SIMON BROWN: I’m chatting with Chris Vorster, CEO of Stadio, which has results out for the six months ending June. Revenue is up 17%. Student numbers, which is the really important one, are up 11%, and Stadio moved to a headline profit per share of 6.9 cents. Importantly, the Centurion complexes are ready for students in the new year.
Chris, I appreciate your time today. I want to get to Centurion. Before I do, how much contact face-to-face teaching is happening in your campuses at this point in the pandemic?
CHRIS VORSTER: Obviously with the restrictions [there’s] not a lot of on-campus activity, although we do make space available on the campus for those students who struggle with access to devices. But those are limited to students on campus at the moment.
SIMON BROWN: The students are obviously there. We can see it from the numbers. Although you’ve got the distance learning at Milpark [Education], the students are doing it via technology, doing it remotely.
CHRIS VORSTER: Yes, 80% of our student population are already distance-learning students, meaning they are online. So when we get into the lockdown situations, we actually move only 20% of our students, making space available for them to go online.
SIMON BROWN: That online was Milpark, an acquisition a couple of years ago of a well-known, well-entrenched brand within the online space. Were you able as a group to leverage some of its technology and expertise in the online space?
CHRIS VORSTER: Yes, Simon, I think it’s important to note that the Stadio Higher Education institution was the consolidation of four brands and in those four brands we had Southern Business School, which is actually the biggest online player in our group. And yet we had that infrastructure and expertise that we’ve built on.
Then obviously we also have Milpark, as you mentioned, with years of experience which is also coming to the fore now and giving us these good results.
SIMON BROWN: Okay. Are you seeing some of the face-to-face, traditional contact students? Were some of them perhaps at the beginning of this year planning to enter tertiary education, but took the view (with the) pandemic that “I’ll come back in 2022”? Was there a bit of a delay from some students potentially?
CHRIS VORSTER: Yes, definitely, Simon – one hundred percent correct. Especially with the matric results that were released so late, a lot of students said, “Okay, let’s just postpone. We will start in the 2022 academic year,” knowing that there would be Covid disruptions and the like. They just felt they would rather postpone.
SIMON BROWN: Yes, rather than put that pressure on themselves, trying to get it all together. How have student collections been? In some of the industries … collections have started to pick up. Are students paying timeously? Have you still got a concern in that space?
CHRIS VORSTER: We do see stress in the system, without a doubt.
We are very excited about our new partnership with Capitec Bank, which will now make funding available to our students at very reasonable rates.
So we’re excited for the 2022 academic year specifically; that will come into play and really assist our students in meeting those payment deadlines.
SIMON BROWN: That’s always been one of the challenges – funding. With respect to the traditional banks, it’s not always that easy to get funding for tertiary education.
Your Centurion campus (will be) up and running next year. What sort of capacity is that going to have when it kicks off in January?
CHRIS VORSTER: The capacity of the campus would be 5 000 students when full. But we will start off, we hope, with between 500 and 700 students, Simon, in 2022.
SIMON BROWN: And then how long to get to that 5 000? Is it going to be a couple of years– three, five years perhaps?
CHRIS VORSTER: Our projection shows about five years. Then it would be at full capacity. One must also remember that we are bringing in more hybrid academic models so that we can accommodate more learners at a campus.
SIMON BROWN: And the demand? Do you say 500, 700 students in year one (and) a couple of years to get to capacity? The one thing we see every January/February as the new year rolls around is that massive demand for tertiary education. You’ve got Centurion. Would you look for other campuses in time as well?
CHRIS VORSTER: For now we want to, say, test to see what the uptake would be at Centurion. There’s (been) a big Capex spend on that site. We want to see what the uptake will be before we look at building another mega-campus, here in the Western Cape. If we look at the applications we’ve received thus far for next year, we are very excited. Obviously, they must move on to registrations, full-time paying students. But applications thus far look very, very good for 2022.
SIMON BROWN: One of your other acquisitions was CA Connect. This is kind of a bridging (facility) to help people get into the chartered accounting space. You ended up having to pay a whole lot more for it simply because it has been, frankly, a stunning success since you took it over.
CHRIS VORSTER: Yes, we are very excited with the CA Connect business, as you’ve said. I think it has a sweet spot in the market. We see that this specific industry is very keen, going the online route. With its unique way of offering it to the market, I think it is a very attractive offering at the moment.
SIMON BROWN: Last question before we sign off. Obviously, there’s the academic year and I appreciate – particularly in tertiary (education) – some people might pick up only in the second semester and the like, but generally is the second half of the year going to be more or less in line with the first half of the year, notwithstanding perhaps some capital expenditure and collection rates?
CHRIS VORSTER: If we look at student numbers, I think we can expect similar numbers. We are actually still open for registrations today. If I look at where we are currently, it looks very similar. Obviously at the end of the year, with a lot of our contact learners doing their assessments, there are some additional costs that will come through. But profit levels would be very similar. We are confident of having a good financial year this year.
SIMON BROWN: We’ll leave it there. That’s Stadio CEO Chris Vorster talking about those results in a space that is globally important and of course massively important for South Africa as well. Chris, I appreciate the time today.
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