South African private education group ADvTECH reported a 3% fall in earnings as a result of a lower student intake and a financial hit from an accounting fraud uncovered last year.
Diluted headline earnings per share — the primary measure of profit in South Africa that strips out certain one-off items — fell to 69 cents in the year to end December from 71 cents a year earlier.
The company, which also runs colleges and recruitment agencies, took a R35.5 million hit from a three-year long fraudulent overstatement of sales, understatement of costs and theft of cash.
The fraud claimed the head of the company’s finance manager in its schools unit, the biggest contributor to the company’s annual sales.
The division, which operates high-end schools such as Crawford and Trinity House, also experienced a lower growth in student numbers as South Africans battling high personal debt levels and stagnant economic growth opted for cheaper schools.
Enrolments at the company’s schools edged up 3% for this year, lagging far behind its budget-friendly rival Curro Holdings, which recorded a 14% increase.
However, ADvTECH’s tertiary and recruitment divisions showed strong growth thanks to cross-border expansion that included investments in schools in Botswana and Zambia. It expects to open the first Crawford International School in Kenya this year.
ADvTECH said its recruitment unit benefited from the success of Africa HR Solutions, its unit based in Mauritius with networks across Africa, which countered slow job growth at home.
Shares in ADvTECH eased 0.25% to R15.68 by 1318 GMT, as the broader JSE All Share index inched 0.5% higher. Curro’s shares were trading lower at 0.94% to R31.76.