Bad debts, fee discounts, and half-full new schools - why some investors are unhappy about Curro

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Analysts say investors are concerned about school fee collection and teething problems in some of Curro's new schools.
Photo: Frikkie Kapp/Gallo Images via Getty Images
Analysts say investors are concerned about school fee collection and teething problems in some of Curro's new schools. Photo: Frikkie Kapp/Gallo Images via Getty Images

Curro seemed to have disappointed many investors on Tuesday when it told shareholders to expect a decline of up to 54.7% in its recurring headline earnings for the first half of 2020.

Soon after the private schools' group published its trading update, its share price fell by more than 9% before clawing back some of its losses to close 4% lower on the JSE.

But it's not just the earnings decline that bothers investors, say analysts. They understand that the earnings were negatively impacted by the substantial rights issue that diluted earnings per share. 

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