Curro’s ratings are underpinned by the supportive operating environment for private education and relative earnings stability. Against the backdrop of inadequate education spend in public schools, the underlying supply-demand dynamics in the private education space are also expected to sustain high growth in learner enrolments over the medium term. Within this environment, the ratings take cognisance of Curro’s strong franchise value and entrenched brands, albeit tempered by the highly fragmented and competitive private education industry. Limited geographical and business line diversification also curtails the ratings.
Curro Holdings Limited (“Curro”) is an independent education group offering services from the early childhood development phase to Grade 12. The group was founded in 1998, became a subsidiary of PSG Financial Services Ltd (“PSG”) in 2009 and listed on the JSE in 2011. Since then, through acquisitions and development of new schools, the group has grown to become the largest for-profit private school operator in South Africa. In October 2017, the group unbundled its tertiary-education business, Stadio Holdings, and listed it separately on the JSE. With one campus each in Namibia and Botswana, the group’s revenue base is predominantly derived from South Africa, with focus placed on major metropolitan cities. Curro’s shareholding remains underpinned by PSG, which controls 55%, with the balance spread across other institutional investors.