South Africa-based recruitment firm ADvTech (ADH: SJ) reported revenue today for the six months ended 31 December 2018 of ZAR 4.38 billion (USD 303.7 million), an increase of 11% compared to the previous year.

ADvTech earns most of its revenue through two separate education divisions, Schools and Tertiary. ADvTech Group’s Resourcing division’s activities include permanent and temporary staffing solutions; as well as recruitment advertising, e-recruitment, and advertisement response handling. The Resourcing division predominately operates in the IT, Finance, and Engineering sectors.

ADvTECH said its revenue and profits in FY 2018 were lifted by its African expansion strategy and the tertiary division continuing on a growth trajectory.

During the year, the company adopted IFRS 15 (International Financial Reporting Standards: Revenue from Contracts with Customers), which was applied with an effective date of 1 January 2018.

On 4 April 2018, ADvTech acquired Makini Group, a chain of schools based in Kenya.

On 13 September 2018, the company announced that it had acquired Monash South Africa, a South African private tertiary education institution.

In 2018, the Schools divisional revenue, representing 46% of group revenue in FY 2018, increased by 15% to ZAR 2.00 billion (USD 138.4 million).

“The challenging South African economic climate and unsettled socio-political environment continue to impact organic growth with increased levels of withdrawals owing to emigration and financial pressures, a trend that has continued into 2019,” the company stated. “The growth in student enrolments for 2019 is largely off the back of our expansion strategy to enter faster growing economies outside of South Africa.”

The Tertiary division showed growth in FY 2018 with revenue increasing by 10% to ZAR 1.71 billion (USD 118.3 million), contributing 39% of group revenue.

The Resourcing division reported an increase in revenue of 4% to ZAR 670 million (USD 46.3 million). The group said its FY 2018 performance is mainly due to the success of the strategy to enter alternative markets outside of South Africa, where the group said it has experienced significant growth.

“Notwithstanding the tough market conditions in South Africa, we have increased our market share and successfully placed 4,608 candidates (2017: 3755),” the company stated.

“We continue to see numerous opportunities, both in South Africa and the rest of the continent, and the group remains in a uniquely strong position to pursue its growth strategy,” the company stated.

“Our Tertiary and Resourcing divisions are well positioned and continue to perform strongly,” ADvTech stated. “Having significantly increased the scale of our Schools division over the past four years, we have now entered the integration, consolidation and rationalisation phase, which we are confident will drive operational efficiencies and sharpen market focus.”

As of last trade ADvtech traded at ZAR 1,243.00 (USD 86.01), down 0.08% on the day and 2.05% above its 52-week low of ZAR 1,218.00 (USD 84.28), set on 15 March 2019. Based on its current share price the company has a market value of ZAR 6.80 billion (USD 470.5 million).