CURRO HOLDINGS LIMITED - Trading Statement And Publication Date Of The Financial Results For The Year Ended 31 December 2020

Trading Statement And Publication Date Of The Financial Results For The Year Ended 31 December 2020

Incorporated in the Republic of South Africa
(Registration No. 1998/025801/06)
JSE Share Code: COH
ISIN: ZAE000156253
Company Code: BICAP
(Curro or the Company)


COVID-19 has had a severe impact on our lives during 2020 and Curro was presented
with various challenges as such. Management has dealt with these challenges, as far as
it was within their control, but it nevertheless affected the results for the year ended 31
December 2020.

Over and above managements many operational interventions to keep learners, staff and
parent communities safe whilst continuing to provide high-quality education, the Company
bolstered its balance sheet with a successful rights offer in September 2020.

As a result of the rights offer, the Company had 597,961,595 shares in issue at year-end
compared to 412,087,989 shares at the end of the previous financial year. Accordingly,
the weighted average number of shares used to calculate earnings per share for the year
was 470,998,749 (2019: 420,384,587). Further details are included below.

In terms of the JSE Limited Listings Requirements, a listed company is required to publish
a trading statement as soon as it becomes reasonably certain that the financial results for
the next period to be reported on will differ by 20% or more from the financial results for
the previous corresponding period.

Shareholders are advised that as required by International Financial Reporting Standards
(IFRS), the Companys results for the year ended 31 December 2019 have been adjusted
to account for the rights offer as follows:

                                     Reported results             Restated results
                                    for the year ended           for the year ended
cents                                31 December 2019             31 December 2019

Recurring headline earnings                   51.0                       50.0
per share (RHEPS)

Headline earnings per share                   61.1                       60.2

Earnings per share (EPS)                      49.0                       48.1

Weighted average number of              412,087,989                  420,384,587
shares in issue

The Company hereby advises that it expects the financial results for the year ended
31 December 2020 to fall within the following ranges:

                                   Restated                            Forecast
                              for the year ended                  for the year ended
                               31 December 2019                    31 December 2020
                                    cents                    cents                   % change

Recurring headline
earnings per share                  50.0                  35.0 to 41.0           (30.0%) to (18.0%)

Headline earnings per
share (HEPS)                        60.2                  34.0 to 39.0           (43.5%) to (35.2%)
Earnings per share
(EPS)                               48.1                 (5.0) to (9.0)        (110.4%) to (118.7%)

In evaluating these results, shareholders should take the following into account:

      HEPS for the previous corresponding period included a non-recurring tax reversal (a
       profit) of R53m and the current reporting period includes a non-recurring acquisition
       cost of R8m (net of tax) which accounts for the key differences between RHEPS and

      Following a detailed and prudent review of the business plans for each of its schools,
       the Company recognised impairments of R202m (net of tax) in the 2020 financial year,
       relating to lower-yielding school assets. These impairment charges are included in
       the calculation of EPS but are added back for purposes of the calculation of HEPS,
       and accordingly accounts for the key difference between HEPS and EPS. EPS for the
       previous corresponding period included a bargain purchase gain of R27m and an
       impairment charge of R86m (net of tax).

      The Company experienced an increase in outstanding school fees and a deterioration
       of the debtor aging profile. In response to this, Curro enhanced its debt collection
       processes and increased the impairment of its debtors book, which resulted in a
       R63m (after tax) higher bad debt expense than in the prior year.

      The financial results for the second half of 2020 were lower than that of the first half.
       The business achieved savings in staff costs in the first half of the year, whilst schools
       were fully operational in the second half. In addition, fee income was negatively
       impacted in the second half of the year due to the Company on average having 4.1%
       less learners in the second half of the year relative to the first half of the year.

      Curro right-sized its schools to contain costs and successfully expanded its digital
       educational offering to meet the demand triggered by the pandemic.

      The Company used the proceeds of its rights offer to repay R1.1 billion of debt, which
       strengthened the balance sheet, achieve savings in finance costs and enables Curro
       to pursue various acquisition opportunities.


Curros schools opened on 15 January 2021 but subsequently closed for face-to-face
tuition until 1 February 2021 after engagement with the Department of Basic Education.

Schools shifted seamlessly to online teaching for its learners, but the sudden lockdown-
related closure disrupted learner registration processes for the new academic year. New
registrations for the academic year are however satisfactory within the current

The Companys business model has proven resilient to date, underpinned by its robust
offering and its strong financial position following the rights offer in 2020. We remain
committed to provide excellent education to all our learners into the future.

Results announcement

The Company is currently finalising its financial results for the year ended 31 December
2020. These results will be published on or about Wednesday, 17 March 2021 due to
certain logistical challenges brought about by the latest national lockdown. A webcast of
the results presentation is scheduled for 10:30 on Wednesday, 17 March 2021.

The financial information on which this trading statement is based has not been reviewed
or reported on by the auditor of the Company.

2 February 2021

PSG Capital

Joint independent sponsor
UBS South Africa

Date: 02-02-2021 09:00:00
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