Stadio, the private tertiary education specialist with a R3.8bn market value, is taking a firm line when it comes to outstanding student fees.
Stadio CEO Chris Voster said in the group’s just released annual report that affordability continued to be the largest risk in the business. “Management made some tough decisions during the year, decisions which I believe were right for the overall business.”
Vorster said the weak economic environment in SA was further affected by higher levels of load-shedding as well as higher inflation, fuel prices and interest rates. “This added strain to our students and their ability to meet tuition payments.”
Vorster said this meant that in 2022 certain students with large amounts outstanding on their tuition fees were excluded from returning in the second semester. “Management engaged with all these students and entered into payment plans where possible, allowing students to return.”
Stadio was spun out of PSG-controlled private schools business Curro in 2017. Curro develops affordable private schools. Stadio has focused on offering affordable university and other tertiary courses via online tuition and physical campuses.
Vorster explained that Stadio’s overall debt collection process had to be amended to allow more students to return to the institution with outstanding fees. He said management proactively monitored debt levels and collection rates. “We were pleased to keep the overall loss allowance to 7% for the year”, he said.
Vorster explained that management also sought additional funding solutions for students and looked to retain tuition fee increases aligned with inflation, despite little or no increases in fees in 2021.
Despite the tough trading environment, Stadio had a solid 2022 financial year, with first semester student numbers up 11% at 38 348 and second semester numbers up 8% at 41 296.
After-tax profit skipped up 36% to R186m, with net cash flow coming in at R360m.
With several campus developments under way or planned, Stadio has no debt, with a R100m revolving debt facility and access to an additional R100m if needed.
Vorster said the group’s strategy was not to build a comprehensive campus in every city, but rather to optimise existing campuses.
There are three campuses in frame: Stadio Centurion (already opened), Stadio Musgrave and Stadio Bellville.
Vorster said Stadio was a cash-generative business in a strong cash position, with access to a debt facility. “Any expansion can be funded through cash and minimal debt levels,” he said.
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