South Africa-based recruitment firm AdvTech (ADH: SJ) reported revenue this week for the six months ended 30 June 2023 of ZAR 3.93 billion (USD 208.9 million), an increase of 16% compared to the previous year.

The company said its financial performance for the first six months of the year was delivered off the back of higher enrolments and moderate fee increases across all parts of the education division together with enhanced operating leverage, while, in its resourcing division, the positive momentum in volumes from the prior year continued.

Operating profit increased by 23% with the group operating margin improving to 19.2% (2022: 18.1%).

AdvTech CEO, Roy Douglas, said, “ADvTech’s strong financial performance for the first six months of the year is a result of a solid contribution from all the group’s operating divisions with improved margins across the board. Our schools and tertiary divisions benefitted from good enrolment growth, moderate fee increases and enhanced operating leverage, while we continued to reap the rewards from our rest of Africa investment in our resourcing division.”

Revenue by segment

In Schools South Africa, the group cited good enrolment growth while in Schools in the Rest of Africa, the company added that it also continued to experience good enrolment growth and is operationally sound.

The tertiary division performed well and continues to grow on the back of a well-established, quality brand portfolio that offers a comprehensive range of programmes and qualifications.

Within Resourcing, the strategy to expand into the rest of Africa continues to bear fruit with volumes growing substantially and resulting in revenue increasing by 33%. The South African business’ revenue decreased marginally by 4% due to the disposal of the group’s 51% share of the Contract Accountants group in the second half of 2022. The continuing business performed well in a tough economic environment, increasing revenue by 6%.

The company said the continued growth in demand for quality education in South Africa, and particularly in the rest of Africa, persists.

AdvTech stated, “Our ability to convert this demand into good enrolment growth in both the schools and tertiary divisions, supports the group’s confidence in sustaining its growth trajectory in the near term.”

Douglas said, “AdvTech remains uniquely positioned to benefit from the growth in demand for education in both South Africa and particularly in the rest of Africa. We look forward to the continued growth of our resourcing footprint in the rest of Africa. We are single-minded in our approach to optimise our performance across the group. Our focus on productivity, efficiency and leveraging scale to deliver value in quality education remains key to our continued growth.” 

AdvTech shares closed on Monday at ZAR 2,070.00 (USD 110.0), up 3.5% on the day. The company has a market cap of ZAR 11.57 billion (USD 614.80 million).