Curro plans Stadia listing
Unbundling from parent into separate company will ensure that there is a dedicated management focus to grow and manage Stadia, Curro is telling jittery investors.
Hopes are high for the coming unbundling of Curro Holdings' tertiary education operations but questions are being asked about the fledgling division's ability to reproduce the rapid growth of the schools division.
JSE-listed private education business Curro announced its intention to unbundle the tertiary education division, called Stadia, into a separately listed company in February.
Nico de Waal, an executive at leading shareholder PSG, said the unbundling and separate listing would ensure there was a dedicated management focus to grow and manage this specialist business.
The education group, run by CEO Chris van der Merwe, first invested in the tertiary sector in 2013, when it acquired Durban-based teacher-training college Embury.
The college was initially acquired to provide training for Curro teachers, but this subsidiary now forms the operational base for a more diversified tertiary offering.
The tertiary division is a small contributor and the schools division still informs sentiment. The new tertiary division would offer courses in education, commerce and information technology, while increasingly focusing on distance learning to augment its predominantly contact-learning offering.
Curro's share price seems to reflect investor uncertainty around the unbundling as well as the performance of Stadia.
Mergence Investment Managers equity analyst Nolwandle Mthombeni said the tertiary division was a small contributor and the larger schools division still informed market sentiment.
Mthombeni said management had indicated it would deploy similar growth strategies to those of Curro schools: list the business, embark on a few rights issues to fund growth and move towards the J-curve profit effect.
He believed the tertiary thrust would not achieve the same scale as Curro's fast-growing schools business.
“Through the unbundling, they will list a brand-new separate entity and then scale up and grow the division,” Mthombeni said.
Curro's growth strategy has helped boost the market value, from about N$100 million before listing in 2011, to more than N$18 billion. In six years, the share price has increased more than 300% to N$44.70, with pupil numbers rising 14% to 47 589 in 2016.
Curro is no stranger to fundraising.
The private school group has had six rights offers in six years. The subscription price of new shares in Stadia and the size of the fundraising will provide an indication of how much enthusiasm there is for the offshoot at not only major shareholder, PSG, but also institutional investors who were late in assessing Curro's potential.
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JSE-listed private education business Curro announced its intention to unbundle the tertiary education division, called Stadia, into a separately listed company in February.
Nico de Waal, an executive at leading shareholder PSG, said the unbundling and separate listing would ensure there was a dedicated management focus to grow and manage this specialist business.
The education group, run by CEO Chris van der Merwe, first invested in the tertiary sector in 2013, when it acquired Durban-based teacher-training college Embury.
The college was initially acquired to provide training for Curro teachers, but this subsidiary now forms the operational base for a more diversified tertiary offering.
The tertiary division is a small contributor and the schools division still informs sentiment. The new tertiary division would offer courses in education, commerce and information technology, while increasingly focusing on distance learning to augment its predominantly contact-learning offering.
Curro's share price seems to reflect investor uncertainty around the unbundling as well as the performance of Stadia.
Mergence Investment Managers equity analyst Nolwandle Mthombeni said the tertiary division was a small contributor and the larger schools division still informed market sentiment.
Mthombeni said management had indicated it would deploy similar growth strategies to those of Curro schools: list the business, embark on a few rights issues to fund growth and move towards the J-curve profit effect.
He believed the tertiary thrust would not achieve the same scale as Curro's fast-growing schools business.
“Through the unbundling, they will list a brand-new separate entity and then scale up and grow the division,” Mthombeni said.
Curro's growth strategy has helped boost the market value, from about N$100 million before listing in 2011, to more than N$18 billion. In six years, the share price has increased more than 300% to N$44.70, with pupil numbers rising 14% to 47 589 in 2016.
Curro is no stranger to fundraising.
The private school group has had six rights offers in six years. The subscription price of new shares in Stadia and the size of the fundraising will provide an indication of how much enthusiasm there is for the offshoot at not only major shareholder, PSG, but also institutional investors who were late in assessing Curro's potential.
BUSINESS DAY
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