The construction of an e-learning high school in one of the most violent Cape Town townships, Delft, shows how far private schooling group Curro is willing to venture into uncharted waters to find pockets of growth in SA.
Curro, the largest listed private schools group in terms of market capitalisation (about R7.6bn) now boasts 180 schools with a growing number of these being developed in townships such as Soweto, Soshanguve and Mamelodi. In Delft, Curro is building a high school that will employ modern technology and offer fourth industrial revolution (4IR) subjects.
In comparison the oldest player in this market, AdvTech, has managed to grow the number of its schools to 104. Another competitor, Pembury Lifestyle Group (PLG) whose share price has lost more than 81% of its value in the past year, is aiming for 55 schools by the end of 2020.
Speaking at the JSE SA Trade Connect, Curro CEO Andries Greyling said while it has become a tougher market over the years, Curro is thriving because it adjusted its schooling model to cope with the changing realities in SA, and is planning to expand into more townships.
“There are higher targets set and the amount we invest will vary annually,” Greyling said regarding the expansion.
Despite other companies “burning their fingers in the education sector”,.uptake of private schooling in SA continues to rise even in communities facing affordability pressures, he said.
PLG is one company that has found it hard to grow consistently and has announced it will close two loss-making campuses at the end of the 2019 financial year.
“People ask us; ‘can they afford’? We actually did a study and found that 20% of our Academy clients, people will not give credit to, but they are not in arrears with school fees. That’s an opportunity,” said Greyling.
Curro now has 20 Academy and Meridian campuses — the low-fee model schools — around the country accommodating about 17,000 pupils.
“Out of difficulty comes opportunity. I still think there’s a huge amount of opportunities, even in SA,” said Greyling, adding that Curro is deploying all its capital at the moment to fill its campuses in SA.
The group, which already has schools in Windhoek and Botswana, is considering ramping up its presence outside SA, said Greyling, but added that it will however be cautious on that idea.
“It’s not about being narrow-minded and just saying that you need to be focusing only in SA,” he said.
Curro regarded SA as its “risk-free opportunity” because it understood the market and regulations.
If the company does identify a good opportunity “up north” on the continent, it would pursue it in the form of partnership.
“Some big companies burn their fingers in the rest of the world taking their money out of the country,” said Greyling, adding that Curro does not want to make that mistake.
Curro is looking at working with third parties in the development of new schools. Greyling said there were potential joint ventures with some developers that would allow the group to expand without having to use its own capital to develop the properties. One of those is a cricket stadium owner who has proposed to Curro that it be turned into a school.
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