Curro Reports Slight Drop in Learners and Major Earnings Hit from R74 Million Impairment
Curro Holdings has reported a slight drop in learners and a major hit to earnings from a R74 million impairment, with the JSE-listed education group expecting a decline of over 20% in earnings per share for the first half of 2025, though headline earnings remain stable amid positive cash flow gains and share buybacks.
Impairment Charge Weighs on Interim Results
In its latest trading statement released on 22 August 2025, Curro Holdings, South Africa’s largest independent school operator, disclosed a challenging first half marked by a R74 million impairment on land-banked properties held for future development. This non-cash charge, stemming from updated valuations and revised development assumptions for specific land parcels, has significantly impacted the group’s earnings per share (EPS), projecting a drop of more than 20% compared to the prior period. However, the impairment is excluded from headline earnings per share (HEPS) and recurring headline earnings per share (RHEPS), which are expected to remain largely unchanged, reflecting the underlying operational stability.
The impairment assessment, a standard accounting requirement, highlights the pressures facing the education sector amid economic headwinds, including rising interest rates and subdued property market conditions that have affected the viability of some expansion sites. Curro’s management emphasised that this adjustment does not reflect on the core business but is a prudent step to align asset values with current realities. Analysts from Nedbank CIB noted in a recent report that such impairments are common in capital-intensive industries like education, where land holdings form a key part of growth strategies, but they could signal delays in new school openings planned for 2026 and beyond.
Learner Numbers Dip Amid Economic Pressures
The group reported a weighted average of 71,749 learners for the six months ended June 2025, a 1.4% decrease from the previous comparable period. This decline, the first in several years, comes against a backdrop of affordability challenges for middle-income families, exacerbated by high inflation, stagnant wage growth, and a sluggish economy. Curro, which operates over 180 campuses across South Africa offering affordable private education from preschool to matric, has seen enrolments soften particularly in its mid-fee segment, where parents are increasingly opting for public schools or delaying new admissions.
Despite the dip, Curro highlighted resilience in its learner base, with retention rates holding steady at around 90%. The company attributed part of the drop to the closure of underperforming campuses and a strategic shift towards higher-fee models in urban areas. In a webinar following the statement, CEO Andries Greyling explained that while overall numbers are down, revenue per learner has risen by 8% due to fee adjustments and a focus on premium offerings like Curro Digital and specialised STEM programmes. This aligns with broader industry trends, where private education providers are adapting to cost pressures by enhancing value-added services to justify fees ranging from R3,000 to R10,000 per month.
Positive Cash Flow and Shareholder Returns
On a brighter note, Curro reported a 10% increase in net cash generated from operating activities, underscoring improved efficiency and cost management. This cash strength enabled the group to continue its shareholder-friendly initiatives, including the repurchase and cancellation of 10.8 million shares for R116 million during the period. “This share buyback underscores the company’s confidence in the group’s prospects and its commitment to enhancing shareholder returns,” the statement read. The buyback programme, ongoing since 2023, has reduced the share count by over 5%, potentially boosting EPS in future periods.
Curro’s focus on cash generation ahead of capital expenditure has bolstered its balance sheet, with net debt levels remaining manageable at around R2.5 billion. The group invested R350 million in campus expansions and upgrades during the half, including new facilities in Gauteng and KwaZulu-Natal, aimed at capturing demand in growing suburbs. Financial experts from Investec pointed out that this cash discipline positions Curro well for recovery, especially as interest rates are expected to ease in late 2025, reducing borrowing costs.
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