Report
David Talpert

Curro | Relatively defensive

Despite weak economic growth, we expect Curro Holdings (COH) to deliver earnings growth of 22% for H1 '19. The growth is due to increased capacity utilisation and expanding margins as schools mature. In our view, schools are defensive as consumers prioritise private education ahead of discretionary expenditure. However, net student growth at COH has slowed due to financial pressure or emigration. We expect COH to grow earnings at a 25% CAGR over the next four years.
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

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

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Analysts
David Talpert

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