Stadio gains further traction with strong results
Stadio Holdings’ operations and business strategy has gained further traction with a strong set of results for the six months to 30 June 2021.
Core headline earnings, the financial measure used to benchmark the Company’s underlying performance (excluding adjustments that may distort the underlying financial performance from year to year), increased by a sturdy 44% with a 11% growth in student numbers.
The JSE listed investment holdings company holds investments in three private higher education institutions – Stadio Higher Education, AFDA and Milpark offering both undergraduate and postgraduate programmes on the contact, distance and blended learning modes of delivery.
The core headlines earnings increase of 44% from R57 million to R82 million, provided for a 41% rise in core headline earnings per share from 6,9 to 9.7 cents. Revenue increased by 17% from R468 million to R548 million.
The overall growth in core headline earnings per share is due to the underlying organic growth in earnings before interest, taxation, depreciation and amortisation (EBITDA), as well as additional cost savings due to the protracted lockdowns through the period under review.
EBITDA increased by more than 100% from R46 million to R161 million in the period under review. Earnings per share amounted to of 9.6 cents (June 2020: loss per share of 8.7 cents) and headline earnings per share of 9.4 cents (June 2020: headline loss per share of 1.5 cents).
This large earnings increase was primarily due to organic grow in the first six months of the year and the significant once-off adjustments in the prior year that related to a fair value adjustment of R74 million concerning the CA Connect acquisition and a R60 million once-off, non-cash accounting impairment of trademarks of the underlying brands (excluding Milpark) following the migration of the various brands to Stadio Higher Education.
Announcing the results, Stadio CEO Chris Vorster said that the results are not only pleasing, but a major achievement considering the extreme economic conditions and disruptions since the outbreak of Covid-19.
“The focus up to now has been on consolidating entities and laying a solid foundation for a new structure and managing the change. These solid results pave the way for a shift in focus to growth in 2022. Some 47 new academic programmes currently in the pipeline will also enhance the potential for growth.
“Stadio’s first mega-campus opening for new students in early 2022 in Gauteng will be part of the drive for growth. Phase one of Stadio Centurion was completed in June 2021. Stadio’s smaller Gauteng campuses will migrate to Stadio Centurion over time, which in turn will unlock more cost efficiencies.”
Vorster said that the 11% growth in student enrolments to 34 494 students (June 2020: 31 053) was most encouraging in these challenging economic times. Over the same period, distance learning students grew by 15% to 28 573 students (June 2020: 24 784) and contact learning students declined by 6% to 5 921 students (June 2020: 6 269).
As at August 2021, the group had 38 101 students (August 2020: 33 586 students) enrolled, with second semester enrolments still in progress.
Distance learning student numbers reflected good overall growth, with online professional qualifications showing significant growth in enrolments over the period under review. The decline in contact students is mainly due to students delaying or deferring studies given the impact and uncertainties of Covid-19 but should recover once normalcy and stability return to campuses.
“Due to the economic impact of Covid-19, many students are under financial pressure with their studies. For this reason, Stadio is excited to have partnered with Capitec to provide affordable loans to students.
“Higher education forms a fundamental pillar of social and economic empowerment that Stadio aims to use as a catalyst to promote growth in the country. The group is currently well positioned to meet the growing demands of the country’s higher education needs and in doing so, will contribute to long-term growth in the economy.
“Stadio is in a strong cash position with a cash balance of R111 million at 30 June 2021 and our target is still firmly set on 56 000 students by 2026,” Vorster said.