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ADvTECH to grow in 2009
Johannesburg - Advtech, an education and recruitment group listed on the JSE, said it still expects growth in its 2009 earnings despite a more challenging trading climate.
"Advtech has a robust and resilient business model. Despite the expectation of a more testing operating environment in 2009, we are confident that growth will remain substantial and positive in real terms," said Advtech CEO Frank Thompson.
The CEO's comments followed the release of the group's results for the year to end-December 2008 on Monday, where it reported a 25% increase in revenue to R1.2bn and a 27% rise in operating profit to R201m.
Headline earnings per share went up by 26% to 40.2c, while the group's operating margin grew slightly to 17% from 16% in the previous corresponding period. The results also showed a 25% increase in distributions per share for the full year to 20c.
"These results flow from good performances in both operating divisions, with growth being enhanced by successful contributions from new investments, whether organic capital expenditure or through acquisition."
Both revenue and operating profit in the education division increased by 20% to R977m and R192m respectively, reflecting continued enrolment growth and efficiency improvements.
The group's educational brands and institutions include Abbotts College, College Campus, Corporate College International, CrawfordSchools, Imfundo, Junior Colleges, Rosebank College, the National College of Photography, Trinityhouse, Varsity College and brand communication school Vega.
Its education division had 46 500 students during 2008 at the 52 sites and campuses across South Africa from which the group operates. This was higher than the 45 000 students of 2007.
Niche markets
Thompson told media earlier this year that there was a 100% pass rate achieved by the 1 043 matric candidates in the new outcomes-based education curriculum.
"The class of 2008 obtained distinctions in a third of all subjects written - 2 332 As in total - and average scores of 75% in mathematics, 66% in physical science and 70% in English."
Its other business unit, the resources division which comprises the recruitment businesses, saw revenue growth of 49% to R223m and a rise in operating profit of 51% to R47m.
Brands in its resourcing division include Brent Personnel, Cassel & Company, Communicate Personnel, Inkokheli HR Appointments, Insource.ICT, Network Recruitment, Pro Rec Recruitment, Vertex-Kapele, IT Edge, Tech-Pro Personnel and the Working Earth.
"The resourcing division maintained a strong focus on the key niche markets of IT, finance and engineering, while also growing new sectors in sales, freight and HR.
"With further development of human capital and physical assets, the division was able to strengthen and grow its brands markedly during the year, increasing consultant numbers by 20%," it said.
During 2008 the group invested R98m in capital expenditure, mainly to increase student capacity in the school and tertiary businesses. The group also invested R143m in acquisitions already reported, of which Trinityhouse was the largest at R104m.
Shortly after the release of its results, Advtech's share price was trading 2.86% higher at 360 cents on Monday. This was in line with the JSE's broader all-share index, which was up 2.56% at 21 334.91 points at the same time.
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