CURRO HOLDINGS LTD Presentation at the AGM 21 June 2013 1 - - PowerPoint PPT Presentation

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CURRO HOLDINGS LTD Presentation at the AGM 21 June 2013 1 - - PowerPoint PPT Presentation

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CURRO HOLDINGS LTD Presentation at the AGM 21 June 2013 1 ACHIEVEMENTS Declared highest profit since inception in 2012 year (R15m) Target learner numbers exceeded All new schools and expansions successfully delivered 3rd Rights

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CURRO HOLDINGS LTD

Presentation at the AGM 21 June 2013

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ACHIEVEMENTS

  • Declared highest profit since inception in 2012

year (R15m)

  • Target learner numbers exceeded
  • All new schools and expansions successfully

delivered

  • 3rd Rights issue R606m (R476m in 2012 and

R320m in 2011)

  • Acquired R900m debt funding in past 2 years
  • Old Mutual/PIC partnership
  • Acquired a profitable private teacher training

college

  • Investment grade bond rating

(BBB-)

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CURRO PRESENTS ...

80 @ 20

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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 72% 30% 17% 13% 11% 5% 4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Netherlands Australia India Global average USA United Kingdom South Africa

Private school learners (% Private school)

MARKET POTENTIAL

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MARKET POTENTIAL

“World’s biggest private school operator GEMS seeks $1bn”

Bloomberg 27 March 2013

  • 130 000 students attend GEMS network of 100 schools in 11

countries; Huge demand across Africa; Next challenge: a $250-$300 a year quality school

“Private equity bankers compare Africa’s potential with emerging markets such as Brazil, India and China, which have attracted significant investment into their education sectors.” Reuters 8 April 2013

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MARKET POTENTIAL

  • Many examples and opportunities globally

– UAE, Mexico

  • Other significant international players

– Cognito (+-50 000 learners) – Beaconhouse (+-190 000 learners) – North Anglia, Meritas, SABIS

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SOUTH AFRICAN SCHOOL STATISTICS

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2006 2012/13 CAGR 2020 CAGR NUMBER OF LEARNERS Curro 910 20 840 68% 80 000 17%

% of total 0.01% 0.17% 0.8%

Private 352 000 504 000 6%

% of total 2.9% 4.1%

Total (Private and Pubic) 12 294 000 12 428 000

  • Significant increase in private school learners confirms the

market potential.

  • Only 60 of 1400 registered private schools with more than 1 000

learners

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CURRO provides private school education

From 3 months to grade 12

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SUPPORT SERVICES

  • Aftercare
  • Bus Services
  • Clothing and Attire
  • Teacher Training

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28 145 310 400 450 575 751 775 910 1 107 1 642 2 059 3 083 5 557 12 473 20 840

  • 5 000

10 000 15 000 20 000 25 000 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 13

NUMBER OF LEARNERS

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LEARNERS PER GRADE

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500 1000 1500 2000 2500

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OUR BRANDS

R2500 – R4000 pm Max 25 learners Academic, sport , culture Sufficient variety R4500 – R6000 pm Established campus Convenience Location Wide variety R900 – R1500 pm 35 – 70 per class Academic focus Support by class assistants Some extra mural R2000 – R2500 pm Full day care Convenience and safety Cognitive development programs

SELECT SCHOOLS CURRO CASTLE

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2012 ACADEMIC RESULTS AND QA

  • Select and Curro brands

– 358 candidates – 99.4% pass rate – 81% university exemption

  • Northern Academy

– 346 candidates – 99.4% pass rate – 73% university exemption

  • Meridian

– 180 candidates – 77% pass rate – 14% university exemption

  • Government

– 72% pass rate – 26% university exemption

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SOCIAL IMPACT

  • Relieving pressure on the Government

– In 2012 we invested R460m to expand the capacity of existing and new campuses

  • Local labour and suppliers

– R271m in operational expenditure of which R191m comprises salaries – PAYE of R31m – Income tax of R5m

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SOCIAL IMPACT

  • Creating Jobs

– Current staff complement of 2 257 people

  • Developing human potential

– R18,4m in bursaries – Delivering 880 matrics – Module library of 1 000 modules provided to needy schools

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SOCIAL IMPACT – COMMUNITY SERVICE

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RECORD ATTEMPT FOR BIGGEST KNITTED BLANKET

Distributed the pieces of the huge blanket to the needy community in winter.

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SOCIAL IMPACT – COMMUNITY SERVICE

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BAREFOOT DAY

Collection of old shoes – more than 12 000 shoes donated to the needy

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DURBANVILLE (WESTERN CAPE)

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First school provided the model

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DURBANVILLE

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1 200 learners

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LANGEBAAN (WESTERN CAPE)

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Confirmed demand and scalability

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HAZELDEAN (PTA, GAUTENG)

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Reached capacity within 4 years

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ROODEPLAAT (PTA, GAUTENG)

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Private schools have a catchment area of more than 20km

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SERENGETI (JHB, GAUTENG)

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1 000 learners in three years

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SERENGETI NURSERY SCHOOL

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Estate school convenience

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COLLEGE HAZELDEAN (PTA, GAUTENG)

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Separate high school: the result of fast developing primary school

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BANKENVELD (MPUMALANGA)

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14 ha will accommodate 2 000 learners

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AURORA (JHB, GAUTENG)

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Magnificent turnaround in profitability since acquisition

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HELDERWYK (BRAKPAN, GAUTENG)

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School campus > 1 000 learners: High barriers to entry

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HERMANUS (WESTERN CAPE)

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Demand in remote areas: 440 learners in 2 years.

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HEUWELKRUIN (LIMPOPO)

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Before Curro: 200 learners in 10 years Now: 450 learners 2 years later

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NELSPRUIT (MPUMALANGA)

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Significant growth despite nearby private schools

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HILLCREST (DURBAN)

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From church school to private school with Christian ethos

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WOODHILL COLLEGE (PRETORIA)

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Select schools keep their identity

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ROSEN CASTLE (DURBANVILLE)

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Our nursery schools run a programme which enhances cognitive development

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NORTHERN ACADEMY (POLOKWANE)

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4 000 learners, 2 500 boarders

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NORTHERN ACADEMY

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50 – 70 learners supported by class assistants = 100% pass rate

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NEW SCHOOLS 2013

  • Curro

– Existing schools capacity (R300m) – Ballito – Port Elizabeth

  • Meridian/Northern Academy

– Karino (Nelspruit) – Northern Academy 2

  • Curro Castle

– George

  • Acquisitions: always in the offing

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CURRO SCHOOL MODEL (example)

  • Capital

– 1000 learners R60m – 2000 learners R100m

  • Open with 250-300 learners

– Thatchfield surprise of 800 learners

  • Breakeven EBITDA between 350 and 450

learners (2 years)

  • IRR of 20%+

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MANAGEMENT PHILOSOPHY

  • Flat, decentralised and shared leadership
  • Executive head is wholly responsible for his

school (academics, co-curricular, HR and finance)

– Well remunerated and incentivised

  • Head office gives support

– Regional Heads / Inspectors of education – Curriculum development and quality assurance – IT – Back office processing

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FOCUS…

  • Successful delivery
  • f new schools
  • Efficiencies

– Personnel

  • Management

information systems

  • Debt funding

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BALANCE SHEET

Pro forma rights issue 31 Dec 2012 31 Dec 2012

ASSETS School Properties 1 426 1 426 Current assets 28 28 Cash 30 249 Total assets 1 484 1 703 EQUITY AND LIABILITIES Equity 861 1461 Interest Bearing Debt & Overdraft 441 60 Deferred tax 85 85 Other ST liabilities 97 97 Total equity and liabilities 1 459 1 703

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RE-GEARING OF BALANCE SHEET WITH BONDS AND CONSOLIDATED BANK DEBT

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HOCKEY STICK

2011

% of Eventual Capacity Schools Learner numbers EBITDA Rm EBITDA Margin

75%-100% 1 1 175 9.2 26% 50%-75% 3 2 461 17.8 23% 25%-50% 4 1 269 4.3 11% 0%-25% 4 652 (4.8) (29%) 12 5 557 26.5 16% 2012 75%-100% 5 4 160 41.6 36% 50%-75% 6 3 890 33.9 27% 25%-50% 5 2 728 9.9 15% 0%-25% 6 1 695 (6.7) (18%) 22 12 473 78.8 23%

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2012 Actuals vs Pre-listing Statement

2012

% change

2012 (PLS) Schools 22

57%

14 Learners 12 473

67%

7 457 Capacity 25 000

108%

12 000 Turnover (Rm) 355

60%

222 EBITDA 54

46%

37 PAT (Rm) 15

7%

14 EPS (cents) 7

(20%)

8,7 School assets 1 426

146%

580 Equity 861

119%

394 Debt 370

85%

200

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YESTERDAY, TODAY, TOMORROW

2009 2012 2013 2020 Schools 3 22 26 80 Learners 2 059 12 473 20 840 +- 90 000 Staff 251 1 630 2 257 +- 8 000 Learner/Educator ratio 10 11 14 +- 19 Turnover (Rm) 48 355 EBITDA 9 54 PAT (Rm) 2 15 EPS (cents) 2.5 7.0 ٭٭٭٭٭

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SHARE PRICE & MARKET CAP

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CAGR growth rate of 83,1% since listing at R5,50 on 2 June 2011

1000 2000 3000 4000 5000 6000 2009 (PSG invest) 2011 (Listing) Today

Market Cap (Rm)

500 1000 1500 2000 2500 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
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Thank you for your attendance and support …

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