Report
David Talpert

Curro | Cutting capex

Despite reporting a slowdown in recurring HEPS growth to 7% y/y, Curro Holdings (COH) reported strong operational results. Revenue increased by 19% with EBITDA increasing by 21%. Management decided to reduce the capex pipeline and focus on increased capacity utilisation. Thus, we believe the move through the j-curve will accelerate. The business model relies on increasing capacity utilisation; fewer new schools will allow aggregate occupancy levels to increase. We remain positive on COH's potential to generate free cash flow and expect a four-year HEPS CAGR of 20%.
Underlying
Curro Holdings

Curro Holdings Limited is engaged in the provision of independent schools and education services. The Company develops, acquires and manages independent schools throughout South Africa. The Company's segments include Curro and Meridian. The Curro segment offers independent education and ancillary services. The Curro segment also includes Select Schools, Curro Academy Schools, Curro Castles and Teacher Training College. The Meridian segment offers independent education and ancillary services. Curro schools consist of Durbanville, Langebaan, Hazeldean, Helderwyk, Hermanus, Serengeti, Nelspruit, Heuwelkruin, Embury, Hillcrest, Bloemfontein, Krugersdorp, Rosen Castle, Curro Castle George and Curro Academy Pretoria. Its ancillary services include boarding facilities, aftercare centers, cafeterias, school transport and activity centers. The Company provides education services to approximately 42,000 learners in over 110 schools across South Africa and Namibia.

Provider
Avior Capital Markets
Avior Capital Markets

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Analysts
David Talpert

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