Agenda Results Financials Academic excellence Schools division Tertiary division Resourcing division Africa Prospects Annual Financial Results for the year ended 31 December 2017
Good results Trading Performance Summary Trading Normalised Trading Operational Earnings Revenue Profit Per Share 23% 20% 20% Annual Financial Results for the year ended 31 December 2017
Segmental Trading Performance Tertiary Resourcing Schools 15% 40% 26% Revenue Operating 3% 59% 44% Profit Annual Financial Results for the year ended 31 December 2017
Growth Group 2016 2017 2018 STUDENTS 63 544 60 176 53 337 122 EDUCATIONAL SITES 117 98 Annual Financial Results for the year ended 31 December 2017
Growth 2016 2017 2018 STUDENTS 92 475 Including Oxbridge + University of Africa 63 544 60 176 53 337 122 EDUCATIONAL SITES 117 98 Annual Financial Results for the year ended 31 December 2017
Bad debt Tough economic environment Schools Tertiary Pressure on <1% <3% consumers Well managed and under control Annual Financial Results for the year ended 31 December 2017
Financial overview
The reported incident of fraud Total of R48.1 million, perpetrated over a three year period starting in 2015 Overstatement of revenue & understatement of costs R35.5 million after tax impact Theft of cash - R5.0 million of which R2.0 million has been secured Criminal & civil charges being pursued Annual Financial Results for the year ended 31 December 2017
Impact of fraud Total Amount 12 Months to 12 Months to 6 Months to 6 Months to R’m 31 December 2015 31 December 2016 30 June 2017 31 December R’m R’m R’m 2017 Name Rm’ Revenue overstated - (9.3) (5.1) (2.5) (16.9) Expenses Understated (Including the cash loss of (6.7) (15.1) (2.9) (6.5) (31.2) R5.0 million) Operating profit overstated (6.7) (24.4) (8.0) (9.0) (48.1) Taxation Effect 1.9 6.6 2.0 2.1 12.6 Profit after Taxation Effect (4.8) (17.8) (6.0) (6.9) (35.5) Annual Financial Results for the year ended 31 December 2017
Group Trading Revenue +23% 4500 4096 4000 3353 3500 3000 2705 2500 R’m 1932 2000 1766 1500 1000 500 0 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group Trading operating profit +20% 800 671 700 600 560 500 448.0 R’m 400 300 256 222 200 100 0 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group Group trading operating margin 18% 17% 16% 16% 16% 14% 13% 13% 12% • Growth Capex 10% R’m • Capacity utilisation 8% 6% 4% 2% 0% 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group NEPS +20% 80 75.8 70 63.3 60 53.9 50 42.3 Cents 37.9 40 30 20 10 0 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group Cash flow generation 900 Cash generated by operations 811 800 Cash from operations +37% 738 700 600 558 500 R’m 400 400 363 286 291 300 223 200 200 93 100 0 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group Free operating cash flow before capex +28% 700 597 600 500 468 400 338 R’m 297 300 196 200 100 0 13 14 15 16 17 Annual Financial Results for the year ended 31 December 2017
Group Capex and acquisitions CAPEX AND ACQUISITIONS R'm Acquisitions 215.6 - Glenwood House - Summit College - The Private Hotel School - University of Africa - Greenwood Bay College - Elkanah House Capex Projects 718.0 5 Site Acquisitions 226.3 3 New Schools 114.4 Student Management and Finance Systems 29.2 Expansionary capex – existing sites 218.00 Furniture, Fittings, IT and Vehicles 130.1 Total Capex and Acquisitions 933.6 Annual Financial Results for the year ended 31 December 2017
Group Net cash position 13 14 15 16 17 0 -200 -202 -400 -436 -600 -800 R’m -1000 -1110 -1200 -1157 -1400 -1600 -1617 -1800 Annual Financial Results for the year ended 31 December 2017
Tough Economic Times - 2017 GDP growth last 5 years 1.5% GDP growth last 3 years 1% 135k formal jobs lost Q4 2017 IMF World Economic Outlook: SA expected to remain below 1% GDP growth SA business confidence 2018 highest Unemployment increase STATS SA Q4: Since 26,5% 1970s
Operating Environment School market Total SA enrolments 12 932 000 Public 2016 12 342 000 enrolments: +6% 2000 11 647 000 Independent 2016 590 000 enrolments: +130% 2000 256 000 Higher Education market size Total estimated higher education enrolment SA 1 132 000 Public higher 985 000 2015 education: +3% 2012 953 000 Private higher 2015 147 000 education: +51% 2012 97 000 Source: CHE 2015, VitalStats 2015, SA Institute of Race Relations 2018 survey. CHE says 90 000+
Strategic Imperatives SOCIO-ECONOMIC ENVIRONMENT Growth > Organic and Acquisitive > Channel Africa > Product > Segment > Geographic Excellence through specialisation > Niche market focus TION REPUT Academic excellence > Benchmarking > Teaching & learning > Database > Benchmarking our REGULA development performance A > Learning analytics TION > International & Employer recognition Customer focus Innovation Human & > Easy to do business > Business process capital with us > Product/market productivity > Understanding needs development TRANSFORMATION Annual Financial Results for the year ended 31 December 2017
Academic Excellence
Academic Excellence 2017 Matric results 1.6 1 754 2 866 Average distinctions Per candidate Matriculants Distinctions Annual Financial Results for the year ended 31 December 2017
Academic Excellence Schools academic results comparison NSC IEB ADvTECH ADvTECH ADvTECH Competitor Competitor NSC IEB IEB 2017 Group NSC 2017 NSC IEB Schools Schools 2017 2017 2017 2017 2017 Number of 1 144 1 224 1 754 530 824 matrics Matric pass 99% 100% 99% 75% 98% rate Bachelor pass 29% 42% 89% 85% 94% 84% 58% rate Average distinctions 1 2 1.6 per candidate Annual Financial Results for the year ended 31 December 2017
Academic Excellence Academic focus: 4 Strategic Areas CURRICULUM The Department of Basic Education (DBE). Curriculum Assessment Policy Statements (CAPS). Independent Examinations Board (IEB). Cambridge International (Cambridge). Early Years Foundation Stage (EYFS) CORE SKILLS / GLOBAL COMPETENCIES Investigation | Creating | Communicating | Collaborating | Organising | Digital citizenship DIGITAL LITERACY Investigation | Creating | Communicating | Collaborating | Organising | Digital citizenship GLOBAL CITIZENSHIP Values | Attitudes | Behaviours | Embracing diversity | Taking action/Service
Academic Excellence GoLab programme at schools Critical Thinking Skills Creative and Innovative Thinking Skills Problem Solving Skills Analytical Skills Computational Thinking Skills Design Thinking Skills “GO Lab empowers learners with 21st - Helps to address the United Nations Century Skill Sets and hands-on Collaboration & Teamwork “17 sustainable development goals.” experience with modern technology to better equip the youth for global and future careers.” – GO Lab website Curiosity & Questioning Skills Dedicated labs on campuses Communication Tools, Techniques & Skills Annual Financial Results for the year ended 31 December 2017
Differentiators Regulation, accreditation & operations The IIE central academic team Portfolio of brands Centralised academic structures Market segmentation Development of qualifications and Unique value differentiation proposition Centralised systems and offerings Public universities, 200+ Tertiary classes students per class SA’s largest <100 students “private university” Academic excellence Continued focus on Critical value academic excellence proposition as a differentiator
Academic Excellence Accredited courses by category THE PRIVATE THE HOTEL UNIVERSITY CAPSICUM OXBRIDGE IIE SCHOOL OF AFRICA 5 17 99 13 31 5 2 2 MASTERS VOCATIONAL DIPLOMAS 17 VOCATIONAL PHDs 1 9 HONOURS TRAINING 2 HIGHER TRAINING MASTERS 11 20 DEGREES DEGREES COURSES CERTIFICATES COURSES 27 9 DIPLOMAS VOCATIONAL 34 HIGHER TRAINING 26 CERTIFICATES COURSES TOTAL 165 ACCREDITED TERTIARY COURSES 2 PHDs 10 MASTERS 11 HONOURS 47 DEGREES 36 DIPLOMAS 28 HIGHER CERTIFICATES 31 VOCATIONAL TRAINING Annual Financial Results for the year ended 31 December 2017
Academic Excellence Tertiary academic results 82% 18% 72% 12% Average Average Average Average module module throughput dropout pass rate distinction pass rate rate rate Annual Financial Results for the year ended 31 December 2017
Academic Excellence International and employer recognition 2 363 of our graduates were placed in first time employment through our Graduate Empowerment Programme Annual Financial Results for the year ended 31 December 2017
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