Top-line continues to grow backed by higher enrolment and recovering supportive revenue streams CIRA recorded another period of positive revenue growth achieving EGP2,006 mn, with a YoY rise of 37%, in line with our expectation of EGP1,998 mn. The climb came backed by a 26.9% rise in higher education revenues and 17.5% rise in K-12 education revenues. Higher education revenues formed 53% of total revenues for the period, with tuition revenues recording EGP1,015 mn (+26.1% YoY), while other r...
Higher education revenues act as the main supporter of top-line growth;Utilization rates drop on new expansion Revenues for the quarter spiked by 47.2% YoY to reach EGP633 mn from a previous EGP430 mn. The rise in revenues is backed by multiple factors:1) the cancellation of the centralized enrolment system imposed by the government, 2) the revision of the minimum eligible enrolment score by the government after the implementation of the new examination system, widening the pool of eligible s...
REVENUES SUPPORTED BY TUITION FEES ACROSS BOTH SEGMENTS; HIGHER EDUCATION REVENUES SHOULD REVIVE AFTER CENTRALISED ENROLLMENT CANCELLATION CIRA recorded a topline for 3Q21/22 of EGP520 mn, higher YoY by 1.7% from the previously recorded EGP511 mn in 3Q20/21. Yet, below our expectations of EGP599 mn.For the 9M21/22 revenues reached EGP1,464 mn, climbing by 15.3% YoY, against EGP1,270 mn in the previous period. Topline growth came supported by both of the company’s segments growing by 15% YoY,...
The independent financial analyst theScreener just lowered the general evaluation of CAIRO INV.& RLST.DEV. (EG), active in the Personal Products & Services industry. As regards its fundamental valuation, the title still shows 1 out of 4 possible stars. Its market behaviour, however, has slightly deteriorated and will be qualified as moderately risky moving forward. theScreener considers that these new qualifications justify an overall rating downgrade to Neutral. As of the analysis date March 29...
TUITION FEES & ENROLLMENT RISE BOOSTS TOPLINE CIRA recorded a solid topline of EGP430 mn in 1Q21/22, compared to EGP370 mn in 1Q20/21, rising by 16.2% YoY. This boost in revenues came backed by steady growth in Higher Education (HE) revenues of 12%, as well as solid growth in K-12 tuition revenues by a full 21.7%. Tuition revenues for 1Q21/22 increased by 18% YoY to EGP386.2 mn, accounting for 89.8% of total revenues. Tuition revenue growth came on the back of the increase in enrollment acros...
ON THE GROUND UPDATES & 2022 FINANCIAL TARGETS * Management stated that this year, some hiccups were faced due to the changes in the national high school system, setting the minimum eligibility score for college admissions, way above the achieved scores by high school students, leading to only four-five universities capable of meeting their admissions target, and CIRA’s BUC was one of those. However, these hiccups are not permanent and are now resolved with a more stable university admission...
EXCEPTIONAL TOPLINE GROWTH DUE TO INCREASED HIGHER EDUCATION ENROLMENTS CIRA recorded an exceptional topline of EGP1.391 billion in FY20/21 (+27.8% YoY), in line with our expectations of EGP1.365 billion. Revenues for 4QFY20/21 came in at EGP120 million, up 25.3% YoY but down 76.5% QoQ. This boost in revenues was driven by an exceptional growth in overall revenues in Higher Education (HE) by 52% as well as the steady growth in k-12 tuition revenues by 5%. INCREASED FINANCE COSTS AND PROVISION...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
INCREASED HIGHER EDUCATION ENROLMENTS RESULT IN OUTSTANDING TOPLINE GROWTH CIRA recorded an exceptional topline of EGP511 million in 3QFY20/21 (+31.5% QoQ and 57.2% YoY), 24% higher than our expectations of EGP412 million. Revenues for 9M21 came in at EGP1.27 billion, 28% higher than these of 9M20. This boost in revenues was driven by an increase in overall revenues in Higher Education (HE) as well as the steady growth in k-12 tuition revenues. Tuition revenues for 9M21 increased by 33% YoY t...
CIRA recorded a topline of EGP389 million (+5.1% QoQ and 10.0% YoY), 10% below our expectations of EGP432 million. Revenues for 1H21 came in at EGP759 million, 14% (Adjusted: 23%) higher than these of 1H20. This was because of the Presidential decree to delay the beginning of the second term of FY21 until March due to covid-19. This resulted in 21-day shorter period reflected in 1H21 than for 1H20. Consequently, CIRA has adjusted last year’s 1H19/20 figures down to reflect the same period len...
ON THE GROUND UPDATE * Although CIRA increased annual tuition fees by only 7%, it managed to reach a total of 12% increase YoY for FY19/20 in revenues on the mass of new students coming in. * During FY19/20, CIRA faced three significant components that stressed a bit on its margin: 1) The revenues included around EGP35 million year-round coming from an external construction project that was done with very low EBITDA margin, 2) Bus operations were loss-making, 3) CIRA was already hosting...
HIGHER EDUCATION BOOSTS REVENUES FOR 1QFY2020/2021 CIRA recorded a topline of EGP370 million for 1QFY20/21 (+18.2% YoY) slightly below our expectations of EGP387 million. Tuition revenues increased 25% YoY to EGP327 million, accounting for 88% of total revenues. The growth in tuition revenues was driven by a surge in students enrollment in both k-12 and higher education (HE) segments. Other revenues recorded EGP43 million, down 15% YoY, as a result of bus fees reduction, and contributed 12% o...
Solid footing warrants an OW. We raise our 12M TP by c12% to EGP18.5/share, as we rollover our DCF, on a c3% higher EBITDA over FY21-29e, factoring: i) stronger-than-expected FY21e admissions, mainly for BUC (+8% vs. previously), thanks to CIRA’s cutting-edge offerings, including lucrative partnerships (University of Arizona’s agreement to extend its e-learning programmes), reinforcing its position amid the fallout, ii) c3% higher average pricing for higher education, on a better-than-anticipate...
OPERATIONAL AND FINANCIAL HIGHLIGHTS * Concerning FY20/21, CIRA is expecting revenues of EGP1.35 billion (EGP600 million coming from k-12), EBITDA of EGP620 million and bottom-line of EGP320 million. * Currently CIRA has 13k students in Higher Education and 28k students for k-12 segment. EXPANSION PLAN UPDATES * Regarding construction updates, CIRA will begin building one school around third week of November and another one by second week of December. Actual construction for Assiu...
REVENUES FOR FY2019/2020 PASSES THE TARGETED EGP1 BILLION MARK CIRA recorded a topline of EGP1,088 million for FY19/20 (+54% YoY) exceeding the targeted EGP1 billion mark; in line with our expectations of EGP1,040 million. Tuition revenues increased 50% YoY accounting for 86% of total revenues and recording EGP939.6 million. Other revenues (14% of total revenues) increased by +86% YoY to amount to EGP148.3 million. Revenues for 4QFY19/20 amounted to EGP96 million, up +54.2% YoY. However, indi...
We initiate coverage on CIRA with an overweight recommendation and a FV of 15.50/share.CIRA is Egypt’s largest private education provider, operating 20 schools (26.5k students) and a university with 10 faculties (10.5k students) as of FY 19/20. In addition to the existing business, our model accounts for: i) Badr University in Cairo’s (BUC) six new faculties (to be operational by 2020/21), ii) BUC’s new branch in Assuit (four faculties by 2021/22, 12 by 2024/25) and iii) five new schools (by ...
Despite COVID-19 challenges, flow is still smooth for Cairo for Investment & Real Estate Development (CIRA) * As it stands, and based on the company’s discussions with the Ministry of Education, the coming fall semester will likely follow a blended model nationwide (60% on campus and 40% online ratio, adjusted downwards for the higher grades and technical faculties), whereas the spring semester will likely see students back on-campus. Although the possibility of adopting a full online semest....
Play defensive, against current uncertainties. CIRA offers better FY20e earning visibility (+c36% y-o-y) vs. our consumer coverage, given its ability to swiftly shift to remote learning, post the closure of schools and universities on 15 March, amid the COVID-19 outbreak. That said, we see no risk on FY20 tuition fees, despite market chatter of partial refunds. We raise our TP by c3% to EGP16.5/share to factor better-than-expected: i) higher education margins, on higher PTR, due to delays in tea...
Expansions spree warrants TP upgrade. We raise our TP by c10% to EGP16.0/share, factoring: i) phase I of BUC’s extension (+4k seats), ii) BCCIS’ acquisition (+924 seats), iii) three additional schools (+c3.8k seats), and iv) DCF rollover. This should drive our FY19-25e EBITDA CAGR of 28% (vs. 23% previously), along with assuming c2% higher average tuition on a more favourable sales mix and 30bps lower EBITDA margins over FY20-28e. CIRA’s premium valuation (FY20e P/E of 33.6x vs. peers’ 26.7x) is...
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