South Africa-based recruitment and education firm AdvTech (ADH: SJ) reported revenue Monday of ZAR 7.86 billion (USD 416.0 million), an increase of 13% compared to the previous year.

AdvTech’s revenue increase was due to enrolment growth in both the schools and tertiary divisions together with increased business activity in the resourcing division.

The company added that its financial performance for 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.

Within AdvTech’s resourcing division, the positive momentum of the rest of Africa business continued.

The group also posted 18% growth in operating profit. Operating margin improving to 20.1% (2022: 19.1%).

Effective 1 March 2024, Roy Douglas stepped down from the board due to him retiring as group CEO at the end of February 2024. AdvTech noted that one of his last formal responsibilities will be to present the financial results to the market alongside new group CEO Geoff Whyte.

Whyte joined the group on 1 March 2024 as the new group CEO and was appointed to the board effective from that date.

On the group’s results, Douglas said, “AdvTech’s robust financial performance for the year ended December 2023 is indicative of the group’s sound business model and quality assets. Our schools and tertiary divisions benefitted from good enrolment growth, moderate fee increases and enhanced operating leverage, while, in our resourcing division, we continued to benefit from our investment into the rest of Africa. This sustained performance is driven by the group’s established market position in South Africa and its growing presence across the continent.”

Commenting on the executive changes, board chairperson, Chris Boulle said, “Roy has successfully led the group in its expansion strategy during his tenure, resulting in AdvTech becoming the leading private education and recruitment group across the continent. He leaves AdvTech in a strong position to continue its growth trajectory. The board wishes to thank Roy for his invaluable contribution during his tenure as CEO and wishes him well in his retirement.”

“The board is similarly pleased with the appointment of Geoff Whyte as CEO and are confident that Geoff’s track record and experience will enable him to build on the group’s successes,” Boulle said.

Revenue by segment

All of the ‘Schools’ brands in South Africa showed volume and operating profit growth. The group said it continued to win market share in a ‘tough operating environment’.

AdvTech said its school brands in the rest of Africa also continued to experience strong enrolment growth and are operationally sound. Revenue was up despite the negative impact of the weakening Kenyan Shilling on translation into Rands.

The tertiary division performed well. AdvTech stated, “Our ability to provide multi-modes of delivery (contact, hybrid, distance and online) on a full-time and part-time basis is fundamental to our value strategy and allows us to meet the requirements of every student at any time and at any location.”

In the Resourcing division, the company said its strategy to expand into the rest of Africa continues to bear fruit with volumes growing substantially, resulting in revenue increasing by 26%. The South African business’ revenue decreased by 9% due to the disposal of the group’s 51% share of the Contract Accountants group in the second half of the prior year, together with the muted activity as a result of the tough trading environment.

Looking ahead, AdvTech announced Boulle will be retiring from the board following the conclusion of the AGM to be held on 5 June 2024. Alexandra Watson will take over as chairperson of the board from 5 June 2024.

The company stated, “While we acknowledge that current economic conditions put South African consumers under pressure, we believe that AdvTech is uniquely positioned to leverage all these advantages and to benefit from continued growth in demand for education in South Africa and particularly, in the rest of Africa where this pressure is less pronounced.”

“This, together with the good enrolment growth achieved at the start of 2024 in both our schools and tertiary divisions, gives us confidence and an expectation that we will continue our growth trajectory,” AdvTech stated.

Advtech shares last traded at ZAR 2,900.00 (USD 153.57), no change on the day and 3.33% below its 52-week high of ZAR 3,000.00 (USD 158.76), set on 12 March 2024. The company has a market cap of ZAR 16.09 billion (USD 851.62 million).