively
impacted in the second half of the year due to the Company on average having 4.1%
less learners in the second half of the year relative to the first half of the year.
• Curro right-sized its schools to contain costs and successfully expanded its digital
educational offering to meet the demand triggered by the pandemic.
• The Company used the proceeds of its rights offer to repay R1.1 billion of debt, which
strengthened the balance sheet, achieve savings in finance costs and enables Curro
to pursue various acquisition opportunities.
Prospects
Curro’s schools opened on 15 January 2021 but subsequently closed for face-to-face
tuition until 1 February 2021 after engagement with the Department of Basic Education.
Schools shifted seamlessly to online teaching for its learners, but the sudden lockdown-
related closure disrupted learner registration processes for the new academic year. New
registrations for the academic year are however satisfactory within the current
circumstances.
The Company’s business model has proven resilient to date, underpinned by its robust
offering and its strong financial position following the rights offer in 2020. We remain
committed to provide excellent education to all our learners into the future.
Results announcement
The Company is currently finalising its financial results for the year ended 31 December
2020. These results will be published on or about Wednesday, 17 March 2021 due to
certain logistical challenges brought about by the latest national lockdown. A webcast of
the results presentation is scheduled for 10:30 on Wednesday, 17 March 2021.
The financial information on which this trading statement is based has not been reviewed
or reported on by the auditor of the Company.
Durbanville
2 February 2021
Sponsor
PSG Capital
Joint independent sponsor
UBS South Africa
Date: 02-02-2021 09:00:00
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