Pembury Lifestyle Group (PLG) began in 1999 and consists of a school, retirement village and property portfolio. Now, it’s looking at even further expansion in the retirement and education sectors – and things are going better than planned.
March 31 marked the company’s landmark listing on the JSE AltX. Pembury Lifestyle Group CEO Andrew McLachlan says that it is the third company to be listed in the education sector this year. “Even though we’re smaller than the others, there’s great potential there and already excellent growth.” Retirement and education, he says, are two exciting industries which will always do well, regardless of the economic or political climate. According to McLachlan, both the education and retirement services sectors are underserviced markets, characterised by high barriers to entry and strong demand. They both represent defensive plays in an uncertain political and economic environment.
The Black Managers Forum Investment (BMFI) recently purchased a 15.7% stake in the business for R55 million. With BMFI representation now on the board, McLachlan feels PLG is primed for aggressive growth as its planned strategy gains traction.
According to McLachlan, new opportunities have been opened up by the BMFI on-boarding, providing access to new networks and expertise. The BMFI has a long-term view of its investment into the sectors and is a perfect match to PLG’s focus on sectors that are able to deliver social value to the community, in addition to capital growth. The deal has also strengthened cashflow, providing more funds for property acquisition and capital expenditure.
Its initial goal of growing PLG schools at the rate of at least three campuses per year has been surpassed already. “We’re on the verge of opening five new campuses for 2018 instead of just three as we had predicted.” says McLachlan.
McLachlan is an entrepreneur, an investor and a parent. These different viewpoints are perhaps the base to his passionate belief in the exponential growth potential of the education sector in South Africa.
“We started the schools because some of our properties were already built and ideally suited for schools instead of retirement [villages]. So in 2014, we started our first schools and saw growth prospects and great demand,” he says, noting that schools and campuses have become a big buy at this point in time.
In April, PLG announced that it was going to acquire six retirement lodges to expand the sector that, until now, remained previously unexplored in SA.
“We were the first JSE AltX-listed company to offer investors exposure to the retirement services sector.”
Worldwide, demand for services for aging populations is fast outstripping supply. According to McLachlan, PLG was the first to recognise this urgent need 18 years ago and to innovate by introducing a hospitality-based approach when offering services to an older population and to recognise that the biggest driver of growth in the retirement sector is a strong brand with good word-of-mouth.
“We wanted to establish PLG as a national brand, and we see a great need to expand the retirement sector.”
PLG follows a business model that has already been successful in New Zealand and Australia for the last 15 years. “SA just didn’t see this opportunity before!”
And, he says, further expansion into retirement villages is on the cards.
Pembury Lifestyle Group has tapped a fountain of investment, and McLachlan is excited about whatever more the future will hold.
Brought to you by Pembury Lifestyle Group.