Clean-up has brought five of troubled PLG schools close to profitability

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The Pembury Lifestyle Group owns PLG Schools including Raslouw College, Carlswald and Greenhills Academies.
The Pembury Lifestyle Group owns PLG Schools including Raslouw College, Carlswald and Greenhills Academies.

Private schools owner the Pembury Lifestyle Group (PLG) says five of its schools are now breaking even.

PLG had a tumultuous year from the beginning of 2020 when it announced that it had suspended its CEO and was investigating him because of "governance concerns". Thanks to one of its shareholders, Verityhurst, which stepped in and made an offer to buy millions of its shares to pump some money into the group, it narrowly escaped liquidation proceedings brought by its former auditors.

On Monday, the group said Verityhurst, which is set to buy 180 million of its shares, still has not done so because PLG has not yet agreed with the JSE about the value of its shares.

While Verityhurst agreed in July last year to pay 10.5 cents per share once the JSE had lifted PLG's suspension, the price that the shareholder would ultimately pay was subject to discussions with the exchange.

PLG said the JSE asked it to provide additional motivation around pricing these shares and to perform a valuation of its share price. The group said it has done as asked and is now waiting for the JSE's feedback.

But the company has also not finalised the audits of its 2019 and 2020 financial statements yet. It needs audited financial statements to get the JSE suspension lifted. It blamed the delay on cash flow constraints, but said it has already compiled full IFRS-compliant financial statements.

But while PLG waits for the JSE to list its suspension, the shakeup, which began when the Verityhurst deal was announced, has left the group in a better space.

The company talked its troubled former CEO, Andrew Robert McLachlan, into stepping aside. It disposed of its loss-making PLG Retirement Villages, cut costs in many areas and got certificates of compliance for some of its schools that were in trouble.

"As a result of the above board interventions, five of the schools are now at a positive or breakeven EBITDA level, before allocation of head office costs and the impact of collections," wrote the group in its quarterly progress report.

The company said the process of turning around its operations is still expected to take another 12 to 18 months.

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